Promotion and management of the TT Festivals – did Vision Nine have it in the bag before the tender process started?
At the time of writing this blog, I am moving into the closing stages of my campaign. I vowed before I undertook to run for MHK that I would manage a clean campaign, report only the facts, argue intelligently with the opposition and expose anything untoward, duplicitous or of a foolish nature should evidence cross my desk.
So, here I am presenting what I’ve discovered in my investigations and asking questions of relevance. In this blog piece, I will explore how the tender process seemed to be undertaken, how various parties have been written to (without response) and how V9 was presented to Tynwald, highlighting how DED and Minister Skelly dealt with our local and loyal companies during the process of installing Vision Nine as promotors and managers of the TT. Once you’ve read this piece, please leave a comment. . .your feedback is important and your opinions matter.
Who are Vision Nine and why did the DED want to change what wasn’t broken?
Vision Nine (‘V9’) are, according to their website http://www.visionninehq.com/ a company that “…create and curate events that build social, cultural and lifestyle value.” Apparently, they have a team of forty staff that “. . .creates ground breaking and innovative events.” According to the website, V9 not only create events and build their own IP but they manage and deliver events on behalf of world renowned brands and entertainment properties.
Events that V9 produce are:
- The NASS Festival (BMX and Skate boarding)
- Spring Masked Ball (themed venues and a party – the dedicated website has no information on it, and only lets you buy tickets)
- The Halloween Masked Ball (as per the Spring Ball, no info’ on the dedicated website)
- The Boardmasters Festival (apparently, the UK’s major celebration of surfing).
No motor sports experience. . . . or is there?
Well, under the ‘our work’ section of the website, V9 profess to “Create, plan and execute a tiered hospitality programme to leverage burn’s partnership with Lotus F1.” V9 claim to have had 162 guests attend over three days with 166 VVIPs experiencing Paddock Club hospitality, 96 VIPs experiencing Grandstand hospitality and 1,500 guests partied the night away at the Just Cavalli Club. Impressive stuff, I’m sure this went very well but it’s a far, far cry from promoting and managing the most famous and largest road racing event in the world which has:
- 1,200 + volunteers
- 25,000 locals putting up with road closures
- Circa 57,000 visitors (according to Minister Skelly, Tynwald Hansard April 2016)
According to the Tynwald briefing document, V9 will increase the number of visitors to 85,000 though the minimum will be 57,800 by 2026. Hang on! Just 800 more in ten years time!!! Tynwald sanctioned this deal 27 votes to 3 with just Beecroft, Karran and Turner seeing sense and I’ll talk more about the Tynwald “debate” later on.
Perhaps it’s worth noting at this point that the Boardmasters Festival was cancelled in 2013 due to a lack of sponsorship (only three years ago) and V9 cite the economy as the antagonist in the saga http://www.bbc.co.uk/news/uk-england-cornwall-22284385. The event has been successfully run since 1981, it attracts the biggest names in surfing and V9 got involved in running a music festival in 2005 and at some stage, took over running the competition itself which has prize money of $180,000. The competition was cancelled in 2013 due to V9 not being able to obtain a sponsor. Their excuse, “. . .the economy.” V9 claim that they couldn’t afford to put on the competition but they still managed to sell tickets for and host the music festival I believe.
Interesting. Tickets in 2016 are currently retailing at £169 for an adult, £209 for a VIP and the Boardmasters competition attracts thousands of people. . .could V9 afford to run the competition or were they protecting the V9 Shareholders dividends? Who knows, but I would caution Tynwald from agreeing to working with a company that can’t find sponsors for a sporting event that is one of the most popular in the world and who would cancel an event because they apparently couldn’t afford to run it, but too late, Tynwald have sanctioned V9 as the promotor and manager of the TT. We’ll take a look at the V9 accounts later and see if they are able to afford to put on a TT Festival. Fingers crossed. . .
