A-Kon 30, 2019: What Happened?
UPDATE AS OF 2023: The text of the original announcement below has not been edited, however, please note that the ownership of A-Kon has shifted from a single owner to a group of investors that teamed up during the pandemic to support the event and keep it afloat during that time.
The recent changes to A-Kon created quite a stir, and many of you have been left with a number of questions. As we created additional follow up posts, we realized we were cutting out information we wanted to share with the community to make the posts more social media friendly. So we decided to post this page to provide additional details for those of you who are interested, concerned, or just want to know more about what’s going on and why. It’s important to us to have a transparent relationship and trust with our fans and our community, and we hope this will be a positive step in that direction.
Out of love and respect for the community, both our former and new owner have agreed to share additional information about the sale of A-Kon. This was a difficult process for everyone involved and we ask that you are respectful with the information provided.
With this said, let’s get to some answers…
Why did A-Kon sell?
The short answer is that A-Kon has been in a state of financial distress since mid-2017.
Now for the long version. Many of you remember the abrupt post we made when we left the Anatole and announced our move to Fort Worth. This was the beginning of what would turn out to be one of the most difficult years A-Kon ever had.
While Fort Worth had some great advantages, it also had some serious drawbacks. The most notable and relevant was that it turned out to be more than twice as expensive as our prior venue. For the first time in our 30 year history, we faced having numerous exclusivities (this is when venues require you to buy services like power, internet, janitorial, food & beverage, parking, setup labor, etc. from them directly or a single, specific vendor), stricter venue rules, a multi-site/multi-hotel setup, park rentals, room rentals, parking garage fees and more. In most cases, these exclusive vendor prices are generally well over market averages for similar services outside of a convention center environment. The reason being is that the business that provide them need to make a profit, but also are required to pay a commission of the sale back to the convention center or city in which they are in. Most of the time this commission is paid for by excessive markup on the price the event pays.
What some of you may not know is that when an event is in a hotel and has the ability to rent out a lot of hotel rooms, usually the event is able to acquire the meeting space for free or for a very nominal fee and is usually able to negotiate a lower rate for staff rooms. This makes hotels ideal for cons that fit in them as the rental costs for the building are essentially free and staff rooms come at a considerably lower cost for cons. All you need to make this work is a hotel with enough rooms and enough attendees who want to stay there to make the hotel happy. This leads to substantially lower expenses for the event and directly translates to the attendee in the form of lower badge cost.
Because Fort Worth has fewer hotels, all of which are considerably smaller than their Dallas counterparts, this type of agreement isn’t really possible. While A-Kon was able to negotiate some discounts, ultimately it ended up having to pay for the meeting space in the Hilton and the Omni, the latter of which was essentially a six figure agreement for additional concessions.
In addition to the above, we also were required to make a Food & Beverage sales commitment for concessions which we had never had to do before. Without ever having experienced the food, knowing the options we were going to have or having the time to do substantial research, we were asked by the Fort Worth Convention Center to set a number. In the end, the number that was set was in the low-to-mid six figures range and was too high. Thus, A-Kon was put in a position of owing the difference, another six figure bill, to the convention center at the end of the 2017 event.
Lastly, there is something we’re going to call “adjustment costs” at the Fort Worth convention center. It’s when you pay additional fees for room flips, changes, and adjustments. In the case of Fort Worth, each room that requires a changeover (and we had a lot of them in 2017) had an additional cost of $2 per chair for adjustments. Basically this means that the con pays $2 when a chair is picked up and $2 when a chair is put back on the floor. Initially this doesn’t sound too bad until you consider that we had a couple of programming spaces with over 3500 chairs in them, that had to be rearranged after each event. A-Kon staff were not permitted to move tables and chairs themselves for room changeovers. The A-Kon planning team made heroic effort to minimize the number of flips, but we still needed some and by the time the final bill rolled in, it was less than six figures, but not by a huge margin.
By the time all of the normal costs of running a show were in and you added the additional hotel costs, the food and beverage commitment overage, the high cost for the exclusive services, the parking costs (A-Kon paid the same daily rates for parking that the attendees did, except we had to get hundreds of spaces to accommodate staff and vendors), the “adjustment fees”, and the extras we needed to purchase to make the show work (signage, printing, decorator, etc.) A-Kon 28 was not just over budget, but completely a bust.
For the first time in A-Kon history the show took a substantial loss. The loss was large enough that not only did it drain A-Kon’s capital reserves, it also drained the owner’s personal reserves with plenty of leftover debt to go. Shortly after the event, A-kon’s owners buckled down to figure out what they could do. They borrowed a large sum of money to help cover as much of the cost as they could, worked out a deal to settle some of the money owed to Fort Worth, forged payment agreements with a couple of vendors, and offered promissory notes to volunteer staffers who deserved compensation for their hard work. They did everything they could to make sure A-kon could survive another year.
With 2017 behind us, work for A-Kon 29 began in earnest. Knowing that there was still nearly a half million in outstanding obligations, the owner asked the leadership team to buckle down wherever we could because they were going to have to use some of the proceeds earned from A-Kon 28 to make installment payments for the debt incurred in 2017. With a better understanding of how Fort Worth worked, we started reworking contracts, space, hotels and anything we could do that would help us reduce costs. But, while we were in cost cutting and money preservation mode, we wanted to make sure we addressed as much of the attendee feedback as possible. So we improved concessions, made more efficient space decisions, got more signage and did what we felt was needed for the attendee experience. Most of this ended up being successful, but a few of the necessary measures had unintended consequences and A-Kon 29 earned the dreaded nickname #LineCon2018.
In the end, we were partially successful. Barring the line issues, we managed to make Fort Worth work on a lower budget and had plenty of ideas on how to fix the line issue plus an epic amount of feedback from the attendees on how to handle it as well. We managed to cut several hundred thousand dollars off the expense line which meant A-Kon went from taking a loss in 2017 to nearly breaking even in 2018. However, A-Kon needed to profit enough in 2018 to cover the installment payments made against 2017 debt and it didn’t; so again we ended a year in Fort Worth where money was owed.
Near the end of 2018 it had become clear that A-Kon 29 was going to be the end if something didn’t change. Meri, our founder and previous owner, never gave up. She looked at countless options, both good and bad, and was adamant about finding a solution that would not only give A-Kon the possibility of seeing another year and hopefully beyond, but also one that would preserve the soul of A-Kon. In December of 2018, she found an option that she felt would work. And here, we are.
Who owns A-kon now?
When we made our initial announcement, we didn’t realize how many of you would want to know. It was an oversight on our part and, in the process, we ended up coming across to some of you as secretive which wasn’t our intent. Rather than give you guys a stuffy written bio, our new owner Frank wanted us to share this with you guys. So, here it is:
