Photo: GeekGirlCon's first convention in 2011 and the board of directors at the time. That's me in the Wonder Woman costume.
Events don't make money, but you can still be fiscally responsible and put on a good event
Universal Fan Con (UFC) canceled their convention a week before the show. The fans noticed 24 hours before the UFC event organizers put out any kind of statement as the hotel — where UFC attendees were directed to stay — started canceling hotel rooms in the discounted block. UFC's official statement is a mess, which plenty of others have pointed out, and states finances as the reason for the cancelation. Another statement from a public face who volunteered states they knew about the finances a month ago, considered a few emergency funding options, but waited until this moment to cancel UFC.
A) I do not know the organizers behind UFC. Though I have read that at least one has been behind two other failed cons that were successfully Kickstarted. My heart goes out to those who've lost real money and time on this (attendees, vendors, talent, etc.). Check out efforts to help vendors make back some lost revenue.
B) I do believe there's an audience for UFC and other conventions and conferences built for folx who are marginalized by geek culture. As a founder of GeekGirlCon, I know for a fact there's an audience. I also know how hard it is to start and run a fancon when everyone is a volunteer who also has jobs and families.
C) My credentials: I've organized 11 conferences and conventions — ranging from 200 to 3,000 attendees — and numerous smaller events and meetups in places like Seattle and LA, but as far away as Cape Town, South Africa. My conference/convention budgets have ranged from ~$15,000 (the first GeekGirlCon 2011) to $1.3 million (MozCon 2016).
I want to specifically talk about the financial angle because it's important for those looking to start fancons or events to know what they're getting into. Conventions and conferences don't make money. With very few exceptions.
UFC did not have a business plan of scale to cover costs.
The Kickstarter sunk their profit margins
UFC's Kickstarter brought in $56,498 with 1,187 backers. Kickstarter takes 5% and credit fees are 3% + $0.20 for every transaction, or $4,757.24. We're now at $51,740.76 in earnings. Then small business taxes are ~30%, and that means we're down to $34,791.36.
This does not include if there are any taxes specific to Baltimore or the state of Maryland. For instance, the City of Seattle charges a 10% event tax. You sell tickets to anything, and you pay them 10%.
UFC sold 1,092 tickets through Kickstarter, which is a strong showing. I can see how they got overly optimistic. They beat their monetary goals, and over 1,000 people showed they wanted this to happen.
The financial problems really start with the details of the Kickstarter. They promised too much with too little monetary return. For $10, you got a Saturday pass (final price $44.99), a photo op with a celebrity ($50-90), and a personal thank you from con staff (time=money). That's the lowest tier that got a con ticket, and those celebrity photo ops come with a huge cost. This is negative profits. It says attendees saved $15, but you actually saved $50-90.
It gets worse from there. Similar missteps happen with the next most popular tier $35. All the same rewards, but weekend passes instead. And then they start promising multiple tickets and hotel rooms.
Let's look at the $1,000 tier. For $1,000, you got two weekend passes ($74.99/each), 2 nights in the hotel ($135 + 9.5% hotel tax/night), pictures and autographs with celebrities no limited stated (easily $300-500), and VIP specials (~$150). They did later sell VIP tickets, ranging from $99.99-$299.99. VIP tickets included special t-shirts, exclusive artwork, exclusive collectable, special lanyard, karaoke party, and Avengers Infinity screening.
For $1,000, you were getting that in value, but most at cost to the conference itself when it came to net profit and profit margins, and their 6 backers at the level weren't going to make up for the lower tiers that destroyed any leftover profits to invest in other parts of the convention.
The problem with photo ops
Photo ops sound like a great way to make early backers extra happy. However, many celebrity guests who have photo options at conventions work like this. (This example is based on a D-list celebrity GeekGirlCon invited and then said no thank you, but I changed their name.) Sarah is an actor, who's had guest star runs on a few popular fandom shows and has a couple million Twitter followers. She requires the following: hotel, 2 first class, round trip plane tickets, $5,000 honorarium, and $5,000 in guaranteed photo op fees. Sarah does autographs for free. The conference could end up spending around $15,000 on her, if her photo ops aren't popular or attendees aren't charged for them. You can see how the photo op Kickstarter reward could've cost UFC big money quickly.
