Voiceover:
From the library of the New York Stock Exchange at the corner of Wall and Broad Streets in New York City, you're Inside the ICE House, our podcast from Intercontinental Exchange on markets, leadership, and vision and global business, the dream drivers that have made the NYSE an indispensable institution of global growth for over 225 years. Each week, we feature stories of those who hatch plans, create jobs, and harness the engine of capitalism right here, right now at the NYSE and at ICE's exchanges and clearing houses around the world. And now, welcome Inside the ICE House. Here's your host, Josh King of Intercontinental Exchange.
Josh King:
Some people like theme parks. Some people like trade shows. In many ways, they are similar, a total immersive experience in a single unifying idea. Me personally, I love them both. I took my daughter to Disney World in Orlando last fall on a daddy-daughter jaunt. She's a great wing lady, but I was the kid in the candy store. If you haven't been, Star Wars: Galaxy's Edge at Walt Disney World Resort is to me the apex mountain of three-dimensional, thematic creative expression. Hats off as always to Bob Iger and the team of Imagineers at Disney, that's NYSE ticker symbol DIS, for what they've accomplished.
But if you really want to get my juices flowing, drop me in the middle of a massive trade show exhibition floor in a cool city with a theme that lets me work my quads and glutes and geek out on my passions at the very same time. That's what brought me to the Salt Palace in Salt Lake City, Utah, from where I'm talking to you right now. Having spent the morning at Outdoor Retailer's Snow Show '23, owned and produced by Emerald Holding Inc., that's NYSE symbol EEX.
Oh boy, I'm in heaven. Let me tell you about my last three days. At o-dark-thirty on Sunday morning, I flew from New York to Salt Lake and was skiing down Snowbird by noon. On Monday, I logged about 25,000 vertical feet at Brighton in the morning and solitude in the afternoon on my new peak skis by Bode Miller. And now here on Tuesday, I've spent the day taking in the sights and sounds of Snow Show, checking out gear and talking to vendors, getting a real sense of what the future holds for the outdoor recreation industry, adapting to supply chain issues and climate change challenges and predicting what will drive consumers to purchase today, tomorrow, and years into the future.
That's really the beauty of trade shows. You get an inside look in the circulatory system, the lifeblood of the global economy. Like the stock exchange itself, the matching of sellers and buyers that injects capital into the balance sheet of entrepreneurs and fills the store shelves of retailers across the 50 states, from the big box stores to the hotel boutiques and cruise ships that ply the oceans. Just like the NYSE, this is where trade happens, where growth is predetermined based on the innovation and ideas of some of the world's most creative thinking.
For a civilian consumer like me, I'm an interloper getting an advanced peak of what's in store from my own Christmas list and a real sense of where consumer trends are headed. For a geek like me, I'm a kid in a candy store. In a minute, from here at the Salt Palace in Salt Lake City, my conversation with Herve Sedky, the president and CEO, and David Doft. of Emerald Holding Inc. The art of matching buyers and sellers through trade shows, the substantive policy discussions that happen along the edge of the action, and the combination of technology and human muscle needed to produce 140 extravaganzas like this every year.
And oh yes, we're going to have a very special guest along during the conversation. And that's all coming up right after this.
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Josh King:
Herve Sedky joined Emerald two years ago as CEO after six years as president of the Americas for Reed Exhibitions, and before that, 20 years at American Express Company, ultimately running American Express Global Business Travel, which coincidentally spun off as its own public company at the New York Stock Exchange, that's NYSE ticker symbol GBTG. Last year, Herve got his bachelor of science and business from Northeastern and graduated from the executive management program at HBS. David Doft is the CFO of Emerald, overseeing its finance team, strategy, corporate development, compliance, treasury, real estate, and investor relations among other duties.
In his three years at Emerald, David has had his hands full in M&A with a strategic acquisition of PlumRiver Technologies, MJBiz, Advertising Week, and Bulletin. David came to Emerald after 12 years at MDC Partners where he helped scale it into one of the 10 largest global advertising and marketing communications companies. David's a graduate of UPenn's Wharton School. During the course of our conversation, Herve is going to introduce our special guest. In at this point in the show, gentlemen, when we're back at the NYSE, I usually say welcome Inside the ICE House, but it's more appropriate for me to say thank you guys for welcoming me to Snow Show.
Herve Sedky:
Thank you and welcome.
David Doft:
Great to be here.
Josh King:
I mean, what an experience, roughly 400 outdoor brands, an estimated 10,000 to 15,000 visitors you're going to have over the next couple days from here at the Salt Palace Convention Center. We met at the NYSE a couple months ago. We run the stock exchange, but you really run an idea exchange that runs and drives the $6.4 billion outdoor recreation industry.
Herve Sedky:
That's right. And that's why your opening comments were so appropriate. What trade shows are, are essentially a gathering point, a meeting point for people to be inspired, to discover what's new, to see what's out there. Yes, it results in commerce, but more importantly, it's around inspiration. And that's why this type of medium is so successful in the US. And to your point earlier, it drives small businesses. 80, 85% of our customers are small businesses. They don't have the tools, the resources, the sales and marketing organizations to be able to really buy and sell their products.
What they do is they participate in trade shows. Almost half of small businesses in the US participate in at least one trade show a year, and that's how they drive commerce. As especially today, we're thinking about reopening the economy, really trying to do our part in the environment that we're in post-pandemic, this is a really important part of this reopening.
Josh King:
David, you're a finance guy. You talk to some of these entrepreneurs. You get a sense of their living basically right on the edge as they build out their businesses. What's the kind of conversations you have with them as they really seek to realize their dreams on the floor right below us?
David Doft:
That is one of the amazing things about walking around on the floor is how many of those entrepreneurs are here and they're here for the first time. They've finally built up the scope of a product line that it makes sense to make the investment, might be their entire marketing budget for the year in order to get in front of the right buyers for their product or their services. Ultimately, this is about generating leads for their business where they could more efficiently spend their marketing spend, have an environment where they know exactly that the people they're looking for are there that are coming by to look for new and inspiration, as Hervey noted, and hopefully there's a match that's made.
