My Analysis of the Sue Bryce Education Acquisition

The Announcement

NEW YORK, NY. (April 5, 2021) — Emerald Holding, Inc. today announced the acquisition of Sue Bryce Education, a member-based portrait photography education platform; and its affiliate, The Portrait Masters, an online photo education destination and conference created by Sue Bryce and Digital Product Studio. 

Sue Bryce Education and The Portrait Masters offer photographers online and in-person learning and community, inspiring them to grow creatively and build successful businesses as photographers. As part of the business agreement, all four of the prior owners – Sue Bryce, Aaron Andersen, Craig Swanson and George Varanakis – will remain committed to the future growth and success of Sue Bryce Education and The Portrait Masters by partnering as consultants to operate and integrate the businesses with Emerald.”


A Little More About the Players

Today, Sue Bryce and her business partners George Varanakis, Aaron Andersen, and Craig Swanson announced the acquisition of Sue Bryce Education and The Portrait Masters by trade show giant Emerald (NYSE:EEX). Emerald is the largest trade show company in the US with a Market Cap of around $400M. They manage over 140 tradeshows and conferences like WPPI and Outdoor Retailer.

Alongside the quartet at the announcement was Arlene Evans, a long time photography industry powerhouse and content director for Emerald’s photo group. Evans has been a close colleague of Varanakis since 2004 and they have worked together in several capacities over the years at WPPI and Creative Live.
Because of this connection between all of the members, Sue called the acquisition a “full circle” explaining that she met George and Arlene in 2010 at WPPI. Craig Swanson and Varanakis were driving forces behind Creative Live, and Anderson has been with SBE since the beginning.

How Am I Qualified to Analyze This?

So why am I writing a blog post on this seemingly mundane topic?
In my former life as a corporate manager and consultant, I directly participated in over 60 mergers and acquisitions in the Fortune 500. I have seen the process from the earliest conversations between executives straight through to integration. I was myself acquired by Cisco Systems in 2000 as part of the $800M Sightpath deal. Short story: I’ve seen some shit go down from both sides.
So the following is just my analysis on how I read the landscape based on the same news everyone else is reading.

What Goes In To An Acquisition Announcement?

Some may assume that a merger or acquisition happens quickly. It does not. From my experience, the due diligence process alone can take the better part of a year before the agreement is signed and closed.
During that time every single aspect of the target is inspected, vetted, and studied under a microscope from financials to team member background checks. Compensation strategies, retention for key employees, success factors, reporting structures, and a slew of data systems and communications planning are executed. This is the type of stuff lawyers live for.
My guess is that Sue and George and the entire team were buried in paperwork requests 24/7. Sue mentioned that the process took about 8 months, so it has been reassuring to see how well the company has grown amidst that behind-the-scenes chaos.
From this point forward, I would expect corporate updates at the 100 and 180 day marks. At that point, either the acquisition will be well on its way to success, or there will be trouble in paradise. Everything I’m seeing leads me to believe the former rather than the latter.

What This Means for Sue Bryce Education and The Portrait Masters

The biggest question coming out of this announcement of course is “what changes, and what happens to Sue Bryce Education?”
Sue and the team continue to stress that nothing will change on a day to day basis for members. As a member of SBE I was concerned that the brand would become diluted, sweeping changes would be made and the sense of community that we all feel would disappear. That it would lose that special “thing” that makes SBE such a family.
You see, there are subtle differences between mergers and acquisitions. Rarely do you ever have a true merger of equals. The typical acquisition model is to have the parent acquire a target for either cash, or stock, or a mix of the two. 

I have no insight to the financials here, but on first glance, this seems like it would be an acquisition with SBE and TPM acting as subsidiaries or separate legal entities. Basically, they’ll operate business-as-usual until some time in the future when it makes sense to start restructuring or rebranding, a common occurrence in large organizations.
After listening to the special Portrait System Podcast featuring Sue, George, and Arlene, I have all the faith in the world that the management team of SBE has nothing but the best intentions to keep the value and power of the platform performing optimally. The team will continue on as consultants guiding the direction of their brand.
In plain speak, the four probably signed multi-year contracts (Sue hinted at hers being a 5 year contract during her live announcement) that retain their talents for the foreseeable future. This gives Emerald a sufficient time period to figure out what to do with the brands and recoup their investment without losing key talent.
Keeping the management team for a defined period of time is a common tactic in M&A and ensures that the transition is a smooth one for everyone involved. Two year terms are common if the product or company is being assimilated into the parent, but five years is significant and speaks to Sue’s value to Emerald. 

As “consultants” I would expect that the team, especially Sue, drives the face of the brand with the upper execs at Emerald signing off on the direction. But with Emerald hiring them as consultants, the SBE team (I’m sure) has a bit of latitude in their contracts and guarantees of certain protections.

My guess is that for a 5 year contract to stick, there are some level of financial incentives with revenue or growth targets. Incentivizing management to keep things operating smoothly is beneficial for Emerald and allows the public to digest any future changes. No smart entrepreneur signs an acquisition deal without taking care of themselves. That’s the game.

