UPDATE: Monday 24 September, 11am: C2 International have sent ASE a statement in response to our article. Read it here.
After being contacted by a supplier, ASE has uncovered over $150,000 of debt suppliers claim is owing for work completed for or contracted by C2 Melbourne.
A special investigation by Bronwen Largier
These revelations came in the same week that C2 Melbourne Pty Ltd – the Australian registered company responsible for the Melbourne event – placed itself in voluntary administration.
In addition, one supplier who worked closely enough on the event to have some knowledge of the budget has claimed there was nothing production-wise which would have prevented the event from proceeding.
“They could have delivered the show. From a production perspective, we were ready,” says Michael Petrani from Diversity Rigging.
“We had everybody there, we had all the people chosen, they were all the right people to deliver the job – it was possible.”
Petrani got in touch with us at ASE after several failed attempts to contact C2 both in Australia and Canada regarding a significant amount of money outstanding for work he was contracted to complete for C2 Melbourne.
“It’s not about people going ‘oh, poor you, you’ve lost money’, it’s got to be about these big businesses coming to Australia, selling us their dreams, but if they can’t deliver it, they should be able to pay their way, they should be able to pay their debts. They should be able to take responsibility for it,” he says.
Two days after Petrani approached us to help investigate where things stand, C2 Melbourne went into administration.
Before getting into our subsequent investigation, let’s recap C2’s timeline in Australia and the hype surrounding it:
May 2017: Melbourne Convention Bureau announces Melbourne has secured “the world’s most innovative business conference”, C2, to take place in Melbourne on 30 November – 1 December 2017.
June 2017: MCI “joins forces” with C2 International for C2 Melbourne 2017
July 2017: C2 Melbourne has media launch, announces venue for 2017 conference as “neglected indoor and outdoor parking precinct” Berth No. 5 North Wharf and the No. 5 Goods Shed on the northern banks of Melbourne’s Yarra River.
26 September 2017: C2 Melbourne’s final Facebook post referencing a speaker for #C2MELB17
23 November 2017: C2 Melbourne announces Early Bird tickets are on sale for C2 Melbourne 2018 to be held 17-19 October 2018. No mention of C2 Melbourne 2017 which should have taken place a week later.
1 December 2017: C2 Melbourne holds a C2 Taster for approximately 300 people at Melbourne Convention and Exhibition Centre.
February 2018: Hype for C2 Melbourne 2018 starts to build with the Melbourne Edge event at AIME devoted to the C2 Melbourne concept.
At this event ASE interviews C2 Melbourne Executive Producer and COO for C2 International Martin Enault who says of the 2017 postponement, “The business executives from the region and even globally were telling us, ‘You know what, we’re not ready yet to understand what you guys are bringing – it’s so different and so unique, we need a little bit more time.’ In our mind, we were saying, let’s do it as quickly as possible so people see it. But we realised that people just didn’t understand us as much as we wanted them to understand us and it’s felt that we were trying to push something upon them that they were not ready for, so we preferred to take a step back… take a bit more time and push the event back to next year  in order to do the right thing for the community and the event.”
May 2018: C2 announces Melbourne as its Asia Pacific HQ and MCEC as the venue for the 2018 conference.
May 2018: MCEC announces partnership with C2 International at IMEX Frankfurt giving the centre exclusive access to C2’s experiential design platform and signature “labs”. Diversity Rigging delivers the installation for MCEC’s announcement in Frankfurt (for which they’ve been paid).
3 July 2018: C2 Melbourne appoints Ron Gauci as Managing Director. Gauci is known as a Mr Fix-It for brands in a spot of bother.
16 July: MCEC launches its expansion and marks the occasion with the chance to experience a number of the C2 “labs”.
31 July 2018: The Victorian Tourism Conference devotes the best part of half a day to the C2 Melbourne concept.
8 August 2018: C2 Melbourne announces more speakers on the program.
17 August 2018: Martin Enault steps down from C2 Melbourne – this is his last day with the organisation.
24 August 2018: C2 Melbourne announces the cancellation of the event. The following week Gauci tells ASE he “ran out of runway” to fix the problems.
14 September: C2 Melbourne places itself in voluntary administration.
After undertaking considerable investigation, we have now discovered:
Diversity Rigging aren’t the only ones with bills unpaid.
A further three suppliers confirmed to ASE they had amounts outstanding with C2 Melbourne. Together with Petrani’s claim, we arrived at our figure in excess of $150,000 but this seems unlikely to be the full extent of funds owing.
Understanding that MD Ron Gauci has now departed the organisation it seemed most appropriate to direct our questions to C2 International in Montréal.
We contacted both their media contacts and the President of C2 International Richard St-Pierre for comment.
They did not return our emails requesting answers to questions including whether the international arm of the organisation would be taking responsibility for debts owed to Australian suppliers should what’s left of C2 Melbourne not have the funds to cover costs.