Josh King:
It has been a five-year hiatus since Snow Show was last in Salt Lake City. It decamped to Denver before your time at Emerald, Herve, due to a controversy over Utah's land use policies, but it's back in full force. We do have this special guest who maybe you should introduce our audience to now to basically talk about the reaction to this move, the feedback that you've been hearing from vendors, from buyers, and also from members of this community, including its leader.
Herve Sedky:
It's really my honor to introduce Mayor Mendenhall who's here with us today, as you mentioned. The mayor and I have spent a significant amount of time over the course of the last year discussing really the pros and cons of moving. It is not an easy decision to move a large event or a series of events, because OR is multiple editions a year, to a new location.
But I am 100% convinced that Salt Lake City is not only extraordinarily committed to the outdoor industry, but also all of the things that the mayor is doing and the city is doing around environment sustainability is really what we wanted to also promote and support. The mayor convinced me that being here back in this city to be part of the conversation would allow us to drive significant change. Mayor, thank you for all of your commitment to the industry, to our relationship, and welcome.
Mayor Erin Mendenhall:
Well, thank you, Herve, and thank you for making space for me to join your show for just a moment. We are thrilled to have Outdoor Retailer back. It really feels like a homecoming. I've remarked that this community's affinity for not only being in the outdoors, but protecting and making sure that from climate change to addressing our depleting Great Salt Lake, we are actively engaged on a daily basis in a way that this industry completely aligns with. It feels very purposeful that they're back here in our capital city with us.
Josh King:
Mayor Mendenhall, I certainly got that vibe through my last couple days here, from arriving at the new SLC, the airport, the experience is great, going up Cottonwood Canyon, my time at Solitude and at Snowbird and Brighton, and then back here right in the downtown core. My goal was to experience it the way a new visitor might. I rented an Airbnb in the Warehouse Section just down the street. I've experienced what the scene is at night, but what drove you to take this office and what are some of the major issues including enticing back business like Snow Show through your term?
Mayor Erin Mendenhall:
We are at a tipping point as a community. Utah's the fastest growing state in the nation, has the strongest economy for the 15th year in a row. We have an opportunity that will determine whether or not we grow in a way that maintains a quality of life here that we enjoy today, but really whether or not it's sustainable in the long-term from an environmental perspective. What I mean by that is getting more of our people out of their single occupant vehicles onto public transportation, reoccupying and concentrating our downtown. Right now for example, we're doubling our residential population in the downtown core.
Josh King:
All the construction is amazing.
Mayor Erin Mendenhall:
It's exciting too because since Outdoor Retailer was last here, dozens of new restaurants and bars have come back into the downtown. Really new ones actually cropping up because there is a shift to an 18-hour city that's happening here. It's important for us to not only align with industries like this Outdoor Retailer industry that's here right now, but that we work together with purpose, especially as a blue dot this red state of Utah. We can't stand alone and get very far, and my work with this city is hoping to make more alliances like this.
Josh King:
Because you did volunteer to come on the show, I need to ask you a pretty direct question because I read a lot of stuff from the East Coast, including I think one massive piece in I think it was the New Yorker or New York Times magazine about the gradual drying up of your namesake lake, the Great Salt Lake. For listeners, can you tee up what the problem is, what's actually happening, and what you as the mayor see as the solution?
Mayor Erin Mendenhall:
We are in the midst of a drought that we haven't seen the lakes of in about 1,400 years. This isn't unique to Salt Lake City, but of course, it's happening across the west, and water is the issue. That's the greatest challenge for development from Salt Lake City to the Coast of California. For us in Salt Lake with our namesake, as you said, we've seen the lake go up and down over the decades. It's not uncommon that the lake gets too high or it gets low, and I think that it delayed the sense of urgency until the scientists really started ringing the bell a couple years ago that this is not normal and it's not going to recover without some dramatic intervention.
Our state legislature put $40 million out there as sort of a seed fund. They'll be reconvening for their 45-day session in the next two weeks. We are expecting some serious legislation to address it. Salt Lake City and all the other municipalities that use water that is in the Great Salt Lake watershed are only 9% of the total water that could go there. Now, we're taking full responsibility for our portion of that 9%, but we really do need, to the earlier question, that other 91% of the watershed to step up and most of that is agriculture. It's going to take our legislature working with farmers to make a change.
Josh King:
If you could cut a check for $40 million and solve the problem, we'd do do it tomorrow. But what really is it going to take you and your advisors think in terms of either the investment or the working with the agricultural industry to replenish the water supply?
Mayor Erin Mendenhall:
What they're talking about is paying farmers to not grow their crops. For a state like ours that does pride itself on a lot of our local food production here, it's not just an economic shift, it's a change in the culture and the identity of many Utahns up and down the Wasatch Front. That's a shift that takes a community embracing to happen. I think that what we saw with a report that was just recently updated a week ago, we don't have 20 years to fix this. We actually have to fix it in the next year. And in the next five years we are facing that catastrophic failure of the Great Salt Lake if we don't do so.
Josh King:
Well, we need to preserve the Great Salt Lake so that OR can come back year after year as among millions of other visitors who appreciate everything that I've come to appreciate over the last couple days. Let's dive in a little bit more to what is happening right now at the Salt Palace Convention Center. Even tonight you're hosting the OR homecoming block party open to the public, sort of this homecoming rager for your return to Salt Lake, Olympic athletes, drum line, pep rally, DJs, beer garden. What the community welcome mat has entailed.
Herve Sedky:
I can only talk about why we're coming back, and we've talked about why we're back. I'm really committed to Salt Lake and being back here. What we need to do though is also recognize that we have to come back in a different way. The business has changed and business continues to change and successful companies are ones that constantly look at how they're going to change the model and serve the industries that they've served in different ways.
