The Sydney Symphony

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The Sydney Symphony A presentation by Rachel
Hadfield Director of Finance
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Director of Finance Job Overview
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Director of Finance Job Overview

• Financial Management
• Business Analysis
• Financial Reporting (internal and external)
• Budget Preparation
• Risk Management
• Development of Company Calendar
• Board Secretariat
• Board Governance
• Internal Audit
• Records Management
• Risk Identification and Accountability
• Legal Liaison

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Director of Finance Job Overview (cont.)

• People
• Pay, Employee Records
• Human Resources
• Recruitment
• Induction
• Training
• Performance Management Systems
• Enterprise Bargaining
• Consultative Committee Liaison
• IT
• Systems Development
• Network Integrity
• Admin Staff Skills
• Productivity Improvements
• Office Management
• Maintain Productive Office Environment

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Business Services Team
Director of Finance
Management Accountant
HR Manager
IT Manager
Business Analyst (PT)
Business Services Assistant
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Sydney Symphony Context
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Evolution

• SSO established as part of the ABC, only 24
  players
• Start of annual concert seasons
• State and Local Government agree to establish an
  orchestra in Sydney
• Eugene Goossens appointed first Chief Conductor
• "Sydney must have an Opera House" - Goossens
  chooses Bennelong Point
• Sir Charles Mackerras appointed first Australian
  Chief Conductor
• Mary Vallentine appointed Managing Director
• Stuart Challender appointed Chief Conductor
• Edo do Waart appointed as Chief Conductor and
  Artistic Director
• Federal Government increased player numbers (104)
  and salaries
• SSO corporatised with Federal Government support
• 2.5M 'Creative Nation' funding provided to SSO
• Nugent report requests orchestras to build up
  reserves
• Administration Staff reduced by 20
• Libby Christie appointed Managing Director
• Gianluigi Gelmetti starts as Chief Conductor and
  Artistic Director

1932 1936 1946 1947 1948 1982 1986 1987 1993 1994
1995 1997 1999 2002 2003 2004
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Australia's Flagship Orchestra

• Sydney Symphony is Australia's flagship
  orchestra
• Largest audience reach
• Longest history
• Largest government funding
• Largest subscriber base
• Largest revenue
• Largest administration team
• Home town is Australia's largest city
• Home venue is Australia's premier venue Sydney
  Opera House
• The Sydney Symphony concert experience can be
  perceived as elitist. Marketing efforts, outreach
  programs and free events are attempting to break
  down this perception

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Australia's Flagship Orchestra (cont.)
Government Funding v Revenue
Share of Voice
Equity v Liabilities
Paid v Unpaid Audience Reach
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2003 Financial Results
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2003 Financial Overview

• Net Surplus of 593k
• Net concert result exceeded budget by 566k (and
  2002 by 843k) despite various obstacles
  throughout the year (eg Agerich cancellation)
• Significant savings in operating expenditure
  particularly in marketing
• Corporate sponsorship target not met
• Orchestra costs were under budget due to the
  number of vacancies
• Admin Expenses variance due to impact of Fixed
  Asset Review

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Noteworthy Results - Income

• Ticket Sales
• 17 growth in ticket sales on 2002
• Increased reliance on the single ticket
• market, which represented 52 of sales
• in 2003 (46 in 2002)
• Development
• 14 growth on 2002
• 615k in corporate sponsorships
• Commercial Work
• Incredible success achieved with net contribution
  of 689k, 11 of budget
• Funding
• 1.871, relates to a loss in real terms of
  194,331
• Interest
• Increased interest income in line with the cash
  surplus generated in the year and interest rate
  rises

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Noteworthy Results - Costs

• Marketing
• 3 increase in efficiency with 4.39 in single
  ticket income generated for each dollar of
  performance marketing spent
• Orchestral Salaries
• 14.8 increase for all musicians
• Savings resulted however from the number of
  vacancies
• Fixed Asset Review
• Long overdue audit completed of Company assets
  with 441k impact on Administration expenses for
  the year

