Apparently, every person in the UK at some point in their lives will hold or touch a Lego brick.
Imagine that scenario in all of the countries in Asia, especially China and Japan, and it’s easy to appreciate why David Ciclitira is excited about a reshaped and rejuvenated Parallel Media Group PLC (LON:PAA).
Two recent acquisitions, Brick Live and Parallel Live Media, have refocused the AIM-listed firm into an organiser of fan-based events based around a Lego theme.
And if Parallel Media has undergone a rejuvenation, so has Ciclitira, who was evangelical in his belief in both Lego and the potential to expand the number of shows, when he talked to Proactive.
This can work
A 25-year veteran of golf and music promotions across Asia, the 60-year old described an almost damascene conversion to the plastic bricks when he attended a show staged by Brick Live at the NEC in Birmingham in November 2016.
“I was absolutely gobsmacked by what a great experience it was,” he said.
“Kids have never seen so much Lego. There is not an instruction book anywhere, they just build and create.
“The Lego pieces are the cement of the show, which was all about children enjoying themselves.
“It was at that point I thought this can be really interesting and work.”
This year Brick Live and Parallel Media Live, a separate company that puts on shows in the US, staged 17 shows.
The aim is for 30 in 2018, though Ciclitira is confident it can do more.
Ultimately his aim is to be running 100 shows by 2020 and a big name has been brought on board to help get to this target.
High profile management
Andrew Smith took over in November as managing director of Bricklive.com. He came from Multiplay, a part of Game Digital, where he had established Insomnia as the UK’s largest gaming event.
He also ran Minecon, the largest gaming event in the world and themed around Minecraft, the hugely successfully building game.
The logical thinking required in Minecraft has children hooked all over the world with more than 50mln versions of the game sold so far.
This link with Minecraft is also important to Brick Live, where a successful part of the events it stages is the Minecraft area, which combines education with Lego.
Countries such as Korea are already including computer coding into their school curriculums and Ciclitira sees the Minecraft link as a novel way to tap into this.
Indeed, Lego themselves are reportedly intrigued by what Brick Live is doing with Minecraft and the possibilities it might open up in Asia, he says.
Brick Live has no formal relationship with Lego, though US company Parallel Media Live does have a licence.
Ciclitira says the two companies have a good relationship and it even has a compliance officer to make sure nothing it does will upset the brand owner.
The relationship is more of collaboration and mutual benefit, he says something that will be important in Asia, where it has good knowledge and experience.
Brick Live and Parallel Media’s business model is to work with partners that are licensed to organise and stage an event in a particular demographic region.
Income comes from licence fees, revenue sharing and merchandising.
Licences are granted for four to five years, contain strict non-compete clauses and specify what content is to be provided.
Visitors pay an entrance fee. In the UK it is £20 standard or £35 VIP, from which there is a sharing percentage of up to 10%.
All merchandising rights are retained by Parallel Media.
Visitor numbers are impressive. Some 36,000 people attended a show in Basel and 25,000 and 20,000 respectively in recent shows in Naples and Brussels.
A permanent exhibition is also being established in Beijing in a ski resort ahead of the Winter Olympics in 2022.
Sales at the shows are also eye-catching. Toys‘R’Us, which partnered the NEC event in November 2016, shifted over 1mln units of Lego in four days with an average spend of £260.
Complex series of deals
Ciclitira will end up with 56% of the company once all of the transactions go through.
That will include loans made by him to Parallel Media and also his existing interest in Brick Live and Parallel Media Live.
A placing at 30p will raise a further £1.26mln to provide working capital.
Given the fees and costs involved in bringing the three companies together, it might take a while for the stated numbers easily to reflect how the business is trading.
Brick Live though posted interim revenues of £1.07mln to June to follow £1.74mln in the year to December 2016.
Ciclitira says the key is building a network of shows.
A name change to Live Company Group will herald the start of the new phase for the group and Ciclitira is confident.
“I’ve spent most of my life in events and the thing about this is it sells itself. It really is an extraordinary product.”