Confidential Instructions for the Key Opera's Business Manager The Key Opera is an established institution in Sydney, Australia, a major metropolitan area. As with most opera companies, it is a nonprofit company that is financed by a combination of ticket sales, foundation and corporate grants, and income from a modest endowment. It usually breaks even over the year, with fairly good attendance in its 2000-seat hall. Ticket prices range from A$18-55, with A$28 being a reasonable average for rule of thumb accounting. You have been working with the Key Opera for three months. So far things have been going well, but your most important deal is linked to the upcoming negotiation with the individual from Aria Agency, an Italian company that represents Patricia Melody (and other singers and musicians). You want to make sure your boss, the artistic director, is pleased with the outcome. You met with the artistic director yesterday and learned quite a bit of helpful information. A production of Bellini's Norma is scheduled to open in three weeks. This production is set to run for 6 weeks, with 3 performances a week. When the Key announced this season's schedule over a year ago, Amelie Treble was listed as the title role for Norma. Miss Treble is a first rate performer; however, she has not yet achieved the popularity that singers like Ms. Melody or Kara Alto enjoyed at the peak of their careers. Three weeks ago, Ms. Treble's name was suddenly dropped from the opera's advertising. Although it is not widely known (the opera wanted to hold off on making a public announcement until the diagnosis was confirmed), the reason for the omission is that Ms. Treble has developed a benign throat tumor that will require surgery prior to the opening date. The Key has been unable to find any other good soprano who is available for the dates of the performances. The soprano engaged for the secondary role (at a salary of A$14,000) does know the Norma part. She has a good voice, but is a relative newcomer to the opera and clearly lacks the experience necessary to perform the title role well. The Key is obviously in a tight spot. Cancellation of the opera would result in the loss of hundreds of thousands of Australian dollars. Fortunately, Patricia Melody, a distinguished though somewhat aging soprano, heard rumors that the opera was in trouble and called the artistic director to inquire whether there was any possibility that she might sing the lead. Up until now, the artistic director has held her off, hoping to find a younger lead. Unfortunately, this now appears impossible, and the artistic director is quite desperate to sign Patricia. Consequently, you have scheduled a meeting with her agent. Patricia has sung many times for the Key over the years, but the last time she sang for the Key was over a year ago in the secondary soprano role of Adalgisa, also in Norma, for which she received A$12,500. Four years ago, when she was at the pinnacle of her career, she received A$22,000 for singing the title role in Norma at the Key. This was regarded as extremely high at the time, justified only by the fact that Patricia was at the apex of her profession and had a significant following (which has probably fallen off somewhat since then). On the other hand, over the last four years, due to inflation and increased popularity of opera, the average amount paid to top opera singers had nearly doubled. As a matter of policy, the Key generally does not disclose the salaries of its performers. However, for negotiating purposes, you have been given access to the average salary figures paid by the Key in recent years for the title and secondary roles in Bellini's Norma and other similar operas:

	Title	Secondary
5 years ago	A$14,000	A$7,000
4 Years Ago	A$22,000	A$8,000
3 Years Ago	A$17,500	A$9,000
2 Years Ago	A$21,000	A$12,500
Last Year	A$25,000	A$12,000
This Year	A$ [ ? ]	A$14,000

This year A$ [ ? ] A$14,000 Although particular cases vary widely, as a general rule the Key tends to follow the industry practice of paying performers in lead roles in operas of this type about twice the amount of the secondary performers. The Key needs to keep the costs of the performances as low as possible. It averages an 85% house over the course of the yea r. This is also the breakeven point. Of course, many performances are sold out, but the average is 85%, with a standard deviation of about 5%. Anything less than 80% attendance would cause the Key to lose A$50,000 or more, and a house of 50% or 60%, while barely conceivable, would be a true disaster (these kinds of figures probably explain why Patricia has had so few offers recently for lead roles. While her voice remains generally fine, most operas are reluctant to risk even a small chance of an off day). This year, Miss. Treble was to have been paid A$30,000. In light of the emergency situation and the great desire of the artistic director to obtain Patricia, the Key trustees have authorized you to offer up to A$45,000 should that be necessary. If she holds out for more than that, the Key will just have to use the neophyte secondary soprano and hope she miraculously rises to the occasion (you would probably pay her something less than double her secondary salary of A$14,000 for that, certainly no more than A$28,000). You should also bear in mind the potential adverse impact future negotiations with other performers should an unusually high salary for Patricia become public knowledge. The artistic director wants Patricia. Though she is old for the role, the director believes that with proper makeup and a little luck Patricia will work out extremely well. In any event, there is little alternative. As it is, the late announcement of changes in the title role may affect box office sales. The artistic director is hoping, however, for a favorable public response to Patricia being in the title role.

What are somethings about your role's culture (to understand your role) as well as some notes on the culture of the other party and your related style, approach, strategy, etc.