Digging deeper into V9, they are a UK company with UK beneficial owners (and page two of the briefing document describes an aim to “. . .help grow the economy and balance the budget.” (by outsourcing a successful event away from local providers to a UK company??!) and were funded to the tune of £5M by the Ingenious Group, and through some digging on this company, one will find that HMRC are investigating parts of the group for tax avoidance structures in the film industry. Why does the film industry always come back to bite us I wonder?? Perhaps it’s pertinent to note that the other bidder for the TT contract was a company whose ownership cannot be publicly ascertained. Now, I have to ask, what are DED doing??! Are there no background checks done on anyone anymore? I’ve found all of this within half a day and personally, I would be screaming “Danger, Will Robinson, danger!” because the research does not bode well, at all.
V9 were bidders on the failed and utterly shambolic TT World Series tender process which has cost the taxpayer £332,000 so far http://www.energyfm.net/cms/news_story_399953.html and this is expected to rise to over £400,000 despite what Minister Skelly has claimed to the press. In going through this process, V9 had an advantage over other invitees to tender for the promotion and management of the TT, what with the local vendors only being given two days to prepare their PQQs and V9 having already been through the process (more on this later).
Well, that’s what I’ve found on V9 but why would DED want to fix a relationship that was working? I honestly, don’t know. There were schenanigans ten years ago surrounding ‘Signature’ and their lofty promises (costing Government hundreds of thousands of pounds) and Government’s insistence on bringing in a UK company and ‘North One’ seven years ago about “robust KPIs” surrounding TV revenue which have never been met.
Why did DED want to change what wasn’t broken?
There are many reasons for this, some we can only guess at and part of me thinks the worst when one is forced to consider the past and public controversy over tender processes, emails being deleted and later discovered, companies with utterly shocking track records and zero experience of managing start-ups being given huge grants to set up business incubators and never having to pay the money back, Greenlight Media running a tight ship for five years and returning over £100K per year to Government (I think) when marketing the TT; this before North One were granted the tender.
And then there’s the reasons stated in the Tynwald briefing document.
According to the Tynwald members’ briefing of the 13 April 2016, page 2, the question was asked; “By seeking a promotor partner, what are we aiming to achieve?”. . . let’s investigate.
DED want to:
- Attract industry-leading skills to develop the events beyond where DED is able to take them with its current resources and capabilities
(whilst ignoring world standard local skills, knowledge and resources which has delivered growth at minimal cost)
- Secure third party investment to develop essential innovations that DED cannot fund
(whilst ignoring significant local and private capital resources that could have been utilised)
- Remove significant cost and risk exposure to the taxpayer
- Contribute to the aim of smaller, simpler Government
(using a UK supplier with no experience and no local knowledge – watch out for the fallout over logistics on this issue)
- Help grow the economy and balance the budget
(by taking a contract from a local supplier and giving it to a UK supplier with a UK beneficiary who would no doubt transfer and spend profits off-Island)
I find the above interesting and wonder why so few members of Tynwald queried what they were presented with, so let’s take a stroll through the briefing document and mull over the bold claims within it.
Tynwald members briefing document – a whistle stop tour of bold or incorrect claims debunked
Claim 1 – Through DED investment (I thought Greenlight Media made a large contribution but hey!) the TT and Festival of Motorsport have grown significantly in the last 5 years. Government income has grown 63% to £5M.
Debunked – Since 2006, direct revenue has increased from £0.3M to £2.1M or +600%
Claim 2 – Increase spectators to 85,000 for the TT and 40,000 for the Classic TT (at the lower end 57,800 for the TT and 18,700 for the Classic)
Debunked – How would we transport and accommodate an extra 68,000 visitors for the fortnight (per Minister Skelly’s assertion in Tynwald, we currently get 57,000 visitors)?
Claim 3 and 4 – Government costs are £5M and Government revenue is £5M
Debunked – Current costs are £4.3M and revenue is £2.16M
Claim 5 – Economic benefit of the TT is cited as circa £30M
Debunked – Duke Marketing surveyed 6,500 visitors in 2007 and extrapolated that off 45,000 visitors, the economic benefit was around £52M (that was nine years ago). Looks like the TT is a world class event already.
Claim 6 – From year 1, the promotor will be responsible for £4.6M of annual DED operating costs and associated risks. No DED contribution from year 4 onwards.
