Allocating central overhead to shows without starting a war between show directors

The portfolio review pack goes round on a Thursday. Two show directors read the same page and reach opposite conclusions about which of them is running the better business, and by Friday afternoon one of them has emailed finance asking how the overhead number on their page was arrived at.

Nobody has done anything wrong. Allocating central overhead to shows is a choice with no correct answer, and the moment the choice is made silently it becomes a claim about performance that the people being measured never agreed to.

Why any basis you pick changes who looks good

Central overhead is real money. Finance, legal, information technology, human resources, group marketing, the office, the audit. On a portfolio doing 39.2 million of revenue across seven shows, 4.2 million of it is ordinary.

The trouble is that none of that spend was caused by a show in any traceable way. The group financial controller does not fill in a timesheet against the June exhibition. So any number you put on a show's page is the output of a rule you invented, and different rules give different answers because shows differ in the dimension the rule measures.

That is the mechanism, and it is worth stating plainly before anyone argues about fairness. An allocation basis rewards shows that are small on the dimension you chose and punishes shows that are large on it. Choose revenue and you punish big shows. Choose headcount and you punish labour-heavy conference programmes. Choose floor space and you punish large-hall exhibitions with thin teams.

Three bases on the same show

Take the June exhibition: 8.4 million of revenue, 14 people charged to it, 31,000 net square feet. The portfolio behind it does 39.2 million across 68 people and 128,000 net square feet, and carries 4.2 million of central overhead.

On revenue share, the show's slice is 8.4 divided by 39.2, which is 21.43 per cent. Applied to 4.2 million that is 900,000.

On headcount, 14 of 68 is 20.59 per cent, which loads 864,706, call it 865,000.

On net square feet, 31,000 of 128,000 is 24.22 per cent, which loads 1,017,188, call it 1,017,000.

Three defensible rules, one show, and a spread of 152,000 between the lightest and the heaviest. On a show contributing 3.7 million before overhead, that is the difference between reporting 2.8 million and reporting 2.68 million, or margins of 33.3 and 31.9 per cent against the same 8.4 million of revenue. Which subtotal each of those sits at is set out in the event profit and loss structure.

Nobody starts a war over 1.4 margin points. The war starts on the other shows.

What happens to the ranking?

Put a second show next to it. A conference-led event doing 4.2 million of revenue with 16 people and only 6,000 net square feet, because most of its value sits in the programme rather than the floor.

Revenue share gives it 4.2 divided by 39.2, or 10.71 per cent, which is 450,000. Headcount gives it 16 of 68, or 23.53 per cent, which is 988,235, call it 988,000. Net square feet gives it 6,000 of 128,000, or 4.69 per cent, which is 196,875, call it 197,000.

The same show carries 197,000 or 988,000 depending on a rule chosen in a finance meeting it was not invited to. If it contributes 1.5 million before overhead, its reported profit is 1,303,000 on the space basis, 1,050,000 on revenue and 512,000 on headcount. Its margin on 4.2 million of revenue is 31.0, 25.0 or 12.2 per cent.

Against the June show's 33.3 per cent on a revenue basis, the conference is either close behind or in a different league. Two show directors comparing their pages are comparing an allocation rule and calling it performance.

There is a fourth basis that gets less attention and often fits better than any of the three above: the count of things the central teams actually process. Exhibitor contracts raised, invoices issued, credit checks run, contract variations, refunds. Finance and legal cost tracks transaction volume far more closely than it tracks revenue, and a show with 420 small exhibitors consumes more of the group finance function than a show with 90 large ones at the same revenue. Counting those transactions takes an afternoon in the billing system and produces an allocation that a show director can argue with on the merits, because the input is a number about their own show rather than a ratio about somebody else's.

None of this makes allocation wrong. It makes an unpublished allocation indefensible.

What the standard actually asks for

The listed groups have already had this argument, and their answer is instructive: mostly they do not allocate at all in the reported segment result, and where they do anything they explain it.

IFRS 8, the operating segments standard adopted into European Union law in 2007, requires an entity to explain how the segment amounts were measured, including the basis of accounting for any transactions between segments and the nature of any allocations of centrally incurred costs, and to reconcile the reportable segment totals back to the group figures. The disclosure obligation does the work that a prescribed rule cannot, because there is no rule that would be right for every business.

Emerald Holding's Form 10-K for the year ended 31 December 2025, filed in March 2026, shows what that looks like in practice. Its corporate-level activities category is described as finance, legal, information technology and administrative functions, and the 51.4 million dollars of general corporate and other expenses for 2025 is presented below segment adjusted EBITDA rather than inside the Connections segment that holds the trade shows. A reader can see the corporate cost, see the segment result, and combine them however they wish.

That is the pattern worth copying internally. Report the show contribution before central overhead, report the overhead pool as its own number, and show the allocation as a clearly labelled memorandum line rather than as an unexplained deduction inside the show margin.

The version that stops the argument

Four things, and they take a paragraph rather than a project.

State the pool. Central overhead 4.2 million, comprising finance, legal, information technology, human resources and group marketing. If a show director thinks group marketing should not be in there, that is a conversation about the pool rather than about their margin.

State the basis and the inputs. Allocated on revenue share, 8.4 of 39.2 million, 21.43 per cent, 900,000. Anyone can recompute it in ten seconds, which is exactly the property you want.

Use more than one pool where the drivers genuinely differ. Human resources and information technology on headcount, finance and legal on revenue, operations support on net square feet. Three small allocations that each track something real beat one large one that tracks nothing.

Keep the pre-allocation subtotal visible. Show contribution before central overhead is the number a show director controls, and it is the only one worth putting a bonus against.

Should overhead be allocated at all?

For internal management reporting, often no. The argument for allocating is that a show which cannot cover its share of the company is not really profitable, and that is a fair point when you are deciding whether to keep a show. The argument against is that the allocated cost is outside the show team's control, so putting it inside their result measures the finance department's cost structure and calls it their performance.

My own preference is to allocate for portfolio decisions and to leave it out of operating reviews. A launch decision, a divestment, a question about whether to keep running an edition that clears 400,000: those need the fully loaded number. A monthly review with a show director needs contribution before overhead, because that is what next month's actions can move.

The one case where allocation is close to mandatory is a shared-cost show team, where the same people run several editions and the payroll has to land somewhere. That is a different mechanism with its own timesheet arithmetic, covered in event staff cost allocation.

Where this stops

An allocation is a presentation choice, and it cannot create or destroy a penny of group profit. Every hour spent arguing about the basis is an hour not spent on the 4.2 million itself, which is the only number in this post that is actually reducible.

There is also a real trap in using allocated show margins for decisions. Close the conference-led show above and the 988,000 of headcount-allocated overhead does not leave the building with it. Most of those 16 people are central, so the cost lands on the remaining shows and their margins fall, which is how a portfolio talks itself into a second closure it did not need. Any decision paper that recommends closing a show on an allocated margin should carry a second calculation showing group profit before and after with the overhead held constant, and that reconciliation is the event gross margin calculation done at portfolio level.

The last limit is behavioural. UFI's 37th Global Exhibition Barometer, published in July 2026 from 466 companies across 59 countries and regions, put internal management challenges fourth on the list of short-term business issues at 11 per cent of responses. An allocation rule that show directors distrust is an internal management challenge you built yourself.

This week, take your current portfolio pack, add one line under each show reading the basis, the two inputs and the percentage, and send it round unchanged otherwise. If anyone recomputes it and disagrees, you have started the conversation in the right place, and the rest of the event finance pack gets easier to defend.