Fan conventions are booming like never before, but developments at one of the industry leaders suggests that there might be financial trouble hiding behind the masks and costumes. Earlier this week, Wizard World Entertainment (OTCBB: WIZD), which runs nearly two dozen conventions in markets large and small across the US, capped a recent string of company announcements with the news that it has replaced its CEO, John Macaluso, with former entertainment industry executive John Maata.
According to the announcement from Wizard World released on Tuesday, “Maatta has enjoyed a particularly successful career as an entertainment executive, having served as the first employee of the WB Television Network, as well as the Executive Vice President and Chief Operating Officer of both the WB and the CW Television Network—where he was the co-head of the network for more than six years. Maatta served in various capacities as an executive at Warner Bros and Lorimar-Telepictures Corporation for almost 28 years.”
New face or new broom? Maata had joined Wizard World as non-executive Chairman in February, 2016, succeeding Macaluso in that position. Shortly afterward, the company hired Randall Malinoff as acting COO on a temporary basis, and also parted ways with its accounting firm. Now Maata has stepped in to run the company.
Earlier this month, Wizard World reported a $4.3 million loss in 2015, the result of a series of failed bets on new conventions in smaller US markets, a lackluster debut show in China, and an alliance with Cinedigm for a project called ConTV. The company’s stock has shed nearly 2/3 of its value in the past 9 months.
According to a statement released by the company announcing the change in CEO, Maata sees opportunity despite the recent troubles. “Wizard World is on the verge of becoming an especially powerful force in the entertainment industry as it rapidly expands into the area of content creation together with the launch of new distribution initiatives. Wizard World stands squarely at the intersection of the audience, celebrities and cutting edge content. Wizard events are the sweet spot where the entertainment industry interacts one-on-one with its audience,” said Maatta.
Bringing fan cons to new markets. Wizard World shows, which feature a wide range of celebrities, collectibles dealers and programming, have a mixed reputation in the industry. The company has templated a particular show format and has been experimenting by taking it to smaller markets like Madison, Tulsa and Columbus in addition to its flagship events in Chicago and Philadelphia.
Recently, Wizard World has been upping the ante on celebrity appearances. The upcoming Philadelphia convention features many of the biggest stars from the Marvel Cinematic Universe, including Chris Evans, Tom Hiddleston, Chris Helmsworth and Sebastian Stan, plus perennial favorites like Michael J.
Is 'Peak Geek' approaching? Are the losses experienced by Wizard World the canary in the coal mine indicating that the market for fan conventions has reached a peak? It’s hard to say because the other major players in the industry, ReedPop (a division of Reed Exhibitions in the RELX group), Informa’s FanExpo and Left Field Media, do not disclose financials. However, all have been actively expanding their schedules and acquiring independent shows.
Privately, industry insiders say costs are rising and competition is growing to a point that makes them question the long-term sustainability of the trend. Is there a limit to the dollars fans are willing to spend on live events? Will there come a day when everyone who wants a signed photo of William Shatner will have one?
Regardless of headwinds, the ownership at Wizard World is betting that putting new man behind the curtain can get the company back on the road to profits.
