Case 9-4: Cost Volume Profit (CVP) Analysis and Strategy:The ALLTEL Pavilion

The ALLTEL Pavilion in Raleigh, North Carolina is an outdoor amphitheater that provides live concerts to the public from April through October each year. The seven-month season usually hosts an average of 40 concerts with 12 year-round staff planning and managing each season.SFX Entertainment Inc. operates the pavilion. SFX is the largest diversified promoter, producer, and venue operator for live entertainment events in the United States. Upon completion of pending acquisitions, it will have 71 venues either directly owned or operated under lease or exclusive booking arrangements in 29 of the top 50 U.S. markets, including 14 amphitheaters in nine of top 10 markets.

History/DevelopmentThe ALLTEL pavilion was built in 1991 by the City of Raleigh and Pace Entertainment Company of Houston, Texas. The management of the pavilion was contracted to Pace Entertainment and Cellar Door Inc. of Raleigh, NC. Hardees Food Systems, Inc. of Rocky Mount, NC, the original sponsor of the amphitheater, paid an annual fee to carry their name and logo on all signs and ads regarding the amphitheater. On February 3, 1999 the title sponsor for the amphitheater became ALLTEL Corp.

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