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Chris Jones

Comdex Trade Show Leaves Vegas

24 June 2004

LAS VEGAS -- The producer of Las Vegas' annual Comdex trade show on Wednesday pulled the plug on this fall's planned technology showcase, deleting an event that only a few years ago was considered the city's most important convention.

San Francisco-based MediaLive International called off the trade show, which would have started Nov. 14 at the Las Vegas Convention Center to allow time to "reshape the event" in cooperation with information technology leaders.

MediaLive representatives did not return phone calls Wednesday, but the company issued a statement that said the show is expected to return to Las Vegas in November 2005.

"While we could still run a profitable Comdex this year, it does not benefit the industry to do so without broader support of the leading technology companies," said Robert Priest-Heck, president and chief executive officer of MediaLive. "We thought it best to postpone this year's show."

This was not the first sign of trouble for the annual technology convention.

MediaLive emerged from Chapter 11 bankruptcy protection last year, but not before its financial problems had raised doubts about whether last year's Comdex show would take place.

The company said Wednesday it has set up an advisory board to determine how Comdex best can meet the future needs of its industry. Companies represented on that panel include technology giants Advanced Micro Devices, Cisco Systems, Dell, Intel, Microsoft Corp., Oracle Corp. and Samsung Electronics.

Comdex has been held in Las Vegas each year since 1979, and in that span it's enjoyed a love-hate relationship with locals. Las Vegas' economy benefited from the money spent by event attendees, but many businesses frowned at the show's heavy traffic and gaming-averse patrons.

Comdex peaked in 1998, when an estimated 220,000-plus delegates had an estimated nongaming economic impact of $341 million. After the dot-com bubble burst three to four years ago, coupled with the events of Sept. 11, 2001, attendance fell dramatically. Last year, only 51,000 delegates were reported, adding $69.5 million to the local economy.

The show's popularity also was hurt by growth of the rival International Consumer Electronics Show, which in January drew 130,000 attendees to Las Vegas.

Rossi Ralenkotter, who on July 2 will become president and chief executive officer of the Las Vegas Convention and Visitors Authority, said he learned early Wednesday of Comdex's plans. The convention authority, which owns and operates the Las Vegas Convention Center, now will work closely with MediaLive to bring Comdex back in 2005, though the company probably will face penalties for canceling this year's event on short notice.

Contracts called for MediaLive to lease 1 million square feet within the center's north and central halls, an amount of space that normally would cost $250,000, or 25 cents per square foot. However, Ralenkotter said the convention authority had not yet determined how much it will penalize MediaLive.

"Comdex is a long-term customer in Las Vegas, and even with the attendance numbers they had last year, it's still a very strong show," he added. "Any time you have an annual show, you want to see it continue to go forward.

"We'll see what we can do to assist them for the show's future," said Ralenkotter, who added his sales team will try to keep the city busy this November with other convention and leisure business that can be booked in the short term.

One of Comdex's major benefits to Las Vegas was that it helped fill local hotel rooms and convention space during a normally slow period of the year.

Patti Shock, chairwoman of the tourism and convention department at the University of Nevada, Las Vegas, said Comdex's departure could spawn discounted hotel rooms and cheap airline tickets come mid-November. Its loss also could free up space for meeting planners who typically can't book space here, she said.

The city's sex industry could take a hit, however.

"Comdex attendees don't gamble, but they line up in those gentlemen's clubs," Shock said. "I've been on flights coming into Las Vegas sitting next to hookers that fly in just for that week, and they make no bones about it. So all of those hookers are going to be out of work.

"The casinos have never liked Comdex because computer people don't gamble that much; they know the odds. ... It's mainly going to be the restaurants, taxis, gentlemen's clubs and other places (that attendees) spend the money" that will feel a loss.

In response to the lecherous leanings of many Comdex attendees, a Marion, Ind.-based company called TradeShow Productions in 1995 launched AdultDex, an adult entertainment-themed spinoff that enjoyed an eight-year run in Las Vegas.

Dave Gould, an owner of TradeShow Productions, said Wednesday that last year's AdultDex show was canceled because of difficulties securing hotel convention space and an unwillingness by many would-be patrons from Asia and Europe to travel overseas. Those obstacles are still in place, Gould said, and probably would have precluded another AdultDex this fall regardless of Comdex's cancellation.

Officials said Comdex's cancellation also won't seriously hurt businesses such as GES Exposition Services, a local contracting company that's helped set up and tear down exhibitor booths at Comdex for several years.

GES spokeswoman Sallie Sargent said Wednesday her company was disappointed to learn that the event had been pulled but doubted that its absence would leave many laborers out of work this fall.

"In our business, we have to be prepared for this kind of thing as best you can be," Sargent said. "Comdex is really one of the few bigger shows toward the end of the year, so we'll now use that time to get ahead of a lot of the production work before the January shows hit."

John Mulkey, a gaming industry analyst with Bear Stearns & Co., also expected Comdex's loss to have little measurable impact on the local trade show industry.

"Attendance has been waning at that show for the past several years, and convention sales departments have already been filling the town with other events, whether it's other trade shows or medium-sized conferences," Mulkey said.

Las Vegas Sands Inc. Chairman Sheldon Adelson, who created Comdex and oversaw much of its growth before he completed an $862 million deal in April 1995 to sell the show and several other events to Tokyo-based Softbank Corp., could not be reached for comment Wednesday.

Softbank Corp. later spun off Comdex and other trade shows to form Key3Media, which was renamed MediaLive International after it emerged from bankruptcy protection as a privately held company.