When your association has invested 44 years in growing your trade show from a handful of merchandisers assembled in a parking lot to become the world’s largest exhibition in its field, why would you even consider selling it? And why would a show producer want to buy an exhibition that was already well-run and for all intents and purposes had matured in its market? Both saw what they stood to gain from this unique partnership.

In June 1998, the Professional Golfers’ Association (PGA) of America, based in Palm Beach Gardens, FL, sold its PGA Merchandise Show and PGA International Golf Show to Norwalk, CT-based Reed Exhibition Companies. For PGA, this move gave them a way to invest in their membership and future programs and watch their shows continue to grow. And Reed gained a platform from which to launch an international show in the golf market, as well as acquire two others.

The move proved a resounding success on both sides. Reed Exhibition Companies runs the shows, and PGA officials are still actively involved in the future of the shows that bear its name. And over the past three years, the two original PGA shows have proved a valuable addition to Reed’s lineup while providing PGA some much-needed revenue to further the game of golf.

The history
The PGA Merchandise Show, which started in 1954 as a handful of golf merchandisers assembled in a parking lot during a series of PGA winter tournaments, is now the world’s largest golf exhibition. By 1998, the four-day show covered 670,000 square feet at the Orange County Convention Center in Orlando, FL, with 1,304 exhibitors and 51,458 attendees from 80 countries.

In 1992, PGA purchased a regional golf show in southern California, renamed it The PGA International Golf Show, moved it to Las Vegas and made it the world’s second largest golf exhibition. By 1998, the three-day show covered 372,000 square feet at the Las Vegas Convention Center, with 1,106 exhibitors and 25,564 attendees from 60 countries.

The success was welcome, but PGA anticipated that they would eventually reach the limit of the association’s resources in growing the shows. “Every year, we monitored the shows, their potential growth and what issues or areas we needed to address to continue to grow them. Eventually, we reached the point where we felt we’d gone as far as our expertise and in-house talent would take us. So we decided to sell the shows to someone who could take them to another level but still let us be involved with our name on the shows and our members still participating,” says Jim Awtrey, Chief Executive Officer, PGA of America, Palm Beach Gardens, FL.

Reed now produces the events in cooperation with PGA senior management under a decades-long licensing agreement that includes revenue sharing.

“With Reed using its tremendous infrastructure of resources to run the shows, PGA can continue to provide its members with truly marquee events in which they play a significant role. But that organization doesn’t have to manage the budget, sales and all the day-to-day operational issues associated with producing trade shows,” says Christopher McCabe, Vice President and Show Manager, PGA Worldwide Golf Exhibitions, a division of Reed.

PGA gets sale proceeds and its share of the ongoing revenue to invest in its primary objectives — promoting interest in the game of golf and serving its 26,000 members. Reed gets shows that represent a well-known sports-marketing brand to use as a platform for launching and acquiring more international golf shows. Exhibitors get access to an even broader international market. And attendees get a range of new services and benefits. 

PGA’s strategy
PGA tapped Seay and Thomas, the consulting firm that helped the association analyze the market, to search for a buyer. Once PGA selected Reed from among the recommended companies, PGA CEO Awtrey handled negotiations with Reed Senior Vice President Tony Calanca. 

“PGA was looking for three things — a partner who would, of course, meet their financial requirements, be around for a long time, and desire the association’s long-term, significant involvement,” says Calanca. “At Reed, we were also interested in a partnership where they had significant involvement. We wanted them to be around for a long time and to keep doing all the same things at the shows in terms of programs, receptions, awards ceremonies and other functions.”

Negotiations began in December 1997, and the deal was closed the following June, just three months before the 1998 PGA International Golf Show. “The PGA team was already working on the show, and we kept the entire team on a service contract for about 45 days after the Fall Expo was done,” Calanca says. Eventually, Reed hired two PGA staff members to work for them in an office at PGA headquarters in Florida. 

The remaining PGA show staff members took other positions with the PGA organization. “Most of them had been with us many years and had evolved into working on the show, so they were able to move back into other areas of PGA programs,” Awtrey says.

“With Reed managing the show, we have more time to focus on other areas. This year, we plan to create a grant program to incentivize our members to develop new programs to help grow the game of golf,” says Awtrey. “We’ve taken the proceeds from the show sale and created an endowment so that the revenue that was always going into programs is there for future programs.”

Reed’s strategy
“The PGA acquisition is part of a larger strategy for Reed. We looked at it not only based on what growth we could bring to the existing events in the United States but how could we parlay this into a global platform for business,” says Calanca. “PGA is what we call a platform partner. Their brand is so well-recognized, and there’s sufficient consolidation in the industry globally that if you can become a point of access in the North American market, it’s not terribly difficult to become a point of access in other markets.”

