Introduction to Arts Management Final

docx

School

University of Iowa *

*We aren’t endorsed by this school

Course

3600

Subject

Business

Date

Apr 3, 2024

Type

docx

Pages

Uploaded by mbobitt

Introduction to Arts Management THTR 3510-0001 University of Iowa Theatre Arts Department Take-Home Final Exam May 10-12 Spring 2020 Please answer 6 of the 8 following questions. Question #1 MUST be one of the 6 questions that you answer. Finals should be submitted to ICON no later than Tuesday May 12, at 6:oopm. Any email submitted after 6:00pm on Tuesday May 12 will not be accepted and your grade will reflect that you did not do the final. Answer each question as specifically as possible, giving examples where available. Be careful of circular reasoning (“it’s good because it’s good”), and of unnecessary repetition of your points. Check for grammar and spelling. Make sure your name is on your work. Take your time - that's why it's a take-home. 1. Summarize the challenges for Shakespeare and Company that have recurred between the first article, in 2004, and the second article, in 2009. In the first article about Shakespeare and Company, an American theatre company located in Lenox, Massachusetts, we learn of the organization’s struggle with funding its recently acquired 63-acre plot of land in need of numerous renovations. Almost all of the challenges that Tina Packer, CEO of the company, ran into revolved around the “slight overreaching” of acquiring this new property just at the point the economy began to tank. The article stated that this property came with buildings that were in various states of disrepair and numerous costs that Tina wasn’t prepared for. For example, maintenance and utilities alone jumped from $65,000 to $400,000, and expenses began to quickly outweigh income- at one point the company carried almost 6 million in debt. Due to these expenses, the company was required to lay off staff members, and the budget was reduced from 4.5 million to 4 million. The theater’s season was forced to be shortened, and the company also ended up having to sell off a chunk of their property. In the second article, which was published five years after the first, we see Shakespeare and Company facing many of these same issues. After the release of a 37 page report that examined the theater’s finances, we learn that the organization faces a deficit of 4.75 million dollars over the last five years, and liabilities exceeding assets by a ratio of almost seven-to-one. Once again, we read about Tina Packer being forced to reduce staff size, freeze the hiring of new staff, and shift performance schedules which cut down on days the theater needs to be closed during the summer season. Interestingly, this article also states that within the last year, the company spent a large chunk of money renovating a massive building on its property for scenery, costume shops, rehearsal rooms, and a 65-186-seat theater while it was already 8 million dollars in debt with Century Bank of Medford. Fundraising for this project made it harder to secure money for the company’s 5 million dollar annual operating budget, and the end of the article states that the company is expecting further staff cuts, shifting performances, and moving the company’s summer training institute to earlier in the year. It is clear that although the company was able to last the five years between each article, the problems that they face are still very much the same.

2. Make the argument that Shakespeare and Company did not practice due diligence when it originally acquired 63 acres of land in 2004 - give specifics of what due diligence would have entailed. Due diligence is defined as “the investigation or exercise of care that a reasonable business or person is expected to take before entering into an agreement or contract with another party, or an act with a certain standard of care.” I believe that a very good argument could be made that Shakespeare and Company ignored the idea of due diligence when they purchased the 63-acre plot of land. Firstly, the article states that when the land became available for purchase, Shakespeare and Company snapped it up immediately after getting a great deal on the property- $3.6 million. Had the organization practiced due diligence, they would have done a detailed screening of the property and would have understood that the property was in various states of disrepair, requiring huge maintenance projects and an increase in mortgage (from $65,000 to $400,000 a year) which simply wouldn’t fit in the budget. Since they didn’t take the time to do this, by 2004, the company faced a tremendous amount of debt and was forced to take measures to reduce spending which in turn hurt their staff, shorten their season, and sell off a chunk of their property. 3. In 2009, what is the relationship of Tina Packer to the organization? Tina Packer is the founder of Shakespeare and Company, which she began in 1978. Packer’s title was artistic director of the organization up until 2009, however she stepped down from this position and was replaced by Tony Simotes. Although she is no longer artistic director of the company, she spearheaded the $4.1 million deal to purchase the new plot of land and is still involved in the operations of the theater. 4. What do you think is the reason that Shakespeare and Co went public with their troubles in 2004? In 2009? As the Director of PR, what would you have done? (Be specific.) I think that in 2004, Shakespeare and Company may have gone public with their troubles in order to gain publicity in search of potential donors that could offer them some relief to the large amount of expenses and debt they faced. I also think that with an organization as big as Shakespeare and Company, they may have wanted to provide some transparency with the public in regards to their struggles, and they may have known that these problems would have gone public eventually. With this in mind, the Director of PR probably would have wanted to be the one to reveal this information rather than it getting leaked. In 2009, however, after reading that the organization is still facing all of the same troubles that they were five years prior, the article states that “there’s been no outward indication of financial struggles, there’s been no public statements by them and no appeals to the public.” This is confusing to me, as I would think that if they were still in desperate need of donations to keep operations running, they would have maintained transparency with the public about their struggles and could have potentially received financial support. As PR Director, I absolutely would have chosen to continue communication with the public, and I think that since this wasn’t done, everyone assumed that their financial situation was much more stable and they were no longer in need of help, thus cutting off access to potential donors.