What we've realized is there are a number of things, particularly in the outdoor space, that we need to do a better job at. One is advocating more, advocating more for the industry. We're doing that, and that's new for us. It's new this year. We're launching it, and we're excited. Small progress. You'll see a lot more during summer, volunteerism, a number of other things. The second part is the consumer bit. Business to consumer is an important part of what our customers are looking for. For us, while we're a small introduction of bringing in outside invitations to our event tonight, really you'll start to see a lot more from us in the consumer space.
Two big examples, one is we're launching during summer in an outdoor consumer experience, and this morning we just announced the acquisition of Lodestone Events, which is a company that does a number of consumer events for different consumer events in the action sports industry.
Josh King:
Congratulations on that. Mayor Mendenhall, you're putting out the welcome mat. You've got the block party tonight. Herve talked about this year in which you and he talked about bringing this show back. Where did that rank in terms of your priorities coming into office, getting big events like this back to the city?
Mayor Erin Mendenhall:
I was thrilled when I heard from our county partners who run this convention center with Visit Salt Lake that they had even entered into discussions about the potential for Outdoor Retailer to come home. We hadn't heard a lot from Outdoor Retailer in those first few years after they'd left. It was always a hope, because Salt Lakers have a natural affinity for this industry. Not only because of the use, but even the individuals who come to the show. When we were having 30,000 people come into the city, it's kind of like when you get in an elevator with somebody and you just feel like, "Hey, I got your vibe. I know you for sure. We should hang out," that's how Salt Lake feels about the Outdoor Retailer show.
We love it when they come to town. It's the friends we haven't made yet and literally some people make relationships over the course of time. Our community's been beyond excited about the return of Outdoor Retailer, but I think even more so, as Herve said, because there is intention beyond the walls of this convention center. We have so much work to do. The city is hard at work on making those things happen.
We are embracing the opportunity to invite these retailers, whether it's a three person company or a thousand person company, to show up with us and bring their ideas and their insights from a business perspective, and then maybe bring a little elbow grease too. As he'd mentioned, we'll be doing some unique volunteer work in the community in the coming months.
Josh King:
Talking about elbow grease, David, from an organizational standpoint for Emerald, what does it take to put this on? Talk about the planning, staffing, technology, and organization that goes into securing this venue, the hotels, you got a brand new hotel you're working with, marketing to the vendors, an enticement to the buyers throughout the year leading up to fill up the floor.
David Doft:
One of the amazing things about the Emerald organization is the teams of experts we have in the different areas that are necessary to put together an event like this and frankly put together events like this every week or multiple times a week across the country. We had a major event last week. We have another one later this week. We have two next week.
We have a core team that is really focused on securing venues, on planning out the floor space, leveraging third party technology around floor space management, and working with our customers to make sure we're curating the space appropriately and putting people in the proper space where they can be successful and get the right traffic to their booths. We've added over the last couple of years, and you mentioned the PlumRiver Technology acquisition, which goes to market under the Elastic Suite brand.
We've added technology around then enhancing the experience in the show floor to drive efficiency into the transaction process, which is what the Elastic software platform does. Many of the exhibitors on the floor here at OR are Elastic customers where they can streamline the buying and selling process to make it more efficient, make it more like a consumer experience, frankly, for retail buyers and help make everyone's time more effective.
The beauty of it is that these teams all work together to really deliver an event like this that we're planning essentially a year in advance in order to get it done, and it culminates in the success that you're seeing today.
Josh King:
I'm curious, gentlemen, what goes into the creation of an event maven? We'll start with you, Herve. I said in the intro, six years at Reed, 20 years at Amex. Were you infected with the travel bug at an early age? Trace the origins for me.
Herve Sedky:
I was. I was infected. I started my career as an intern in a travel company, a very small travel company, that was later acquired by American Express. Amex didn't really choose me, but I chose Amex and decided to stay for so many years because it's a terrific company and I learned a lot of really important things with American Express, a company that really focuses on people and leadership, a company that's maniacally focused on the customer and understanding what the customer needs are.
The mayor will attest to this, in all of our discussions, it always came back to we have to go back and ask customers. We have to survey customers. We have to understand our customer's needs because decisions need to only be made, in my opinion, based on what the customer's needs are. That's why we made the decision we made because we need to serve the customers that we're serving.
Josh King:
But I'm curious, did your parents, The Sedky's, say, "Pack up the bags, kids. We're going to travel?" Were you brought through airports and passport controls at an early age and say, "This kind of life is for me?"
Herve Sedky:
Yes, I was. My father was Egyptian, my mom French. I was born in France, but went to school in Egypt, in Cairo. We traveled a lot from a very, very young age. My parents enjoyed traveling very much, and so we were constantly traveling. I had a travel bug for sure. I think having a multicultural background also contributed to my interest in different cultures, different languages, different religions. We lived in environments with three or four different religions. It definitely formed me as a person from a very young age.
Josh King:
After the time at Thomas Cook, I mean, you cut your teeth on the world's most recognizable travel brand, a company with Titans at the top like Jim Robinson and Ken Chenault. What did you learn about leadership and brand management while inside Amex?
Herve Sedky:
The importance of brand. Amex is probably one of the most successful brands in the world. What I learned from mostly under Ken's leadership when I worked at Amex was this focus on constantly reinventing the company. Amex is one of the few companies that's been around for hundreds of years, and it's been around for that long because it's constantly changing, starting from a delivery company to the travels checks business, eventually the cards business, and now all these different forms of electronic payments.
That was really what I learned the most in terms of brands is brands are only successful if they constantly reinvent, if you're constantly changing. And that's what we're doing. The examples that David just gave around investing in different technologies to really serve the trade show business is exactly what we believe we need to do. Constantly push the envelope and do things differently for our own brand or for our own company to be here for decades to come.
