You’ve seen the headlines by now PSAV Acquires Encore. You may have also recently seen our article about the recent acquisition of Encore Event Technologies by PSAV. On this episode of Event Tech Podcast Will Curran of Endless Events and Brandt Krueger of Event Technology Consulting take a deeper dive into what this could mean for the events industry and AV companies. They share interesting perspectives from their vast years in the industry and insider conversations they have heard. Be sure to listen to gain a unique perspective on the controversial acquisition and what it could mean for the events industry.
Brandt Krueger: Hello everybody and welcome to The Event Tech Podcast I’m Brandt Kruger with Event Technology Consulting and joining me today is Will Curran from Endless Events.
Will Curran: Hello. Hello everyone Will Curran from Endless Events here ready to talk some tech.
Brandt Krueger: That’s right and so the big news over the course of the last couple of weeks as we’re recording this has been the announcement of the acquisition of Encore Audio Visual by PSAV. And Will, I don’t know about you but my feed absolutely exploded over the course of this week. I was on site when the announcement broke so actually the headsets practically caught on fire on this show because everybody was like, “Oh my God did you see? Oh my, God, did you see? Oh my, God, did you see?” And so yeah there was a lot discussion going on and we’ve seen a lot of discussion going on in the planner community about how this is going to affect.
Brandt Krueger: So we thought we actually had some other shows kind of in the hopper that we were going to do first but one of the advantages of doing this kind of fast and loose and a little bit less structured podcast format is we were able to kind of bump things around and address this one. So let’s get things out on the table. Will, tell folks a little bit about where you’re coming from so that they kind of know and then we’ll do kind of my caveats as well.
Will Curran: Totally, so I think obviously it’s really important to be really transparent for I know where my opinions come from. So for those who don’t know I own an AV company, a third party, out-of-house AV company called Endless Events. We’re a full-scale event production company. And we compete a lot with the PSAVs, the Encores of the world. A lot of our clients are deciding between us and the third-party provider or with us in the in-house I should say. So obviously I want to make sure that’s 100% clear before we get in. So you guys can obviously know where my thought process is going to go with this. Don’t be surprised if some of the things I saw and yeah, I just figure everyone should know that before we start this discussion.
Brandt Krueger: So take everything that Will says with a grain of salt or at least in that context.
Will Curran: Real quick, I do want to say I realize though too I do should mention that my big whole goal is transparency in the events industry is really huge for me. Whether you do actually use my competitor whoever it is, my biggest thing is I just want to make sure planners are aware of what’s going on in the AV world, understanding education about AV. So ultimately you may be thinking here, hey I’m going to come here as a witch hunt. But to be honest there’s many times where I actually tell clients, “Hey PSAV is going to be a better option.” So I want to make sure everyone knows that my first priority is actually helping planners in making their lives easier not just growing my company and making lots of revenue and money.
Brandt Krueger: Exactly. And that’s one of the things I wanted to mention as well is that you and I have been doing a session for a lot of industry events called the AV Smackdown where we talk about the benefits of using the in-house or using a third party, the pros, the cons. So we really kind of lay it all out on the line. And so we’ll be getting to a lot of those things here today as well. And just so folks know for me I don’t have a dog in this hunt and I’m an independent contractor, an independent consultant. I don’t make any more or less money on whether you use a third party AV company or an in-house AP company.
Brandt Krueger: And so I’ve always come from the standpoint that there’s a time and a place for either. So there’s going to be a time when you want to use the in-house. There’s going to be a time when you use the third party. So we’ve got that all out onto the table. We all know where we’re all coming from. All of the disclaimers and caveats are out there. So well, before we kind of get into this most recent acquisition. You guys actually did a really nice write-up at Hello Endless about kind of the history behind this. That things have been happening so fast in furious. So I kind of wanted to dive into that and just give folks a real quick overview of how we got to where we got to.
Brandt Krueger: And it actually goes all the way back to October 2012, I didn’t remember it was that long ago.
Will Curran: Totally, yeah time flies.
Brandt Krueger: Yeah, that PSAV announced that they were going to be merging with Swank and for those of you who remember Swank, Swank AV was a really nice in-house AV company. They were always very professional in my opinion. Always did a great job. Had nice gear. And so already back in 2012 is when PSAV acquired Swank.
