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?
I put this article out hours prior to this – exactly the same sentiments. Support local, quality races, and stop using goddam groupons.
I am sitting here at 12:20AM, after finishing a 4 1/2 hour brainstorming meeting reading this article and all I can say is WELL DONE! Gr0upon/Llving Social deals just happened to come up on the agenda this evening and many of the points here were brought up as well as the sad demise of some of the event companies that have folded recently. It’s a different world in OCR than it was in 2011 when BoldrDash started in Rhode Island. We have remained true to what we believe in and have never strayed from the core of what we are. A local event that will challenge an elite runner while giving a beginner athlete a course that is attainable. No matter who you are, you’ll be smiling so much when you cross the finish line you’ll have to scrape the mud from your teeth. We give a high quality event with over 25 obstacles along the way (and just for clarification – ONE of our obstacles is 10 over/under walls – if it’s the beach event you’re carrying a 25-35lb water buoy while you do it). Gr0upons and LlvingSocial are not something we have used regularly and not something we can use if we intent to continue to provide our runners with new, innovative obstacles every season. Heck, I’m not even sure they existed bad when we started. I certainly didn’t know about them. Bottom line, you get what you pay for. Happy racing everyone, I am going to go to sleep now. I hope when I read this in the morning it actually makes sense.
BoldrDash Race LLC (RI)
I disagree with your points regarding the sites “that shall not be named” to buy event tickets. A customer is not at fault for a business failing when the customer paid what the business asked for and that turns out to not be enough to cover the business’s costs. A business has to choose to offer their products/services through a discount web site and in making that choice they should have a goal in mind for doing so; and based on the terms of those discount web sites, those goals should along the marketing lines and not profit. On top of that, I believe that businesses can set a limit to how many “discounted items” the web sites can sell of theirs, so again the business needs to understand what they are looking to do when they choose to use one and what they can afford to “lose”.
The business has to decide what their bottom line is per customer, and set their pricing accordingly. If the business then offers discounts to that pricing; whether that’s offering early bird pricing, offering discount codes, using a discount web site, or something else; it’s not the customer’s responsibility to pay more then they are being asked for in order to keep the business going.
Also, in my experience these discount sites will provide refunds if the products/services that were purchased through them become unavailable because the company shut down that service or closed down completely. So, the folks who bought event tickets through a discount web site will probably get their money back or at least credit with the web site, while the folks who bought tickets directly from an event that went out of business are likely to get nothing at all back.
In the case of 5KFoamFest, it’s nice to see other events offering to pick up the registrations for the folks who have lost out, but have those businesses ensured that they can support these extremely “discounted” participants. In effect, this is even worse for these events then the discount web sites because they are going to be making $0 off of each of these adopted participants, but from what I’ve read they’re going to treat everyone like they had paid (medals, shirts, etc). So, what’s their business goal in doing this? Well, at a minimum this situation is getting their names out as “heroes” for the folks who have lost out, which may get other people to sign up for their events that wouldn’t have before.
Here is the problem I have now with early registration. I registered early for our local 5k foam run and got burned. I’m new the OCR, but this Foamfest fiasco put a bad taste in my mouth.
In response to John Judd’s comment, I do see Redfrog events coming out looking like a “hero”. I am lucky that we have a Warrior Dash in our area every year.
@James- You picked a bad race, Tough Mudder, Spartan, BattleFrog, Bone Frog, HELL, Even the Disaster Run. Try t out.
As far as the fate with OCR, There should be status for each event. Athletes go to Spartan/BattleForgs/Tough Mudders and people who enjoy just getting out and trying new things go to Foam Runs. Its fun but a different venue. Its like Football. You have Pro, Semi, Rugby, Flag and Touch….Something in it for everyone.
The marketing and reward to the people doing it will grow and all these small races will fall and the big boys will be left standing. There is a marathon and then there is Ultra’s. The OCR will become athletic….and thats ok….
There are a number of reasons why businesses go under. To blame it on a discount web site is nothing more then a piss poor excuse. How about facing the truth. The event sucked and was overpriced. 80+ dollars per person on top of parking and the gas to get to the remote location adds up. How about making it reasonable for people to attend. You might be surprised – People will come. Otherwise more events will close down.