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2003 Reversed A Decreasing Trend In Profitability
Revenue (m)
Profit (m)
Expenses (m)
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Increasing Orchestral Salaries.
Employees (m)
Increasing orchestral salaries
Revenue (excluding government funding) (m)
Artists (m)
Operating Loss (excluding government funding) (m)
Admin (m)
Expenses (m)
Depreciation (m)
Once off depreciation expense
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Have Been Matched By IncreasedTicket Sales And
Commercial Revenue
Ticket Sales (m)
Revenue (excluding government funding) (m)
2003 growth driven by increased ticket sales
Sponsors/Donations
Operating Loss (i.e. excluding government
funding) (m)
Other
Expenses (m)
Mostly an increase in orchestral hire revenue
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Business Analysis Metrics
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The Dashboard
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Cost per Full Orchestral Call

• Musicians work in 2-hour time slots a call
• Depending on their position in the orchestra a
  musician has a max call count of between 260 and
  300 calls per annum
• Management have little ability to work the
  musicians beyond this (exception being commercial
  work)
• Some instruments will never reach their call
  ceiling
• The strings however reach their call ceiling and
  thus represent the key limiting factor
• Therefore a full orchestral call represents a
  full string count of 16 1st violins, 14 2nd
  violins, 12 violas, 10 cellos and 8 double basses
• A program that requires instrumentation of
  87654 represents 0.5 of an orchestral call
• Understanding the contribution per orchestral
  call of a program is crucial in determining the
  profitability of various audience segments

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Series Analysis
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Whats Next?
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Four Emerging Themes for Strategy 2004 - 2007
Whilst making sure we remain financially secure
and meet our educational and artistic obligations
to the government
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Create A Distinctive 'Sydney Sound' That Is
Internationally Recognised And Respected
Distinctive

• Distinctive Australian sound and repertoire
• Sydney Symphony an 'Australian icon'
• Promoter of young Australian musical talent

'Sydney Sound'
Internationally Recognised

• International reputation for excellence and
  innovation
• Ambassador for Australia through sell-out
  international tours (sponsored)

• World class performance venue
• Centre of world class music festival
• Australian guest artists and conductors world
  class
• Regarded as one of top 3 world orchestras

Internationally Respected
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Create A Sense Of Occasion That Resonates With
Wider Audiences
Wider Audience Feels 'Sense Of Occasion'
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Develop Broader Relationships To Separate
Funding From Ticket Sales
Enhance Existing Relationships

• Increase regular funding from audience members
  and current donors
• Robust 'In Memoriam' program

Broad Relationships
Develop New Relationships

• Develop endowment fund
• Establish donations from non-audience members
• Bequests from Australian and international
  philanthropists
• Reduce reliance on government funding
• Separate funding by use eg education, guest
  artists, touring
• Education program becomes a major source of
  funding
• Enhance corporate funding pool through innovative
  partnerships

Maintain Government Support

• Protect orchestras' economic security through
  regulations

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Attract, Develop And Engage All Of Our People To
Deliver Success
Culture Of Excellence, Innovation And Cooperation

• Working together towards common goal
• Recognition and appreciation of differing roles

Engaged People
Recognise Demands And Provide Support

• Flexibility of working environment

Provide Feedback And Development

• Recognition of achievement and effort
• Opportunities for professional development of
  musicians and admin staff
• Peer support for development needs

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Whilst Remaining Financially Secure And Meeting
Our Educational And Artistic Obligations To The
Government
Financial Security
Educational Obligations
Artistic Obligations

• Reserves 20 Opex
• Government support maintained
• Sydney Symphony benefits from significant
  relationships
• Sydney Symphony continues to offer imaginative
  and new opportunities for supporters
• Competitive employment conditions for musicians
  and admin staff

• Education programme must be retained

• Retain Opera House as main venue
• No change to 'programme led recovery' strategy
• No change in numbers of players
• Maintain existing subscriber base
• Continue to attract world class conductors and
  soloists
• Maintain regional touring

• Key Questions
• Is Marketing Success sustainable?
• Existing growth has depended on pushing staff and
  supplier limits
• Existing advertising costs are low due to
  successful bargaining, however, this could
  fluctuate widely with economic factors
• Is there future growth in Commercial Events?
• - Key success factor is ability to be able to
  roster them

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Questions