From the President - Oct. 2011
As you know, I like to use this space to keep you updated on important developments at the St. Louis Symphony. Accordingly, I am writing to update you on financial results for FY11, the multi-year context for those results, and our plans going forward. The St. Louis Symphony continues to make positive progress. But we also understand that we do so in a very challenging environment which is unlikely to get easier in the years ahead.
Results to Date
For the recently completed FY11 season, ticket revenues for all concerts totaled $6.56m, up 1.5% over FY10. Seats sold totaled 194,700, within 1% of the prior year high. Overall, this was largely a year of consolidating the major gains in ticket sales and attendance achieved in FY09 and FY10. Since the launch of Building Our Business in 2008 and its major audience development initiatives, and despite an unfavorable economic environment, total ticket revenues have increased over a three-year period 36% or $1.72m from $4.84m to $6.56m – the highest ticket revenue for all concerts since 2001; with a 17% growth in seats sold from 165,865 to 194,700; and a 12% increase in per-concert average attendance, from 1,522 to 1,708. In addition, more than 22,000 new buyers have been added to the Symphony’s audience base over a similar time period.
Contributed operating revenues in FY11 totaled $9.16m, up 7.5% from FY10 and a 10-year high for annual contributed operating revenues. Since the launch of Building Our Business three years ago, annual contributed operating revenues are up 18% from $7.76m in FY08.
Controlling expense is also a critical part of our plan. Expenses in FY11 totaled $26.6m, up 2% over the prior year. Worth noting is that FY11 expenses are 18% under FY01 expenses when adjusted for inflation.
Overall, since 2007, total revenues have grown $3.8m or 19% while expenses have grown $3.2m or 13.7%.
Because of audience development initiatives at the core of the plan as well as other revenue progress and strong management of expenses, the structural deficit has declined 18% from $3.4m in 2007 to $2.8m in 2011, dipping to $2.62m in 2010. Although the slight uptick in FY11 was disappointing, we are very committed to continuing the overall downward trend in deficits in FY12. The St. Louis Symphony reports these gaps as deficits; however, gaps to date have been fully funded by additional contributions secured for the purpose of operations. Worth noting also is that we have been able to make progress in reducing our deficit overall despite the fact that the total funds taken into the St. Louis Symphony operations from endowment were $450k less than two years ago due to market impact on the endowment, which stood at $126.m at the close of the fiscal year.
Looking Out: 10-Year Financial Model
The success of the St. Louis Symphony’s strategic initiatives depends upon meeting short-term, intermediate, and long-term benchmarks and objectives. The St. Louis Symphony has a 10-year financial model that matches revenue objectives to goals established in Building Our Business and the strategic plan. That model calls for revenues to grow 4-5% and expenses under 3% annually on average leading to diminishing and eventually eliminating structural operating gaps over the course of the plan. As part of this plan, the St. Louis Symphony has raised additional operating funds in recent years to ensure investments can be made in audience development initiatives, capacity-building, and R&D; and to ensure deficits do not accumulate over time as our revenue growth plan advances. Funding raised for this purpose is projected to cover deficits into FY14. An additional estimated $10 million of special funding must be raised to ensure the organization remains debt-free through to break-even at the end of the decade.
To sum up, although there are no shortages of challenges ahead, we are committed to a vision, plan and set of benchmarks that continue to measure our progress. Most importantly, we have a great orchestra and outstanding product; a talented staff, and committed board. The sum total of the energies of these constituencies will provide the energy and talent to build on the progress we have made over the years, and meet the challenges that lay ahead.