Will Curran: Yep and it’s crazy how time has just absolutely flown and that I felt like that was such a big announcement back then and everyone’s going, “Oh my gosh. This is so interesting. So crazy.” And when we get into a couple more down the timeline you’re going to see this was the start of it all.
Brandt Krueger: It really was and what’s funny is we’re still feeling kind of the reverberations of that acquisition even still today. That you can still many times when you’re dealing with an in-house company, you can kind of get a vibe. Oh, this used to be a Swank property. That there was something about their level of customer service, something about their way of approaching things that you can still to this day even though they’ve been relabeled as PSAV. You can still kind of tell, that was a Swank property and sure enough, I’ll kind of ask every now and then, “So did you guys used to be Swank?” And they’d be like, “Yeah, we did.”
Brandt Krueger: So it’s kind of funny that you … when we talk about these mergers and when we get into the current ones, the more current ones. I just want to kind of keep that in the back of people’s minds that it’s not the end of the earth. It’s not … These crews, these companies will be absorbed but at the same time perhaps maybe we’re seeing the absorption of some of the good things as well. So let’s kind of keep that in the back of our heads. So January 2014, just two years later was the other kind of bombshell announcement when Goldman Sachs announced that they were going to acquire PSAV. And that also feels like a lot more recent than when that happened.
Brandt Krueger: But I remember that kind of being blowing up the headsets as well when we were on site that holy crap, Goldman Sachs is buying this AV company and there was a lot of speculation at the time that, oh man, they’re going to jack up the prices and they’re all going to be all about profit and it’s going to be all about just taking advantage of these things. And we didn’t necessarily see that but let’s put a pin in that and come back to it. And just keep going with the history a little bit.
Brandt Krueger: So that was 2014. 2015 they acquired American Audio Visual.
Will Curran: Which is local to my Phoenix market. So I remember when they bought American Audio Visual everyone was like, whoa, that’s crazy. They’re just in Arizona. Why just that one market but obviously Phoenix was really important to them.
Brandt Krueger: Yeah, clearly saw it as being worthwhile acquisition. And then 2016 they acquire Southern Audio Visual. Let’s see that was mainly luxury hotels, key markets. Let’s see “the addition of SAV is an important step towards PSAV’s goal of being the ultimate local resource for corporate association and event planners around the globe.” That’s a mighty nice press release. October 2017, sometimes I wish I could do dramatic readings of press releases.
Brandt Krueger: October 2017, PSAV acquires Hawthorn Theatrical. One of the biggest live event production companies in the UK-
Will Curran: That’s when they started kind of moving start all over the pond and starting to take over some international properties.
Brandt Krueger: And then now just let’s pay attention to that timeline here. So it was 2012. 2014 so two years later. 2015, one year later. 2016, one year later. 2017, one year later. Now we’re into 2018 PSAV acquires Hargrove which was one of the biggest kind of mainly East Coast is my understanding. Experiential events and production companies. They do massive stuff. I remember when we were doing ads for Hargrove on the GatherGeeks Podcast, when I was on there. And it was insane the amount of stuff that they were doing. And that’s January 2018. November 2018 they acquire concise-
Will Curran: To focus on apps.
Brandt Krueger: Yep. And June 2018 was when it was announced that they were acquired by Blackstone. One of the largest investment firms in the world. October of 2018 they announce that they acquired FMAV, one of Canada’s largest Audio Visual and event technology companies. We were just talking with a bunch of those guys up in Edmonton for the Go West Conference. And now here we are finally January 2019 where they’re announcing Encore Event Technologies. And man, that’s quite the pattern of acquisitions.
Will Curran: Totally. Well what’s
Brandt Krueger: Go ahead.
Will Curran: I was just going to say. I think what’s crazy is that for people to know too as far they’ve been just gobbling up companies but what is interesting is that Encore is its own company but it was owned by Freeman, a larger company. So they said we’re going to buy this entire division. To say we want your business basically that you’re creating, which Freeman created so that way they could service their AV for all these larger events that they’ve already had. All the exhibition set-ups for and everything like that.
Will Curran: It’s just wild that they bought and entire division just to say, hey, Yoink we want this but obviously one of their largest competitors as well.
