Key3 Exits Chapter 11 With New Name, Role
Key3Media Group Inc., the producer of Comdex and other technology trade shows, emerged from bankruptcy protection Wednesday with a new name and a renewed focus on remaining relevant as the tech industry and the rest of the economy remain in a slump.
The company is now a privately held entity called Medialive International Inc. It will face significant challenges as it tries to rebuild a business that buckled under declining sales and $370 million in debt, analysts say, with a key problem being that trade shows are increasingly being replaced by online events.
“Sellers and buyers are coming together without shows,” said Rob Enderle, a technology research fellow at Forrester Research. “Shows may be done. The show itself is much less of an event.”
Medialive plans to redefine its role as a “catalyst” in connecting buyers and sellers of software and high-tech gear such as computer chips and Internet phones, said Robert Priest-Heck, its new chief executive.
That means concentrating on providing more information and education on emerging information technology products instead of creating the huge, glitzy events that embodied the excesses of the late-’90s tech bubble.
“Just like the tech industry has to change, Comdex has to change,” said Priest-Heck, who was Key3’s chief operating officer. “The truth of the matter is that size doesn’t count; relevance counts.
“When people ask me, ‘How big will Comdex be?,’ I say, ‘Who cares?’ ”
To regain a top position in the trade show industry, Medialive must steer Comdex to showcase specific technology issues and court an audience of serious buyers, said Tim Bajarin, president of Creative Strategies, a technology consulting firm in Campbell, Calif.
“Any show going forward has to show great value to vendors,” he said. Comdex “ended up with a lot of tire kickers.”
Medialive already has started down that path. In recent months, it has been holding free, mini-Comdex education seminars on various topics in an attempt to draw buyers.
Today, Priest-Heck said, “doing it the old way is not going to be the best way.”
In addition to Comdex -- which became an annual Las Vegas spectacle replete with fashion shows and concerts by the likes of Tony Bennett -- Key3 put on the Seybold Seminars for electronic publishers and the Network+Interop show for computer networking firms.
Key3 made the bulk of its money charging exhibitors a premium for space at its shows.
But it suffered when the dot-com bubble burst, and attendance took a further hit when business travel was slashed in the wake of the Sept. 11 terrorist attacks. On top of that, the company spent $120 million buying technology trade shows at what turned out to be top-of-the-market prices.
The stock, once worth as much as $13 a share, sank to less than a penny in over-the-counter trading by the time it filed for Chapter 11 Bankruptcy Court protection in February.
Under its reorganization plan, the company reduced its debt by 87% to $50 million and transferred ownership to Thomas Weisel Capital Partners, which owns about 90% of Medialive’s shares. The company will move its headquarters from Los Angeles to San Francisco, where many of its customers and partners are located.
Former CEO Fredric D. Rosen, the Los Angeles entrepreneur who made his name building Ticketmaster into a powerhouse, will remain with Medialive as a director.
“For companies to survive today’s world, they have to evolve and change,” said Rosen, who bought Key3 from Japanese Internet and media conglomerate Softbank Corp. in 2000. “As the IT industry and economy improves, then so will the company.”
