The Hollywood Staffing Model

Several recent conversations with event business owners have validated a trend I’ve been seeing of companies increasingly relying on contractors to address fluctuations in staffing needs, in response to the ongoing unpredictability of workflow. This follows what I call the Hollywood staffing model, which relies on specialized teams of contractors coming together for specific projects, then dispersing. It’s a model that offers benefits like flexibility, cost mitigation and talent upgrades, but comes with a number of challenges. More on this below.

Lots of updates in this issue! That’s what happens when you wait 3 weeks between posts. Here’s a peek:

• M&A Updates: Neuehouse, Northstar Travel Group, the Free Press & Explori

• Upcoming Events: Skift Meetings Forum, SITE C-Suite Agency Summit at IMEX, EDPA’s ACCESS, and earnouts

• The event talent roller coaster

• The Hollywood staffing model

• Benefits & challenges

• . . . and a little humble bragging

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Humble Bragging

You’ll have to indulge me here for a hot minute, but I was pleasantly surprised to find out that the open rate for this newsletter ranks in the top 10% of all Beehiiv (the platform I use, similar to Substack) newsletters, which is over 75,000. My average open rate is 70.19%, and I know open rates are far from an exact science, but still. Writing is a very solitary activity, so it’s nice to know I’m not just shouting into the void . . . void . . . void . . . (picture echo sound effect).

In other ego-stroking news, Skift Meetings did a profile on yours truly in their Meetings Innovators series, which previously featured Liz Lathan of Club Ichi, and Claus Raasted, founder of the wickedly-clever named College of Extraordinary Experiences, both true innovators themselves. Thanks to Skift’s Editor-in-Chief Miguel Neves for the opportunity to opine on all things innovation and disruption, topics near and dear to my heart.

M&A Updates

• In my last post I noted that Soho House is going private, in a deal valuing the company at $2.7 billion. On the other end of the private club spectrum, Neuhouse is shutting down. Neuehouse targeted the creative industry, attracting professionals from the worlds of art, fashion, media, design, film, and television, and had very cool clubs in NYC (which I’ve used), Hollywood and Venice Beach. On September 5th (my birthday!) they filed for Chapter 7 bankruptcy (the liquidation version, not chapter 11 which is for restructuring). Clearly the entertainment and advertising industries have undergone major disruption, which I’m sure didn’t help, but my sources tell me the company was better at concept development than operations.

• In previous posts I wrote about how the Creator Economy presents a major new opportunity for events, since it’s easier than ever for thought leaders to reach their loyal audiences. The latest example: Paramount is buying The Free Press, a news media company founded by former NY Times writer Bari Weiss in 2021, for $200 million. In a few short years The Free Press has built a base of 1.5 million subscribers, who power dozens of events.

• Northstar Travel Group is being acquired by JTB, a travel conglomerate based in Japan that does $7.3 billion in revenue. Northstar was owned by EagleTree Capital since 2016, and was reportedly close to an exit in early 2020 before Covid put that deal - and a number of others - on ice. Over the years, I’ve collaborated with one of their divisions, the Northstar Meetings Group, led by David Blansfield, a number of times, and found it to be a very well run, tech-savvy organization skilled at incubating new brands. They successfully geo-cloned their popular London-based event, The Meeting Show, in Singapore last year. I had expected NTG to sell to a larger PE firm, so this deal is a bit unusual, as JTB doesn’t neatly fall into the category of strategic buyer either. But it’s a safe bet that the deal will turbocharge Northstar’s new product development and growth.

• Earlier this year I joined the Events Venture Group, where event industry entrepreneurs pool resources to invest in promising young event companies. This month I participated in my first investment with the group by being part of a fundraising round for Explori, which develops measurement tools for tracking event ROI, something I’ve been passionate about for years. Founder Mark Brewster, who also started Event Leaders Exchange, has built a great company, and this investment will fund some exciting new product development at Explori. Stay tuned!

