Two of the biggest arts presenters in the region the Sacramento Philharmonic and Sacramento Opera have decided to merge operations, effective July 1.
The move, which culminates two years of merger talks, brings together two arts nonprofits that were deeply affected by the economic downturn and the sea change under way in attendance.
The new organization will operate under the tentative corporate name of the Sacramento Region Performing Arts Alliance. The merger forms one board of directors from the two current boards, effectively turning the two nonprofits into one.
The decision was made at a meeting Tuesday of both boards, with each board voting unanimously to merge, said Jane Hill, interim executive director for the philharmonic. Each organization will keep its artistic identity and name. "They will be like subsidiary companies," said Hill.
The merger is intended to strengthen the economic sustainability of both organizations. The SRPAA will operate on a $1.8 million budget in 2013-14. That budget is lower than the present combined budgets of both organizations of $2.1 million.
"We have two artistic fields that are going through huge changes that are macro changes and that are not just economic but societal and cultural," said Hill.
Both organizations have seen plunges in subscription ticket sales and corporate donations.
At the 31-year-old Sacramento Opera, a company that canceled most of its 2011-12 season due to financial shortfalls, subscriptions are down by roughly 150 this year.
"There is a move from subscription tickets to single-ticket buying, and that is a 'white-knuckler' for us since single buyers are last-minute buyers," said Rod Gideons, general director of the opera.
At the philharmonic, which has been on the scene in the region for 14 years a lag in corporate funding was cited as a major factor in it nearly closing last spring due to a $150,000 shortfall. The orchestra issued an emergency plea to the community to raise the funds and the current season was saved, but the corporate funding issue has remained.
Such mergers are still rare in the arts nonprofit world, but are becoming more common. One of the first took place in 2002 when the Utah Symphony and Utah Opera merged. That merger proved controversial and was cited as contributing to annual deficits that lasted until 2006.
Last year in Ohio, the Dayton Philharmonic, Dayton Opera and Dayton Ballet combined to become the Dayton Performing Arts Alliance. Also last year, the 24-year-old Oakland East Bay Symphony merged with Oakland Symphony Chorus and the Oakland Youth Symphony.
The mergers bring benefits and pitfalls.
"Sometimes there is the belief that there will be major cost efficiencies, and there has been somewhat of a tendency to overemphasize what that benefit is," said Jesse Rosen, president of the League of American Orchestras, the lead advocacy organization for the nation's orchestras. "But there will surely be some overhead savings."
It is hard to tell what the savings will be for the SRPAA, since overhead costs have already been reduced, with both organizations down to skeleton staffs and sharing some administrative costs.
"On the upside, you have a certain amount of overlap of audience members rather than having them divided," said Marc Scorca, president of Opera America, an advocacy organization.
"That's a potential advantage having one marketing effort to the universe of people who like symphony and opera," Scorca said.
However, it is well established that opera and symphony audiences are two different animals both in performance preferences and donation behavior.
It is not a given that opera donors will give to an organization also involved in symphonic music and vice versa, said Scorca.
"You have to maintain a level of philanthropy through a merger so that resources are not diminished so that one plus one equals two, and not one and a half," he said.
Brand loyalty and art form preferences are strong factors, said Scorca.
"One of the things that was learned in the Utah merger is that there was not necessarily a loyal following for the Utah Symphony-Opera there is a loyal following for the Utah Symphony and one for the Utah Opera," Scorca said. "They had to separate the brands more clearly within the merger after a year or so."
Currently, there is a 7 percent overlap in ticket-buying between the philharmonic and opera. The tough task of getting audiences to cross boundaries is not lost on Hill.
"Research shows that traditional audiences for these art forms have little crossover," she said. "In fact, opera audiences tend to cross over with visual arts institutions. We have no illusions about that."
But, Hill said, just because it has been true doesn't mean that it will always be true.
He believes that offering reduced-price tickets on some seats and the possibility of allowing patrons to blend opera and symphonic performances on a single subscription will be key to changing audience behavior. "This can lead to new audiences that don't define themselves as 'opera' or 'orchestra,' " she said.
It remains to be seen how the merged organization will accomplish the tricky job of audience development, given that marketing budgets and staff will remain small.
The organization is also without a leader, as neither Hill nor Gideons is vying for the top job of general director. A search is under way for a general director, with three candidates to begin interviewing soon, said Hill.
A big plus for the merger is the continuity that current Sacramento Philharmonic music director Michael Morgan will provide. Morgan, whose résumé includes leading Festival Opera in Walnut Creek, will be the music director of SRPAA. He has already conducted two Sacramento Opera productions.
"Here you have kind of a symmetry of artistic direction and leadership around Michael and having that piece in place matters a great deal," said Rosen of the League of American Orchestras.
A change in programming focus for both organizations will be one of the biggest shifts. The expectation is to parse those changes over the next three seasons, said Hill.
Although the 2013-14 season is not yet finalized, audiences can expect a strong focus on family programming. The orchestra will offer three concerts, with one of those expected to be a pops concert.
Embedded in the plans is a new Sacramento Opera partnership with Sacramento State's music department with the two working together on an opera production in September and a full opera in November produced by Sacramento Opera.
"We see a hole here for classical programming for families and young people," said Hill. "We have a huge hole in marketing to the millennial age group (young adults) who are now forming their cultural habits for their families. If we don't find a way to reach them, where will our audience be in the future?"
The combined organization is looking at offering performances in less formal, nontraditional settings.
The newly formed Sacramento Region Performing Arts Alliance projects a $1.8 million operating budget for 2013-14.