Celebrities, the double-edged sword
While at the info booth at Emerald City Comic Con (ECCC) one year, a group of three women swarmed the desk deeply pissed off that they couldn't get into see James Marsters' panel as the room was full. They said he was the *only* reason they came. They demanded a full refund from the poor ECCC volunteers.
Celebrities and specific guests can sell the show, but the benefits have to outweigh the celebrity costs. And a lot of times, conferences and conventions hit a weird gold. An internet marketing conference runner in Paris programmed Kevin Spacey (years prior to #MeToo), and tickets flew out the door. Who knew?
But you have to be able to cover your bills. Looking at UFC's special guest line-up, I know at least one of those people who charges $30,000 for appearances, plus hotel and airfare. (They deserve every penny of it too.) You know, how I know? I talked with their speaking agent about them appearing at my conference, and I made the call that we couldn't afford them. And my overall conference budget was $220,000.
UFC booked a lot of incredible special guests, and while I don't know what the guests were promised, the numbers add up. For one show I did, three nights in a hotel and airfare for 28 speakers totaled up to $48,000. And that's without honorariums or other expected revenue deals like Sarah had. Special guests who run their own small businesses are often the ones who need and charge fees.
Additionally, a lot of marginalized creators, especially people of color, are not paid their worth, and I can see how any show with the philosophy of lifting them up would want to promise them great benefits to appear. Or at least, I hope they would.
Conference size, venues, hotel blocks, and UFC biting even more off than it could chew
It's very clear UFC expected all 1,092 Kickstarter backers with tickets to show up, plus more. By my rough estimates, UFC would've had to sell 1,000-2,000 additional tickets in order to be profitable on ticket sales alone.
It's utterly bad math and bad event running experience to believe that everyone spending $10 on a Kickstarter Saturday ticket would've been able to afford travel and hotel to Baltimore. I'm sure many Kickstarter backers at that level wanted to just support the mission, even if they couldn't actually make it this year.
For example, if you have a free event, you can expect around 30% of the people who RSVP'd in your Facebook invite to actually show up. Hell, I've seen no-shows at conferences where someone spent $1,000/ticket. And, friends, this is super US-centric behavior. In other cultures, if you say you will be there, you will be there, even if the event is free, the subway's packed, and you wore mismatched socks that day.
UFC booked the Baltimore Convention Center. If GeekGirlCon, MozCon, or CMX Summit — the three large conventions/conferences I've worked on — booked a convention center their first year, they would've bankrupted the show. To date, CMX Summit is still not big enough to move to a convention center.
The Baltimore Convention Center cost them $40,000, which is right in line with other big city convention centers. This cost, by the way, only gets you the building. These deals often give you electrical up to a certain amount, airwalls to make appropriate room sizes, and maybe, if you're lucky, some chairs, tables, and access to house a/v systems without further vendors. But usually, anything beyond the space itself, you are paying more for it. And by the way, the electrical bill you will get after the show, that will be $5,000-10,000, even if you only used the lights and a/c.
Convention centers are typically unionized and often have preferred vendors for catering, internet, and a/v. If you go with an outside firm, you pay a huge fee. Being a unionized means things like to hang one banner from a walkway, you will pay someone $150 and they will be your only option. Then there's janitorial, security, or other required staff who are paid hourly and have varying staffing numbers depending how many people are in the building at that specific time. Just a few "hidden" costs when renting event spaces.
I assume nice guests and musical performers means UFC would want stages and proper sound. For quality and for just two rooms, you're looking at minimum of $20,000 investment. The program seemed to have 3-5 stages running at any time. This does not include recording or livestreaming.
UFC's venue was too big, and they needed to simplify programming, which would've changed other costs dramatically. Their special guest page listed 50 people or musical groups. Imagine how much they would've saved with the guest list cut in half. They also never should've done three days off the bat. You grow your show to three days. Heck, you grow your show from one to two days.
For the first GeekGirlCon, we would've been happy with — and had predicted based on online pre-show ticket sales — 350-400 attendees. We ended up selling out with 1,200 attendees, and had to turn people away due to fire codes. We were shocked. This also means that ~700 or so attendees showed up without RSVPing and likely lived in the Greater Seattle area.
Which a big percentage of online ticket sales were also from Seattle area people. This means, our hotel blocks, in two smaller, boutique hotels, were like 25-40 rooms combined.
