The Frequently Asked Questions on this page are intended to help our athlete/customers understand the realities of the behind the scenes for independent races and race series. MultiSport Canada was founded by athletes who had a passion for the sport and a desire to introduce more people into the sports of triathlon and duathlon, a healthy lifestyle and tremendous camaraderie.
Before I start this article I want to stress that I do this to help educate people about some of the realities of INDEPENDENT event management. Those who know me, some are in this group, will tell you know that I started our business as an athlete who had a passion for the sport and a desire to introduce more people into a sport with a healthy lifestyle and tremendous camaraderie.
Two days ago I saw this posted in a Facebook group as a conversation starter that expressed his very balanced perspective on the possible scenarios of refund, postponement or deferral. Here is some of what he posted:
“If you’re getting upset that race directors aren’t quick to refund your money, consider what that would actually look like if they actually refunded your money??? It would mean NO MORE RACES. Our race fees are already spent long before the race and refunds would cause promotors to go bankrupt. Let’s be happy that there are people willing to assume all the risk to put big races on… And if we loose a few bucks because of corona, so be it. There will be other races when this thing blows over. Let’s just be grateful we can still get out there and run right?!??!”
As an RD with almost 20 years in the business, the largest independent triathlon and duathlon series in Canada and the largest non 70.3 branded half in North America (Barrelman Niagara Falls), I can tell you that we ALWAYS think of the athlete customer first. All of the race directors I know have the same attitude. On a personal level it is upsetting when people immediately go negative, get out the broad brush and make bold unfounded statements or immediately expect the worst in others. I hope these people will consider that there are some who are honest and simply trying to give the best to their athlete/customers. There are however, some realities to our business, which you may want to consider. One of these is, where will you race if there are no more independent races?
What follows is part of the world of an INDEPENDENT event management company, not the WTC/Wanda/Ironman. It is also an effort to help those who seem so angry to understand the behind the scenes. For others, who are so sure that the event manager’s/RD’s insurance would cover lost revenue or the refund of entries, to let them know they are misinformed.
For those who don’t have the time for this lengthy post here are the areas I try to discuss:
Races make a lot of money for the race director
I think there is a common misperception that if a race is long standing and successful it equates to lots of profit going into someone’s pockets. This seems to be the basic math used by many athletes.
Race Entry x Number Registered – race specific costs = LOTS OF PROFIT
This is simply not the case. In our case where we run the series and Barrelman Niagara Falls, approximately 50% of race revenue goes to overhead, NOT RD salary, overhead. Rent, annual equipment purchases, full and part-time staff, insurance and all of the associated costs in running a small business. Above that many or the race specific costs are paid out early. One example would be Finishers medals, Finishers hats and race day age group award medals. They must be ordered by February and, once the order has gone to production, we are liable for payment on delivery. The bill for 8,000+ athletes is in excess of $80,000. Many other service providers such as race venues, municipalities and equipment rental require a non-refundable deposit. Remember that this is paid over and above day to day business operating costs. I would also suggest that many race directors have an annual salary or income that is far below what is assumed by many to be high. There is NO COMPLAINT from race directors simply because that is their choice. But it is our reality.
Ok, so you don’t make that much from entries, but you have all that sponsorship revenue!
Some may jump in and say…”well you also have sponsor revenue”. That would have been a reasonable assumption to make up until about 5 years ago when cash sponsorships were still difficult to get, however we and many other races had some success. That has changed DRAMATICALLY! I can tell you from our experience and the many RD’s I have spoken to here and in the U.S. cash sponsorship is possibly 5 to 10% of what it was back then. (That would probably not be the case for the WTC as their international brand is very attractive to sponsors.)
I would strongly suggest that if an independent race or series of races were to lose a year of race revenue, they would be bankrupt. Some may say, well that is the cost of doing business, they would be right. However, if you think beyond that, it also means possibly not being able to compete in the local race as it would not exist. Full circle back to the WTC and higher fees.
Races have insurance for cancelling and this sort of thing
Based on what some have said over the past few days there are some industries, such as concert productions, where cancellation insurance is available. The assumption then is mass participation events have this available to them. No they don’t! At least not in our segment of the industry.
If you really think about it, what would the insurance cover? Would it be fees that have already been received? When would the insurance kick in? Would it be the annual total revenue a race or races have historically seen? How do you calculate the premium for something as nebulous as this? I can tell you we have researched this and haven’t found that insurance company. If there was one, why wouldn’t a event company give refunds? So, if someone out there can direct me and other RD’s to a reputable insurance company, please send the information along.
What sort of insurance is out there?
The insurance that an event management company has is two-fold. Standard commercial insurance, which covers damage, accidents etc. The other is liability insurance, which is the insurance that protects them from personally having to pay a customer as a result of an accident while competing. Typically in these situations it would have to be proven that the event management company was negligent. Our liability insurance is offered through our governing body and I assume this would be the same in many provinces and states.
What about insurance paid by the athlete to cover cancellation?
In researching for this piece I reviewed the Active registration insurance and they specifically state “they will not provide a refund if the booked event is cancelled, abandoned, postponed, curtailed or relocated.” I have also spoken to other providers and there is no consensus as to whether the COVID-19/Coronavirus pandemic will be a reason for reimbursing athletes for race fees if an event is cancelled. It would appear to be certain that this very circumstance will change the face of insurance in the weeks and months ahead.
From an athlete in this group: Do you think a $40 insurance fee, which the WTC charges, would be received well if it was simply added to the registration fee for all entries?
First you have to consider the previous information “What about insurance paid by the athlete to cover cancellation?” Off the top of my head, I don’t have a good sense of what premiums an insurance company would charge to offer race cancellation insurance, which we pass on to the individual athlete. It would have to be based on a number of factors such as race fee amount and ancillary benefits. My gut on the other hand tells me that $40 would more than cover that sort of a premium and there might also be a revenue stream there for the WTC. As I say, that is my gut so please don’t quote what my gut tells me.
The other side to that equation for an independent race is TOTAL race fees. While many athletes who participate in Ironman branded races will whinge and complain about the gouging in race fees, they are more than prepared to continue to pay increasingly higher fees.
Why not offer cancellation insurance?
On the local level races must be very mindful of the upper limit for race fees. We are fortunate in that the reputation of our series races is excellent and many who have raced with us at Barrelman Niagara Falls compare the experience to as good as or better than a lot of the branded 70.3 races. While that makes us feel proud of our efforts we are still in a position where my sense is that increasing fees to include cancellation insurance, even as low as $10, would be extremely problematic and affect registration numbers.
A factor in not including insurance cancellation fees, which would increase the total race fee, is the change in the customer segment and market. 10 or 15 years ago approximately 40% of our athletes competed in more than one event a year, some for all 7 to 10 races, which also equated to over 60% of total series race entries. They were “triathletes” and took advantage of our multi-race discounts so their cost per race was sometimes significantly lower. The sport has changed and now the number of athletes who compete in multiple events and are truly in the triathlon or duathlon lifestyle is extremely low. For us that means 90% now only race once a year. Those people enjoy their “once a year challenge” however will be more price sensitive. The “sticker shock” would more than likely not get them past the price to see that it also included cancellation insurance.
I hope this is helpful to some in understanding some of the factors and influences with this topic.
In the end I go back to what that athlete said, “If you’re getting upset that race directors aren’t quick to refund your money, consider what that would actually look like if they actually refunded your money??? It would mean NO MORE RACES. Our race fees are already spent long before the race and refunds would cause promotors to go bankrupt.”
Thank you for your time.
Here is another article that articulates the reality of race and event management.