Upcoming Events

• On December 3rd I’ll be in Amelia Island, FL doing a session on The State of M&A at ACCESS, the annual conference of EDPA (Experiential Designers & Producers Association), an organization comprised of companies that support the exhibition, experiential and event industry. I’d heard of EDPA but hadn’t had much involvement with them until this past April when they had a dedicated theater on the show floor at the Experiential Marketing Summit, where they did a nice job curating content.

• I’m working on an article about best practices when structuring earnouts, and am looking to speak to event business owners who’ve been involved in M&A transactions with earnouts being a key part of the deal. If this is you, email me. I’d love to get your perspective, and can keep your comments anonymous if you like.

• On September 15th I’ll be interviewed by Miguel Neves at the Skift Meetings Forum in NYC on how buyers value event businesses, and the state of event industry M&A in general. If anyone’s attending this event, please let me know; I’d love to meet up. I downloaded the event app, and was impressed by the attendance list, so I’m expecting a vibrant event.

• If you’re going to IMEX America I’d love to meet up. I’ll be leading a session on M&A at the SITE (Society of Incentive Travel Excellence) C-Suite Agency Summit that Tuesday morning, and am starting to plan the rest of my schedule there.

The Event Talent Roller Coaster

Over the past 5+ years, running an event business has not been for the faint of heart, as a series of disruptions has created an unpredictable pipeline of workflow. One year you’re doing record numbers; the next year you’re losing a ton of money, because the increased staff you brought on to handle the bumper year is sitting idle, waiting for work.

The companies that held onto their employees for too long when Covid hit, have learned their lessons, and won’t touch that hot stove again anytime soon. They’re faster to lay off now, and those that need to hire are leaning more heavily on freelance staff. Here are quotes from several conversations I had over the past few weeks:

• “We just laid off 16% of our team, going from 50 to 42 FTEs, because several large clients have put their events on hold. When that work comes in, we’ll probably fill a good chunk of those roles with freelancers.” CEO of event production firm.

• “At the end of 2022 (a banner year) we had 35 FTEs and no freelancers. By the end of 2023 we cut that number back to 13 FTEs. By the end of this year we’ll have 25 FTEs and 12-15 freelancers. We’re trying to use that as a hedge against a somewhat unpredictable workflow.“ Owner of experiential agency.

• “Our pipeline is pretty solid, but there are a couple of repeat events that may get scaled back or cancelled altogether, so I needed to do some cost cutting. We had a full time video producer that we had to let go, and we’ll contract that out when needed.” Co-owner of event marketing agency.

Finding equilibrium between being overstaffed and understaffed has been an ongoing challenge for event companies, even those with a high level of repeat clients. Stock your firm with talent and you’ll be well-positioned to deliver when the work comes in, but risk losing money if it doesn’t. Taking the opposite approach, and keeping headcount lean, minimizes expenses, but you risk not being able to service new business when it comes in, particularly when hiring decisions are increasingly made on short notice by clients.

The Hollywood Staffing Model

When they make a movie in Hollywood (or anywhere, really, since film production is increasingly taking place elsewhere), nobody who works on the film is a permanent employee. Everyone is brought in, often as independent contractors, for a fixed amount of time until the movie is finished. Then they all go their own ways.

The beauty of this model is that executive producers can pull together a customized team with the exact skills they need, with no long term obligation. If they’re making a comedy, they hire a comedy script writer, a comedy director, etc. If they’re making a thriller, they get people who are good at thrillers. 

This model makes a lot of sense for the events industry too. Like movies, much event planning isn’t a year-round activity; it runs its course over a period of months and then it’s over. Also like movies, events come in different styles. The person you staff on a understated shareholder meeting likely is not the same as the person you assign to a flashy product launch.

Cost Shifting

This staffing approach becomes more common during economic downturns, due to a combination of factors. Declining sales and/or business uncertainty leads companies to cut non-essential staff, which, much to our ongoing dismay, typically includes event marketers and meeting planners.

And while many events do get shelved or cut back, most still move forward, and those that do, need people to plan them. The only difference is that now those same companies supplement their in-house teams with agencies or freelancers. In many cases, the very same employees who were let go are hired as contractors for the same events, often making more money than they did as employees, albeit without benefits or predictable revenue.