Debunked – The latest data from DED gave total costs of £4.23M, so if £4.6M of costs are taken by V9 from year 1, why are we waiting until year 4 before DED stop making a contribution?
Claim 7 – Overview of V9 – “Vision Nine has direct experience of working with the IOM TT
Debunked – as a manager of one sponsor of one team
Claim 8 – We are experts in events – and will work closely with incumbent motorsport & TT experts
Debunked – No experience of motorsport events.
Claim 9 – TT vision: to develop IOMTT into one of the world’s “must see” sporting events – for both spectators and viewing audiences.
Debunked – It already is. It’s only limited by the Island’s travel links and infrastructure.
Claim 10 – Classic TT vision: Create a globally recognised motorsport & nostalgia festival celebrating all facets of motorcycle racing and history.
Debunked – Again, limited by travel links and infrastructure. Target market has a higher expectation of accommodation type that other TT fans who will house share or camp out. The TT is about the Course and The Classic is a nostalgia festival.
Claim 11 – TT scope for growth graph – claims 28,000 visitors would leave within 24 hours at the end of the fortnight.
Debunked – This would require a 300% increase in transport capacity!
Claim 12 – Better live experiences
Debunked – requires better infrastructure/enhancement and an investment in same. Will V9 pay for this? I doubt it looking at the accounts.
Claim 13 – Vision Nine’s approach to growth
- Improve the experience
- Develop communication and broadcast strategy
- Target new audiences and customers
- Commercial growth, spectator revenue, commercial partners
Debunked – all of this is what’s been happening since 2006! What’s new? What’s so different that we need V9?
Claims 14 and 15
14 – “Boardmasters: a proven track record”
Debunked – see earlier in this report but as a refresher, in 2013 the competition was cancelled because V9 couldn’t get a sponsor.
15 – Boardmasters’ £45M bonanza (press article in small print)
Debunked – £45M isn’t the event turnover and V9’s accounts for 2014 shows only a £2.5M turnover from all activities. Also, it’s hard to believe this article if there were 37,000 surfers per day at the event as they’d be spending roughly £243 per person per day – pretty amazing for surfing music festival goers who all camp(the surfing is free by the way). Based on this the TT is worth over £80M!
Remember, this was a briefing document presented to Tynwald and backed up by claims made by The DED Minister in a sitting of Tynwald.
Areas of concern about how the process was apparently handled
- My research tells me DED outsourced the tender process for both the TT events and the previous TT World Series to ‘The Sports Consultancy’. Research tells me that they progressed with two responses to the TT events, one from V9 and one from an unknown party (to date, no tender responses have been published – strange). Did Sports Consultancy ever declare to DED that V9 were a client?
- The tender process was ran very differently from other DED tenders. Why? Eg, for the TT World Series tender, DED allowed a period of 38 days between the deadline dates for returning an expression of interest and returning a fully completed pre-qualification questionnaire but for the TT Events tender, there was only 2 days allowed. Why? (For the Strategic Branding Services tender, there was 21 days allowed – even at the lower end this is still 3 weeks). Were V9 pre-selected?
- Why is the contract stated as 10 years when the usual contract period has been 5 years? Most IOM Government contracts are for 5 years.
- Why would local suppliers with extensive knowledge of motorsport events (note the plural here) and who have organised events such as Mallory Park and Donnington be excluded from tendering for the TT World Series on the bases of not having the “wider skill set to successfully develop an international motorsport series” yet V9 with no experience of promoting, managing or running a motorsport event were included? V9’s experience extends to managing sponsorship and hospitality for individual teams. . .a far cry from the DED pre-requisite.
- In the event of a CoMin or DED pulling the contract or a decision by DED or the Minister that adversely affects the contract (even taking into account external factors or acts of God), will V9 be entitled to compensation?
- Will the KPIs referred to in Tynwald by Minister Skelly be included in the contract (see Hansard 1289T133 5060-5070)?
- Will failures to hit KPIs trigger penalty clauses or termination clauses? “Failure by this organisation not to meet those two in a row, we can terminate this contract.” What does two in a row mean, legally?
