By Julius Grafton.
DALLAS: The Freeman Company and PSAV just announced that Encore Event Technologies, the in-house AV Goliath owned by Freeman, is now part of PSAV. In other words, the United States in-house AV business is now utterly dominated by one firm. This will cause much pain in the USA.
It means Australia’s Encore Event Technologies now has a new owner. PSAV almost snagged the business here when they were the under-bidder to buy Staging Connections, back in mid 2015. (Freeman won Staging Connections, and changed the name to Encore a year ago).
The new combined business in the USA will now reap considerable benefit within the walls of hotels and convention centres where it controls how much anyone spends on anything from a white board to an entire event.
The prices they charge are mind boggling. I spoke to 25 venues across the USA over the last year and compared events costings. Some unionised venues with a PSAV or a Freeman branded in-house AV supplier quoted triple prices compared to others, with the gold standard in price gouging applying at almost all Vegas venues – where the common complaint was that no event could set a firm budget, because everything is a surprise. Not a nice one, a nasty one.
While PSAV (1,500 hotels) and Encore (450) were competing, hotels at least had a choice. There is no national ‘third player’ in the market in the USA, and a deal such as this would not pass anti-competition laws in Australia. Here, Encore are the leader in-house, but have stiff competition from AV Partners, Microhire and AVD.
The hotel industry has been brutalised by the big aggregators – who are setting terms and conditions and interrupting the market. They see the Audio Visual offering as an answer, and are leaning hard on the in-house suppliers to ratchet up the everything, especially consumables and non-discountable line items like labour and transport.
Prior to now, Freeman and PSAV had been gobbling up smaller firms. By example, PSAV had digested the gloriously named SWANK AV while Freeman took over AVT.
What does it mean in Australia? Probably not much for now, but given that PSAV is controlled by the delightful Blackstone Private Equity vulture fund (Motto: “We see things other people can’t”; which makes CX think we probably need to get to Specsavers real soon now) you can bet that Encore Australia CEO Tony Chamberlain will get some pressure to earn more, more, more. They may also try to buy some of their annoying competition down under.
But thankfully, they can’t buy too many more, without falling foul of our competition laws.
Ken Sanders, Chief Development Officer of The Freeman Company and Tony Chamberlain CEO of Encore Event Technologies (Australia).
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