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August 28, 1994, Sunday, Late Edition - Final

SECTION: Section 3; Page 5; Column 1; Financial Desk

LENGTH: 1887 words

HEADLINE: When Broadway Meets the Midway, It's Big Business

BYLINE: By JUDITH BERCK; Judith Berck is a freelance writer based in Iowa City.

DATELINE: MILWAUKEE

BODY:
ON the surface, state fairs have shed their rustic ways. But at heart they haven't changed much. These giant postcards of Americana have somehow managed not to sacrifice their hog-pulling, cotton-candy roots as they've sprouted into very big businesses indeed.

Just look at the Wisconsin State Fair, which drew close to a million fairgoers at its 11-day run earlier this month. Rural rubbed shoulders with urban, old with new. Farmers in overalls munched turkey legs alongside bikers in Harley-Davidson T-shirts. Local brewery workers and Mediterranean Leghorn roosters stared at each other in the Poultry Barn. Wide-eyed children watched jumpers swan-dive off a 14-story Bungee jump, cheered the Miller High Life Pig Racing contest or climbed the World's Largest Piggy Bank (16 feet high).

The Ferris wheel, of course, still turned, but nearby, business people in Ray-Bans and teen-agers in the latest grunge lined up to try the new virtual-reality game. At the 15,000-seat grandstand, the line-up included Reba McIntyre, Motley Crue, the Beach Boys, and Barry Manilow.

The site itself had a tale to tell, too. In 1892, the 200-acre Wisconsin State Fairground was carved out of rural farmland, 10 long miles from Milwaukee. Now, the creeping city has almost engulfed the fairground -- with some of it even lying within the city limits.

But the fair survives -- just one of more than 3,000 in the United States and Canada that are doing just fine in this decidedly non-agrarian age. You can still see exhibits of champion sheep -- which is, after all, where some say it all started: In 1807, a man named Elijah Watson, sometimes called "the father of U. S. agricultural fairs," staged a modest sheep exhibit in Pittsfield, Mass., and the rest is history.

Nearly two centuries later, you can still see pig races, pumpkin-carving contests or farm equipment displays -- but they're interspersed with hundreds of product displays and industry showcases. You can still hear plenty of country music, but heavy metal and rap have found their way in, too. And don't be surprised to find a Karaoke machine next to the saltwater-taffy stand.

That sheep exhibit, in short, has evolved into a diversified, billion-dollar business, with the full weight of corporate sponsorship and civic boosterism mixed in with old-time agricultural showcasing and carnivals. According to Thomas Powell, associate publisher of the trade paper Amusement Business, the estimated 158 million North American fairgoers spend about $300 million a year at the gates, $300 million more on carnival rides, and even more on food, drinks and games. And that doesn't include the millions spent on hotel rooms, restaurants and shopping.

The economic impact of a fair can be considerable. The Eastern States Exposition in West Springfield, Mass., brings an estimated $50 million into the local economy during its run (this year, Sept. 16 to Oct. 2). The Texas State Fair claims a $160 million lift for the Dallas/Fort Worth economy.

And in Milwaukee, "It's like having two major league baseball teams in town each day," said Mayor John O. Norquist. "People from all over the state patronize local hotels, restaurants, bars and other shops."

And nested inside each nonprofit fair is another world unto itself: the carnival. Carnivals are private businesses that travel year-round, setting up and operating their rides on the fairgrounds' midways, then moving on. Many are family-run and decades old, traveling long-established routes. Most have just 6 to 8 rides and may move 5 to 10 miles a week. But these days, many are huge interstate, or even international, businesses, with more than 100 rides.

Carnivals spend only a few days at each event, typically paying 25 to 40 percent of their gross to the fair's nonprofit sponsor, with rides costing $1.50 to $3. In off-season, they play all kinds of events. Dominick Vivona, one of five brothers who run Amusements of America of Englishtown, N.J., said his 120-ride carnival is booked year-round from Florida to Canada. "In the spring we play what we call 'still dates' -- shopping centers, coliseum parking lots, racetracks or stadiums," he said. "Then, in June and July, we start playing our fairs -- county fairs, state fairs, festivals, celebrations."

Carnival revenues can be enormous. "A large carnival, with 60 or 70 rides, has the capacity to gross anywhere from $500,000 to $2 million a week," Mr. Vivona said. And a handful go far higher. Murphy Brothers Expositions, based in Tulsa, Okla., the No. 2 carnival last year, has an annual gross of $30 million to $40 million.

But "if you make a 5 percent profit, you're doing well," Mr. Vivona said. "By the time you pay your percentage of the ride gross, and your insurance, your payroll, your transportation, and your maintenance payments on the rides, there's very little left."

When Mr. Vivona's parents started Amusements of America in 1940, they bought a Ferris wheel for $3,500. Today, though, "a little kiddie ride costs $50,000 to $100,000," said Jerry Murphy, owner and president of Murphy Brothers. "A very big ride costs upwards of $1 million."

Regulation also causes big headaches. "The red tape has become unbelievable," Mr. Vivona said. "If you're a big carnival, and you have to operate from state to state, it has become very difficult and expensive because every state has different safety laws, different permits, different licenses."

Operating a big carnival "is like running a little city," Mr. Murphy said. "You've got to be the mayor, the police chief, the fire department, and everything."