We also asked C2 International for more specific reasons as to why the decision was made to cancel the event, in light of Petrani’s assertions about production viability and Ron Gauci leading us to believe, in our previous article on C2 Melbourne’s cancellation, that “trending indicated that the numbers would probably have been reached” in terms of attendance.
While we did not receive any enlightenment from C2 International, we discovered, according to communications sent to creditors of C2 Melbourne by the appointed administrators, both St-Pierre and C2 International are guaranteeing $100,000 to pay the Australian administrators’ costs. As is usual practice in Australia the administrators take their fees first and then anything left over is divided up among the creditors.
C2 Montréal was founded by Canadian creative agency Sid Lee and Cirque du Soleil.
In 2015 Cirque du Soleil was sold for US$1.5 billion to a consortium led by private equity firm TPG Capital and Sid Lee was acquired in the same year by Japanese global marketing company Hakuhodo DY Holdings (for an undisclosed amount).
According to their website, “C2 International is a private, for-profit company licensed to use the brand and that benefits from C2 Montréal’s experience to develop new services and markets”.
It seems appropriate at this juncture to point out that C2 International’s website extolls virtues of accountability with C2 International ensuring the financial stability of C2 Montréal.
Do they not have a moral duty to do the same for the Melbourne event?
Petrani is adamant C2 needs to practice what it preaches.
“C2 sells this amazing story, and this amazing potential of change but the havoc that they’re leaving behind in the process is affecting change but in the wrong way,” he says.
“As an organisation, I’m disappointed that they haven’t turned out to be the company that sells the ideas that they think they’re selling. The idea is a fantastic idea and I really support the concept of trying to bring industry together to affect change – I think that’s an amazing concept.
“I think we need this in the current environment we have on our planet.”
The issue which seems to be causing the major consternation in our industry is the idea that C2 International has a certain level of accountability to the Australian events industry and to Victorian taxpayers, due to a perception that the event was being partially funded by public money.
When we sought comments from the Australian stakeholders who may be able to dispel or confirm this perception, what we found is a distinct lack of transparency.
The evasiveness of MCB, MCEC and the Victorian Government at this point is odd, when, as far as we can tell, they have done nothing wrong. They did what they could to support C2’s success in the Australian market – but keeping tight lipped at this point is making them look as though they have something to hide.
When approached, MCEC declined to comment as to whether they had taken a financial hit from C2 Melbourne’s cancellation and if they would be seeking to recoup any outstanding fees.
We asked Melbourne Convention Bureau to clarify how much they invested to secure C2 for Melbourne and whether they intended to try to recoup those costs. They only had this to say:
“MCB is working cooperatively with the administrators voluntarily appointed by C2 Melbourne. Any matters relating to the administration of C2 Melbourne are best directed to the administrators themselves.”
So we contacted the administrators, who had “nothing concrete at this stage” (admittedly, they were only about a day and a half into assessing the situation when they told us this).
We contacted Minister for Tourism and Major Events, John Eren’s office to clarify taxpayer investment into C2 Melbourne.
Their reply: according to a ‘Victorian Government Spokesperson’, “This is unfortunate news, but the closure of C2 Melbourne is a company decision. No taxpayer money has been lost and we’ll continue to support innovative conferences that bolster our reputation as Australia’s business conference capital.”
Making bland statements of fact like the one above will not satisfactorily reassure our industry – or Victorian taxpayers – without sufficient reasoning to back it up, particularly when, according to their 2016/2017 Annual Report, “MCB steered the proposal to bring C2 Montréal to Melbourne by securing support from the Victorian State Government and City of Melbourne.”
Our industry understands that support does not have to be financial – although that is the usual way of these things – but if not money, what was it that these three organisations did to entice C2 to Melbourne?
The real issue here is one of transparency, if they didn’t provide financial support to C2 and only offered them value in-kind, why can’t they just say so?
After getting little out of the official sources – and considerable digging – we came across a Herald Sun article (published 25 August 2018) which suggests that C2 Melbourne returned State Government funds upon cancellation of the event.
We understand that the cancellation of C2 Melbourne was a commercial decision taken by a commercial organisation and we are not suggesting the various Australian taxpayer and industry funded bodies are in any way implicated in the failure of the event. If anything, the amount of hype MCB, MCEC and the State Government generated for C2 Melbourne demonstrates that these organisations did everything they could to contribute to the success of the event. But communication is a two-way street. Communication lines should be as open when things are going well as when the proverbial is hitting the fan.
What we’re wondering is how communication and accountability is doing in our own industry, in our own backyard – entities like MCB and the Victorian Government ultimately exist in partnership with us and we’re all united in a common goal, so why aren’t they keeping us in the loop?
Do you know more? contact ASE