Unless promoted into the upper ranks of Emerald (unlikely) I would see Varanakis, Swanson, and Andersen staying for about 2-3 years before leaving their positions – just enough time to stabilize the ship and let any stock terms vest, then gracefully exiting to start something new. They are serial entrepreneurs and it is in their DNA. It’s just how this works.

Perception is everything at the time of an acquisition announcement, and any level of disruption or hint at uncertainty can cause chaos. The announcement has certainly caused immediate ripples across the SBE community, with some calling it a “turd in a punchbowl” while others are unsurprisingly supportive. 

My personal opinion is that there will be no short term effects, but anything past the 2 year mark is a guess at this point. I’ve seen too many product roadmaps change significantly after only a year. 

With technology changing so rapidly in the community building and education space, it would be foolish to think nothing will evolve. But the personalities here are too strong. I absolutely do NOT see Sue Bryce compromising her values or dedication to her following.
Since Emerald does not currently have a foothold in the online education space, they certainly reached for the gold and acquired possibly the biggest education brainstrust in the photo world. I would not expect that there will be any disruption to the education library on SBE which consists of over 1040 videos. What IS up in the air is the access to that library as the user base increases. Membership prices will undoubtedly increase, but with that increase should come more innovation so it is a trade off.
“Nothing is going to change. We now have partners we can grow bigger and better with,” Sue continued to say. With the trade show know how of Emerald, it can be expected that The Portrait Masters conference will be taken to new heights as Varanakis now has the infrastructure and expanded team behind him to enhance an already stellar event.
And therein lies the issue for every entrepreneur: wrestling with the emotions of getting to a point as a small company where growth to the next level can’t happen without help. That’s essentially what has happened to SBE. Some entrepreneurs set out with the intention of building a company strictly for acquisition, and others just become so valuable it’s only a matter of time before a bigger investor takes notice.
For the past few years, SBE has seen explosive growth. The Portrait Masters conference which started in 2017 is now an annual conference that sets the bar for other small-form photography conference/tradeshows.
According to Varanakis, The Portrait Masters conference will be a little different in 2021, but it will not be in person. From 2017-2019, the conference was held in person, most recently in Arizona. Due to COVID restrictions in 2020 TPM consisted of pre-recorded and live videos that were broadcast to those that purchased tickets to the online event.
By going virtual in 2020, TPM again stayed ahead of other conferences that were struggling to adapt to a virtual meeting space. The content-creation juggernaut that is SBE adapted seamlessly, losing very little in the feel of an intimate conference. To Emerald, this had to have been a significant example of the platform’s benchstrength.
TPM has also turned into a launching ground for up and coming educators and entrepreneurs like Pratik Naik, Felix Kunze, Lara Jade, Richard Wood, Kara Marie, Michele Celentano and several others. Products and courses are sold in the TPM store and it would not surprise me to see TPM continue to become a destination for educators and content creators from across the visual arts landscape.
Additionally, with the Awards & Accreditation process that started in 2018, The Portrait Masters competition has begun to rival the larger PPA and WPPI competitions for prestige amongst photographers. While it is a relative newcomer on the competition scene, the quality of the work and the competency of the international master judges is impressive.
I’ve been following the SBE community since 2017 (a member since 2018) and it has been interesting to see how Sue has shaped the brand to allow for expansion. Clearly, any growth needs to involve others and the gradual improvements over time are what allow the community to digest bigger changes. Sue has consistently elevated herself without alienating her following, something that is harder to do than Common Core math.
For example, Sue has been promoting her team of “mentors” as business coaches for several years allowing the knowledge to keep pace with the growth in student base. The mentors have taken on minor celebrity status in the community and are pillars in the online groups.
To expand reach into other content areas, Sue gave the reigns of the Portrait System Podcast to host Nikki Closser, one of her original disciples and now SBE mentor. Many of the other well known educators under the TPM umbrella also lend credibility to the platform.
So it will be interesting to see how SBE and TPM evolve as a brands under the Emerald canopy. Knowing Sue’s personality she will remain in creative control of the whole enchilada, but I would expect to see her role change significantly around year 3 to something larger.
At that point, several other educators will have stepped up into the spotlight to more prominent roles and I can see The Portrait Masters becoming the primary brand. Sue will most likely remain as the overall executive (figurehead or not), controlling the long term vision and strategy as long as her name is on it.
As Emerald undoubtedly changes in the wake of ever evolving person-to-person regulation, my guess is that they will look to SBE to continue to set the standard for photography education and exploit the capabilities of the platform to attract an even larger audience. This will in turn help them drive attendance to their other slew of trade shows and create content for a virtual audience.
Will the SBE 2 years from now resemble the SBE of today? I certainly hope not. If the current growth has been any indicator, we’re only just watching the engines get warmed up. An influx of cash, resources, and infrastructure can only serve to put out a better product for the consumers and SBE faithful.
So take all of that for what it’s worth – just a bit of crystal ball gazing from an M&A nerd turned photographer and Sue Bryce devotee. Only time will tell if I’m right. Regardless, I wish everyone involved much success.
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