With Hard Charge, 5k Foam Fest and other races going under, what does that mean to the sport of OCR?
This is not an article I want to write, and I have been avoiding it for days. A couple weeks. Over a year.
The hard fact is this; businesses fail. It happens every day, all over the globe. Whether they are a Detroit carmaker or the corner bakery, the collapse of these businesses inflict plenty of damage – both primary (the owners, employees, banks, etc.) and collateral (those employees' families, 3rd parties, and customers) and he fallout can get pretty ugly; social media makes damn sure that happens.
When Hero Rush abruptly deleted their Facebook account and closed up shop, I took it like a gut punch. After dealing with the owners for about a year while researching and writing Ultimate Obstacle Race Training, I didn't see it coming. As a business owner and race director myself, I should have known. It's been over a year, and my skills of observation are still pretty dull, as I didn't see Hard Charge or 5k Foam Fest‘s imminent demise either.
For the most part, every event – marathon, triathlon, mud run, motocross, car race, concert, festival, you name it – is hanging by a thread, if Lakhesis is cranky one day, Atropos is ready with the shears. (too deep with the Greek mythology?)
We Should Have Known?
In the case of Hard Charge, it was eerily familiar to the way Hero Rush went down; I was chatting with both companies about their future just days before on the phone. Both gave me telltalle signs that I can only decode in hindsight; they were either looking for investment to grow or lamenting that numbers weren't where they wanted for some events. Mud Run Guide is essentially a marketing company, so these are the types of conversations I have with nearly every event, regardless of how long they've been in business or how many races they have held.
5k Foam Fest closing up shop was sudden and unforeseen, by all accounts they were a thriving business with events all over North America, and I was intrigued to learn more about how they were developing a sort of “franchise” model with separate owners in different regions. Where we once had a singular contact in the company, suddenly there were new marketing personnel that were operating certain events in certain areas. I guess if it was confusing to us, it must've been confusing to them – this “model” only seemed to be in place a few months before operations went south. Fast.
NOTE: We reached out to Hard Charge, Hero Rush, and 5k Foam Fest for comment on this article. Answers ranged from “It's in the past, we've moved on” to “Not a chance.”
The State of the Biz
Does this mean the sport of OCR is doomed? Obviously not. Events get cancelled all the time in other sports, from local 5k's to marathons, bigger events like rock concerts, festivals, carnivals, etc. Events big and small go “tits up” as my grandfather would say, quite often, and it happens for a myriad of reasons from Mother Nature's wrath to poor publicity.
Throwing your hands up and saying “eh, it happens” does not adequately cover the damage done to everyone affected by events cratering, nor does it absolve the events themselves for employing questionable business practices in order to grow, essentially robbing the proceeds of future races from pre-registration to pay the bills for earlier races.
This “robbing Peter to pay Paul” method is absolutely not sustainable; as soon as one event has low pre-registration numbers, the whole house of cards crashes, and the “business” is out of funds and closes its doors without paying debtors and returning per-paid race fees.
Not all races operate in this manner, in fact, many of the successful ones came into this sport with solid business plans, a reasonable budget of working capital, and enough business savvy and fiscal responsibility to guide them through the rough waters of operating a startup. These are the events that grow adding new venues after they have done due diligence and analysis; some are big names that you instantly recognize (Spartan/Warrior/Mudder) while smaller ones like Terrain Mud Runs and BoldRDash fly below the radar. For many events, being a strong player in a specific region is proper execution of a business plan – they don't need to be everywhere and appeal to the masses.
“Home-field advantage” for race companies is a really big deal. All your contacts and resources are within driving distance, you save on airfare, lodging, and transporting tons of gear from location to location. For some events the cost of bringing their race to a new venue is upwards of $100,000.
The future is pretty bright for the huge event companies like Human Movemement Management, Vavi, and Red Frog (among others), who have put massive amounts of capital from a series of successful events back into future development. Does that mean they are all safe forever? Of course not. They still need to continue to execute on their business plans and adapt to changes (seen and unforeseen) in the future.
What Does This Mean to You?
“Who the hell cares that you think, Brett – shut up and tell us what you expect us to do!”
Well, you have some options:
- Stop racing, trusting any businesses or governments. Pull your money out of the bank, convert to gold bullion and put it under your mattress in a bunker somewhere. Bring plenty of ramen noodles, you may be there for a while before the zombies come.
- Take some chances, live a little on the wild side – register for races early*. Every so often you might get burned, but you're paying less for the entry anyway… just use a credit card. Not a debit card or PayPal account – credit card. Visa & MasterCard offer buyer protection, make sure you check out what type of safeguard your card offers.
- Stick with races you know and trust. This one is still a gamble, there are no 100% guarantees. Is Spartan Race a better bet than Jim Bob's Mud Jamboree? Um, yeah. BUUUUUT, if Jim Bob's Jamboree looks like fun, BY ALL MEANS DO IT.
*Register for Races Early: Rolling the dice on the cheap early bird price will not only land you with the cheapest rate for the event, you're likely helping to ensure that the race stays in business. As a race director, there are plenty of sleepless nights leading up to a race worrying about the venue, the t-shirts, the medals, the weather, etc. The biggest worry that strikes fear in the heart of every RD? Low registration numbers. In the weeks leading up to an event, if the numbers continue to remain low, theres a bigger and bigger chance that one of two things will happen:
- The event gets cancelled
- The race directors sell their soul to Gr0upon or L1ving Social to try and drive registrtion up with cut rates. (Yes, I altered the names, this is not publicity for them)
What's so bad about Gr0upon/L1ving Social?
“This is the second time I'm telling you to shut up Stewart, I really like those coupon deal sites where I can get a Mud Run for $39!”
Fine, go ahead and enjoy those low prices while your race is dying – heck, you're even helping it along by buying that steeply discounted rate. You don't think so? Let's see what happens.
Step 1. When a race pays one of those big coupon sites to carry their event, they are forced to offer a steep discount on the event, usually 50% or more off the normal ticket price. So, that $80 race registration is now a $40 “Gr0upon Deal” for you to buy.
Step 2. Gr0upon takes their cut off that discounted rate you pay – so, the $40 you're paying for is now cut in half, and the race is now getting $20. Let's just think about that – for setting up the event (obstacles, rental, insurance, travel, staffing, t-shirt, medal, etc. the race is only getting $20 for your registration. In most cases this is $5-10 below break even… they are actually LOSING money by having you at their event – all in the hope that you will have a good time, tell your friends and come back next year. They are essentially paying you $5 to $10 just to come to their event – but YOU don't get that money, Gr0upon does. Yeah, ouch.
Step 3. (and this is the doozy) Once you get used to paying $40 (or so) for a race through thee coupon sites, why would you pay full price when you can just wait until the last minute and get a Gr0upon deal?
You're hooked on waiting for the low price, and the event is stuck in the perpetual cycle of releasing tickets to the coupon sites each time… because you're hooked in waiting for the low price.
You want that $40 price?
You want that race to be successful?
Most events offer early bird registrations rates 3 or more months before the event for about 50% of the final ticket price. When you register early, the race has a much better idea of how many racers will be signing up, which makes it easier to plan for t-shirts, medals, food, volunteers, etc. The event also can use the registration money toward planning for and putting on a better event. For you. Get it?