Overview

Sally Soprano is a distinguished older soprano who has not had a lead role in two years. The Lyric Opera has
a production of Norma opening in three weeks, and the soprano who had been engaged to sing the title role
has developed a condition requiring surgery before the performance. The Lyric is eager to hire Sally, and the
trustees have authorized the business manager to offer up to $45,000 for the lead. Naturally, the Lyric, which
is a not-for-profit organization, would like the salary to be lower, if possible.

The original soprano hired for the lead was to have been paid $30,000, and the rather inexperienced secondary
soprano is being paid $14,000. (Industry practice is that lead roles receive about twice the amount received by
secondary role singers.) Four years ago, at the height of her career, Sally received $22,000 for the lead role,
but inflation and an increase in opera’s popularity have nearly doubled the salary scale since then.

Sally desperately wants this role, which could give her a chance at a forthcoming television special. She would
be willing to sing the part for nothing, except for the impact on future engagements and reputation. Her salaries
for secondary roles over the last two years have ranged from $10,000 to $18,000; more than a year ago she
received $12,500 for singing the secondary role in Norma at the Lyric. Last year, an inexperienced soprano
who sang the lead role is rumored to have been paid more than $24,000.

Confidential Instructions for the Lyric Opera’s Business Manager

You have been with Lyric Opera for three months. So far, things have been going well, but your negotiation
with Sally Soprano’s agent will be your most important assignment to date. You want to make sure that your
boss, the artistic director, is pleased with the outcome.

You met with your boss yesterday, and gathered the following information: The Lyric Opera is an established
institution in a major metropolitan area. Like most opera companies, it is a not-for-profit entity and is financed
by a combination of ticket sales, foundation and corporate grants, and income from a modest endowment. It
usually breaks even over the course of the year, with fairly good attendance in its 2,000-seat hall. Ticket prices
range from $18 to $55, with $28 a reasonable average for rule-of thumb accounting.

A production of Bellini’s Norma is scheduled to open in three weeks. The production is scheduled to run for
six weeks, with three performances per week. There are three sopranos in Norma. Norma is the high priestess
of the Temple of Esus and is secretly married to the Roman Consul, with whom she has two children. The
other two soprano roles are those of Adalgisa, the virgin of the temple, and Clotilde, the attendant to Norma.
The challenging title role is generally acknowledged to be a prize for a young soprano, although the age of
the character is not specified. The age of the children is also unspecified, but Norma attempts to kill them in
a rage over her husband’s infidelity. When the Lyric announced this season’s schedule more than a year ago,
Renata Risingstar was listed in the title role for Norma. Ms. Risingstar is generally regarded as a first-rate
performer, although she has not yet attained the popularity Sally enjoyed at the peak of her career. Three
weeks ago, however, the Lyric suddenly dropped Ms. Risingstar from its advertising for Norma. Although it
is not widely known (the opera wanted to hold off making a public announcement until the diagnosis was
confirmed), the reason for the omission is that Ms. Risingstar has developed a benign throat tumor that will
require surgery prior to the performance date. The Lyric has been unable to find any other good soprano who
is available for the dates of the performance. The soprano engaged for the secondary role (at a salary of
$14,000) knows the Norma role. She has a good voice but is a relative newcomer to professional opera and
clearly lacks the experience necessary to perform the title role well. The Lyric is therefore in a tight spot.
Cancellation of the opera would result in a loss of hundreds of thousands of dollars.

Fortunately, Sally Soprano, 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 to now, the artistic director has held her off, hoping to find a younger lead. Unfortunately, that now
appears impossible, and the artistic director is suddenly quite desperate to sign Sally. You have scheduled an
early appointment with her agent.
Sally Soprano has sung many times for the Lyric Opera over the years, but the last time she sang was more
than a year ago in the secondary role of Adalgisa, also in Norma, for which she received $12,500. Four years
ago, at the pinnacle of her singing career, the Lyric paid Ms. Soprano $22,000 for performing the title role in
Norma. That was regarded as extremely high at the time, justified only by the fact that Sally was at the apex
of her career and had a significant following, which has probably fallen off somewhat since then. On the other
hand, over the last four years, inflation and the increased popularity of opera have in general brought about a
near doubling of the average salaries of the top opera stars.

As a matter of policy, the Lyric does not generally disclose the compensation of its performers. However, for
negotiating purposes, you have been given access to the salary figures paid by the Lyric in recent years for
the title and secondary roles in Bellini’s Norma:

Although cases vary widely, as a general rule the Lyric tends to follow the industry practice of paying
performers in lead opera roles of this type about twice the amount received by singers in secondary roles.
Also, following the industry practice, the Lyric has always paid its performers a flat rate salary.

In general, the nonprofit Lyric needs to keep the costs of performances as low as possible. The Lyric’s average
house over the year is generally 85 percent. This is also the break-even point. Of course, there have also been
many sold-out performances, but the average is 85 percent, give or take five percent. Anything less than 80
percent attendance would cause the Lyric to lose $50,000 or more, and a house of 50 percent or 60 percent,
while unlikely, would be a disaster. (These kinds of figures probably explain why Ms. Soprano has had so few
offers for lead roles recently. While her voice remains fine, most operas are anxious to avoid even the smallest
chance of an off day.)

This year, Ms. Risingstar was to have been paid $30,000. In view of the emergency situation and the great
desire of the artistic director to obtain Sally Soprano, the Lyric trustees have authorized you to offer her up to
$45,000 should that be necessary. If she holds out for more than that, the Lyric will just have to use the
neophyte secondary soprano in the title role and hope that she miraculously rises to the occasion. (You would
probably pay her something less than double her secondary salary of $14,000 for that, certainly no more than
$28,000.) You should also bear in mind the potential adverse impact on future negotiations with other
performers should an unusually high salary for Sally become public knowledge.

The artistic director wants Sally, despite thinking that she is too old for the role. The director believes that
with proper makeup and a little luck Sally could work out extremely well. In any event, there is little
alternative. As it is, the late announcement of the title role may adversely affect box office sales. The artistic
director is hoping, however, for a favorable public response to the announcement of Sally in the title role.

Prepare for your meeting with Sally Soprano’s agent.