Josh King:
David, 12 years at MDC Partners. The Wharton School trends out financiers and entrepreneurs. What drew you there and who was the business person that emerged from Wharton, a banker with DLJ and a CIVC pedigree who eventually found his way into advertising, marketing, and PR?
David Doft:
My expertise on Wall Street was advertising and in the early days of digital media. I realized at some point in my career that I'd rather try to build something than beyond the financing side of it and was fortunate enough to move into the CFO spot at MDC. What I really appreciated about MDC Partners is I moved from a very financially driven organization to a very creative driven organization, and it helped me learn how to balance the creative and investing behind growth with the financial side in delivering results, which ultimately I think is one of the things that I do best now.
But it also helped me get a very deep understanding of marketing budgets and how they work and how they move between buckets and why marketers and brands invest behind different types of marketing. While I have spent a lot of time at MDC trying to evolve that organization through M&A and organic investment to more digitally focused types of offerings and we had a lot of success doing that and a lot of creatively driven offerings, ultimately when the opportunity presented itself at Emerald around live and experiential events, that was the other area of MDC where we saw a tremendous amount of success and growth.
We owned this great agency in our portfolio called Team Enterprises that worked on behalf of brands to execute events. I saw firsthand the power of what that could do on driving the direct connection between buyers and sellers. When the opportunity came to join Emerald and be a part of that, be of the energy of that, which I always love, and then help evolve that for the digital age, I jumped over and came here.
Josh King:
The pioneer at MDC was Miles Nadal, who founded the firm as Multi Discipline Communications in Toronto in 1980. I went on the website this morning and looked at all the names associated with MDC. Now, you should know also that I worked closely with Mark Penn in his early years at Penn Schoen and Berland. What was the opportunity and challenge that you saw in merging MDC with Stagwell?
David Doft:
At the end, and it was the last thing I did there was leading that transaction and that deal to combine with Stagwell. Ultimately, MDC needed to get to another level of scale. The advertising industry has been a consolidating industry in the agency side dating back 40 to 50 years. While we were a top 10 company at that point, the reality is is that number one, two, and three were 10 to 15 times our size. Scale and global reach and ability to deliver kind of more organic investment in technology was key, and it made sense to partner up with someone else in order to get that scale.
Josh King:
Mayor Mendenhall, I've talked to these two guys a little bit about their origins in the business world, paths that are both unique, but also they're not completely original the way they went through it. Totally different track. A person who, especially in this day and age, enters politics voluntarily. Why?
Mayor Erin Mendenhall:
I know. There might be something a little off with people like me who really wake up excited, go to work as a public servant and sit through public hearings once a week. But I love the work, and I came into it not thinking I was an electable sort of person. I was an activist in the clean air fight here locally. We have uniquely poor air quality during certain times of the year because of our bull shaped valley. I just wanted to see more change happen. I evolved from activist to community organizer and then co-founded a nonprofit that still works today more in the policy realm and science-based policy.
It was in that vein that people started saying, "You should run for city council. This is a big issue for a lot of Salt Lakers." But I was 32 at the time. This was 10 years ago. I had no money. My friends had no money/ I didn't have a graduate degree at the time. I have a big tattoo on my arm, and I can use some salty language at times. I thought, you can't elect somebody like me. But as it turns out, running for city council in a city like ours is really about knocking doors, listening, talking to as many neighbors as will listen to you and share their thoughts. I won, and I ran again, did two terms on the city council and ran for mayor back in 2019, and then took office in January.
And by March, everything was different. If I could go back to 2019 and someone could tell me what was going to happen from the pandemic shutting everything down, we had a 5.7 earthquake about eight days later, we had 300 protest events between May 30th and January 6th, social uprising are reckoning with our history of racism, I would do it all over again. Because for people like me who came into it wanting to make change, wanting to be reinventing what we've just counted on staying the same for too long, there's never been such an opening. The fabric was rent. We got down to the brass tacks.
I think unlike any other time in our lives, in the history of our lives, we have a population that's saying, "Hell yes! Make these changes. We're standing with you. We want to see a clean future of energy and environment. We also want to see access to opportunities and address the inequities that have plagued us." I love my job.
Josh King:
Herve, David, between you both, an enormous array of experience, leadership, and vision for an industry. You're both relatively newcomers to Emerald. What was its history and its legacy? What did you find when you got there, and what do you see as the growth opportunity?
David Doft:
Emerald in its origins was a division of Nielsen, the media research company, used to own a lot of other assets beyond that core product that they're best known for. About 10 years ago, a private equity firm out of Toronto called Onex bought the business out of Nielsen, and over the course of a number of years began to scale the business through acquisition, which culminated it going public in 2017 on the New York Stock Exchange. The business from 2013 until now has made over 20 acquisitions in order to scale to where it is today.
Ultimately, Herve and I were brought in to run the business after a period of underperformance, that was prior to the pandemic, where I think more integration of the business was necessary, more focus on growth investment was necessary. Those core areas of expertise I think of the two of us in order to build the business from here going forward. Onex remains the controlling shareholder of the company, and yet we have lots of leeway to follow the strategy that we've developed as a team and build from here.
Herve Sedky:
I'll only add the part about growth. We're kind of lucky, to be honest, as an industry. We've seen the worst. We were shut down for a couple of years. We had virtually no revenues. As some other sectors around us are worried, and rightfully so, wondering what the impact of soft landing, hard landing, whatever it is, I can assure you it's not going to be as bad for us as what we've experienced the last couple years. We've got a nice tailwind, coupled with the fact that we've made seven acquisitions in the last two years.
Mayor Erin Mendenhall:
Eight as of today.
Herve Sedky:
Sorry, eight as of today in the last two years. We feel very confident. We're investing in the right places. We're transforming appropriately. We're launching new shows. We've got a pipeline of launches that we're excited about. We've got four new launches in the market. One actually will also be in Salt Lake City. We feel very good about our business and where we're headed and the opportunities to continue to grow, but equally obviously have to continue to focus on the basics, focus on our customers, focus on our people, focus on the things that are going to allow us to grow appropriately.
