New competitors lining up against bankrupt Comdex

Tuesday, Feb. 4, 2003 | 11:17 a.m.

Comdex creator Sheldon Adelson is considering starting a new technology trade show to compete with the bankrupt owner of Comdex, and a Connecticut company today announced plans for its own show to compete with Comdex -- this one at Mandalay Bay.

While Adelson contemplates a new show at his massive Sands Expo Center, Jupitermedia Corp., Darien, Conn., said today that it will stage its first-ever Computer Digital Expo Nov. 17-21 at the Mandalay Bay Convention Center.

The producers of Comdex, Los Angeles-based Key3Media Inc., filed for Chapter 11 bankruptcy protection Monday. Officials said the company would reorganize its finances and continue to produce Comdex and another big Las Vegas computer event, Networld+Interop in May.

Comdex has traditionally been one of Las Vegas' largest conventions. At its peak, the event drew more than 200,000 people and 2,000 exhibitors. But since the downturn in the technology industry in early 2001 and the travel downturn that occurred after the Sept. 11 terrorist attacks, attendance has dropped by about half.

Alan Meckler, chairman and chief executive officer of Jupitermedia, said he firmed his decision to stage the event when Key3Media Group filed for Chapter 11 bankruptcy protection.

Meckler said today that when he discovered that the Mandalay Bay Convention Center was available during the dates of Comdex, he secured the entire 1.8 million-square-foot building for his event, which will be known as "cdXpo."

The announcement set off what's likely to be a bitter battle between the two show producers. Jupitermedia is advertising its show as "the next generation technology event replacing Comdex."

But officials with Key3Media say Comdex will go on as planned.

Frederic Rosen, chairman and chief executive officer of Key3Media, said the Comdex brand name is what draws computer industry professionals to Las Vegas and he expects they will continue to support the 24-year-old event.

"I've heard that Sheldon (Adelson) says he's going to have a show at the same time at the Sands and that Jupitermedia is going to have a show at the same time at Mandalay Bay," Rosen said. "I understand that Mickey Rooney and Judy Garland will be putting on a show at the Sahara at the same time, too."

Rosen said his company will meet the competition head-on. He said "Caesars Palace didn't close when The Mirage opened" and that he expects rivals will attempt to take advantage of his company's bankruptcy filing to incite exhibitors to abandon Comdex.

"Clearly, we have had our financial issues, but now that we are developing a new plan, we're looking at the long term," Rosen said. "We're not giving up any of the playing field and Comdex will be here this year and for many more years to come."

Key3Media's plan includes reducing its debt to $50 million from $390 million, lowering its annual interest payments to $3.4 million from $38 million.

Meckler said today that he and his team considered buying Key3Media's assets, but changed plans in January.

"About two or three weeks ago, we concluded that it (Key3Media) was a broken company and that Comdex was a broken show," Meckler said.

The bankruptcy filing, he said, will make potential exhibitors even more nervous about committing to Comdex.

"Would you want to send a deposit of $50,000 to $100,000 to a company in bankruptcy?" Meckler asked. "The industry really wants a show and everybody has that time in November booked out, but they may not have made all their plans. The time and city are the same. Comdex week is now cdXpo week."

But Rosen countered that Comdex will keep many of the large exhibitors because of the strong Comdex brand name. One of the keys to success, he said, will be in securing big companies like Microsoft Inc., which traditionally has been one of the biggest Comdex exhibitors and has lent star power to the event with annual keynote speeches by its chairman, Bill Gates.

"The Comdex brand is the magnet that brings everybody to Las Vegas that week," Rosen said. "And we're assuming that Bill Gates will be opening Comdex again this year."

Michael Hughes, director or research services for Tradeshow Week, a trade publication that follows the convention and meetings industry, concurred that the Comdex brand would be hard to replace.

"Comdex has some issues, but it is still the leading brand-name technology event in North America," Hughes said. "The recent bankruptcy filing occurred relatively early this year, which is probably a good thing for Comdex because they can reorganize, move on and focus on the fall 2003 show.

"Adelson and Jupitermedia obviously have other ideas on doing things differently," Hughes said.

Meckler said he has told convention planners at Mandalay Bay to expect attendance of between 75,000 and 125,000 people for the inaugural show. He said Juptermedia sales representatives already have begun contacting potential exhibitors and are offering exhibit space for the show at rates that are 25 percent below the cost of space offered at Comdex.

Meckler said cdXpo would be "the next generation technology event encompassing computers, portable devices, hosted services, pervasive access and the rapid changes they are undergoing."

"While the growth of the computer and IT marketplace has been stunted by a lack of new and compelling applications, new digital technologies and initiatives will evolve the role of the computer and simultaneously help create the next wave of indispensable technology," Meckler said.

Comdex was founded and later sold by Adelson, who later built his Venetian hotel-casino into a success by catering to the convention and meetings industry. The Venetian is adjacent to the Sands Expo Center.

Adelson's interest in developing his own rival show to Comdex was sparked by a lengthy history of financial problems at Key3Media, not by its recent bankruptcy announcement, Sands Expo Center President Richard Heller said.

"We're looking at how the industry can be served better," he said.

The center is also looking at how it can fill space that was vacated when Comdex defaulted on a lease at the Sands in December.

The show under consideration wouldn't necessarily be similar to Comdex in scope, he added.

"You can't just launch a trade show and expect everybody to come. You need to look at the needs of what the sellers and the buyers are and put something together. You have to study it."

The Sun's Liz Benston

contributed to this report.