What's the saturation point of the expanded comic con schedule? WIZD looks cheap annualizing Q1 numbers which seems possible given the schedule of 4 events/quarter. It looks even cheaper if you assume similar profitability on 2015's slate of 23+ events. Historically only a few cities have been profitable (Chicago, Philly) and the losses from the rest have more than offset those gains, but Q1 results hinted at improvement. A more aggressive schedule amplifies the risks (untested/smaller markets, less ideal seasonal dates, cannibalization of existing markets) but also allows the company to sign bigger names, form larger media partnerships, attract more national vendors, advertise nationally, etc.
I just wonder, beyond the next few quarters, how many of these events can individual markets support? For example, Wizard is adding Indianapolis next year. There are already four other cons announced next year for the same venue alone (Indiana Comic Con, Indiana PopCon, Awesome Con, Gen Con), and plenty more in neighboring cities. This is the case in many of the cities Wizard is expanding into. Wizard may have advantages over all of them as the only national player, but that's still a lot of competition at a single venue in a smaller market. Is the demand for these events increasing a rate high enough to support all of these? If so, is it sustainable? If not, can Wizard use their greater financial and marketing resources to effectively supplant the established local event sponsors -- profitably?
Although I've done some due diligence, I'm admittedly not in tune with the trends of popular culture. I see the potential for a trade on the next couple quarters' results, but I'm not yet comfortable on the longer term thesis. Thoughts appreciated.
