Comdex Operators File for Bankruptcy

VileScum writes "According to this article in The Australian, Los Angeles-based Key3Media Group, the company operating the giant Comdex trade show, filed for protection from its creditors yesterday in the United States Bankruptcy Court. Does this mean I have to start buying cloths again instead of getting them at trade shows?" Also see a story in The New York Times. Concerns of bankruptcy were voiced last November.

Comments

cloths?

[jd81eldo]

I got a few free shirts at Comdex, but I never saw a booth giving out free cloths

Re:cloths?

[K8Fan]

Most of my T-shirts are from trade shows. Now I just need the booth weasles to start throwing pants out to the crowd. Some socks and underware would be nice too.

This is just a protective move

[Hairy_Potter]

to protect them against an incipient class action lawsuit by inexperienced geeks who were tramautized by picking up "girls" in Las Vegas with large Adam's Apples during the last Comdex.

Get your clothes at Adultdex instead

[YeOldeGnurd]

The sex industry is recession-proof. I'm sure Adultdex isn't going under.

Oh, but I guess they don't do clothing there, do they. Darn.

Comdex Memories

[kahei]

Long ago, before I had a Real Job(tm), I helped out at one of the very first comdexes to earn money to buy crusts of dry bread.

And there were all these people there, totally focused on building a stand that was better than the next stand, which in turn was trying to be better than the next one. Not because all the people loved stands or anything, but just because they'd all talked each other into believing it was really important.

And they totally broke their backs to get their stands ready, they seriously worked 20 hour days to make sure their glossy stand thing worked perfectly and all the brochures and things were in the right place, although none of them actually cared about brochures or stands.

It was this experience(*) that has made me cynical about capitalism in general and trade shows in particular. The sense of 'why not just stop bothering' that I acquired then has stood me good stead ever since :)

(*)Along with the Tale of the Uneaten Breakfast, but that's another story.

noooo!!

[borgdows]

Computer industry will be doomed without the yearly 'Bill Gates COMDEX Keynote' !! ;-)

unsurprising

[Boromir son of Faram]

Comdex has been in steady decline for a few years. I don't think anyone's exactly floored by this announcement, which is just ceiling the fate we all saw coming as the trade show has become increasingly walled in.

Then we have trade shows like LinuxWorld that have trouble selling enough booths to cover their costs. I don't think this is anything to be upset over. The Internet is to some extent doing away with the need for meatspace trade shows, and in these lean times it's hardly shocking that businesses don't want to throw away money on a trade show booth that could be spent in their web presence with many times the return on investment.

So, the Comdex bankrupty filing has been found, as legend foretold.

Re:unsurprising

[RecoveredMarketroid]

Having worked in the marketing department of a company that traditionally exhibited at Comdex, I'd absolutely agree that the writing has been on the wall for a long time. But I would note that it started long before the ecomonic downturn.

The decline in exhibitor interest was precipitated by a deterioration in the quality of attendees. We used to see a lot of real prospective B2B customers, people who were knowledgeable. Over time, COMDEX seemed to reduce the 'admission requirements' to increase revenue; over time, these customers were mostly replaced by consumer tire-kickers and people looking to drop off resumes.

I'm not knocking comsumers (or job seekers!), but the reality is that most of the exhibitors didn't survive on consumer sales...

Too bad

[SpikeSpegiel]

This is regretable, I wonder if they will continue to run Comdex after emerging from bankrupcy. I remember reading about comdex displays (as I have been unable to get to the west coast) and a lot of the stuff was damn cool.

I guess I am just nostalgic for the supercooled 800MHz Alpha from Comdex '98. I got to play with that machine in Digital's labs in Marlboro...it was fun :-)

Yay, no more junk mail.

[OppressiveGiant]

I hope this means I stop getting email from key3media asking me to register for the next comdex.

Corporate accountability

[Sonicboom]

With all the failed companies (Enron, etc..) and all of the "dot-bombs", I can't help to ask myself who's to take responsibility?

Today's corporate leaders are the "Robber Barons" of the late 19th century. Unfortunately (*in the USA*) the Government doesn't seem to watch/regulate corporations, nor do they seem to care. The end result is the rich getting richer, and the average working guys like you and I are getting screwed.

Oh - Don't worry - some other company will spring up and take over Comdex... or they'll re-create it under a different name.

Conventions are doomed anyway

[Mononoke]

Ever exhibit at a convention? Ever seen the bills you have to pay? The convention support firms (Freeman decorators, various unions, et al.) are killing the business.

Just a few of the typical expenses (daily rates):

• $20 to rent an $8 table.
• $25 for access to an electrical outlet. Don't plug anything in yourself, though, or some teamster will break your fingers.
• $200 for access to a fractional T1 (a very small fraction, most times).
• $10 to rent a $4 chair.
• Want carpet? That'll be $100. Want that carpet unrolled?...
• Bring your own equipment? Too bad, you've got to pay a fee to be allowed to use it.

You haven't dealt with monopolies until you've tried to exhibit at a convention. One company controls all access, labor, and equipment, and you've got no say over how any of it is handled.

A manufacturer's money is much better spent sending out press releases and designing an infomative web presence.

How not to survive a downturn

[FunWithHeadlines]

From the NY Times article, two quotes that explain it all:

"Crucial exhibitors began dropping out, some going out of business themselves, and others scaled back the elaborate booths that had been a staple of the dot-com era. And as Key3Media's business began looking tenuous this fall, some exhibitors became reluctant to commit to shows even six months away."

