OE Experiences, a financial consulting and business management firm that specialises in the experience economy, will celebrate its second anniversary next month. The firm has used this milestone to reflect on its entry into the themed entertainment industry, focusing on some of the lessons learnt, and embracing future opportunities.
The company has its origins from an integral partnership between a former financial advisor and a former CFO of Regal Cinemas, with both founding partners having distinctive backgrounds in the experience economy.
Shortly after OE Experiences opened for business, COVID-19 became an assertive mechanism of change, providing clearance to fresh entrepreneurs and seasoned operators alike to test new initiatives or challenge orthodox thinking.
The main focus of OE Experiences is the monetisation of the previously mentioned experience economy, enabling the company to serve as consultants, owner representatives, and co-developers on various projects across the US.
Backing the right idea
Founding partner and CEO Matthew Cross says he has seen emerging groupings of creative ideas based around immersive dining, themed hospitality, and premium location-based entertainment. The concepts are combining technological innovations with creative pricing strategies to allow industry innovation to flourish for many sectors. Cross however says that whilst some ideas are moving forward, most are not.
He continues to say that the global financial markets are struggling to find experiential businesses “bankable”, much to their long-term disadvantage – whilst there is a certain irony that banks universally acknowledge that the future of retail lies in the experience economy.
Just as one example, experience economy expert Joe Pine recently described in an op-ed piece for the Wall Street Journal that Walt Disney World’s admission pricing has increased since at a rate of 6.39% since 1981, more than double the inflation rate of 2.76% as gauged by the Consumer Price Index.
Experiences are a highly valued commodity, becoming increasingly insensitive to price rises as people focus on unique memories and moments over physical items.
Financing investments
Cross adds projects are now moving forward due to one of three reasons: a large balance sheet serving as collateral for conventional financing, equity investors are taking high-risk positions in idiosyncratic situations, or financial engineering is taking place – which is to say that vendors are becoming partners, products are being paid in splits of cost and equity, or other models are being created to suit parties that have unique assets to leverage in transactions.
The third option, the so-called financial engineering, has become standard in new industries whilst markets come to accept and create comparables that allow innovation to thrive more readily.
It could be argued that 1950s Disneyland itself is such an example, in that an animation studio traded its traditional media work for financing to assemble the park with ABC. Unfortunately, neither specialised dealings such as this one nor the first option – the presence of a large balance sheet – imply a financial ecosystem that sustains the type of innovation that is already growing in the market. OE Experiences has plans to change this and to be an active representative of that change.
It has taken some time for traditional retail estate players to accept that entertainment and attraction experiences are an increasingly influential component to convincing people not to shop online, however, there still is not a clear path for many prospective tenants to further develop their concepts.
Generating experiences and returns
The initial phase when a creative idea has been formed, but financial backing has not been secured, is where 90% of aspirational experience companies fail, to the disservice of the market. “How should the market, therefore, choose between these ideas?” is just one question that Cross has experience in.
Cross says:
“When we began OE Experiences, we had a knowledge of institutional investors, operations of a twenty-thousand person company from a CFO’s perspective, and an appreciation of themed entertainment’s role in creating the best experiences that can be monetized for excess return.
“We needed greater expertise in the space to sharpen our lens, and to more easily evaluate which ideas had merit and where our abilities could illuminate a pathway for their successes. Over the last two years, we have successfully grown an internal team of industry professionals including vice president Sam Russo whose past experiences include Universal, Thinkwell and international projects. OE Experiences has also built a network of trusted advisors.”
Lewis Frazer comments on OE’s place within the themed entertainment arena:
“I envision OE as a speciality firm continually adding great people with unique industry skillsets. While we want to be creative in our deal structuring, we never want to supplant the true Makers in our industry. That is our customer! Of course, there are many traditional developers as well who need a partner who can navigate this industry with our expertise.”
Cornerstone projects
Cornerstone projects for OE Experiences include The 407: Gateway to Adventure, a two hundred-acre development with the Eastern Band of Cherokee Indians, and the provision of strategic consulting and advisory services to Medici XD; a newly formed partnership between industry leaders Chuck Fawcett and Mousetrappe’s chief creative Daren Ulmer.
Both The 407 and Medici XD have exciting announcements prepared for later in the year, and, while big ideas take time, patience is not one of Cross’ core attributes! He concludes “2022 is an exciting time for our firm and our industry.
“We continue to find or be approached by entities that have grand ideas and may need one or two pieces of the puzzle to get their business launched. It might be a site, starter capital, or an operational business able to own a component of the design process. Until investors and lenders are fully educated on our sector, we will continue to play the role of financial engineer as we monetise the experience economy.”
Prospective clients can find out more information on the OE Experiences website.
OE Experiences recently attended the return of IAAPA Expo in Orlando, Florida, where the founding partners alongside Russo, spoke to exhibitors and prospective clients about its cutting-edge products and services.
