The New Age’s breakfast goldmine

The New Age could be taking home as much as R1.15 million for each business breakfast it hosts, according to a BusinessTech investigation.

Using industry insights and quotations from various venues – as well as publicly available estimates – BusinessTech has calculated how much it would cost to host a New Age business breakfast – and how much  of the “sponsorship” the newspaper takes home at the end of the day.

The New Age editor, Moegsien Williams, recently underlined the expense of hosting a business breakfast event.

“If you want to hire a venue at the Sandton Convention Centre, you’ll be out of pocket by about R150,000 to R250,000,” Williams told Grubstreet.

“We run a complete back office here to organise the event – about eight to 12 people – and that is costly. There’s the cost of the food that we serve and the audiovisual system – all these other costs in terms of staging an event like this.”

“That’s where the sponsorship goes,” Williams said.

The real costs

BusinessTech spoke to FrontFoot MD, Michael Sham, to further unpack the real costs of hosting business meetings.

FrontFoot is a business-interest event and training company that has been serving the South African business community since 2003. The company was initially tasked with organizing the New Age Business Meeting in the event’s early days.

Sham agreed with Williams that there was more to hosting an event than simply hiring a venue and paying for catering.

Adding to the costs were staging and marketing fees, as well as a strong administration and back-end systems management team. Events such as these are often labour and systems intensive, the events specialist said.

Events involving high-ranking government officials are also subject to other costs – mainly around security – but unless it involves the President himself, security is usually sufficient to host officials, Sham said.

And while the exact figure to host the New Age business breakfasts remains unknown, Sham said that such an event could be priced at approximately R300 a head (excluding the other operations).

BusinessTech received a quote from one of the venues used by the New Age for a similarly-structured event amounting to just over R270 per head (R81,000), which included catering, drinks and basic technical setup.

Some venues often offer special rates, though the most expensive rate quoted to BusinessTech was R465 per head.

All quotations were for 300 delegates.

All information gathered puts the cost of hosting such an event at between R80,000 and R150,000, included catering, drinks and basic technical setup.

Making a mean profit

Various media reports paint the business breakfasts as a highly profitable venture for The New Age, with the paper taking in massive state-sponsored profits.

According to reports from City Press, the following state-owned companies had paid massive amounts in “sponsorship” for New Age business events between 2011 and 2012.

  • Transnet – R17.5 million for 18 events (or R972,000 per event);
  • Eskom – R7.2 million for 6 events (or R1.2 million per event);
  • Telkom R12 million for 12 events (or R1 million per event).

As an average, this equates to R1.057 million in sponsorship per event.

According to The Star, Gauteng Premier Nomvula Mokonyane‘s office paid close to R400,000 for 500 tickets for the event which hosted her; while other speakers have also reportedly paid fees to be hosted.

This is contrary to common practice, Sham said, where speakers are typically paid to address delegates at events.

(Ticket sales + Sponsorship) – costs = profit

From ticket sales, which according to The New Age’s own reports, cater for around 300 delegates (at R792.50 each), the paper makes back around R237,750 almost immediately.

Working on averages (300 delegates; average SOE sponsorship) and the highest figure of cost as quoted from the New Age editor (R250,000) – the New Age is raking in about R1.05 million in profit at the very minimum.

However, if sources are to be believed, and the real cost of hosting the breakfasts are taken into account, profit sits closer to R1.15 million per event.

BusinessTech approached the New Age for official figures regarding their events, but the newspaper had not returned comment by the time of publication.

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The New Age’s breakfast goldmine