Planning by the Groningen Arts Centre
The city of Groningen is an important population centre in the north of the Netherlands. People come from far and wide, even from other provinces, to its university, university hospital, new museum, large sports centre, and venues where big events are held. This list of regional facilities should also include the Groningen Arts Centre. In other words, Groningen ranks as one of the ten top cities in the Netherlands.
The Groningen Arts Centre (GAC) includes four venues;
* the large concert hall, which seats 1,200;
* the small concert hall, which seats 450;
* the city theatre, which seats 700;
* the indoor plaza, which seats 100.
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The three main types are described below.
The first type is the variable-fee contract. In this case, the artist or company involved and the GAC receive fixed percentages of the box-office receipts, for example the comedian Bram de Jong is going to get 75% for his next performance in the theatre and the GAC 25%. Every performance by Bram de Jong used to be a sell-out, but theatre-goers’ interest has begun to wane somewhat. For his most recent performance, the GAC sold only 25% of the 200 tickets for inferior seats in the theatre, i.e. seats behind pillars or in the top balcony.
The second type of contract is the fixed-fee contract. In this case, the GAC pays a fixed amount to the artist or company involved, e.g. the GAC is going to pay €6,500,- for a single solo performance by the actress Bridget Masland in the theatre.
The third type of contract is a combination of the two types mentioned above, namely the fixed-variable-fee contract. The band Double Dutch, for example, is going to give one performance in the large concert hall. Each ticket is going to cost €17.50 and Double Dutch is to receive:
* €12,500,- and
* 50% of surplus box-office receipts, i.e. receipts from tickets sold after a minimum of 800 tickets have been sold.
Double Dutch’s performances are usually reasonably well attended. However, during the last season the last 200 tickets had to be sold at the very competitive price of €6.25 after extra promotional activities amounting to €500,-.
Please calculate the estimated financial results of the contracts mentioned above concerning the next performances by:
* the comedian Bram de Jong;
* the actress Bridget Masland;
* the band Double Dutch;
and evaluate these contracts while taking the GAC’s objectives into consideration.
* Fixed-fee contract: the performance by Bridget Masland
* The GAC could ask €15 for each best seat (60% of the total number of seats) & €10 for each worst seat (40%)
* The GAC would expect to sell about 450 to 500 tickets.
* It could raise prices, e.g. from €15 to €17.50
* Variable-fee contract: by Bram de Jong
* The comedian doesn’t want the price of a best or worst seat to exceed €17.50
* (?) Calculate the estimated financial results concerning the next performances by: the comedian Bram de Jong, the actress Bridget Masland & the brand Double Dutch
PRESENTATION OF SOLUTIONS
(A) By the comedian BRAM DE JONG (VARIABLE-FEE CONTRACT)
| Case 1(based on last year) | Case 2(based on last year) | Case 3(based on latest season) |
# of seats(unit:seat) | Best seats:60%(700)seats=420Worst seats:40%(700)seats=280 | Best seats: 500Worst seats: 200 | Best seats= 500Worst seats:25%(200)- 50 |
PRICE | Best seats =17.50Worst seats= 15 | Best seats= 17.50Worst seats= 15 | Best seats = 17.50Worst seat = 15 |
INCOME | BEST SEATS:(420)(17.50)=7,350Worst seats:(280)(15) = 4,200Total 11,550 | Best...