How hotel blocks work — you (the event) make a deal with a hotel that in exchange for them giving your attendees a discount and them holding a block of rooms for you, you will cover costs at varying percentage rates, if those hotel rooms don't sell these rooms by a month before your event. This usually guarantees your attendees are on the same floors together, and makes the city very happy. Some convention centers — if owned by the city — won't let your rent their spaces if you cannot guarantee them a certain amount of tourism and hotel booking for the city.
For GeekGirlCon, 25-40 rooms for 1,2000 attendees is a tiny fraction. Especially if you don't know how many attendees you'll have as it's a new convention, be extremely conservative with hotel blocks.
Obviously, I don't know how big UFC's hotel block was. But they were underwater with the hotel and did not sell their hotel block as the hotel started canceling attendees' reservations, and this was how attendees found out that UFC had been cancelled. Hotels do not mess around.
This all goes back to attendance size. The biggest predictor of attendee size is how big it was last year and how fast or slow tickets sold last year. With new shows — or shows that changed drastically — you often have no idea. Even seasoned event runners mess this up.
At CMX Summit last year, we planned on having 600 attendees. It was my first year running the event and working for CMX. Previously, CMX had two conferences each year, one in NYC and one in San Francisco, and each had 300-400 attendees. We decided to combine them. Easy 600 attendees, right? And we moved the show to LA, which is a more affordable city than either NYC or SFO for both our costs and attendees' costs (if traveling).
By July and two months out, it became crystal clear that we were not going to have 600 attendees. That instead, 400 attendees seemed likely. Luckily, we had a flexible venue, and with some relatively inexpensive pipe and drape, made the space smaller. We also hadn't ordered catering — professional conferences spend ridiculous amounts of money on food! — or other attendee count variables like t-shirts. But I did have to message speakers and sponsors about this, which sucked. Luckily, our hotel block was extremely conservative.
While this didn't suck for our attendees — Summit 2017 was our highest-rated show ever — as we pivoted smartly, it did suck for our business and sank the profit margin down to 13%. Summit was expected to cover at least my salary, on top of expenses, which it did not.
Conventions/conferences need early ticket sales
As an attendee, the best thing you can do for conferences and conventions you're supporting is buy your ticket earlier. I get it, planning ahead is hard. But those early ticket sales are needed to float early costs and deposits.
I'm currently planning another CMX Summit in October. Cost-wise, we'll spend somewhere between $220,000-260,000 when all bills are in. Right now, I already have $100,000 in costs guaranteed to vendors with contracts — not including hotel block penalties, since we should sell that — with ~$40,000 already paid out. Thankfully, our early tickets and sponsorship sales right now are covering that $100,000.
Now this doesn't include future costs we know are coming. Cash flow is tight. But this year, my predictions for ticket sales have been beautifully spot-on (knock on wood).
First year conventions/conferences aren't going to have the kind of early tickets sales. Especially if tickets are cheaper, people frankly don't have to plan ahead. There's no threat that you won't have tickets at the door. There's no way to know how many people might've shown up for UFC who didn't pre-buy their tickets.
Based on finances, UFC should've cancelled a month or more ago. At-the-door tickets never would've ever made up for their costs. Or the $300,000 that UFC organizers told other staff they personally spent on it.
Don't some conventions/conferences make truckloads of money?
There are three ways to make truckloads of money: 1) cut corners and nickel-and-dime attendees and sometimes talent; 2) grow audience to tens of thousands of attendees by barely breaking even for years and putting on good shows, and then sell your show, or buy already successful shows; or 3) sell your soul to sponsors.
For a fan convention looking to celebrate inclusiveness, #1 is not the way to go. An example of a nickel-and-dime model is Creation Cons. Everything is a separate fee, and nothing is bundled for savings. Creation Cons notoriously came from Star Trek fandom where women ran huge fan conventions, and then got burnt out, and some men decided to run them for-profit. They had a market gap they filled, and they ran on those early conventions' social capital as the only game in town. You cannot grow an event without goodwill of your attendees.
In Nichelle Nichols' autobiography, she talks about a convention in Houston where they sold 20,000 tickets, but only let in a handful of VIP ticket holders. They also didn't pay anybody, except Leonard Nimoy — and had the entire original Star Trek cast, plus a band, there — and Nichols herself paid the a/v crew because the actors didn't want to disappoint their fans. There was also literally a fire on another floor of the building. I don't think that convention had a second go-around.