Josh King:
Let's turn back to where we actually are, Salt Lake City and the Outdoor Retailer Snow Show 2023. What does this event mean for the outdoor recreation industry? As I told you guys last night when we were at the media reception, I rode the chairlift at Brighton with this lady named Kelly, owner of a one woman company from Michigan who makes something called the skiing passport.
This show is her entree to a world of stores selling her product. I went back and saw her booth on the floor this morning. She's so excited to be meeting people and to talking about this vision that she has. Her husband's there to support her. But in many ways, if you are not here, she doesn't get to have this exposure to the retail world.
Herve Sedky:
That's right, Josh. That's why we do what we do. You nailed it. The number of stories that I have the benefit of hearing constantly is amazing. It gives me goosebumps. It's just unbelievable to understand the impact that we have on some companies. There's a small company that was telling me they had an idea. It was just an idea, and they were able to build a prototype before coming to our show. They introduced this prototype at the show and left with a million or so dollar order. It changed family's lives. It's really what creates businesses, and that's why we do what we do. It's really extraordinarily exciting.
David Doft:
And I would add, I think despite the rise of the internet and digital media and the e-commerce and even our own investments in e-commerce technology, it's really hard to replace that face-to-face interaction, the touching and feeling of product, comparing it potentially to competing products that are right there 10 feet away. It's really efficient, it's insightful, and really drives discovery in a way that hasn't been replaced and we don't think will be replaced.
Josh King:
Thinking about just the show alone and the outdoor recreation economy overall, it represents $862 billion in economic output, 1.9% of GDP, 4.5 million jobs according to the Department of Commerce. That's more than oil and gas extraction, mining, and agriculture. What sense of responsibility does that give you at Emerald as basically holding the key to match buyers and sellers to keep that level of economic output going?
Herve Sedky:
It's an enormous responsibility and one that we take really seriously through our investments. An example that we didn't really touch on today is our matchmaking capabilities. We've invested in matchmaking. Matchmaking is really allowing us to be a lot more scientific in using data and technology to match the right people. People are looking for more efficient, even if it's face-to-face, a more efficient buying and selling opportunity. We are going to continue to invest in these tools in order for that industry to continue to grow. We're doing this across multiple industries, but we take that responsibility really seriously.
Josh King:
Mayor Mendenhall, I was feeling during the last couple days here in Utah, this... As you mentioned too, the way people look at each other, the way they dress, this love of the outdoors, it's really woven into the lifestyle. It contributes more than $6.4 billion to the Utah economy, employing more than 83,000 people, not to mention $737 million in state and local tax revenue and $322 billion in wages and salaries. You came into this job because you wanted clean air, but now you are basically a salesperson to get more people like me to fly to SLC.
Mayor Erin Mendenhall:
Fortunately, I get to be the salesperson for a gorgeous city at the foothills of the Wasatch Mountains that's not separated by more than a 14-minute drive from our LEED Gold airport that just opened up, that you mentioned earlier. I don't have to work too hard at convincing potential partners that this is not only a place that they can align values in that arena with the public dollars that are being leveraged to bring, for example, 100% net renewable energy into the city in the coming couple of years, but that their employees and the talent they want to recruit here and bring in here are going to look up at these mountains.
They're going to see a trailhead not too far from wherever they live, and they're going to be able to have a quality of life balance that is almost unmatched across this country. It's a place where if you ask the average Salt Laker how they got here, so many people will tell you, "I came out to ski for six months, and I ended up staying for the next 23 years. I love it here." People come because of these mountains, and again, the amazing snow that we have is counting on the Great Salt Lake to pick up that moisture and drop it in these mountains.
The nature of this ecosystem that we are a part of and that actually this industry is a part of, but the fragility of the natural aspects of it are bringing these kind of partnerships to a new fever pitch of importance. I think companies like Emerald and the show that they're bringing here is underscoring that commitment to act quickly and to act with intention across public and private partnership.
Josh King:
We don't have Florida Governor Ron DeSantis here with us. We only have the mayor of Salt Lake City. But David, you have a sister show to this, which happened last week, the Surf Expo held twice a year on Orlando, Florida. You mentioned it earlier. You go from hot to the cold, but the idea is the same, helping people get outdoors. What was your take from Surf Expo and the prospects for the summer economy?
David Doft:
Surf Expo was a fantastic event last week. It has bounced back very meaningfully from the pandemic impact of the event. Pretty much the first event post-COVID that we held was in January of 2021, which was Surf Expo in Orlando. It was amazing even then of a show that was a fraction of the size of what it was this year to see the commitment of the industry to come out and support the event and support an industry that did frankly fairly well during the pandemic because more people spent time outside and invested behind Outdoor Recreation, whether it was winter or summer, or warm weather or cold weather.
The event this year continues that recovery, and it does seem that that industry is doing quite well. We saw many, many exhibitors return this year that hadn't returned last year because they weren't sure it was time yet. They weren't sure whether the support would be there from the buying community. As the year developed, it's become clear that the support is there, the buying power is there, the consumer trends continue to be there, and the show was quite robust.
Herve Sedky:
One of the trends that we also saw across our shows is that it's much easier for a visitor or a buyer to decide to go to a show because the investment is light. Whereas the sellers, they have to make decisions months in advance. What we saw is we saw a lot of buyers return earlier on than sellers and that dynamic has helped really fuel growth for us moving forward. As we've said on various earnings calls, we see on a quarter to quarter basis improvements in our forward booking. We continue to see that trend.
Josh King:
Talk about '23 and '24 for, an event geek like me, I look at your annual calendar and there's so much to dive into, design, equipment, retail, technology, safety and security. We could spend the rest of our conversation on the sports licensing and tailgate show and The International Pizza Show alone. But at Emerald, there is so much more that meets the eye. How would you describe what else you can find under the hood at Emerald?
