1) A limited Tradeshow in 2021 at an alternate venue; 2) Multiple smaller Regional shows at Tribal Gaming Properties; 3) Virtual tradeshow.
If NIGA is able to implement even one of these options, NIGA will still need to make up a significant amount of revenue from other sources. We are looking at the Clarion loans and potential PPP money from the Government to make up for NIGA’s 2021 Budget shortfall. Back in September, Clarion Events approached NIGA with several funding opportunities in the form of a Tradeshow revenue partnership, or an outright grant. ( see Attached July 2020 Memo to Officers). Clarion is based in London, and is owned by the Blackstone hedge fund group. It is Clarion’s stated intent to maintain the prominence of NIGA’s Tradeshow and assist NIGA through these economic challenges. The NIGA Accountant and I, with advice and review from our Auditors at WipFli (Joseph Eve), have been negotiating for months with Clarion leadership about financing NIGA operations to ensure NIGA’s continued presence in the Tradeshow business. The scope and nature of the negotiations have been in constant flux due to the unexpected and worsening pandemic through the fall and winter in both England and the United States. This has severely and negatively impacted both of our revenue projections for FY 2021. Ultimately, given the announcement from the San Diego Convention Center, both parties agreed to discuss loan and contract terms that assume there will be no NIGA Tradeshow in 2021. Outlines of a Draft Agreement with Clarion Below are the common points upon which we hope to conclude an Agreement with Clarion: 1. Clarion loans NIGA, $1.5m per year starting from Jan 1 st 2021 plus the required cash flow to fund the next NIGA event prior to being back in profit/positive cash flow (potentially 2022). Clarion will loan NIGA up to $5 million over 3 years, if needed. While we are hopeful NIGA will only need only one (1) loan of $1.5 million, we are building in a loan scenario where the NIGA Tradeshow revenue could take a year or two to recover to pre-pandemic levels. 2. The loan(s) will be subject to 3% annual interest and NIGA would be required to pay it back to Clarion over a 25 year loan timeframe. With a loan calculated on a 25 year term, NIGA would be eligible to pay off the loan ASAP, thereby reducing interest and the financial commitment from Clarion. 3. Profits from future events will be split according to an agreed upon percentage and will be paid within 90 days of each annual event. The specifics of the profit share is not
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