Brandt Krueger: And I think that’s really what it boils down to for me is it’s one thing to acquire smaller companies because you want to extend your reach, right? And that happens. So you buy the smaller companies because you want to get into this market or that market or that kind of thing. Totally understand that but when you are suggesting buying out your single largest competitor, that’s when I start to get nervous. And again, I don’t have a dog in this hunt, right? I’ve always been a champion of using whatever makes sense for you.
Brandt Krueger: Yeah, the in-house AV has a tendency to get ripped as being more expensive. And they tend to be more expensive. And the analogy that I’ve always used and Will you’ve heard this a thousand times is that’s the same reason that you can go down to the lobby store and get a candy bar for $8 right.
Will Curran: Yep.
Brandt Krueger: Yeah, sure. You can go out the front door. Go down the street, find a gas station and buy that same candy bar for a dollar. But it’s getting close to bar time and I really just want a snack and head back to my room and it goes back on the master account and I can just sign for it and nobody will know that I spend $8 on a candy bar by the time my expense report rolls in. So it’s convenient. You’re paying for convenience. You’re paying for the in-house AV that is there every day. They know every nook and cranny of that space. They know which outlets you have to jiggle to make work just right.
Brandt Krueger: They’re the ones that know those spaces. So you’re paying for the convenience of their knowledge. You’re paying for the convenience of having them there in case you need something at the last minute. So I’ve always been a proponent of using what makes sense for your event. Sometimes it makes sense to bring in third party. Sometimes it makes sense to bring in in-house and that’s the whole idea behind AV Smackdown. But man, Will, I get so nervous when I see something like this. When I see a major player offering to buy another major player.
Brandt Krueger: and as happy as I am that T-mobile is potentially buying Sprint. They’re still sorting that out just because I want more network and all that kind of stuff. That makes me nervous too. I’ve been talking for a while you go.
Will Curran: No, you’re good. You’re good. I think consolidation makes everybody a little bit afraid. I think first people it makes afraid is the competitors because they’re concerned of the “m” word, which is “monopoly” right? But then I think that it also makes some consumers also afraid as well because they’re worried that, hey, when there’s a monopoly it also affects the consumers as well because they have this price fixing. They have the ability to justify any sort of mix in that. And what’s interesting about this is I definitely want to use the word m monopoly and think, oh my gosh, they pretty much own every single property in-house.
Will Curran: There’s obviously little properties here and there. And not necessarily little properties but properties all over the place that have one vendor doing it. But there’s no one who is like, I own a big chunk of the market right here. I own a big chunk of this market here. I own all of L.A., all of Chicago. So what that leads to is a little bit of a scariness but what’s interesting is that while they’re creating a monopoly in the in-house world where they’ll be in property. But there’s obviously still the ability right now at least for you to bring a third party vendor in.
Will Curran: So I think while companies like Endless exist and all third party AV companies. There will be less pushback on this being a true monopoly and being really scary but more so what does this mean for planners? And I think that’s a great conversation to have and we kind of in the article, which we’ll post in the show notes. We’ve surveyed a bunch of awesome planners and said, what do you guys think this means for the future.
Will Curran: And got some really really great opinions on what it looked like. But I think for most part, I think this made everyone just raise an eyebrow to be like, what this just happened and it happened so quickly that was kind of FMAV was like, wow, now they basically got Canada now. Okay cool. And then it was, oh man, they just bought Encore. That’s the number two guy that we all go to in the secondarily. So what was some of the stuff that you were kind of hearing from planners.
Brandt Krueger: Well and then that’s just it. And kind of message boards and things like that. Unrelated to this news I was already starting to see people saying, “Wow, it just feels like hotels and venues and in-house AVs are bending a lot less. I mean we’ve always been, both you and I have been proponents of the idea that, hey planners you guys have the power. You can negotiate these contracts. You can say, “Look I don’t want to pay third party, I don’t want to pay fees for bringing in a third party.” You’re not going to rake me over the coals for rigging points. You’re not going to do any of these.
Brandt Krueger: All of that was negotiable. It’s literally what I said in all of my sessions. And you’ve done some great PDF downloads and things like that, white paper stuff. On hey this is how you negotiate AV, we’ve done Whiteboard Wednesdays on how to negotiate AV. I think those are coming up.
