How Fine Print Could Kill Videogame Shows

Doug Mealy | 7 May 2009 21:00
Op-Ed - RSS 2.0

Example 4. If the show arbitrarily changes location or dates, and you can't attend, you're still financially responsible.

In previous years, such show changes were made in response to "Acts of God," but what's new for 2009 is the "Acts of God" clause seems to have disappeared from some Space Contracts. Without the "Acts of God" clause, show organizers now claim the right to change show dates and locations for any reason they choose, and you have no input. If you aren't available during those new dates, or if the show is rescheduled into direct conflict with another show at which you're already exhibiting, you can't get any refund - you're still on the hook for the full amount even if you can't be there. According to an Exhibitor Contract for another upcoming 2009 show, if the show organizers change, move, or cancel show dates, "you shall not be entitled to the payment of any resulting damages which you may have incurred." And that, my friends, means your entire show budget is at the mercy of the show organizers who make such decisions based on what's best for them, not what's best for their exhibitors.

Example 5. Show organizers can arbitrarily change your booth location and the footprint dimensions.

In the old days, we used to sign space contracts that specifically identified a booth number. In recent years this changed to buying a specific number of square feet without identifying a booth number. What's new for 2009 is that some Show Contracts are not doing either, and that's quite risky for exhibitors. Here's another direct quote from a Space Contract: "...the organizer is entitled to subsequently allocate you[r] booth space other than stated in the confirmation of acceptance, to change the size and dimensions of your floor space...without claims arising on your part." Translation: They can change your entire exhibit (size and location) - including moving you to a distant booth with a pillar inside - and you have no recourse. Can you imagine finding out at the last minute that your space has changed, and your booth won't fit? Or get moved to a larger space and you have to pay for the unwanted extra square footage? Or get moved to a different Hall?

Show organizers don't provide a deadline date in the contract. They can change your booth right up until the move-in date. Can you imagine trying to re-schedule all your booth meetings the day before the show opens?

Example 6. Fixed price floor space is being replaced with variable pricing.

Be sure to check the contract fine print regarding the actual cost of floor space. Until 2009, we used to pay a flat rate per square foot (or square meter) and that price was firm. Starting in 2009, some shows are selling floor space based on a variable price model. This means you pay a fixed price for the floor space, but then you will be invoiced for additional costs for any increases the show organizers experience. Specifically, they pass on to exhibitors their share of any higher costs incurred for increased venue costs, higher production and labor costs, higher taxes, higher energy surcharges, and any other fiscal charges imposed by the venue. This means several weeks after a show, you could have a surprise charge on your credit card to cover these surcharges, and you'll never know the amount until after the charge has been made.

Transfer of Liability from Show Organizers to Individual Exhibitors

The term "transfer of liability" means that as the economic noose tightens around trade show organizers they may change the "fine print" in the Space Contracts to transfer various liabilities from themselves to you as an individual exhibitor. Not all shows are doing this but the trend has started. This could, theoretically, change the entire scope of the trade show industry. The "transfer of liability" trend allows show organizers to announce a new show, sign up only a dozen or so exhibitors, then use the "under sold" excuse to cancel the show, and still make a profit. The profit comes from the signed exhibitors who are assessed their portion all the costs associated with canceling a show. The very real danger Exhibit Managers face in the next 12-24 months is that the "fine print" could now increase your company's financial exposure to levels that some CFOs might call unacceptable. Companies considering exhibiting at any of the major shows (E3, GDC shows, GamesCom, SPIEL, and CES as examples) between now and the end of 2010, must be sure to read the "fine print" carefully, During your contract review process, you may find yourself asking a legitimate question: Are we at the point where the financial risks now included in some Space Contracts outweigh the value of exhibiting at a show?

Doug Mealy is president of Online Marketing and Public Relations (www.om-pr.com) which has launched over 300 titles at 155 shows worldwide for 115 CEOs of game developer studios. You can reach him at dmealy@om-pr.com.

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