Are Races a Good Business?

Jen Miller’s NYTimes weekly newsletter contained some more “bad news” about the state of races:

“Triathlons appear to be facing the same kind of participation slump that hit running in the mid-2010sU.S.A. Triathlon’s membership dropped about a quarter over a five-year period. And that’s not all — on July 26, Wanda Sports Group, which owns, among its many holdings, Ironman and the Rock ‘n’ Roll race series, went public for $190.4 million — a disappointment considering that in June it said it hoped to raise $505 million.

This follows on a story she did a couple of years ago about “The Running Bubble Has Popped“. It also follows bad news about a number of OCR companies the past several months – Warrior Dash going out of business, Tough Mudder struggles and change in ownership, and Terrain Racing. We also publish a number of market analysis reports like our annual Race Trends, and our bi-annual Registration Market Analysis.

Our conclusion at RunSignup is that the endurance community is more defined by the passionate volunteers, thousands of nonprofit causes and local communities that come together than these businesses who are struggling. Yes, there may be a few less people participating in races, but go to almost any race and you will feel the energy and enthusiasm of everyone there. Having fun, sharing an experience, and usually doing so for a good cause.

We think that BUSINESSES have a difficult time scaling and making a profit. The market is not that large (about $1Billion total registration fees in the US), and trying to replicate the amount of energy volunteers and nonprofits put into races is very difficult.

The other thing that most people forget is that the large races and large organizations are really a very small part of the total endurance community. The Top 100 Road Races in the US account for far less than 10% of participants. Even in Wanda’s (Ironman and Rock n Roll) SEC S1 filing, they state they are only 1.3% of the market. And one of the key learnings from that filing was the variety and depth of revenue generation they have beyond race fees is difficult to replicate on a broader basis.

Sure, our community is not growing like it was, but RunSignup is super bullish on the real people who go out and direct a race, volunteer to hand out bibs, bring their timing equipment early on Saturday morning, fundraise for a good cause, and encourage their friends to participate in a healthy and fun sport. Continue to have fun and do something meaningful!

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