Herve Sedky:
Well, I think that's a very good description of what you can find under the hood. I think you gave a nice range of events. One of them is actually David's favorite event that you listed there.
Josh King:
Sports licensing or pizza?
Herve Sedky:
Sports licensing. I'm more the pizza guy.
Josh King:
I want to go to sports licensing.
Herve Sedky:
You're more than welcome.
Josh King:
It's in two weeks. Where is it? In Vegas?
Herve Sedky:
Las Vegas. You're more than welcome to attend any of our events. I think it's back to the comment of the impact that we have on the industries that's really exciting. We work in such a broad range of industries, and we can have the same impact across all these industries. When you compound that with our strong and active M&A machine, so to get into more high growth industries, and our launch machine, we're trying to launch in sectors that are either underserved or not served at all, that really allows us to do the kinds of things that we do or doing here. And that's really exciting.
Josh King:
On the safety and security aspect, your campus safety conference West Show is coming up in July in Henderson, also in Vegas. So many of us have been transfixed by the horrific murders of the four University of Idaho students in Moscow, Idaho last November. At CSC West, really and indeed at all your shows, beyond a vendor introducing new video surveillance technologies, for example, how do you use the convening power of your events to gather industry thought leaders to dive into the substantive policy issues and work on developing consensus and solutions?
Herve Sedky:
That's what these events are for. That is exactly what happens at the events, whether it is our campus safety and your right to highlight the atrocities, but those are discussions that happen, because what happens at these events is you have all of these different from public officials to private sectors. The mayor was talking about that combination and that partnership between private and public. Officials with private sector, with agents of change that come together and have these discussions, that's what happens at events and that's why they're so important.
There is a buying and selling component, of course, that happens, and that's critical because being able to make sure that school superintendents know the latest and greatest of security tools and applications to be able to secure this school is critical, but there's also the conversation parts that draws all this audience to the events.
David Doft:
The events have heavy conference components for educational purposes where those discussions take place, but I also think we shouldn't forget the fact that we also own the media assets around the industries. While we have the event, we're also the go-to business media news source for most of the industries that we have trade shows. The example of campus safety is we're engaging with that audience year round where there's analysis and updates about what's going on in the industry and the latest best practices and tools and technologies that can be adopted with case studies year round that culminates in the live event where they get to get together in person.
Josh King:
Mayor, this is a university town and any mayor has scores of schools under his or her domain. Again, as you told us, you got in the job to clean the air, and you're now the city's number one salesperson along with the county, but you're also the protector of its students. What are the things that you've seen and learned and done during your term so far to increase the safety of students?
Mayor Erin Mendenhall:
The Salt Lake City Police Department has actually recently done an outreach effort that was exclusive to administrators of our public schools. Now, in Salt Lake, our school district is a separate entity from the city itself. Nonetheless, it's our police who would be responding when an active shooter situation should happen. We invited those school administrators into our community room of the police department without cameras, no media invited, and not necessarily to do a learning session on the strategies, but to talk about the lessons that our police department have learned by studying these tragedies that have unfolded across the country school based and otherwise.
Some of the technologies that are coming out and the basic principles that they wanted to make sure these administrators could go back to their schools, check on what is and is not there, and that this is now an ongoing conversation where our police department can be an advocate for those schools with our school district and perhaps up to the state level for the funding that they need to make sure they're as secure as possible and that they know we are as ready as we can possibly be.
Josh King:
One of the phrases that came out of the pandemic and the murder of George Floyd was defund the police, and part of that is personnel, part of that is technology and equipment. From your vantage point, what has been your perspective coming into that and thinking about the additional investment both in personnel and technology that the police department needs?
Mayor Erin Mendenhall:
I think every city's most fundamental job is to keep their people safe. Without safety in a community, education, commerce, none of it can happen. It was important for my administration to listen to the communities who have been disenfranchised over the course of the history of the city and this nation and grow the table of conversation so that we could hear what they wanted to see in their communities. Although there continues to be, and I think it's a good thing with the activism throughout communities, there's still pushback on funding the police, we heard at the grassroots level throughout our community, in particular our city's west side and central city, they want to see good policing happen.
They want it to be good policing. We issued a series of reforms in August of 2020 around use of force, body-worn camera, and ultimately we need better training for our officers on the actual experiences of our residents and the historic relationship of our communities with our police department. That makes the conversation less about you as an individual and me with a contrary opinion, and now we're fighting with each other without solving this systemic issue that we're facing. Those kind of conversations are now a built-in part of Salt Lake City government in our commission on racial equity and policing.
The police are at the table as listeners to answer questions. Ultimately, this commission made up of civilians, leaders from around the communities are telling me what we need to change in our budget and in our policies. We've implemented all of their recommendations over the last two years, and they're going to keep doing that work for us and with us.
Josh King:
David, this question may go hand in hand with what Erin just said, but you service a lot of industries like safety and security, but also a lot of burgeoning ones. One of those is cannabis. I haven't dived deep into where Utah law is right now in cannabis or where the debate is, but David, you paid $120 million in cash for MJBiz last year, which includes, as you say, some of the content that goes along with it, mjbiz.com as well as MJBizDaily, Hemp Industry Daily, and MJBiz Magazine. Herve, in the deal news release, you called it a transformational acquisition. Was this a good time, David, to dive into the world of cannabis?
David Doft:
I think it was. We're still we believe in the early days of growth of that industry. Where we sit today, there are 38 states that have legalized cannabis, half for recreational purposes, the rest for are medicinal purposes. There's surely a tailwind behind that, as well as a tailwind behind potential federal legalization that we think could lead to continue expansion of that industry. Outside of the recreational side, the medicinal and pharmaceutical applications I think are important.
