Business of Endurance Races: Part 1

For those of you that don’t know, I’m kind of an endurance race enthusiast. Not that I’m very good at those races but I like competing in them. I classify endurance races as anything over 5 miles, human powered. I figure bike races that are 5 miles are sprints, but trying to get into a sort of biking shape even for a short distance does take some work.

My background? I’ve completed a handful of races at varying distances: marathon (26.2), half-marathon (13.1), 10K (6.2), Olympic Tri (.9, 24, 6.2), Long distance Tri (.75, 18, 5.1). I’m by no means competitive, but I’m trying to get a little higher in the age bracket finishers. My idea is that an everyman can do some amazing things with a little work. I don’t really diet except for little things (soda limit, skipping dessert) and I don’t have a gym membership (I use the UMKC Swinney Pool) so I try to make do with that.

While writing up my term project for Consumer Behavior (which was on strategies for Major League Soccer’s Sporting Kansas City supporting the new stadium and the rebranding project), I came across an interesting fact: During recessions, the number of people participating in endurance races sharply increases (around 9% a year to reach 500,000 marathon finishers in 2010). It is a reflection of the individual will to feel in control and to work towards something grand and ultimately achievable.  Given more time and less disposable income (gym memberships sharply decline in a recession) people turn to the low cost of running and using the abundance of available training programs that are offered free online.* Huge event races are getting sold out months in advance and attract more than 20,000 participants each.

*Yet another real life activity that is made more popular by the information wealth from the internet.

The largest growth shown among participating groups in endurance races are women. The Boston Marathon, the most storied US marathon, was once an all men’s affair and the most prestigious distance race in the world (arguably). In April 2011, of the almost 24,000 finishers, a little more than 10,000 were women. Boston Marathon Results What is neat about that is the fact that not anyone can sign up to run in Boston. The cut off times for 2011 were around 3 hours and 15 minutes in a different licensed marathon within the past year. Qualifying For those of you without the quick math, it is averaging less than 7 1/2 minutes per mile for 26.2 miles. A fascinating race but it leads to the discussion about the discrepancies between the men’s and women’s qualifying times and the sport of running in general when comparing genders. I won’t really get into that, mainly because it would take all day, but more importantly, I’m still pretty sore that there are grandmothers out there who are in terrific shape and will run these races about an hour faster than I will be able to.**

**Not to take anything away from them, of course, it just means I need to train harder and be less lazy. It’s like if you haven’t showered recently and you need one and then someone rolls out of a dumpster, comes by and tells you that you smell bad. You already know what you have to do but you hate it more that someone else is pointing it out to you.

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The Business Aspect

Let’s take a race like the Boston Marathon for example. Going over the basic figures with some rounding as well as not attributing the early registration fees vs late (as Boston sold out in less than 8 hours this last year) we get these:

20,000 registrants
6,000 Volunteers
1,000 Media Passes
21 Sponsors

Okay so what does that mean exactly? Firstly, the costs to host the race are nearly negligible due to the fact that there are sponsors covering most of the racer perks (race tshirt, during race water/refreshments, after race refreshments, etc.) and the city gets a fancy event to add to the calendar (generally a Saturday or Sunday) which draws tourism money (racers staying in nearby hotels for the weekend with families, exploring the city, eating at restaurants, etc.) and the thousands of unpaid volunteers (some races require a little money for volunteer t-shirts). Volunteers work for free, handing out all the little duties like water and aid stations, helping with check in and racing chip collection, handing out medals, etc. The volunteers are pretty key, many racers are supporting a specific charity if the race itself is not donating some of the funds to a certain one.

Secondly, is how much money is in these races. Registration fees run anywhere from $40 to $120 per race so given a nice estimate of $90, a race the size of the Boston Marathon is looking at a gross pay of $1,800,000. Boston is pretty prestigious and attracts some top talent so the pay out money in total (for all divisions) is $806,000. Let’s also say that the organizing committee donates a healthy hundred thousand dollars, subtracting a Republican 35% tax for being a profit organization, we are looking at a net of a little over $250,000. For an organizing committee of a dozen or so, that’s about $20,000 a person everything held equal. Help organize four races a year and you’re looking at a comfortable upper middle class lifestyle against the national median income, all from what is probably no more than a part time job (20-25 hours a week). Obviously this is just some spitball numbers from an outsider’s perspective (if you know anyone involved in this line of work, event organizing, etc. please let me know, I’d love to have a chit-chat about their business), but I would wager that these numbers are at least ballpark from my limited research.

Why don’t you form one of these yourself? It takes some time and it definitely can backfire as is the case with the Kaua’i Marathon, which is looking to tap the local community that benefits directly from the event due to low number of entrants.

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In the next post about Endurance Races, I will cover Ironman/Tough Mudder, sponsors, and vendors. In the meantime check out one of my more favorite documentaries: Spirit of the Marathon (2007)
You can watch the full thing (with limited commercials) on imdb (through Hulu). If nothing else, it is an entertaining watch, showing people from the very best racers to the common finishers in the Chicago Marathon.

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