For an event company, it’s a dream come true – co-ordinating the production resources for the Millennium Dome. But what happens when another city requests help with its own millennium celebrations?
Most companies would have to turn down the offer to organise Bethlehem 2000. Arguably, there is only one event company in the world that is capable of taking on both jobs, and it’s one that a year ago few people in this country would have heard of.
Over the past 18 months, the publicly-listed US communications group Caribiner has stormed into the UK and swallowed up several companies that were already considered giants in their field. With Spectrum Communications, MWA and WCT Live under its belt, Caribiner is now the biggest live communication agency in the world, with a global turnover of 200m, 45m of that generated in Europe. The official UK launch of the communications colossus took place in January, and it has set the industry buzzing.
“It’s now the largest business of its kind in the world,” says Peter Berners-Price, chairman of Spectrum until the acquisition and now a director of Caribiner Europe. “Clients are excited by what Caribiner is planning to do. International players such as Microsoft like to be associated with things on a large scale. Until now, the advertising world has not seen the value – and hasn’t invested in – the growth of our niche.”
Even rivals welcome the move, agreeing that it has raised the profile of live events. Nick Lamb, managing director of Crown Business Communications, says: “Ray Ingleby (US chairman of Caribiner) has done more for the industry in a year than anyone has done in ages.”
Michael Lockett, chairman of Caribiner Europe and former chairman of MWA, adds: “The most exciting development is in emphasising the live medium as a force to be reckoned with. There’s no way a major communications group can afford not to have a stake in live events.”
“Live communication has come of age,” says Caribiner Europe chief executive Lois Jacobs. “This will be a fillip for business in general.”
So will Caribiner’s expansion trigger a flurry of mergers across the events industry? Jacobs thinks not, although she believes agency groups will take a greater interest in the events medium: “Those event companies owned by advertising agency groups may find their owners more prepared to invest.” And she thinks independents may be advised to © tie up with agency groups to get the financial security provided by shareholder funds.
Another merger has already been announced since Caribiner’s European launch. In February, Californian modular exhibition manufacturer Abex Display Systems took a major stake in UK events organiser Academy Expo so that it could service Europe from a UK base. Academy Expo marketing manager Steve Hill explains that there will be economies of scale: “Our aim is to produce the best quality product as cheaply as possible.”
But critics are wary of the word “cheap”, suggesting that US owners may place more emphasis on profit than on excellence of service. Jerry Starling, managing director of Eventworks, says: “US companies might focus more on results and put more emphasis on delivering a return.”
Crown’s Lamb agrees: “I suspect a number of Caribiner’s clients are now going to think that the bottom line will take precedence over service.”
Lockett acknowledges: “We are a public company, so there is always pressure in terms of delivery to shareholders. We have to strike the right balance between shareholder and employee benefits.”
“Of course, we place emphasis on the bottom line,” adds Berners-Price. “All companies have to. You can’t run a business without doing so. We have a responsibility to run Caribiner Europe as profitably as we can and to maintain shareholder value. That way we will be in a position to pay for and attract the most talented people around.”
The UK events market has a reputation for world-beating creativity, which Lamb suggests may also be compromised by US ownership and its focus on the bottom line.
Hill is undaunted: “The UK market is very strong, with an emphasis on design and creativity. But the Americans are also very good at what they do. Our new owners appreciate our expertise and they won’t compromise our creativity.”
Caribiner, too, is keen to play down the US influence, pointing out that the company was founded by a British ex-pat, Leslie Buckland, in 1970 and the company that bought it in 1992, Ingleby Communications, was founded by another Briton, Ray Ingleby. The European division is being run by those that always held the reins in the UK – companies bought in the recent flurry of acquisitions. “We run our own show with full agreement and guidance as required from New York,” insists Lockett.
But there is no doubt UK and US events are different animals and ones that may not live happily together in the same cage. Jacobs concedes: “The British have always been sniffy about US lack of subtlety and showiness.”
There is more to it than that, suggests Lamb: “What gives rise to individual flashes of creativity may not come out under such a big structure. The real bits of sparkle will go in the formation and formula it has. The people at Caribiner are not new-age thinkers.”
Lamb foresees problems stemming from the integration of the companies making up Caribiner Europe and from the speed at which it has been implemented: “The UK companies that have been bought by Caribiner all had different cultures and all operated independently in the past. Ego is very important in this industry. You can’t merge three companies just by banging their heads together. You can’t merge them without fall-out.”
That fall-out has already started with people jumping ship from Caribiner. “Three into one doesn’t go,” concedes Berners-Price. “Some people have left because they were disappointed not to get the lead role in their department.”
Lockett adds that there was no need for a major redundancy programme, declining to give figures of how many people have left, but saying: “A few people felt that they didn’t want to work for a big company.”
Robert Lee, director of events company Catalysm and former creative director at Spectrum, believes it is the clients that lose out in this situation: “Acquisitions always create a certain amount of turmoil because they lead to speculation and anxiety among staff regarding job security. The customer focus diminishes as employees become preoccupied with internal issues and their own future, rather than the needs of their customers.”
Lee suggests a company of Caribiner’s size is going to find it hard to maintain relationships with staff, particularly in an industry that uses so many contractors. “Despite all of its good intentions, a large organisation is always in danger of losing touch with its freelances, and allowing its relationship with them to pivot around the dreaded accounts department,” he says.
Lockett is aware of the need to “retain the creative spark in order to attract freelances”, adding: “We must make sure it’s a company people want to work for.”
He is also conscious that “big isn’t necessarily beautiful”, but he acknowledges the advantages of the potential economies of scale, the security of shareholder backing and the huge resource of more than 150 permanent staff alongside its hordes of freelances. A client would never be sidelined because the entire company was focusing on a different event that week, which could happen in a company with fewer resources.
While not selling itself on size, Caribiner knows a thing or two about doing things on a grand scale: it managed the Hong Kong handover ceremony last June; it is producing the G8 Summit in Birmingham in May; it is running projects in the Millennium Dome, as well as organising the ceremony for the city without which there would be no millennium, Bethlehem.
Starling suggests Caribiner’s real strength will be in its capacity to deliver the same event across different countries: “If a client wanted an event to happen in six places at once, we couldn’t do it, but Caribiner could. Some companies want a company vision with everyone singing from the same songsheet and with a uniform approach across the world.”
But he sounds a note of caution, believing that events are much better handled if tailored to specific markets: “Think of those pan-European ad campaigns that are designed to run everywhere. Are they as good as campaigns individually tailored to the each country?”
Jacobs agrees that tone of delivery should be adapted for different markets. “You would communicate in a different way to a British, French and Italian market, just as you would approach a pan-European audience differently from a global one.”
Far from restricting diversity, she believes Caribiner offers more diverse experience and more opportunity for variety: “We now have an unprecedented breadth of resource. If someone asks us for an event using water sculptures, say, the chances are we’ll have someone in the network with relevant experience.”
As the new colossus finds its feet, it remains to be seen whether Caribiner can deliver on its promise to be the most exciting company in the events business. It could be its breadth of experience will lead to a lack of focus and its economies of scale to economies of ideas.