Questions to ask a show seller that the teaser deck avoids

The management meeting is ninety minutes and everyone is being pleasant. The seller's team walks through growth, the audience, the rebooking rate, and the pipeline for next year. At the end there is time for questions, and most buyers use it to ask things the deck has already half answered.

The questions to ask a show seller in that room are the ones with a document attached. Assume the seller is honest. An event business still runs on commitments that live outside the accounts: a comped stand for a launch partner, a date move nobody logged, a venue escalator agreed in 2022 that starts biting in 2027. Every one of those is knowable from a specific piece of paper, and the paper is the answer.

Why every question needs a document attached

A question without a document produces a recollection. Recollections about event businesses are systematically optimistic, because the people in the room are the people who built the show and they remember the reasons rather than the numbers.

Attaching a document does three things. It converts a conversation into a request that can be tracked. It tells you something when the document does not exist, which is often the more valuable finding. And it makes the answer transferable, so the analyst who was not in the room can work from the same evidence.

So phrase each question as a pair. Here is what I want to know. Here is the artefact that answers it.

The eight questions

Which editions moved dates, and by how much? Document: the edition calendar showing dates actually run for every edition, with the reason for each move. A show that ran in March, then June, then March again has two comparability breaks in a five year series, and every growth rate computed across them is wrong until the breaks are disclosed.

Which exhibitors received comped or discounted space, and on whose authority? Document: the discount and comp log by contract, plus every side letter signed in the period. This is the fastest route to understanding real price realisation.

What does the venue contract commit you to through 2030? Document: the signed contract, complete, with attrition clauses, rate escalators, option dates and any change of control provision. Summaries are not acceptable here, because the clauses that matter are the ones a summary leaves out.

How many registrations came from rented or partner lists, by edition? Document: the acquisition source table from the registration platform, reconciled against list rental and media partner invoices. An audience that has to be bought each year is a cost line pretending to be an asset.

Which revenue in the last edition will not recur? Document: the sponsorship and ancillary schedule, contract by contract, with the term of each. One three year headline sponsorship in its final year changes the base.

Who holds the relationship with each of the top ten exhibitors, and are they staying? Document: named account owner per account, with contract of employment, notice period and any retention arrangement already agreed.

What do the association or endorsement agreements say on change of control? Document: the agreements. An endorsement that terminates on sale can remove the thing that makes the show the sector's event.

What has been promised for the next edition that is not in a contract? Document: pipeline notes, email commitments, anything in writing. Ask for it as a positive statement that the list is complete.

Scoring the answers

Track them the way you would track a data room request, with three states: answered with the document, answered without it, not answered.

On a mid-market show group I would expect five of the eight to come back properly and three to come back as an answer with nothing behind it. That is a normal outcome and it is a workable one, as long as you decide what the three are worth before the next meeting rather than after exclusivity.

Three responses are available for each unanswered question, and you pick one. Quantify the worst plausible case and take it off the price. Convert it into a specific warranty with an indemnity and a survival period. Or hold consideration in escrow against it. Doing nothing is a fourth option that people take by accident.

What does three of eight actually cost?

Put numbers on it, because a quantified gap moves a price and an unquantified one moves nothing.

Take a group with 5.4 million pounds of EBITDA under offer at 10.5 times, so 56.7 million of enterprise value.

The comp question comes back verbally. Assume the comped share of the floor equals the highest edition you can observe in the booking file, which was 6.4 per cent. On 18,400 square metres that is 1,180 square metres at an average realised 330 pounds, so 389,000 pounds of revenue given away. At an 85 per cent incremental margin that is 331,000 pounds of EBITDA, and at 10.5 times, 3.5 million pounds of enterprise value.

The venue question comes back verbally. The contract runs to 2030 and the seller says the escalator is around inflation. Model it at 4 per cent against your 2 per cent assumption on a 1.9 million pound annual venue bill. By year four the compounding gap is 1.9 million times the difference between 1.1699 and 1.0824, which is 166,000 pounds of annual EBITDA, worth 1.74 million at the same multiple.

The rented list question comes back verbally, and there is no sensible worst case to model, so it becomes a warranty rather than a price adjustment.

Two of the three unanswered questions therefore carry 5.24 million pounds, which is 9.2 per cent of the headline price. That is the conversation. It is specific, it is arithmetic the seller can argue with line by line, and it disappears the moment either document appears.

The evidence on what happens to winners

Worth holding in mind while you decide how hard to push.

Malmendier, Moretti and Peters (National Bureau of Economic Research working paper 18024, 2012, later published in the Review of Financial Studies in 2018) built a clean test of long run merger outcomes using contested deals where at least two bidders were in play, across US mergers from 1985 to 2009. Because winners and losers were bidding for the same asset and their returns move together beforehand, the loser gives you a counterfactual for the winner. Their finding is that winners underperform losers by 24 per cent over the following three years in the US sample and 14 per cent in the international one, and that the usual announcement effect methods do not detect it.

Roll (Journal of Business, 1986) had proposed the mechanism twenty six years earlier. If bidders make valuation errors and the highest bid wins, the winner is disproportionately the bidder who made the largest positive error, and hubris keeps them bidding anyway.

Neither paper is about exhibitions and both are about the situation you are in. In a competitive process, the discipline that survives is the discipline written down in advance. Deciding beforehand that an unanswered comp question is worth 3.5 million pounds off the price is much easier than deciding it in week six against a deadline.

How do you ask without souring the process?

Ask early, ask in writing, and ask once.

Early means at the first management meeting, not after exclusivity. A question raised in week two is diligence. The identical question raised in week seven reads as a retrade being manufactured, even when it is not, and it costs you goodwill you will want during integration.

In writing means the eight questions go over as a numbered list with the document named against each, so the seller's advisers can work the list rather than relying on someone's notes.

Once means you do not re-ask. If an answer comes back without paper, you say what you will do about it, in the same email, and then you do that. Sellers respect a buyer who prices a gap and moves on far more than one who keeps circling it. The rest of the artefact request runs the same way, and the event business data room checklist is the fuller version of the same discipline.

Where this stops

Eight questions with documents attached will catch the commitments that were written down. They will miss the ones that were not, and event businesses run on a surprising number of those.

The specific blind spot is the informal understanding between a show director and a long-standing exhibitor. Best position on the floor. First refusal on the corner. A rate that has not moved in six years because of something that happened in 2014. None of that is in a contract, none of it appears in a side letter, and all of it becomes real the first time the new owner tries to reprice or replan the hall. The only partial defence is question eight, asked as a positive confirmation, and it is genuinely partial.

The second limit is that the seller may not know either. A group that has changed show directors twice in five years has lost the institutional memory along with the people, and the answers you get will be honest and incomplete. That is a reason to fund a proper post-completion audit of exhibitor commitments in the first ninety days, and to reconcile the answers against the booking file you rebuilt during attendance data due diligence and the commercial review.

Write the eight questions into the first management meeting agenda with the document named beside each, and send them 48 hours ahead. What comes back before the meeting, and what does not, will shape the synergy and integration plan more than anything said in the room.