Ironically, the resulting bottom line might be no different, as those planner costs are simply shifted from overhead expense to event expense. But businesses, particularly publicly-traded companies, face tremendous pressure to cut headcount during downturns, and these moves satisfy those investor demands.

Another direct consequence of those layoffs is that some very qualified people become available for freelance work, making it more attractive for companies, especially event agencies, to embrace the Hollywood staffing model. Not only are more planners available for hire, but you can also get more highly qualified people on a contract basis than you could afford full time.

To serve this growing freelance market, the number of event staffing firms has grown over the years, making it easier than ever to source talent. Examples include Soundings, Cadre, Encore Nationwide, Hype Agency, and Assist Marketing.

Benefits

1. Flexibility. I owned an event agency for 20 years, and trying to match the staffing with the workflow was always an adventure, particularly since our events never spread out evenly over the year. We’d always be slammed in the fall and spring, and light in the summer. Having access to good freelancers, however, enabled us to ramp up during those busy seasons, and ramp back down when it was slower.

2.  Low Maintenance. The freelance planners I hired always had a rock-solid work ethic and were extremely focused. They also didn’t need benefits, and didn’t care about career development within our company.

3. Trading Up. Perhaps one of the best things about using freelance planners is that you can get a far more qualified person than you might be able to afford if hired on a full time basis. While you may not have the budget to add that $200k a year stud to your team full time, you might be able to bring them in for a six week engagement. 

4. Specialization.  This model gives you the ability to tap planners with specialized experience in the type of event, location, client or service you need.  

Challenges

1.  Availability. The biggest drawback, however, is there’s no guarantee that person will be available when you need them on your next project. And if that freelancer did a great job on an event and the client asks for them the following year, what happens if they’re not available? The one major difference with Hollywood is that movies are always a one-off, aside from the occasional sequel. The events industry does have its fair share of repeat events, which makes it a bit more challenging for us.

2. Developing A Deep Bench. If you’re going to succeed in this model, you’ve got to put effort into curating a rolodex of good people. It also helps to be able to map out your workflow as far in advance as possible, and line up your freelancers so you can lock them in. At my company when we had someone good, account managers would put “dibs” on him or her for their projects, to ensure the person never had to look for another gig.

3. Commitment. Sometimes you get a “faux” freelancer, someone who’ll take on temporary projects until a full time job comes along. I know a number of employers who were left flat footed when their freelancer walked out in the middle of a project to start a full time job.

4. Constant On-Boarding. It’s not easy continually bringing on new people, getting them acclimated to your internal systems and procedures, learning the politics, etc. Companies that thrive in this environment are those that have developed a culture and training systems that can ramp up a new worker in warp speed.

Running an event business - particularly one that is labor-intensive like agencies, production companies and other suppliers - used to be about honing a good product or service, selling & marketing that service to clients, and then ensuring successful delivery and execution. Now there’s another element: carefully - and quickly - calibrating your staffing levels in anticipation of demand. In this environment of constant change and unpredictable workflow, the ability to be shrewd and agile in evaluating when to cut and when - and how - to add staff, is mission critical to navigating the ups and downs of today’s event landscape.

Here’s to taking your event business to the next level!

Howard Givner
Senior Advisor | Oaklins: DeSilva & Phillips (M&A) email me
CEO | Heathcote Advisory Group (Consulting) email me

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Catch up on recent articles:

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• The Canceling of Colbert and the Rise of the Creator Economy - Events Ecosystem

• Brandicide: The Gutting of Brand USA

• The View From Private Equity: Truelink Capital’s Luke Myers on the GES Acquisition, Investing in Events, and Why Deals Collapse

• Tailwinds

• Preparing Your Event Business For Sale

• 15 Agency CEOs Walk Into A Bar . . .

If and when you’re ready, here are ways I work with event business owners:

• Business Coaching & Owner Accountability

• Business Diagnostic & Company Valuation

• Growth Consulting

• Exit Planning

• M&A (Buy Side & Sell Side)

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