Brandt Krueger: And so we’ve been telling folks for years now you’ve got the power to do it and what was scaring me about these conversations was that senior planners, planners that know better. Planners that know how to negotiate. Because a lot of people they just don’t know that they can negotiate it right. They’re too busy. Well the hotel says I have to use the in-house.
Brandt Krueger: So not those people, I’m talking about people who do know better. People who know they can negotiate these things are aware of all the sticky points. So they know about wifi and rigging points and power charges and all that kind of stuff. They’re being told, no. And that’s the thing that really starts to worry me is that we’re already in a scenario where they’re being told, no by the in-house AV company, by the hotels and venues to say, no. This is non-negotiable. You will use the in-house AV company or you won’t come to our property.
Brandt Krueger: Okay great. Walk away then. The problem is more and more properties are doing this. So there’s less and less properties that you can walk away too and that’s what scares me piled on with this news. So if you take that conversation at face value and then you pile it on with this news that now we’ve got PSAV potentially eliminating their biggest competitor. What’s the incentive to negotiate for planners? What’s the incentive to reduce those fees?
Brandt Krueger: We used to see if you use the in-house, we’ll give you a 30% discount. Well it was a really high rate. So they could easily give the 30% discount. That was an old trick, right. Honestly, I’m looking at a contract right now where the contract literally says, and this why I won’t go into the details but the contract literally says the in-house AV company is the exclusive provider of audio-visual services in our property-
Will Curran: Haven’t seen that in years.
Brandt Krueger: Exclusive provider. And the venue is being nice and letting us have them be the exclusive provider of the Breakout Sessions. We are being allowed to bring someone in. But it’s in the contract is exclusive provider and that was non-negotiable. Maybe it would have been if we had gotten involved earlier because it was one of those things where the in clients signed the contract but so who knows. But what I’m hearing from these senior planners is that’s more and more the answer is no.
It’s not negotiable and so exclusive provider. That makes me nervous. Potential monopolies that makes me more nervous. So it’s a shakey time right now.
Will Curran: It’s absolutely a shaky time for sure. I think we’ll see where the future of what this looks like. I think my biggest concern is that if they continue to make acquisitions like they have in the past which was focusing on acquiring properties and just getting more sales so that way they’re in front of more people. Things like that. That’s totally fine because then there’s that choice. I think where it become scary is when they start to then move sideways more to becoming, for example, they moved into probably 50% of the properties and now they’re the sole controller of wifi now.
Will Curran: Okay and then sometimes they’re electrical as well and the more and more I think that venues that get consolidated under one vendor, the more afraid of that I become as well. However, I think there’s also … as much as we want to talk about fear there’s also this really interesting opinion I’m seeing from people which is this might also means something better for planners and actually might be great. It is this idea that if they have so much market control venues for example. Marriott says you know what? We’re realizing we’re losing customers because no one wants to work with our in-house vendor.
Will Curran: Okay, how can we maybe make this happen. Let’s adjust how we’re doing our commissions or maybe we open this up and get a … make it so we’re not working this large vendor across all of our properties instead we’re only working with some. “Hey maybe we just need to get rid of these restrictions altogether.” This kind of could create a radical shift to bringing the venues back into power to focusing on their customers rather than just the commissions. Obviously, it will be up to then the venues as well and the hotels to be able to say, hey, we want … we’re gonna see this change. We’re going to lead this change.
Will Curran: So I guess we’re now looking to you venues, help us make this not be the worst thing in the world. But you know again it could go the complete opposite. They could say, well this is great for us. Now we have the same vendor across all of our properties. Not only in the U.S. Not only in Canada. Not only in Mexico but in Europe and Asia and oh my gosh, look worldwide control really, really fast. You can go either way but I like to think as optimist and hope the best I think for planners and the world out there I think at large.
Brandt Krueger: And that’s what I wanted to do is before we kind of wrap up on this one. I did want to kind of bring it up. And I want to be clear. I’m not saying that PSAV’s evil that they’re gonna come in and they’re gonna raise their rates and all of this kind of stuff. That’s what they said when they started making these initial acquisitions and when they were bought by Goldman Sachs. That was the doom and gloom. Was like, oh, they’re just going to come in and go nuts and raise all their rates and go crazy.
