MAGIC Gets Court's Approval to Leave Sands
By Heidi Genoist -- Tradeshow Week, 5/17/2004
LAS VEGAS—A federal judge in Nevada has said MAGIC Marketplace can move part of its Tradeshow Week 200-ranked semiannual exhibition out of the Sands Expo & Convention Center. What still isn't clear is how much MAGIC Intl. will pay for the space it won't be using at the Sands, or how the space might be used, with WWDMAGIC, the women's wear exhibition portion of MAGIC, gone.
The ruling, according to at least one tradeshow contracts expert, is indicative of an economic environment that has changed the tradeshow industry.
MAGIC Intl. announced in late March it was moving WWDMAGIC out of the Sands and into the Las Vegas Convention Center, starting with the August 2004 edition of the show, in order to consolidate all of MAGIC Marketplace under one roof. A crossfire of lawsuits followed.
MAGIC asked the U.S. District Court of Nevada for a judgment that would spell out the obligations of each side according to facility license agreements for the 2004 and 2005 shows. In a second suit, Sands owner Interface Group-Nevada asked the court for a temporary restraining order and preliminary injunction to force MAGIC to either keep WWDMAGIC in the building or let it rent the space to someone else.
Attorney Mark Roysner, who is not involved in the litigation but negotiates contracts between show managers and venues, said the dispute reflects a tough economy. "I don't think there's any issue of ill will. It seems driven by business decisions made in the depressed economic climate that has dominated the tradeshow industry over the last few years," he said.
On April 27, a judge in the second case denied Interface's motion. "This means that MAGIC can move WWDMAGIC to the LVCC," Roysner explained. "It doesn't say there aren't other problems." He added that the case will now turn on whether the facility license agreement has been breached and, if so, what damages have been incurred.
MAGIC suggests it has the contractual right to either hold one of several specified types of activities in the building or pay liquidated damages. The show's producers express concern that, if the space were released entirely, the Sands would have the option of leasing it to a competitor. In recent years, MAGIC has endured coat-tailing by groups like Tarsus, which collocated its Off-Price Specialist Show for apparel wholesalers in the Sands' lower level, with the better-established WWDMAGIC.
On the other hand, the Sands claims its losses from having essentially a vacant exhibit hall extend far beyond mere rent, to visitor spending, revenue from services, and business for its third-party partner, the Venetian Hotel.
The next important step, Roysner said, will be the court's ruling on MAGIC's original lawsuit. In that case, MAGIC has requested a jury trial. Interface has asked the court to dismiss the complaint, but a hearing date has not yet been set. Calls to attorneys on both sides went unanswered.
