Union Makes Big Gain in First Half

Controller's Report

Volume CIV, No. 10October, 2004

Jon Bogert

For the six months ended June 30, 2004, Local 802 realized a gain of $176,735, compared with a gain of $52,209 during the first six months of 2003. The audited financial statements for the six month period appear elsewhere in this issue.

The year-to-year improvement in profitability of $124,526 was the result of an increase in revenues of $252,313, or 10 percent, offset, in part, by an increase in expenses of $127,787, or 5 percent.

The 2004 revenue increase was due to a substantial increase in work dues of $292,975, or 13.5 percent. It is estimated that approximately $250,000 of this increase was due to the work dues rate increase which went into effect Jan. 1, 2004. Excluding the effect of that rate increase, work dues on Broadway increased approximately 6 percent in 2004 over the comparable period of the prior year; concert steady engagements increased 8 percent; and recording increased 2.5 percent. On the down side, concert single engagements declined 18 percent; and other single and steady work declined 20 percent.

The decline in other income in 2004 was the result of market interest rate fluctuations which caused unrealized investment losses; a reduction in advertising revenue in Allegro; offset, in part, by advertising revenue from the biennial publication of the membership directory.

With respect to expenses, salary and benefit increases in 2004 for Local 802’s employees amounted to $72,759, an average of 4.1 percent. In addition, provision was made in 2004, in accordance with the bylaws, for severance pay for the union’s newly-elected officers, amounting to $97,500. Severance pay accrued in 2003 amounted to $11,500. Also in 2004, repair and maintenance costs of $39,358 were incurred to upgrade the headquarters building.

Public relations expense in 2004 amounted to $125,532, an increase of 39.5 percent. This increase was the result of spending in 2004 for an ongoing public relations effort, whereas in 2003, the live music campaign was suspended following settlement of the Broadway contract at the end of the first quarter.

Offsetting the foregoing expense increases, in part, was a decrease in strike expense of approximately $110,000, as there was no event in 2004 comparable to the Broadway work stoppage in 2003.