- If V9 require changes to the TT events’ timing or format in order to meet KPIs, for example, TV audience size, and DED cannot comply, will that allow V9 to avoid penalty and/or termination?
- Who owns the IP for the events?
- Looking at V9’s accounts; despite £5M of equity funding the accounts show cash available to the Group of £398K – this falls far short of the £2.5M needed to invest in the TT. How can even the non-accountants in Tynwald sign off on a company that is practically on its knees from a financial point of view? Were draft 2016 accounts shown to Tynwald, how accurate were these?
- Still on the accounts of V9 (and looking at 2015);
- The Gearing Ratio for 2015 returns 13.6% (Gearing measures the proportion of assets invested in a business that are financed by long-term borrowing.) but in 2014 it returned 307%
- The Debt to Equity Ratio (like Gearing but includes all debt) for 2015 returns 57% and in 2014 was over 1000%
- The Current Ratio (how many times over can the company liquidate its assets to pay its immediate debt/liabilities) returns 0.87 for 2015 and 0.85 in 2014 (no real improvement).
This was a cursory look at the accounts only and immediately, I have grave concerns.
Many, many questions exist over Minster Skelly’s breakneck charge into awarding the TT contract to a company we know little about, who we suspect can’t afford to run the TT and on the back of a disastrous TT World Series tender which will cost the taxpayer hundreds of thousands of pounds.
Did anyone stop to question the outrageous claims made by V9 and Minister Skelly, a man soon to be judged over the Villa Gaiety and Tiny Cow, The Nunnery and ICT Limited, Chinese businessmen buying Mount Murray then not buying it, outrageous claims about a multi-billion pound gas company having an office on the Island but really it’s just a PO Box, about Isle Expo and encouraging students to forsake their A Level studies and take part, the wave of business’ that are shutting down and leaving yet no statements from the DED or the Minister, 85% of students not returning to the Island post-graduation, the TT World Series and now this, Vision Nine?
Did anyone stop to check the accounts and other financial information pertaining to V9?
The TT contract has been awarded to a UK company, completely ignoring the excellent work done on-Island by local companies. Has Tynwald been misled through what appears to be comments made with regards to the tender procurement process (2 days were given to local suppliers but these tenders usually give a month’s grace) and the through the briefing document itself. Has Tynwald been misled full stop (see earlier debunked claims from the Tynwald briefing document) or is Minister Skelly just completely out of his depth?
- In the last decade, the TT has been a success story for DED and the IOM taxpayer. Tourist revenues are significantly up and the net cost to the IOMG has fallen in real terms.
- The abandoned TT World Series project has had the effect of reducing the likelihood of an effective local bid for the TT.
- It has been suggested that the TT tender process had no weighting for local jobs or VAT retained/paid on-Island.
- Neither of the short-listed candidates are in any way connected to the Island.
- Time should be allowed for a local public-private venture which could be formed that retains more local control and empathy with TT volunteers and the Manx public in general.
- A Manx TTNewCo would guarantee that there was no increase in the net cost of the TT and should deliver a steady decrease in net cost to the Government with less risks associated with unproven off-Island promoters.
- Explore Manx corporatisation, not UK privatisation (see ICT Limited and how they still haven’t started education provision as an example of where Minister Skelly and DED get this sort of thing wrong).
Local suppliers in the know have written to CoMin, the Acting AG, Minister Skelly and DED without response and it’s upsetting to see how local companies are being treated by people we entrust with the economic well-being of the TT and of our island.
I don’t see how we’re protecting our economy by awarding contracts to UK companies with no track record who will not reinvest their fees on-Island. Sure, they claim they can increase visitor footfall, if all goes well, but have they and DED thought about the logistics of a surge in visitors? I’m sure local companies could do as good a job, if not a better one and in the process, they’ll recruit locally and pay taxes locally as well as spend their hard-earned money locally. This tender seemed to me to have been written specifically for a UK/off-Island company regardless of motor sport experience as there was no criteria pertaining to on-Island and IOM-centric criteria.
What are your thoughts?
(I will add to this blog piece as I conclude more research).