And with that, we've actually launched an extension as part of our launch strategy into the psychedelic space, which is a new emerging space that's getting a lot of attention from pharmaceutical industries, a lot of investment from growth capital funds in terms of funding research into new medicinal solutions for that. We think it's an important place to be. It's a growth industry, and we think we can leverage Emerald's expertise in delivering events at scale into that industry.
Josh King:
You walk onto the floor of the Snow Show or maybe the Retail Innovation Conference and Expo or another one of your 140 events and you get this unique opportunity to peer into the future. Maybe it's about cannabis. Maybe it's about safety and security. There's amazing tech on display. What can trend hunters or people in general learn about the years ahead and what it has in store by attending one of your shows?
Herve Sedky:
I think the inspirational comment that I made earlier is really what we see at the shows, where you have a lot of different reasons why people attend shows. There are probably somewhere between five to 10 reasons why people come. Sometimes they come with a very, very particular purpose and an agenda, an agenda to meet particular buyers and sellers, and they are here to conduct business and go. Other times they're there just to explore and see what's new and understand the trends. We have to create these guided pathways for them to be able to do that within a particular show.
Sometimes they're only there to socialize. Other times it's to learn. David referenced our content or our conference business, which is really all about learning. Our responsibility is to create these journeys that are really clear so that every buyer through surveys, we understand what they want to do. And using our technology and our data, we can serve them the appropriate experience. And that's how our industry is changing.
Josh King:
David, I was at your media reception last night. It wasn't lost on me that this place is crawling with reporters trying to figure out what the next big waves of retail and where they're coming from. What role does the press and public relations play in the ecosystem?
David Doft:
I think it's a really important one. When we talk about bringing together the community of a particular industry, and in this case the outdoor industry here at OR, that includes the press. The event you referred to last night is a great example of that. There are over 300 members of the press who've signed up to attend this event. This is a key part of the consumer economy. Their leadership cares about it. They care about it from a business standpoint. They care about it from a general news and entertainment and lifestyle standpoint. That's what brings them here to discover what's next. What's amazing about event like this is you are peering into the future.
What you see on the floor here are going to be in the stores for next Christmas season, not next month. It's a year ahead peek into the future and what innovations are coming to pass. Yes, there is retail buyers here on the floor that might be buying today, but as important in this gathering is the ability to get that message out to the press to get ultimately consumers to be looking for those products and services throughout this year.
Josh King:
Mayor, do you see this as an opportunity to piggyback on that, to perhaps send the new message of Salt Lake City to this influx of reporters with their reporter notebooks in hand, their cameras and their news gathering apparatus? What's the message you're telling them?
Mayor Erin Mendenhall:
Salt Lake City's on the rise and we're ready. Our skyline is changing. Even from that new airport approach, as you come into the city, you're seeing a downtown rising 2.0 that we haven't seen in a couple of decades here. I mentioned the doubling downtown residential population. We're building up Tech Lake City healthcare innovation businesses that want this bumpability that is intrinsic to a trade show, but it's actually becoming part of the fabric of the downtown core here in Salt Lake City.
We've got the University of Utah, research one university, brilliant minds cranking out incredible technology businesses who are putting their roots down here in the capital city, not just down the road in the Silicon Slopes. I think that the timing is beautiful, but there's something about Outdoor Retailer that is different, as you mentioned, to other industries that have a bottom line here for a state and for a local economy, and it's about proximity to joy. These are activities that people want and they actually are I think remembering that they need in a way that the pandemic presented to us anew. We saw parks and trails increase in use by more than 40%, and that use has continued now in this time post-pandemic.
It's a little too soon to say that, but we're investing as a community, $85 million in November. Our voters approved the biggest bond in parks and trails that we've ever done. We want not only to have Outdoor Retailer come back home to Salt Lake City, but we want to be an active part of living out these industry dreams here on our trails and slopes in Salt Lake.
Josh King:
Herve, in your investor presentation, you mentioned that Emerald's three pillars of value creation are customer centricity, 365 day engagement, and portfolio optimization. How do these three combine to drive value for Emerald shareholders?
Herve Sedky:
Well, I think we touched on all of them today. Customer centricity is really about listening to the customers, understanding their needs, making sure that we develop solutions that are adapting to the changing needs of customers. We have a number of things that we've outlined in our investor presentation around what we're doing to really deliver on our commitment to customer centricity. 365 day engagement David touched on in terms of our content strategy. We've actually just announced late last year a new organization focused on content. It's a really important part of our business.
Our content business was completely linked. Inside of our trade show business, we've now separated them so that we have a real focus on content so that we can continue to really get the value from content and create a lead generating machine for our customers through our content business. The PlumRiver Elastic acquisition and Bulletin acquisitions are also part of the 365 offering our customers with this marketplace so that they can buy and sell and interact with products and companies all year, not just for the days of the trade show. That's the second pillar.
The third pillar we touched on is really simplistically it's our M&A focus and our launch focus. Portfolio optimization, meaning just in managing our own individual stock portfolios, we want to be in the sectors that are growing. We want to continue to obviously grow our company and we'll be in the right sectors. We'll enter sectors at scale through acquisitions. We'll also do some smaller acquisitions that are more tuck-in like Lodestone. It's a tuck-in under our action sports sector. And then we'll launch. We'll continue to launch in order to enter these new sectors.
Josh King:
David, running an annual schedule of 140 events has got to be grueling on the travel schedule of you and the leadership team. Here you are in Salt Lake City, wearing your down vests and kibitzing around the snowstorm last week, as you said, in bathing suits, living the Jimmy Buffett lifestyle. How do both of you manage the grind personally? I mean, you don't have plants, you don't have huge CapEx, but you do have a travel schedule that's a killer.
David Doft:
It's true. We do travel quite a bit. I think I have elite status on every airline. I'm not kidding, all of them because of the travel schedule. Ultimately, for me, it's about family time when I'm home and on the weekends. I have four kids and between travel, sports, and performances and making sure I get to every single thing that I can. That helps me keep the balance, and I find times to sleep in between.