Business cycles go up and down, and the smart business will prepare for these down cycles. After all, you cannnot assume that good times will continue indefinitely. There does come a time when companies will hesitate to spend the money to exhibit. Did Key3Media plan accordingly?

" Key3 Media -- built up in the late 1990's as the technology boom was reaching its crest -- around the same time accumulated substantial debt, making it especially difficult to operate when the downturn in technology became sustained."

Oops. Yet another victim of boom mentality. It seems they jumped in with both feet when the feeding was good, did the usual VC thinking of growth, growth, growth at the expense of debt, debt, debt, and now find themselves hurting when the inevitable down cycle occurs.

Comdex provided me with a lot of fun memories. I hope it continues just so we have a place to go poke buttons and admire large screens in person. But it helps when the owners of the show (no longer Shelley Adelson) are focused on the show, not soley on the bottom line and growth for growth's sake.

---------

Another victim of the economy

[Vapor8]

As an IT professional for the past 10 years, I can tell you that my employer has stopped expensing people's trips to Comdex. There's just not enough ROI there to approve the expense anymore. And with companies losing money left and right, extraneous expenses like trips to Comdex are the first things they look at when they want to cut costs.
Once the economy rebounds, either Comdex, or another trade-show will rise from the ashes and become *the* place to be if you're an IT professional. Until then, corporations are more worried about bottom-line and stockholder expectations, than letting Joe IT go on a trip to Vegas...

Perspectives

[Deton8]

You know, it's all in how you look at it. Since Comdex was surrounded by clouds of doom, virtually none of my competitors exhibited and thus anyone looking for my type of product had little else to do but to visit my booth. We got a thousand leads during the week, and many of these have turned into sales (we make expensive enterprise stuff, so a handful of orders can pay for the show). Another interesting thing was that due to the shitty economy, it seemed like the only people walking the hall were people who worked for companies who actually needed to buy things. Nobody was sending people to Comdex just for the hell of it. So there were a lot fewer morons asking for shirts, pens, mouse pads, and, of course, nobody asked for a cloth. I do agree, though, with previous posters who rail against paying $25 to rent a $3.99 power strip, and other such atrocities. How someone can go bankrupt doing this is beyond me.

Re:Perspectives

[Mononoke]

I do agree, though, with previous posters who rail against paying $25 to rent a $3.99 power strip, and other such atrocities. How someone can go bankrupt doing this is beyond me.

It's not the promoters of these conventions that get that money. It's the "decorating companies" and unions that hold exclusive service contracts with the venue that can get away with charging that kind of money.

The Exclusive Service Contract (and the Exclusive Labor Contract) is a license to steal. However, it eventually drives off the venue's customers.

Don't worry, the decorating companies aren't going bankrupt, just the promoters and venues.

Look at it this way:

[tmark]

Does this mean I have to start buying cloths again instead of getting them at trade shows?

On the other hand, while you might not be getting your clothes at Comdex, you are proportionately less likely to get beat up on the street for wearing said clothes and so baldly advertising your geekiness.

Very upbeat, considering the bankruptcy and all...

[Tsar]

Here's the memo that Key3Media CEO Fred Rosen sent out yesterday--it's even on InternalMemos.comalready.

From: Fred Rosen - Key3Media
Sent: Monday, February 03, 2003 8:15 AM
Subject: Important News From Key3Media
February 3, 2003

To Our Colleagues in the Technology Community:

We wanted to let you know about some news that will have a very positive impact on our ability to serve you going forward. Key3Media today reached an agreement to recapitalize the Company. It includes a voluntarily filing for Chapter 11 protection, which will allow us to remove the majority of our debt, restore a healthy balance sheet and do business with you unencumbered by extraneous financial issues.

All of our scheduled tradeshows and conferences will take place as planned. And, we can now begin to implement an array of new programs that will help make our industry-leading events even better.

We are pleased that our plan is backed by accomplished investor Thomas Weisel Capital Partners. In addition to providing short term funding ? which will enable us to operate our business and meet our obligations during the proceedings ? they are providing long-term financing and strategic counsel to help the Company throughout this process and beyond. While Key3Media has been impacted by the combination of a recent global decline in the IT and networking industries, a significant amount of debt on its balance sheet, as well as a decrease in business travel and hospitality after the tragic events of September 11, 2001, Key3Media is a fundamentally sound business with a strong portfolio of brands, a large high-caliber client base, and a leading market position.

We recognize that there continues to be significant demand for face-to-face marketing, and we remain committed to providing such forums. We sincerely hope this does not cause you any inconvenience and look forward to your continued support. We greatly value our relationship with you, and are committed to meeting your needs. We plan to exit the Chapter 11 process as soon as possible, with no disruption to our events. We fully intend to benefit from Chapter 11, by becoming a healthier, stronger company with a solid financial footing ? enabling us to continue to offer the world?s best information technology tradeshows and conferences.

To view a FAQ document and for additional information, visit www.key3media.com. We will continue to update you as we move through the process, but if you have questions please don?t hesitate to call your Key3Media contact directly, or reply to this email with your message and we will respond to you within 48 hours.

We look forward to continuing to work with you and are committed to giving you our best.

Sincerely,
Fredric D. Rosen
Chairman and Chief Executive Officer
Key3Media Group