By Heather Reid
Did you know that as much as 55 per cent (yes, you read that right!) of a customer’s audiovisual (AV) invoice can be paid by the in-house preferred audiovisual supplier to the venue as a commission for the privilege of being identified as the “in-house preferred supplier”. With commissions at these staggering rates, significant revenues can be generated.
It is no wonder then, that carefully crafted policies and fees are found in venue contracts to influence the event planners’ decisions around third party audiovisual suppliers.
The Exhibition Services & Contractors Association’s position paper entitled “Freedom of Choice” states the following: “AV vendors should win a meeting planner’s business and confidence through performance, product choice and competitive pricing, and not as a result of restrictive trade practices. Those companies that invest in their products, their personnel, and their sales programs are rewarded with long-term relationships that are based on the value that these assets deliver to those customers.”
Here are three truths:
- Event planners are solely responsible for delivering the message and intent of their event.
- Venues should not play a role in determining an AV provider for an event.
- Venue contracts are being signed by event planners every day that ultimately end up negatively impacting their freedom of choice of AV provider.
How are event planners negatively impacting their own freedom of choice of AV provider? Because event planners are not proactively negotiating the specific portions of the venue contracts where the financial impacts and the logistical impacts of not choosing the preferred in-house AV provider reside.
In an effort to address this, the Exhibition Services & Contractors Association in their position paper entitled “Freedom of Choice” crafted the following suggested contract language:
Buyer will not accept or agree to any proposal or contract containing conditions, terms, or clauses which unreasonably restrict our choice of third party suppliers for our event(s) at any meeting facility, whether such conditions are expressly stated in the proposal or contract, or whether they are contained in the general operating policies of the facility, be they published or unpublished. Furthermore, Buyer will not accept or agree to any fees, surcharges, or penalties of any type charged by a meeting facility that are in any way based on or tied to our choice of third party suppliers, whether such fees are expressly stated in the proposal or contract, or whether they are contained in the general operating policies of the facility, be they published or unpublished. This “Buyer’s rights regarding third party suppliers” clause shall be appended to all contracts that are executed by Buyer, and if it is determined that this clause is in conflict with any other clause, portion of any contract, or any general operating policy of the facility, then this “Buyer’s rights regarding third party suppliers” clause shall be deemed to take precedence over the other item(s) with which it is determined to be in conflict, unless specifically agreed otherwise.
While the above language is useful – to me it is more of an overarching statement – and may not address the variety of actual challenges encountered, I believe it is more robust and specific to address – and then contract for – the considerations revealed below.
Some of the items to consider in contract negotiations include:
- Access to the venue’s space for an outside third-party AV supplier’s staff and equipment should not be restricted, and their staff and equipment should be subject to the exact same rules and restrictions as you, the event planner.
- Policies and related fees for exclusive services that are provided by a preferred in-house AV provider – such as rigging or power – should be based on a published price list and should be the same for all customers of the venue regardless of AV service provider chosen.
- Patch fees are a reasonable charge when you or another third-party AV supplier are plugging into a venue’s built in sound system. Fees related to AV patches should be based on a published price list and should be the same for all customers of the venue regardless of AV service provider chosen.
- Monitoring the activities of an outside third-party AV supplier by the venue’s security or supervisory staff should not be necessary nor tolerated. The outside supplier is an extension of your own staff.
- Charging access fees, surcharges or penalties for selecting an outside third-party AV supplier should not be accepted, unless there is a clear and justifiable rationale for the charge.
- Stringent language indicating that the venue does not have the right to impose new fees, surcharges or penalties regarding outside third-party AV suppliers after the signing of the contract should be included.
For event planners, building the freedom of choice for their AV supplier begins at the request for proposal (RFP) stage – and is reinforced by thorough contract negotiations.
Heather Reid, ARCT MSc DES, is founder and CEO of Planner Protect Inc. She consults with event hosts and industry professionals to negotiate balanced event contracts. CEOs, professional planners, and venue representatives alike, all recognize Heather as a trusted and knowledgeable expert in her field.