#2 is where fan conventions sit. You have to start small with small expectations. Plan accordingly. You still have to cut deals and ask for favors, but you can do this without ruining the show or your reputation.
Or, we can look at another angle. A couple years ago, Reed Pop — a conglomerate that owns comic conventions — bought ECCC. They didn't do this until the show had been going for almost 10 years and had over 50,000 attendees. Reed Pop didn't have to suffer through the lean years, the unsuccessful years, the years I'm sure the show barely broken even.
Sometimes, you hit a niche at just the right time, and it explodes. Sometimes your convention or conference never grows beyond a couple hundred attendees. I attended and spoke at the 33rd BayCon, which is the longest fan run sci-fi and fantasy convention; they only have a few hundred attendees, and they still have a good time.
For #3, I only kind of joke about selling your soul. But if you hit a right market at the right time, you can have sponsors knocking down your door.
This is what happened to PAX. The only large video game convention E3 decided they wanted to be an industry-only show and not allow fans in. PAX filled this niche in 2004 with 3,000 attendees at their first show; by 2007, they'd grown to 39,000; and in 2011, they had 70,000 attendees. Now they have multiple conventions across the globe.
The video gaming industry has major money, and PAX gets mega sponsorship. The first time I attended in 2009, the Washington State Convention Center had every surface plastered with ads for games, and exhibitors spending easily a half of million on their booths. These booths, where you can play the exhibitors' games, are the experience that drives PAX. They don't pay for talent, except musicians. Remember that actor Sarah? PAX's business manager told me she asks them every year for money, they say no, but she knows her audience is there, so she comes and crashes panels.
But with that level of sponsorship, you have to be okay with another company owning your brand. Fan conventions built on trust usually cannot risk this. With PAX, the Penny Arcade guys are their own worst enemies.
However, what if UFC had taken on a big sponsor, and say it was Marvel Entertainment trying to capitalize on Black Panther's success. Then what happens? We all remember Ike Pearlmutter, former CEO and now Chairman of Marvel Entertainment, donated millions to Trump and hangs out with him at the Mar-a-Lago, and then a bunch of UFC's special guests start cancelling their appearances or attendees get mad and don't show up.
You can only control so much of what sponsors will do. Plus, most fan conventions aren't focused on big brands, and many are nonprofits or run by a few dedicated staffers. You aren't going to be able to sell Microsoft on sponsoring.
Events don't make money (with rare exception)
Remember how I mentioned I ran MozCon with a $1.3 million budget? That conference was for an SEO software business, and MozCon barely covered itself many years. Which was okay, because the company wrote it off as a marketing expense and their main income source comes from their software business. They don't depend on MozCon's revenue to keep the business entity alive and well, and they made choices around sponsorship, around conference growth, around paying expenses for speakers, based on that.
UFC clearly spend beyond their convention's means, and far beyond what a first year fan convention should ever have spent, if that $300,000+ number is true. (MozCon's the only show I've worked on that spent more than that, and its average ticket is like $800+ as it's a conference for marketing professionals.)
Money goes fast in events. Everything is expensive with limited choices and options. It's a shame that the UFC staffers ended up in this preventable situation, and didn't realize it or take any action until too late, and caused real harm to attendees, guests, and vendors. Not to mention themselves.
One of the smartest things GeekGirlCon's organizers did before our first convention was sitting down with the event organizers of PAX, Sakura-Con, and ECCC and having casual "what's it like to run a fan convention in Seattle" chats with them. With one or two exceptions, most of GeekGirlCon's original staff — including myself — had never run a fan convention or large-scale event. GeekGirlCon, for better or for worse, made some different choices than other Seattle conventions, but we had insight and heard their lessons.
Even with almost 10 years of running large conventions and conferences under my belt, I find it invaluable to talk with other event organizers and share knowledge. I write this not to shake my finger at UFC — but to show how this was set up for financial failure from the beginning. UFC is not the only fan convention, or even professional conference, to have failed.
I love and adore fan conventions. Give me a small, focused show with less than 10,000 people there. Some of my fondest memories are from fan cons with 150 other people. I do believe there's a market for what UFC was trying to do, and I hope in the future to see other shows doing the same work pop up, or those already doing this work, get even more popular.
That's all I got for you this week, my friends.