Optimising the support structures of publicly operated event venues

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Event venues are of great importance for the cultural, social and economic development of regions. For example, exhibition/congress centres, event halls and arenas contribute to improving the cultural offering and the quality of life of the population. In addition, they promote the image of the location and lead to positive economic effects, for example through tourism flows. As both the city and the state as well as third parties benefit from event venues, the ownership of operating companies can be organised in different ways.

In a survey of trade fair and event companies (including operators of multifunctional halls) carried out by actori, a good 80% are sponsored by just one body, usually the local authority. Municipal sponsorship is particularly useful when the municipality itself primarily benefits from the local effects described above and/or close coordination with other municipal organisations such as city marketing or a convention bureau is required. With regard to the governance structure, sole sponsorship makes it easier to reach decisions, as only the legal requirements and opinion-forming processes of one sponsor need to be taken into account. This means that both recurring decisions, such as the adoption of business plans, and one-off projects, such as construction measures, can be implemented effectively and efficiently in line with local authority requirements.

With increasing supra-regional importance and impact of the venues (e.g. in the case of larger trade fair organisers) or special interests of third parties, one or more other sponsors are involved, e.g. the state, the Chamber of Industry and Commerce, the Chamber of Crafts, anchor tenants and/or construction project companies. An example of this is Messe Düsseldorf GmbH with the shareholders City of Düsseldorf (56.5%), Industrieterrains Düsseldorf-Reisholz AG (20%), the state of NRW (20%), IHK and Düsseldorf Chamber of Crafts (1.75% each). The involvement of additional shareholders leads to increased complexity and requires thorough governance regulations. Particular attention must be paid to the majority ratios, decision-making processes and possible blocking minorities. The qualified voting majority of one stakeholder simplifies the decision-making process, but forces minority stakeholders to orientate and possibly finance without the possibility of exerting influence. The introduction of blocking minorities can help here, but should be done with caution, as this can make decision-making processes more difficult. Alternatively, the blocking minority of an individual minority shareholder can be dissolved by the participation of objective third parties. In addition to taking structural aspects into account, individual regulations in articles of association and rules of procedure can be used to regulate cooperation. Furthermore, the establishment of committees at working level for the preparation of meetings and intensive lobbying by the operating companies vis-à-vis their owners and the political and administrative circles behind them has also proven its worth.

As an industry expert, actori has extensive experience and expertise in the development of suitable organisational structures for publicly and privately operated event venues. We would be happy to support you in analysing possible organisational structures.


A contribution by Pavel Achter, Consulting

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