The visitors to that little city, and the rest of the fair, have changed over a century as a population that was 97 percent rural did a back flip to become 97 percent urban or suburban. Not only have people moved to cities, but -- as in Milwaukee -- the cities have often surrounded the fairs.

"A hundred years ago the fair was primarily educational for the farmer, because it showed him different kinds of livestock and seedcorn and produce," said Lewis Miller, general manager of the International Association of Fairs and Expositions. And that past is clearly alive. The Wisconsin fair got about 17,300 entries in 1993 for livestock, home economics, horticulture, and the like. "But the educational value," Mr. Miller said, "has probably become much larger to the city dweller, who comes out and says, 'My goodness, there's a cow being milked.' "

A fair's traditional features, though, bring in little revenue and are in effect subsidized by modern elements. Agricultural associations have long been sponsors. The Wisconsin Bakers' Association, for instance, has been showcasing its products for over 70 years, as have the Wisconsin Beef Council, the Wisconsin Pork Producers and the Wisconsin Poultry Industries.

But corporate participation picked up noticeably in the past decade. "It's cost-effective advertising," said Joe LaGuardia, marketing director of the New York State Fair in Syracuse, which opened on Thursday. "Where else can you reach 86,000 people a day" -- people who are prime consumers "because they're here to look."

And corporate America is becoming quite creative in promoting its products. At the Wisconsin fair, in addition to the Miller High Life Pig Race, you could attend the Bud Light fireworks, a concert sponsored by Skoal or Fleischmann's, or events sponsored by local banks, restaurants and radio stations. You could drink beer in pavilions built long ago by Miller, Pabst or Budweiser.

The Wisconsin fair also had over 700 commercial booths and displays. A "Smart Mop" demonstration was so effective that 500 were sold in a day at $19.99 apiece. Fairgoers tried out the "Kneading Fingers" pillow-sized massager, oohing and ahhing all the while, and bought 40 at $150 each.

IS the cost of promotion at fairs worth it to corporations? "The typical sponsor would be looking for 3.5 to 1 return on promotion dollars," says Richard Bjorklund, director of the Wisconsin fair. "I would be comfortable in saying that if you polled them you'd find they easily get that return and much more."

But in the end, "fairs are not a labor of money, they're a labor of love," Mr. Miller said, with much that's thrown in free. "We've historically had entertainment as part of the gate price, with stages going at all different times, for 141 years," said Norbert Bartoski, general manager of the California State Fair and Exposition in Sacramento.

The recession made things tougher. State governments nationwide cut subsidies to state-operated fairs. Many states mandated about four years ago that their fairs become self-sufficient.

That trend toward self-sufficiency has spurred public fair organizations into better use of their facilities year-round. At the New York State Fair, also called the Empire Expo Center, "we have several major exhibit buildings, a 50,000-seat grandstand where we have auto-racing, a 45,000-seat coliseum with a hockey program in the winter, and parking for 25,000 cars," Mr. LaGuardia said.

One constant hazard for a fair's budget is nature's bad moods. "Weather is the universal fear in the fair business," Mr. Bjorklund said. "We have a lot of eggs in one 11-day basket." Last summer, in fact, the worst storms in 40 years hit the Indiana State Fair's opening weekend.

Last year in Iowa, though, the floods that deluged the state stopped half a mile short of the fairgrounds. The state fair, which called itself "11 Days of Flood Relief," had record attendance of 893,000. "People were ready to come out after so many weeks of flooding and rain," said the manager, Marion Lucas.

'State' Is an Elusive Concept

THE term "state fair" refers to fairs and expositions run by nonprofit organizations in a variety of arrangements, says Lewis Miller, general manager of the International Association of Fairs and Expositions. Of the 50 largest fairs and expositions in the United States and Canada, many are indeed "state" fairs -- bona fide state agencies, publicly owned and operated. But many are private nonprofits, including No. 1, the State Fair of Texas, which dwarfs the rest with attendance of over 3.1 million.

No. 8 isn't a state but a county fair -- the Los Angeles County Fair in Pomona. It had 1.4 million fairgoers in 1993, half a million more than the Wisconsin State Fair. And No. 3 isn't even in this country -- 1.75 million people attended the Canadian National Exhibition in Toronto last year, one of five Canadian fairs to make the top 50. Average attendence at the top 50 is between half a million and 1.5 million people, according to Amusement Business. The fairs generally run 10 to 17 days, mainly in August and September.

Fair revenue comes from four major areas: gate admissions, carnival rides, food and entertainment, with the fair normally receiving about a quarter to a third of the gross. Carnivals typically pay 25 to 40 percent of their grosses to the fair. Some fairs sell concert tickets for the bigger acts, with the fair retaining only 10 to 20 percent.

Per capita spending varies, but a survey for the New York State Fair outside Syracuse, for instance, found that the average person spent about $21.50. Multiply that by an attendance of 860,000 people over 12 days, and that comes to over $18.5 million.

GRAPHIC: Photos: Inside each state fair is the carnival midway, a world unto itself. (Steve Kagan for The New York Times); Richard Bjorklund, left, and Roger Bean, directors of Wisconsin's fair. (Steve Kagan for The New York Times)

LANGUAGE: ENGLISH

LOAD-DATE: August 28, 1994