The crowded theme- and obstacle-race series space that comprises seemingly every kind of event—from mud to foam, dance party to zombie—has recently seen a spike in abrupt, last-minute cancellations. In the past year, the Electric Foam 5K, Great American Mud Run, 5K Foam Fest, Hard Charge Challenge, Hero Rush and Run for Your Lives 5K have ceased operations and denied registrants refunds.
In most cases, a succinct email or website statement informed racers of the cancellation, event websites went dark, and participant calls and emails went unreturned. To get a better sense about why these sudden cancellations have become common, Runner’s World Newswire Races - Places.
The consensus wasn’t that a rash of scammers has descended upon the running industry. Instead, sources said, would-be entrepreneurs don’t understand the full extent of what it takes to put on complex events in multiple markets. While the popularity of themed races is booming and the barrier to enter the market is low—anyone with a computer can do it—the upfront expenses are substantial and often need to be paid in advance.
“I would think that most of the races today have already spent the following year’s [budgeted] money,” said Spartan Race founder Joe De Sena. “It’s not because they are bad people. It’s because no one has really done the research on how expensive of a business this is to run.” (Editors’ note: Runner’s World Results: 2024 NCAA DI Cross-Country Championships.)
“This was never an industry where you could get rich, but I think there was a misunderstanding a few years ago where people saw 10,000 participants in a race where [the directors] only seemed to put out some hay bales,” said Jeff Suffolk, owner of Human Movement Management. “People thought the directors were making millions of dollars. That ignited a lot of people who weren’t in the industry to create some events, and we’re seeing the fallout in real time.”
Human Movement, which puts on large running and nonrunning events, recently acquired two series, the Dirty Girl Mud Run and The Zombie Run, that drew criticism for abrupt cancellations and poor customer service. The Dirty Girl event that was to be held in Charleston, West Virginia, on July 26 made headlines when the original owners, Wisconsin-based 100 LLC, failed to make a payment to a transportation vendor and canceled the race less than a week out. Initially, 100 LLC said it wouldn’t give back the $65 to $95 entry fees to the approximately 2,500 women who had signed up. Human Movement, working as a subcontractor for the event, agreed to provide the refunds Nutrition - Weight Loss.
“The market was correcting, the [participant] numbers weren’t there and 100 LLC wasn’t in position to keep it going,” said Suffolk.
Suffolk said common missteps that leave new series more susceptible to closure include expanding too fast on a national scale in too short a period of time, while working with too few employees.
“We’re not looking to do 60 Dirty Girl events next year, but we think there are 12 really solid events that could happen,” said Suffolk, citing a figure that is about half of what 100 LLC had planned for 2014. Suffolk oversees a staff of 100, a number he said is necessary to manage properties of this size. “It is a massive commitment to pull these things off, from the permit process to getting engineers to sign off on your buildings,” he said. “We’re already permitted for 2015, and we are already working on events for 2016.”
Since De Sena launched the Spartan Race in 2010, he has held more than 130 events and has built his obstacle series into one of the most successful in the world. Still, he said, he ran out of money more than once during Spartan Race’s expansion. “If I didn’t have very wealthy friends who stepped in the three times we needed it, we wouldn’t have made it,” said De Sena. Approximately 500,000 people competed in one of the Spartan Race’s 61 events in 2013. Nonetheless, De Sena said the company will be profitable for the first time next year.
De Sena said it costs $300,000 to put on a typical Spartan Race. Among the expenses: Shipping upwards of 27 life-sized obstacles to a new race location nearly every weekend; setting up courses on the sides of hills using construction equipment; and using rush orders to finish everything in time. When the Spartan Race enters a new country—it’s currently in 17—the company spends closer to $600,000 to $700,000 on everything from travel and scouting to advertising, De Sena said.
“We spend over $10 million a year on marketing,” De Sena said. For comparison’s sake, the entire New York City Marathon budget What You Need to Know About the Sydney Marathon for a race with 50,000 people. Total expenses for a 5K road race with 1,000 entrants are around $100,000.
Sources agreed that inexperience in event management is a factor in the demise of many theme series. In contrast, the founder of The Color Run, Travis Snyder, held his first event—a rock climbing competition—when he was in his teens. Since 2001, he has put on adventure races, from triathlons to relays, before putting on the first Color Run in January 2012.
The Color Run has become the largest 5K series in the United States. But Snyder adds new cities only once a local market has indicated demand.
“If we put Philadelphia on our map, we ask people to subscribe to our email list if they want us to come,” Snyder said. “If we get a couple hundred people, we’d then start working on a permit and figure [out the race].” Race series that have failed often financially committed to an area before they had enough local participant interest, sources said. “An event is a prepaid liability until it happens,” Snyder said.
Another often overlooked cost is insurance. Terry Diller of Star Financial has handled the insurance program for the Road Runners Club of America for the last 25 years. For a typical road race, he said, the insurance rate is $0.35/person for accident coverage; when adventure races were first held, such coverage was $3/person.
When the first claim was filed after a runner dove head first into a mud pit and became paralyzed at the 2010 Richmond Filthy 5K Mud Run in Virginia, Diller said, accident coverage increased to $13 to $15 a person. After a participant jumped head first into a mud pit at a 2011 Warrior Dash in Flint, Michigan and became paralyzed, many providers stopped insuring the events, Diller said. (According to Diller, events that don’t have man-made obstacles are still commonly insured, at a rate similar to what a road race pays.)
A lack of carriers has forced some races to self-insure. Rather than paying a premium, these races have to set aside what is often a sizable amount of money to cover potential claims. To raise that money, events build the cost into entry fees. Other races charge participants directly. To help offset its premium paid to Ace American, Tough Mudder adds a fully disclosed $10 insurance fee to every registration.
Race cancellations aren’t exclusive to obstacle and theme races, but the sector’s rapid expansion has put a spotlight on it. Even someone like Wayne Kursh, who has been managing races in Delaware and Florida for 37 years, has been asked by his clients to execute color runs to feed consumer demand. Kursh has enjoyed putting on nontraditional races because they usually don’t require a timing system or timing chips that can cost him $1 each.
Kursh, however, sees a growing divide in the spirit of the racing industry. While the field has always been competitive, new entrants often lack a sense of community, according to Kursh. He said that if he wants to hold a race in Dover, Delaware, which is outside of his usual market, he’ll call the top race directors there to give them a heads-up. “I’m friends with other race directors, and we’ll work with each other to make things work,” Kursh said. “These [theme race] people, my god, they just don’t communicate amongst themselves. They’re trying to get into every market, and they don’t care what you’re doing.”
Therein lies another reason why some of the themed races have failed. To gain market share, they’re all attacking the same cities with similar ideas. In the process, they can’t help but cannibalize each other.
