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Alltel Pavilion Report

In: Business and Management

Submitted By umbrells
Words 1794
Pages 8
Executive Summary
In order to solve the problem of preparing an accurate budget and negotiating fair and reasonable contracts, the requested CVP analysis was performed. Although ALLTEL is aware the current system for negotiating contracts leads to budgeting troubles, this report details the exact shortcomings and provides recommendations to improve it, including a new system for paying the performing talent.
The Pavilion has goals other than making the highest revenue possible, although they are still looking for 5% annual growth. ALLTEL wishes to achieve its desired earnings while maintaining a competitive edge against its competitors in the area. Being the only pavilion with outdoor seating gives it a unique advantage, but it needs to be careful not to underpay its performers or it will drive them away. Looking for a way to budget accurately, a target increase point was set to give a base to work off of in order to develop a formula. This increase point helped to find what price Alltel will break even from, and can further the process to find a price that will bring a profit. Included in the appendix is the formula used to find the break-even point. Modifying this formula can help to calculate the number of tickets that need to be sold, the price of the tickets, or the highest fixed fee that can paid for a show. These numbers vary widely based on the entertainer and the contract type used. Through using this formula, ALLTEL can determine specific numbers needed to earn its desired 5%. This percentage, like all the variables in the equation, can be altered within the formula. Overall, using the formula provided will not only help ALLTEL to prepare accurate budgets, it will also provide a useful tool in negotiations that will leave both parties satisfied and may even give performers extra incentive to return in the future. Explanation of Procedures
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