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Alaska Market Share Shift: Canadian Company Signs Several Golden Wheel Fairs

4/23/2014

By Timothy Herrick

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Golden Wheel Amusements, the largest - and to many, the only - midway provider in Alaska lost three key fairs in the 2014 season, but these former clients were picked up by A1 Midway, a fledgling Canadian company, marking the first move by a Canadian company onto American soil in many years.

After 30 years with Golden Wheel, contract renewal negotiations collapsed and late this winter and the Tanana Valley State Fair awarded its 2014 midway contract to A1 Midway company. Public incriminations and a lawsuit accompanied the acrimonious split,  which has disrupted the once inflexible shares of the Alaska fair market.

Adding insult to injury, within days the nearby Deltana Fair and Kodiak Rodeo & State Fair  declined to renew with Golden Wheel and instead also signed with A1 Midway.

The 9-day Tanana Valley State Fair has commenced the first Friday in August since its 1924 founding, and is considered the oldest continuous state fair in Alaska. The Tanana Valley is a large and well populated - for Alaska - region, located in the central part of the state, whose major city is Fairbanks.

The fair is held on the 100-acre Tanana Valley State Fair grounds, on the outskirts of the city of Fairbanks, and attracts more than 100,000 fairgoers per year, which makes it the second largest state fair in the Last Frontier State. With attendance of 300,000+, the Alaska State Fair (a Golden Wheel client), held in Palmer (in the same Metropolitan region as Anchorage, Alaska's largest city) later in August, is the state's largest "state" fair.

Golden Wheel Amusements had been the first and until 2014, only midway provider at Tanana Valley.

Loss of Monopoly
Contract renewal discussions between fair organizations and midway providers growing hostile is usually not a noteworthy development, but the fallout between Golden Amusement and the Tanana Valley State Fair disrupts the far north fair market.

Golden Wheel Amusement had what most fair industry observers agreed was a monopoly on Alaska fairs. "That monopoly is no longer true," said Joyce Whitehorn, General Manager of the Tanana Valley State Fair. She said that problems with Golden Wheel had been ongoing for the past few years, and even though they reached a boiling point in 2014, the fair had previously looked for other midway providers, but to no avail.

Until now. This year she said several midway companies from outside of Alaska courted the fair.  "We had at least six different fair companies who showed interest in our contract," said Whitehorn. "They were all offering competitive deals and better percentages than Golden Wheel."

Most of those companies were from states in what Alaskans call the lower-48, but in the end Tanana Valley decided on perhaps an even more dramatic break with regional fair traditions, awarding its midway to A1 Midway, from Manitoba, Canada, a relative newcomer to the North American fair industry.

Mike Mills grew up in the carnival industry, his father, Bob Mills, owns and operates Canuck Amusements and his uncle, Jim Mills, has Select Shows. A1 Midway is offshoot of the Mills family of midway providers. Mills family midways play the fairs of Western Canada; they are friendly competitors who frequently collaborate, such as at the annual Canadian Lakehead Exhibition in Thunder Bay, Ontario.

The smallest and youngest of the Mills midways, the progeny is now poised to accomplish what his elders have not yet attempted, providing a midway to a U.S. fair.
Mills refused to comment on the past history of and the present relationship between the Tanana Valley Fair and Golden Wheel Amusements. Ride pricing is "still being worked out," he said. In addition, he said the main concern of fair organizers was that the midway be a distinct entity within the fair, separate from other operations. "They wanted a midway, not a dictator. I am only doing their midway. I do my job and they do theirs."

Huge Opportunity
According to Mills, the Tanana Valley State Fair may be the catalyst for growth this fledgling midway company needs. "It is by far the biggest spot we ever played, it is a huge opportunity."

He admitted that much of the impetus behind his bold move to enter the Alaskan fair market was the appeal of the "almighty American dollar," and the favorable exchange rate with Canada (the Canadian dollar is worth about 80 cents American, Mills said), increasing the profitability of the event and making the considerable expense required to cross borders to do business in the U.S. more easily absorbed.

In addition to the Tanana Valley event, A1 Midway will be spending most of August in Alaska. Mills was approached by the Deltana Fair in Delta Junction and the Kodiak Rodeo & State Fair in Kodiak to provide their midways. Both fairs, also former Golden Wheel clients, are smaller and more local than the Tanana Valley State Fair, but the combination of the three, "has made the expense worth my while," he said. "I can do three quarters of my yearly business in Alaska. It's a massive step for me"
This massive step requires a costly investment. The expense - not to mention the paperwork - is considerable, said Mills, who estimates that in total he will be spending upwards of $50,000, which covers, among other items, insurance, Department of Transportation (DOT) courses, work visas, and legally incorporating A1 Midway in the U.S. Most of that initial investment will be eaten up by fuel costs. Mills said it was an eight hour drive to the Tanana Valley Fairgrounds.

Mills is sensitive to the criticism that these Alaska fairs are being outsourced to a foreign interloper. "The one complaint I've heard is that we are going to be taking local dollars back to Canada," said Mills. "That is not true. I am only bringing essential staff. Eighty percent of the workers I hire will be local, and I will be paying them above the market rate for fair work. We are leaving a lot of money in Alaska, even our finance company is American."

The A1 Midway at the Tanana Valley State Fair will be smaller than the Golden Wheel edition - about 15 rides compared to 25. New and/or refurbished rides in the A1 Midway arsenal for 2014 include a Chance Inverter, Chance Sling Shot, a Super Sizzler by Wisdom Industries and a Datron Super Slide.

Embracing Change
The loss of three long-term clients and the presence of a new competitor in a once, near-monopoly market, seems to have left Golden Wheel nonplussed. In the Fairbanks Daily News Miner, Golden Wheel said they have  a robust Alaskan circuit for the 2014 season. Leavitt said "the company plans to serve more areas this year than last year. The company plans to travel to Southeast to Juneau, Sitka and Ketchikan, for the first time since 1983."

The Tanana Valley State Fair is also eager to embrace change. "People are tickled to death to have somebody new," said Whitehorn. "We needed a change. We've had a very positive response when the new contract was announced. Our 2014 fair will be better than ever."

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