Magazine article Folio: the Magazine for Magazine Management , Vol. 40, No. 11
A 2008 white paper from media banker DeSilva & Phillips and AMR International characterized events as the "star of old media." However, as print continues to Idecline and digital often struggles to live up to the hype, events are more than just the star of old media, offering higher profits than print and far higher revenue than digital. Many b-to-b publishers make or break their fiscal season depending on the performance of an event.
In a Forlo: article earlier this year ["Where the Dollars Are Going in B-to-B," May 2011] BZ Media CEO Ted Bahr said he's chosen to "throw more money at face-to-face events where you can build a brand for your trade show or conference. Successful event brands often have a high barrier to entry, can survive Internet disintermediation and have excellent margins. BZ Media will get more than half of its revenues from shows in 2011."
Events are a proven entity, according to Bahr. "We have found that events are a relatively low-risk investment that, if they work, can be very profitable," he adds. "Unlike many other media which have been destroyed or at least greatly altered by the Internet, face-to-face events have not been affected as dramatically as long as there is high quality content."
While Hanley Wood struggles with reports of an impending debt reorganization and the prospect of closing several magazines (CEO Frank Anton last month said the company's three core brands--Builder, Architect and Remodeling--will remain safe), the company is seeing growth in events and custom marketing and Anton predicts that "almost all of the shows will outperform 2010."
In a joint survey with FOLIO: sister magazine Expo, we asked media companies about the role of events within their organizations, ranging from profit margins to new launches going into 2012 to how virtual events and "hybrid events" are best used.
EVENT M&A: MULTIPLES DOWN
Eighty-four percent of respondents say they haven't acquired an event in the last 12 months, and 69 percent say they have no plans to acquire events over the next year [Charts 2 and 3, page 33].
In its 2011 "Merger and Acquisition Prospects for Media, Marketing Services and Marketing Technology Firms" report, media banker AdMedia Partners asked prospective buyers what EBlTDA multiples they would be willing to pay for select media properties ranging from print to digital to events. For exhibitions, trade shows and conferences, 5x was the average range given, up from 4x in 2010 (but down from the 7-10x range prospective buyers were willing to pay between 2005 and 2008).
Meanwhile, there were 18 acquisitions of event companies worth $371 million in the first nine months of 2011, compared to 18 deals worth $109 million for the same time period in 2010, according to media banker the Jordan Edmiston Group. Much of the value increase was led by the $173 million buyout of George Little Management, the U.S. trade show platform of Daily Mail & General Trust, by publishing veteran Charlie McCurdy and Providence Equity Partners.
"I've had extensive experience in what has come to be called the niche media space," McCurdy told Expo Magazine in October. "Early this year, as I looked out on the terrain as to where opportunities and risks are, I continued to like the business-to-business media space in part because the depth of information that is available regarding the activities of its audiences, as compared to consumer media. And I think that's a key area of differentiation--the 'decommodification' of what a media firm can offer marketers."
And within b-to-b, events remain especially attractive. "The trade show business was impacted by the recession as everything was, but it does not have the obvious disintermediation challenges that print has," McCurdy said. "And digital and data services, properly employed, should have good growth opportunities ahead. …