Don’t use Groupon or buy discounted entires? Yeah right. And don’t buy anything on sale, or negotiate the price of your new car or house. Buy everything full price. Even if the business is offering it at a discounted price. OCR’s are not going to last because of poor business practices and a declining number of racers. It’s a complete FAD. The big 3 will stick around for a while but not forever. The costs associated with these events are tremendous and will cause every OCR to fold. The major marathons in the country cost $150-$200 and don’t offer groupons or big discounted entries. They don’t travel and have expenses of moving the course every week. They don’t pay venues or have the high liability costs. They charge double the price of an OCR and draw tens of thousands of people to the races. They are financially stable and contribute millions of dollars to charities. And I don’t worry about these races folding the last minute and losing my entry fee. I’ve enjoyed doing OCR’s over the last 4 yrs, but road races, triathlons, etc are going to be here forever and are much more stable. OCR’s are going to struggle; too many variables and companies giving away the company store to try and build a fan base.
I will say from experience that I have done many OCR races and plan on doing many more. My take on this was echoed by Brett. Register early and set your race schedule for the year. I always do and I am happier being able to prepare for events and schedule my time, especially with family, kids, etc. I get cheaper prices that way and if and when I get burned. OH WELL! I’m sure the same people waste more money a year on losing lottery tickets, and if registering for the event got you off the couch and motivated to do more and get in better shape. You got something for it after all.
This is the 2nd event this year that was cancelled. I always sign up early to get the big discounts, and then “advertise” on my Facebook site Whimsical Walk-Runners, to get a group together to participate.
I signed up for the Spartan Sprint in Temecula at least 3 months ago…today, I purchased discount ($40.) tickets through Groupon for 2 of my friends to participate with me….
I was upset the Foam Run was cancelled at the last minute…I tried hard to ‘talk it up” to my friends. I am not surprised though. Last year when I participated, it was disappointing how few people participated, and even commented to my group that I was surprised they could stay in business. More participants add to the ambiance of the event and add to the fun!
I should also say I was VERY EXCITED when Red Frog Events offered to cover everyone with entry to an event. I am going to be traveling up to Portland, Oregon to participate in the Warrior Dash with my daughter. Red Frog GENEROUSLY offered a 25% discount for ‘friends and family’ of Foam Run folks.
It is hard to make money in this business. We have way too many new mud run start ups. This alone is killing the business. I have my events on hold for the next year or two. I will wait for others to drop out. The business as a whole needs big changes. You can not give “FREE” beer, t-shirts, medals, chip timing, music, water and then pay for staff, land, permits, wood, materials, gas, equipment for $45 or less an entry..you loose money at this fast if you do not have 900 or more participants. All the “FREE” stuff needs to go away from all events! or each ticket sale need to be at $125 each.
This entire fiasco … and the issue of events cancelling at the last minute in general … is harming the entire industry. Its nice that other more stable organizations are trying to come to the rescue, but its still a black eye for racers.
OCR events are great and I try to talk them up to anyone I can … but it seems like thats the only kind of marketing most of these races are willing to work with. Unless you’re actively looking for OCR races you’d never know half these events are even happening. You might be able to get away with that when you have critical mass like Tough Mudder, but anyone else needs to market … especially when they move into “smaller” markets (I’m in Western NY, I know we’re a smaller market).
Pre-buying events to support the company doesnt seem realistic … I thought the local 5K Foam Fest was excellent this year … so much so that we purchased tickets for myself and 2 others when they announced 2015 dates … you can see where that got us. I purchased Dirty Dash tickets … that got rescheduled and then cancelled in the wake of the Roundhouse fiasco. There is another race that I have a sinking feeling is on the brink of cancellation too, but nothing is for sure … for whatever reason the cancellation of Facebook events (but with no other communication at all) seems to be the omen to watch for.
The industry needs to self-police itself, some kind of vetting process (like ISO certification) so that the runners can know that a given event is supposed to be following good business practices and has sound finances … Maybe they need to use registration systems where the ticket money goes into escrow until a given race is actually completed. That would suggest the proper amount investment capital to make things work sustainably and everyone is protected from failures.
At this point from now on (or until the industry does something on its own) I am going to do more sticking to “local” groups … there are local event companies that host Zombie Runs in Buffalo and Rochester and those seem very stable. Should a big name event roll into a reasonable travel distance I might sign up for that too (Tough Mudder comes but thats out of my zone still, I mean more Warrior Dash, etc).
[…] can do their part in advancing obstacle racing by saying no to online deals, suggests Brett Stewart, founder of mudrunguide.com. He advises obstacle athletes to support their OCRs and register early if they are looking to save […]