Brandt Krueger: And I don’t think you know that PSAV is evil in any way shape or form. I think though any time you’re reducing competition there’s less incentive to start out with your most fair rates to negotiate things. If I don’t feel like you’ve got a lot of other options. And I’m less inclined to negotiate with you. So to be clear I’m not saying that they’re coming in with some kind of evil intent. I’m just saying that with reduced competition there’s less incentive to negotiate.
Brandt Krueger: It’s one of the reasons that hotels aren’t negotiating as much and this is no secret. Mike Dominguez from MGM has been saying this literally for years. That right now hotels are prioritizing their transient business. They’re prioritizing the people that are just coming and staying there and there’s not as much incentive for then to negotiate away all of their stuff to planners.
Brandt Krueger: So this is something that has been brewing for a while. And so now you’ve got hotels with not very much incentive to negotiate-
Will Curran: Oh my gosh. I tried to bring it happy and you made it…
Brandt Krueger: I was trying to bring things back up and it didn’t work. I was trying … Yeah, I know I didn’t mean to do that. So here’s what I’ll say, when PSAV acquired Swank, a lot of these same doom and gloom and things were saying. And like I said , you can still tell which are the Swank properties, right? Because it was about the people. So the same thing is going to be here. You’re gonna have properties that were Encore properties that were good properties.
Brandt Krueger: You’re gonna have properties that were Encore properties that were bad properties. All of these properties. I’ve always often said that another reason that the in-house, like the large ones, like PSAV get a bad wrap is because they are everywhere. And so it’s very easy to … if you have a bad experience with random Joe Blows AV company in Enid, Oklahoma.
Will Curran: Poor Joe.
Brandt Krueger: Okay great. You never use Joe’s AV Company out of Enid, Oklahoma again. Sorry Joe, you actually do quality work. But every planner that is doing multiple events in hotels has at one point or another worked with PSAV and so I’d say you’re just as likely to get a bad crew. Just as likely to get bad gear in house as you are with a third party. Problem is that’s all under one banner. So to bring things back up again, I don’t think PSAV’s evil. I don’t think they’re just gonna come in and blow everything up and start raising rates like crazy.
Brandt Krueger: I do however see an overall industry trend that is worrying. A trend of buying out potential competition. A trend of non-negotiation. So I don’t think this particular thing is necessarily evil or anything like that. But I’m worried about the overall industry trend. So let’s put it that way. That being said, you’re gonna have good crews everywhere. You’re gonna have good crews here and there. Encore basically owns Vegas. So PSAV of course. They’re now going to have a major play. So why wouldn’t they want to acquire someone that’s going to get them more reach and more global reach.
Will Curran: One of those things to put my kind of final thoughts on it.
Brandt Krueger: That’s my final take on it. Go ahead.
Will Curran: In our AV Smackdown presentation that we do all over the world basically now at this point is that it ultimately comes to you as a planner to do two things. A, to know you have the negotiating power. B, to bring your AV company in earlier and have these discussions before you book the venue. So it’s not tied to the venue conversation or you don’t get forced into anything. And then C, is just know that once you’ve brought your AV vendor in as someone you can trust and partner with.
Will Curran: Whether that’s a PSAV. Whether that’s a company like Endless. Whether it’s Joe’s AV Company. You need to be able to bring them in as a trusted partner as you’re picking your venue. I literally every week, it seems like I’m going to set up a Slack chat that every single time we said, man, I wish I had known that when they were booking the venue. Or you know something along the lines of that I get handed these ballrooms and they go, yeah, we want to do the stage in the round.
Will Curran: And I said, I love doing it in the round. Let’s do it and we look at it and go, this room is not possible to do in the round. And you as a planner don’t know, oh yeah, based on this rigging plot and where everything has to be and where the electrical is and based on fire lanes of where aisles need to be and all these small things. We could look at it and be like, no, you shouldn’t do this venue and you’d be like, oh, okay, let’s go to another venue then. Same when it comes to your choice of AV company.
Will Curran: Definitely bring the people in. It should be a conversation brought together. Not just always step a, step b, step c, step d and I don’t know of a single vendor whether AV or not that doesn’t say, hey bring us in the conversation later. We want to talk to you later. Everyone says talk to me earlier.