Herve Sedky:
Sleep probably is the one that gets hit the most. But I agree, I actually love it. I love being out with our customers, with our partners, with our employees. It gives me energy. It's really for me the most exciting part of the job. What I do is I go to a trade show as an example and I only need a few hours to walk around and see the customers and our people, and then I set my office there and I do conduct the rest of my business at the trade show.
You adapt and you start to maximize your day and try to figure it out. And then to David's point, also make sure that you're present at home with the family. Try to work from home on Fridays as much as possible. Not always possible, but I try. Home and present on the weekends.
Josh King:
I mean, you've only been in this job a couple years, so are you discovering new cities, new hotels, and you say, "How did I not know about this earlier?"
David Doft:
Definitely. One of the beauties of the business with the number of events we have is we are producing events all over the country and we're hitting all sorts of cities. There is, to Herve's point, the energy around that. I do feed off of that. People hear me often say I'm a native New Yorker. I grew up in the city. I feed off energy of having a lot of people around, because that's how I've lived my entire life. And that's what's great about being in this business and being on the road and visiting all these cities.
Josh King:
I'm a tourist, a visitor coming to Salt Lake City for the first time. What are the five things I must do?
Mayor Erin Mendenhall:
Oh my gosh. Well, from here you should get on a Green Bike, one of the bike rentals, and go up City Creek Canyon, I don't know another capital city in the nation that has the proximity from the heart of the downtown core to wilderness space. It has water running through it and where our Indigenous tribes spent their winters up on the western slope of that. Check out City Creek Canyon. Eat some really great Mexican food. Red Iguana and Chubby's are two of the favorites in town. You should probably go check out some of our artists also. We have a great arts community. Salt Lake City is full of makers, so maybe consider getting a tattoo while you're here also. I don't know.
Josh King:
There's so many tattoo joints. It boggled my mind when I was driving around.
Mayor Erin Mendenhall:
Just a slight aside, this very red state that we're in, it extends beyond the borders of Utah into some of our surrounding states. Salt Lake City is the funky safe space. It's where people come to live their authentic lives in a community that loves and supports them. I mean, they say Keep Austin Weird. Salt Lake City is pretty proud of who we are and how we are. Pick up a piece of art while you're here. I can make some suggestions.
Josh King:
Please. I will get that offline.
Mayor Erin Mendenhall:
And then check out some of our historic neighborhoods, and in the heart of those historic neighborhoods are these little business districts. 9th & 9th is a favorite one, 900 East, 900 South. There's local businesses, coffee shops, restaurants, bars, and even a little handheld pie window that you can walk up to. Check out some of the local places in our neighborhoods of these historic bungalows. It's hard to find such intact historic neighborhoods in a downtown core. Fifth one, Jazz are playing tonight. Go Jazz.
Josh King:
I'm going to be there, Jazz against the Cavaliers. I'm going to get on StubHub right after the show and get my ticket. After I do a little block party, then I'm going to go to the Jazz, then I'm going to fly out on the red eye.
Mayor Erin Mendenhall:
Sounds like you have a good trip planned.
Josh King:
I have a great trip planned. Herve, David, you've established this track record certainly for not sitting still, whether it's through attending events like Snow Show here in Salt Lake or grinding out the numbers for your next acquisition. What should we expect from Emerald over the next three to five years?
Herve Sedky:
We've got a very clear plan and strategy. We've outlined it. We are going to be very focused on delivering against that strategy. We're not really chasing shiny objects. We believe staying focused on customer centricity, staying focused on 365, and we can do more there and we are doing more, as well as portfolio optimization, continuing our M&A efforts and launching events is how we'll be successful over time. We'll focus on our people, which is really important.
Internally, we have a people first strategy. We're very focused on retaining, on hiring and making sure that our people have the top tools in the industry in order to be successful. Those are the things that I think will allow us to continue the path that we've been on. Not complicated.
David Doft:
If we can do all that, we'll be able to deliver a whole lot of value to our shareholders.
Herve Sedky:
Absolutely.
Josh King:
Do all that and I'll gather together tonight for the OR homecoming block party.
Herve Sedky:
That too.
David Doft:
We'll be there.
Herve Sedky:
Thank you, Mayor, for hosting us.
Josh King:
We've almost talked right up until the beginning of the block party. Thank you, Herve, David, Mayor Mendenhall for joining us Inside the ICE House.
Mayor Erin Mendenhall:
Thank you.
Herve Sedky:
Thank you.
David Doft:
Thank you.
Josh King:
That's our conversation for this week. Our guests were Herve Sedky, President and CEO, and David Doft, the CFO of Emerald Holding Inc. NYSE ticker symbol EEX. Also joined by our special guest today, Mayor Erin Mendenhall of Salt Lake City. If you like what you heard, please rate us on iTunes so other folks know where to find us. If you got a comment or question you'd like one of our experts to tackle on a future show, email us at [email protected] or tweet at us at @icehousepodcast. Or if you're like Herve and David, you can just grab the mayor and bring her on to the show. We'll take her as well.
Our show is produced by Pete Ash with production assistance from Ian Wolf. I'm Josh King, your host, signing off from in this case, the Salt Palace Convention Center in Salt Lake City, Utah, the home this week of Outdoor Retailer's Snow Show 2023. Thanks for listening, and we'll talk to you next week.
Voiceover:
Information contained in this podcast was obtained in part from publicly available sources and not independently verified. Neither ICE nor its affiliates make any representations or warranties, express or implied, as to the accuracy or completeness of the information and do not sponsor, approve, or endorse any of the content herein. All of which is presented solely for informational and educational purposes. Nothing herein constitutes an offer to sell, a solicitation of an offer to buy any security, or a recommendation of any security or trading practice. Some portions of the preceding conversation may have been edited for the purpose of length or clarify.
