The Palladium is set to become a multi-purpose ‘lifestyle' venue, according to Joe Tabet, executive chairman of new-owners, Pragma Group.
News of the acquisition of the Palladium by the Lebanese-owned Pragma Group last month wasn't a surprise to most in the industry, although many have expressed scepticism as to whether the firm's ambitious plans for the venue are viable. To these people, it reeks a little too much of the fevered frenzy that gripped Dubai pre-September 2008, when the quest to be the biggest, tallest, best, most exclusive and most expense was the primary concern for developers and event organisers in the region.
Despite this, Pragma Group are confident they've made the right decision. "Pragma Group is all about opportunities," says Joe Tabet, executive chairman of Pragma Group. "We have built a smart and successful business by using both hard facts and intuition to seek out the best opportunities on offer, the UAE's Palladium being a great example of this philosophy in action."
While he will not disclose whether the company have taken over Palladium's rumoured debt - "It wouldn't be fair for us to comment on their behalf" - he confirms that they have complete ownership. "It was a 100 per cent acquisition of the total equity and the real estate."
Pragma are also behind Dubai's Cavalli Club and 400, but this is their biggest foray into the events industry yet. "We don't come from the events industry but we're ready to give it [the Palladium] the benefit of the doubt - to see what happens and to give the current team a chance to prove their viabilities," explains Tabet.
The company's plans for the venue are expected to be confirmed later this month but include a US$100 million investment to develop it into a "holistic lifestyle venue" - which Tabet says will include a hotel, a pool of restaurants and clubs, a high-end gym and a name change.
At present, one of the company's variety of businesses, a management consulting arm, is partnering with current management, headed by Raymond Gaspar, to take stock of the venues current bookings, operations and potential. "The team that is focussed on completing the feasibility study and the plan for Palladium is managed by the current executive management team. We're just now in the period of evaluating and deciding how to proceed from here," says Tabet.
When faced with widely touted industry concerns about the Palladiums size - it only hold 4,000 to 5,000 at the most - Tabet voices his agreement: "The critical thing that I've learnt so far about that industry is that in order to have any kind of real success you need 7,000 to 8,000 seats and this is not available at the moment.
"One idea is - because of the size concerns and that the Palladium hasn't reached a certain potential in the market - to have an add-on, to take the Palladium as it is and spot another real-estate that is nearby, move it and then expand it to make a bigger venue for theatre and events."
He says the management consulting team will consider the potential of capitalising on the assets gained from the acquisition and creating a brand-new - and much bigger - events venue. "If it comes down to a bigger one then we acquire different real-estate that is focussed on that particular offering," he explains.
The question then as to whether Gaspar and his team would be kept on was met with a blunt reply.
"No, I don't think so. He's going to be on board as a consultant, or, probably when he gets projects the doors will always be open for him to explore the venue and to team with the operator but I don't think he'll be kept on board as part of the operations team," explains Tabet.
Repeated requests to Gaspar for comment on the announcement went unanswered.
It could be quite some time before we see the ‘new' Palladium - the end of 2011 according to Pragma Group. Joe Tabet, however, is keen to make that time as short as possible - he says any delay will be the biggest challenge to overcome.
"Time to change things, to re-engineer things and to implement concepts is the biggest challenge. The faster we can launch it the better for us."
In the meantime, Pragma will comply with legal obligations required under scheduled bookings at the venue.
"If we're committed with a third party and contractually we're bound to honour those commitments where payment has been made then we're going to have to do it - or find them an alternative - but not for a long period, not longer than September or October."
He does, however, confirm that he's seen bookings as far ahead as October 2011 - and where the takeover leaves these remains unclear.
Tabet's overall enthusiasm for the project is infectious, as is the group's marketing director, Housam Shallah, who offers his spin on the proposed offering: "I think this is a unique offering that we're bringing into the market - which is not just new to Dubai but the UAE and the whole region. This is a concept that is not just focussed on an events platform; it's a holistic entertainment lifestyle centre, so that unique offering won't have any competition from the capital or elsewhere."
Despite being faced with reports on the contrary, he expresses confidence in the ability to attract enough business to be commercially viable in the face of existing competition.
"Even in Dubai we have a lot of big events and more big events are still coming. Even during this low season, and the end of the recession, if that's what you want to call it, we have trust in the market and in the UAE and Dubai specifically, that has the location and the facilities."
Reactions to the news of the aquisition by those in the events sector have been mixed. One industry source, who declined to be named, expressed doubt that Pragma Group had the experience to oversee such a venue, particularly if it reaches the potential planned by the Group. "They may have bitten off more than they can chew," the insider says.
Many, however, are as optimistic about the change as Pragma themselves are. Mark Brown of event production and staging company Eclipse has worked with the Palladium on a number of occasions. "We hope the financial muscle of the new owners can increase the production values and bring in new venue management experienced in venue safety," he says, having been vocal in his concerns about potential safety hazards at the site. He also expressed his hope that "the in-house equipment - if further purchases are made - is of a higher standard and is properly and regularly maintained, and that a professional supplier of technical services, together with experienced crew are provided for each production." Only time will tell.For all the latest lifestyle news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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