Brandt Krueger: Way too early. You shouldn’t even need to be talking to her. Never, never. So 100% agree. 100% agree. Engage your AV companies, engage your production companies as early on in the process as possible. Even if you don’t know for sure you’re going to use them. That was always the thing that drove me nuts is we’d say, hey, just let us look at those contract and we’ll try to help you navigate them. Well, we don’t know if we’re going to use you. We have to get three bids.
Brandt Krueger: It’s okay. We would rather help you and help who it is that winds up eventually getting the business do a better job than to get stuck in the position where you say, you get handed the ball later and say, here you go. So absolutely, engage it. And just to round it out. I know I got a little doom and gloom in there in the middle but you do still have the power planners, you do. So planners out there if you happen to be listening to this. You do still have the power for now. So take advantage of it.
Brandt Krueger: So negotiate where you’re able to negotiate. Bring in your AV folks to take a look at the contracts. Look at your contract specifically. This one where the exclusive provider thing was like one sentence on page 25 of the contract, the 50-page contract. So really got to look at them with a fine tooth comb. You do still have the power to walk away. Don’t get married to the site. Don’t get married to the venue first and then decide oh okay, we’ll try to negotiate this stuff away. It’s just like buying a car. So remember you have the power to walk away and when you do get great service and when you do find those venues that are willing to negotiate with you and those AV companies that are willing to work with you and work with your budget and negotiate. Share that information.
Brandt Krueger: So when you’re talking to your friends at industry events and things like that. Be sure and say wow, I had this great experience with this hotel and the guy was willing to work with me and we were going to come in at five o’clock in the morning and they didn’t charge me extra for overtime and that kind of stuff. Share those experiences. Share the power. That’s right. So Will any closing thoughts?
Will Curran: No, I just want to make sure everyone knows. I don’t pay Brandt to say this stuff. I agree with a lot of what he says 100% but this is just the general option that a lot of people are also putting out there. I know that obviously Endless sponsors this podcast but hopefully this doesn’t seem like an ad for in any way for third party companies. This is just a matter for education and hopefully everybody knows. I just want to make sure that everybody thinks about that while they’re doing.
Will Curran: I just think to myself, man, I agree 100% with this but whether they had bought their biggest competitor whoever it is. I would always just wasn’t to share the news and for example, you want to take a look at the article that we wrote on PSAV acquiring Encore Event Technologies. Take a look at that article and we’d love to see what you think and see how planners are overall looking at this entire situations.
Brandt Krueger: And we’ll drop that into the show notes and make sure that people have links to that as well as some of the other materials that both of us have published over the years on negotiating AV contracts. And again, I don’t have a dog in this hunt. I’m not … I still believe that there’s a time and a place for both. So I think that’s a good way to leave it there. That there’s a time and a place for both models. That there’s advantages and disadvantages to both models. I’m just a little nervous about some of the stuff that I’m seeing as far as trends in the industry.
Brandt Krueger: So with that I think it’s time to wrap up another edition to the Event Tech Podcast. We want to find out. This is still pretty new. We’re loving doing it. It’s something that I’ve wanted to do for a long time. So it’s really exciting for me to kind of have this podcast. Thanks again to John Federico for letting us kind of take up the mantle of Event Tech Podcast and bring it kind of into our world, and our vision of what we think it can be moving forward. We want to find out though what you think as you start to listen to this new version of the podcast. Shoot us an email. That’s the email we’ve got set up at the time. We will read it. We will get back to you.
Brandt Krueger: We will let you know. So as you want to find out more topics and find out what maybe we’ve got coming up in the future that’d be a great way to reach out. Or reach out to of course, on Twitter and we’re on all of the social networks.
Will Curran: All the socials. All the Twitters.
Brandt Krueger: All the socials. All the Twitters. So I’m Brandt Kruger of Event Technology consulting. He’s Will Curran from Endless Events and we hope to see you next time on The Event Tech Podcast.
Outro: Thanks again for listening to The Event Tech Podcast. Be sure to rate and review us on your favorite podcasting app. Also, be sure to head to Eventtechpodcast.com and leave us a comment about this week’s episode we’ll see you next week on The Event Tech Podcast.
Resources
What did you think when you saw the headlines “PSAV Acquires Encore”? Comment below and let us know!
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