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NC STATE FAIR UPDATE
Fair weather clause benefits the carnival

11/16/2006

By MCW Staff

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As reported here previously, the North Carolina State Fair has elected to contract with Power’s Great American Midway (PGAM) to supply the contract for the 2007 fair. This will be the first time since Strates Shows held the midway contract in 2001 that the fair has had the same carnival for two consecutive years. Amusements of America won the contract in 2002, Strates Shows in 2003, Reithoffer Shows in 2004, Wade Shows in 2005 and Powers in 2006.

While the fair has received some criticism for the way in which the contract has been awarded and the amount paid by the carnival to the fair in recent years, a review of the agreement shows some softening in their position towards their carnival contractor. Last year, the fair added three concessions for the carnival, an increase in revenue from advance sale tickets, a Military Day where guests admitted free were not counted for purposes of the contract and perhaps most importantly, a reduction of 10 cents per head on the fee paid to the fair for up to two new spectacular rides that the carnival has the option to bring to the fair. PGAM took advantage of this clause last year, reducing the payment to $5.30 per head by bringing two new rides; the Full Tilt and the Disko.

In 2006, the contract provides possible relief for a situation that has been feared by many of the bidding carnival companies; inclement weather after the gates have opened. The argument for the weather clause is it is unfair for the carnival to pay by the head when there has been continued severe weather after the fair has opened and guests have come in the gate. The weather prevents customers from enjoying the rides and reaching the per capita spending levels that would normally hold. Therefore, the carnival is harmed because the people have come through the gates, requiring a payment by the carnival to the fair but the carnival is not able to reap proper ride revenues because weather prevents them from purchasing tickets for rides. The “Reduction in Payment Due to Severe Weather Event” paragraph is listed below. It provides for a reduction if the carnival is able to prove harm from the weather.

17.2. Reduction in Payment Due to Severe Weather Event. In case of a severe weather event, the Contractor may request that the State Fair grant a reduction of no more than twenty percent (20 %) in the amount required to be paid by the Contractor for the day on which the severe weather event occurred. The Contractor shall provide the State Fair Manager with proof of reduced ride ticket sales due to the severe weather event. For the purposes of this paragraph, a “severe weather event” is a rainstorm, electrical storm, strong winds, or similar weather event that occurs after noon, and causes large numbers of fairgoers to leave the fairgrounds earlier than usual. The purpose of this provision is to prevent financial hardship to the Contractor due to circumstances beyond the control of either party. The Contractor agrees that any reduction in payment granted pursuant to this paragraph shall be in the sole discretion of the State Fair, that the State Fair is under no obligation to grant any reduction, and that the State Fair’s decision is final and not subject to appeal.

MCW is encouraged by the cooperation between the fair and carnival in this case. We applaud the two entities working together to achieve an equitable agreement. One of the heretofore unreported benefits of the carnival and fair working together is that relief is even passed onto the concessionaires who are sometimes the first to be squeezed when contracts are raised. For the 2006 fair, concession rent, depending upon the type of concession, was either reduced or stayed the same for the first time in many years.

There are many who will say that the contract is still too high and the rents are at a level where they can no longer make a living. However, progress in the right direction and a hearing and understanding of the business concerns of their partners, especially at this level, must be applauded and encouraged. Congratulations to the North Carolina State Fair and Powers Great American for seeing the big picture and doing the right thing.

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