Selling To Grow
Why Dwell Media made the surprising move to divest its flagship event Dwell on Design.
Informa in a multimillion-dollar deal. The move was surprising since events, especially for mid-market companies, have become crucial assets as publishers have diversified their revenue platforms. As it turns out, Dwell is still very much involved in the event and the deal, according to Dwell Media president Michela O’Connor Abrams, was necessary to build scale.
Dwell on Design has been on an upward trajectory. It’s just passed its ten-year anniversary, it now attracts more than 30,000 attendees on 300,000 square feet of show floor, and it added New York as a second city to Los Angeles, where it debuted in 2006. Yet, says O’Connor Abrams, much more could be done and Dwell Media didn’t have the resources to take the event to the next level. She had her sights set on international expansion.
“To get to the next level of scale—currently at 32,000 people and half of the convention center—the next step had to be big,” she says. “As a company our size, we didn’t have the ability to grow internationally.”
So O’Connor Abrams began looking at a range of options—outsourcing the event, partnerships and so on.
But after Informa made a splash in the U.S. event market when it bought the exhibition group from Hanley Wood for $375 million late in 2014, O’Connor Abrams realized they had the right ingredients for a partnership. Through the Hanley Wood deal, Informa had event properties that were aligned with the construction and design markets and, importantly, international expertise.
GLOBAL GROWTH? CHECK.
“Informa made it clear that they were in growth mode globally, and so it moved along very quickly, because it wasn’t like we had to figure out how to bridge a gap in mission and understanding,” she says.
Terms of the deal edged it closer to a joint venture. For the next fifteen years, Dwell Media will continue to handle the content, the event will retain its branding and Dwell sales reps will still be able to include the event in their portfolio. But since Informa owns the asset, they’ll take the lead on scoping out the brand’s next moves. O’Connor Abrams says a new location for 2017 will be announced soon.
Rick McConnell, president, construction & real estate, Informa Exhibitions U.S., described the partnership this way: “A key part of the sale centers around a sponsorship agreement that helps manage the ongoing relationship between Dwell Media and Informa. Informa will continue to look to Dwell Media for content direction and market expertise. Dwell will be the official publication of Dwell on Design, and will continue to be run by Dwell Media. Strategic accounts will be managed in collaboration. As the new owner, Informa will be responsible for sales, marketing, financial management and operations for Dwell on Design. Expansion strategies will be a collaborative effort between the two companies.”
A SHARE OF THE SPOILS
O’Connor Abrams declined to specify the revenue-sharing arrangement except to say, “We came up with an agreement in the 15-year term that we will be sharing in revenue at a level appropriate to our contribution.” An important aspect of the deal is the brand’s connection remains intact with Dwell. “With a different kind of buyer, we could have been lopping off the arm of the brand,” says O’Connor Abrams.
While both companies are engaged with the event, Informa wouldn’t have done the deal without a significant stake. “I wanted scale. I knew I could not take it much bigger with out a partner,” she says. “In order to do that you have to certainly let a partner the size of an Informa own part of the asset. They’re not going to be interested in just a partnership.”