Some examples: In July 2000, Reed acquired the PGA Merchandise Show of Australia (founded in 1986), which attracts buyers and exhibitors from both domestic and international markets. In November 2000, Reed launched Première Golf in Costa del Sol, Marbella, Spain. And the company is currently negotiating to acquire the Ontario PGA Golf Merchandise Show in Canada (founded in 1957).

In terms of growing the two PGA of America shows, Reed has had more success with the Merchandise Show. “We created a more efficient floor plan by using a CAD/CAM (computer-aided design/manufacturing) system to design aisles that are pretty much uninterrupted front to center. We think this makes it easier for attendees to walk this really big show. In doing so, we also created about 30,000 extra square feet of space just through efficiencies,” says McCabe. “When we purchased the show, as many as 200 exhibitors were on a waiting list. We were able to accommodate many of them right off the bat and pretty much eliminate the list.”

The numbers for the PGA Fall Expo (the name has been changed), on the other hand, have declined significantly. From 1998 to 2000, both the total square footage and the number of attendees were down by half, and exhibitors dropped by one-third. Both PGA and Reed attribute much of the change to market fluctuations. The golf industry boomed and peaked between 1996 and 1998, and both shows enjoyed the benefits. But as the market has stabilized, the fall show has dropped to its size before the boom.

Reed hopes to grow the show again. “We’re launching an event called Sports Turf Innovations that we’ll co-locate with the PGA Fall Expo in 2001. This show will focus on turf managers, superintendents and recreational lawn care professionals. Probably one-third of its audience will overlap with the PGA Fall Expo’s. It will bring more people to the event and hopefully expand the show,” McCabe says.

Reed also plans to add new exhibitor categories beyond the three staples of equipment, products and services, and apparel. McCabe reports that they added travel this past year, and next year they’ll add health and fitness and a club manager section, which would include food-and-beverage services and anything a clubhouse might offer its members.

Acquiring the PGA shows has also added to Reed’s bargaining power with suppliers. “We signed a 25-year contract with the Orange County Convention Center. Clearly PGA was a key part of that. We’re opening a small office in Orlando, and by next year we’ll have about six shows a year down there,” Calanca says.

Improvement strategy
To further identify new directions and innovations needed for both shows, in spring 2000, Reed formed a PGA Golf Exhibitions Advisory Council. The panel includes industry leaders, exhibitors and buyers. Reed also conducts post-show research via mail and e-mail with exhibitors and attendees, and has recently invested in outside research by Golf Data Tech. 

“We’re always developing and testing new programs. At our Las Vegas event, we’re going to have new on-site and off-site demo areas so attendees can test the equipment, and we’re bringing the conferences that were previously individually sponsored by such organizations as PGA and the Association of Golf Merchandisers under the Reed umbrella,” says McCabe. “And all of this is in response to research we’ve done with buyers and exhibitors.”

Reed has also introduced a Key Buyer Program for both shows, which has grown to include more than 400 buyers identified by exhibitors. Members of this group receive special incentives, such as free airfare and hotel stays for select members and access for all to a special lounge where they can eat meals or use phones, to promote their attendance and participation. 

Exhibitors and attendees alike benefit from Reed’s technology resources. Online registration is one example. In 1999, 20 percent registered online, and that figure grew to 75 percent for the January 2001 show. And Reed added online pre-show planners that offer exhibitor directories and personalized floor plans. Buyers can input the names of the companies they plan to visit and discover the most efficient route to navigate the immense exhibit area. 

Working strategy
“I don’t know if we manage much differently than PGA did on the day-to-day business of running the show. But Reed is a major trade show company, so we have resources and professional staff here who can invest years of experience into improving a show,” McCabe says. He reports that the partners work well together, in part because the Reed staff members in Norwalk communicate daily with people at the PGA organization in Palm Beach Gardens. McCabe also tries to meet at least once a month in person with their executive group, which includes everyone from their CEO and COO to the people in charge of public relations and special events.

PGA continues to have a significant presence at both shows, including space on the show floor and meeting rooms for its seminar and conference programs and other activities. At the PGA Merchandise Show in January, for example, the association has a 60,000-square-foot member services center, where nearly 60 percent of its staff works to provide support services for members attending the show. Additionally, 25,000 square feet of space near the main entrance to the show floor is reserved for PGA licensees, the companies that provide official PGA products and services. 

PGA and Reed agree that the key to the continued success of the two shows is the excellent working relationship between the two organizations. “It’s an ongoing partnership to develop the shows to their maximum level. One of the things Reed looks to us to do is to help them understand the industry itself. They’re the experts in running a trade show. And we provide support in understanding the business of golf,” Awtrey says.

“We really are a team. Our role in putting on these events is to best serve the golf industry, and PGA helps guide us through a lot of the industry issues,” says McCabe. “Our show is their show. Even though we bought it, they’re still an integral part of the event. They’re the foundation on which it’s built.”

Martha Collins, a freelance writer and editor based in Austin, TX, is a frequent EXPO contributor. She is Co-Managing Editor of the recently published Convention Industry Council Manual 7th Edition.