Prepare for expansion: Staging Connections throw off the chains

Staging Connections changed forever in October when Freeman Company took over. Suddenly the crippling $40 million debt was gone. Now the company has an additional $90,000 a week that previously repaid debt and interest. That money could hire 50 top staff or fit out a cluster of venues each year.

Previously the management were preoccupied with the significant bureaucracy of being a listed company, making reports and attending board meetings while trying to navigate the rm. It is Australia’s largest audio visual service supplier, with 70 in house venues and 684 staff.

After the $62 million takeover, Staging Connections Group joins Freeman Company, which is a Dallas based family firm that has vast experience in the AV market.

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CX spoke to Ken Sanders, President of Freeman Audio Visual, and Tony Chamberlain, CEO of Staging Connections Group in Sydney.

“We don’t plan any changes initially, (we’ll) take some time to get to know the market better”, Ken said.

Asked whether the company name would change, he replied: “There’s a lot of brand equity in the name Staging Connections, it’s been (here) 30 years. We’re going to learn more about it and determine if it’s something we want to address.”

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The AV division of Freeman turns over US$ 850 million; and the whole company US$ 2.5 billion.

We asked how Staging Connections is sitting financially now. “We’ll give the business whatever it needs to expand, it’s self funding at this point. It’s a healthy business and it’ll continue to grow”, Ken said.

“We’re going to grow. Not consolidate. Hopefully add to the space that’s here, employing more people.”

What does it say to the competition, we asked?

“They should be nervous,” Tony Chamberlain shot back. “Already in our relationship with Freemans we’re picking up products that Freeman have in the market, and our people have run with. On the digital front it rounds out what we’re doing. Now we don’t have to take a second look at a venue ( t-out), we have the backing.”

What of the efficiency differences between the USA Freeman business, and the Australian firm?

“ We’ve had our operational people on the ground here and they’ve come back and said it’s very similar. We don’t look at hotels and shows and events differently. You need video engineers, you need LD’s, L1’s, all those things, we staff them about the same. There’s no reductions in head counts. That’s not what we’re looking at.”

“ We acquire a couple of companies a year”, Ken says. “The objective is not to be the largest, just the best – and to be diverse. We look at the opportunity to grow the business. All our acquisitions have proven to have been a good growth vehicle for us.”

CX asked about the cost differences between the USA and Australia.

“We haven’t seen big differences. Some of the social programs (here) are a little more expensive than in the States. We don’t plan on making any changes along those lines. In general labor is probably more expensive here than the States. There’s a more diverse freelance pool there, the economies of scale are different.”

How much of the technical workforce in the USA are unionized?

“New York, Chicago and San Francisco are big primary union markets, Vegas is also big. There are days we’ll see 2,000 union people on the payroll, not just on the AV side but also on the exhibition side.”

What are the wage differences in union cities? “Too dif cult to answer, but New York could be double. Freeman trains 40,000 union employees a year! Unions are a terrific resource, we partner with them.”

Staging Connections are also leaders in training, operating the only workplace Registered Training Organisation in the Australian AV industry. Will Freeman maintain this large commitment?

“We haven’t really looked at that”, Ken says.

Tony added: “Not speaking for Ken, I don’t see any reason not to continue. We want to grow into SE Asia. We could take the training into Asia. Freemans have so much training resources we could just drop in, online training.”

Now the sale is complete, we wanted to know how arch competitor PSAV nearly won the bid, and why Freeman bid late?

“Actually we were early! We’re a very measured company. There’s no deal we have to do. We’re fortunate to be our size and have no debt. The business can do what it wants to do. If we feel like a deal isn’t shaping up the way we like, we have an internal discussion. In this case it was moving a little sideways on our side, and we re-engaged. They popped up, we were wanting to be engaged, in the end we moved it forwards.”

Will Tony Chamberlain continue to lead the firm? “He’s done a great job, we’re going to continue. It’s great to work with Tony and a great team of people.”

The past fifteen years have been very turbulent at Staging Connections, with a disastrous ‘growth through acquisition’ phase that led to crazy prices being paid for rms. Such as the $42.7 million buyout of Bytecraft which was eventually offloaded for between $9 and 13 million.

“We watched it from afar”, Ken says. “We knew it was going to happen.”

First published in CX Magazine (December, 2015)