Exhibition joint ventures
24-Oct-11by Annie Byrne
When breaking into a new country, market, or getting a launch show off the ground, competing companies often look to set aside their differences and partner up in a joint venture (JV). A partner can give you the local market nous, or operational support you lack to establish an initial presence, while also providing financial capital or well-established brands that can enhance your existing portfolio.
Mack Brooks chairman and CEO Stephen Brooks knows something about JVs. In one of the biggest partnerships to be announced in 2011, Mack Brooks joined forces with Emap to take the UK-based company’s highly prized exhibition brands into international markets. According to both parties, Mack Brooks’ international expertise will help Emap break out of its UK-centric footprint.
“I think the two most important things to engender when creating a JV are as follows: First, that there is equality between the two parties,” Brooks explained. “If one party is contractually junior to the other, it is not a real or effective partnership in my eyes. Second, both parties need to be clear on why they need each other, now and in the future.” Control and autonomy
However, before you try to work out which partner to choose you need to make sure a JV is the best possible track to follow. MD of Single Market Events Tim Etchells often prefers the licence deal, which gives one organiser a greater amount of control and autonomy.
“You have the right to use the name and all the marketing collateral, for example the logo and website images of a show,” he said. “The benefit of a licence deal is it’s linked to turnover. This way, you don’t have a partner saying you shouldn’t spend on marketing. That’s why I personally prefer the licence route. I just pay them a percentage of turnover, so if I lose money it’s my concern, not theirs.”
Etchells pointed out the combination of the varied strengths of two companies can make breaking into a new market more efficiently and successful. One party could have the infrastructure, while the other has the market knowledge.
As important as it is to know when to enter a JV, it’s just as important to recognise when it’s time to part ways. Etchells compares a JV to the space shuttle: It uses the power of an external fuel tank to leave the atmosphere, but once it’s fulfilled its function the tank is jettisoned and the shuttle continues on its own power.
“When one side isn’t bringing anything to the party anymore it’s time to part ways,” he said, adding that a good way to facilitate this is to include a three-year option for one party to buy the other. “Getting a lawyer that understands the event business to draw up your contract is a good idea,” Etchells said. “You need to trust each other and there needs to be a like-mindedness. There are different cultures in the way you run your business. We are fairly lean and mean with our overheads but if there was a company that wanted higher overheads there would be tensions.” Trustworthiness
While autonomy is important, BBC Haymarket Exhibitions MD Laura Biggs pointed out that it can only be achieved with trust.
“We’ve had over 20 years of experience bringing BBC brands to life so we have the autonomy to deliver the shows, and we have the respect and understanding from our colleagues at the BBC to trust we will deliver a first-class production every time on their behalf,” she said.
Collaborations between BBC and Haymarket include the BBC Good Food Show, BBC Gardeners’ World and BBC Good Homes Live.
With both parties bringing different strengths to the table, a shared vision and open channels of communication, a JV can be a strong leading edge for companies to cut into a new region or market. Just be prepared for a clean break when the time comes.
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