It’s stated in the article that by 2004, the company was already facing a tremendous amount of expenses that they could not cover which required them to downsize staff, cut budgets, and shorten their season. To me, this implied that prior to 2004 the organization already had a pretty good idea that they were headed in a bad direction. As the Director of PR, I think that I would have gone public with these problems when I first realized the gravity of my company’s funding situation. By doing this, it could have potentially reduced the amount of staff members that I had to put out of work and created access to donors that could assist with financial problems before they became even worse. 5. In both 2004 and 2009 it is mentioned that most houses for performances are full, yet expenses continue to outstrip revenue. Is this a rarity? How do arts organizations deal with this? I don’t believe that this is a rarity. When our second guest speaker of the semester, Chuy, came into class, he spoke about Hancher Auditorium and how ticket sales generally were not the primary source of revenue for the theater. He stated that a majority of Hancher’s funding came from donors and University of Iowa alumni who had a love for the arts. Although I’m aware that Hancher is unique in the fact that it has access to a lot of wealthy graduates of the University, it led me to believe that many arts organizations rely heavily on the philanthropy of donors to cover expenses. In the case of Shakespeare and Company, it is stated that they also receive a large chunk of money from donations, however I believe that the amount of expenses that they incur largely outweighs the amount that their monetary donations are able to cover. 6. Based on what you know from each article and the implied organizational structure of Shakespeare and Company in 2004 and 2009, propose a changes that will address some of the holes in the organization as well as the issues that the company faces, including how to pay its staff. Based on what I know from each article about Shakespeare and Company, I have a couple of changes that could potentially address some of the holes in the organization as well as some of the issues that the company faces. After reading the article from 2004, we are already aware that the company is struggling to pay its staff and has dug itself into a pretty deep hole due to the cost of renovations and construction projects on the 63 acre plot of land. Right off the bat, I think that the company should have known that they had bitten off more than they can chew. It’s stated in the 2004 article that they “had received several offers to buy about half of the 63-acre parcel,” and that they “were considering to accept one of these offers.” Firstly, I believe that 63 acres is overkill and the size of their operation could have been reduced long before they had to consider cutting staff members which in turn reduces the quality of their organization. The land was purchased in 2000, and this article was released when they were already facing tremendous financial troubles. In the couple of years before they had to consider cutting staff, I think that they should have already been seriously considering offers to sell a portion of their land. In the 2009 article, we immediately read that not much has changed at Shakespeare and Company, as they are still facing almost all of the same troubles that they were five years before. Not much is stated regarding the downsizing of their operation and selling their land, which leads me to believe that they did not end up selling a decent amount of the 63 acres (this could be

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help

wrong though). What is stated, however, is that in 2008 the organization renovated a massive building on its property for scenery, costume shops, rehearsal rooms, and a flexible 65-to-186- seat theater. This wildly confused me for a number of reasons. Firstly, if the organization was able to put on shows from 2005-2008, was it really necessary to renovate yet another massive building on the property? I think that instead of doing that, perhaps I would have held off on those renovations until I knew that I would be able to afford paying my staff and paying off the tremendous amount of debt that I already owe. In the 2009 article, it is also stated that “there has been no outward indication of financial struggles,” and “there’s been no public statements by them and no appeals to the public,” since the 2004 article. It is very clear to me that the organization has been struggling financially for years, so to cut off transparency with the public and pretend that everything is fine most likely led the public to believe that Shakespeare and Company were in no need of monetary assistance. I think that if the company had maintained communication with the public, they would have gained access to some assistance in which they direly needed. Overall, I think that to address the problems of this organization, they need to take a long look at their budget and prioritize what is most important. I also think that their communication with the public needs to increase, because without asking for assistance or even notifying people of their struggles, people will assume that they are not in need of help.

Introduction to Arts Management Final

Related Documents