I was reading a runner forum recently and came across a post where someone mentioned that putting on a race was easy and lots of money could be made. His comment was certainly naive because he thought that all you had to do was charge a fee, put some water out and you had a race. He obviously had never been behind the scenes of a race to see what really takes place. For me, it was an amusing comment but it was a also a little concerning. I think there is a perception among the race participants that races are making a killing off of registrations and that all of the money is available for whatever purposes the race organizers intend. Nothing could be further from the truth.
At Athlete Guild, we get a lot of calls from people wanting to put on an event. One of the first things that I do with new races is to ask them about their budget. I'm always surprised at how little they have thought about it. They have heard from someone or seen other races and think that they can put on an event and make a lot of money. While it is certainly possible to do that, it is also a really risky venture and there are no guarantees. I've actually suggested to some groups that they would be better off having a bake sale. It would certainly be a lot easier and less risky. They might even be able to make more money.
Let's look at the real numbers on an event to show you what a race director faces. First there is the venue. Depending on where a race is hosted, this can be free or could run into the thousands of dollars. Some venues might offer to sponsor the event which would be the idea situation, but in most cases the race has to fork over several hundred dollars just to reserve the location. Most parks for example charge a fee for the use of their facilities. Along with the venue is the cost of security. If the venue is chosen wisely, this cost can be minimized but that is often not possible. Police and other security usually charge by the hour and have a minimum charge. Most races typically pay between $100 - $150 per officer and as you can imagine, that can easily run into a lot of money if the course requires multiple officers. Add to that the cost of barricades, cones and road closures and an event could pay multiple thousands of dollars just for the course.
The other costs associated with an event are goodies such as t-shirts, food and drink for after the race, bags, bibs, safety pins, music, advertising, awards, timing, etc. Races try and get sponsorships to cover these basic costs but that is really hard to do and requires a lot of work to get those sponsorships. Some races are better at it than others. I've been directing and working with races for a long time and what I have found is that it is really difficult to get the minimum cost for an event to be under $3000 once you add up all the figures. That cost goes up as the event gets larger because more resources are required. If a race charges $25 per participant for the event, then they would need a minimum of 120 people just to break even. I've always thought that it is a waste of time though to simply break even on an event. If all you do is pay out what you brought in, then why bother? If an event is simply trying to raise awareness for a cause it's one thing but most organizations host an event because they need the funds. Breaking even on the costs is really losing money once you start adding in the man hours needed to put it all together.
This is not to say that it shouldn't be done. There are lots of successful events out there that have found a way to make it work and can raise much needed funds. It's important though for the public to understand the risks involved and the associated costs. Race organizers must pay attention to the balance sheet for a race to ensure that they don't lose moeny. At Athlete Guild, we work hard with the organizers to ensure a financially viable event. If you're hosting an event, give us a call and let us help you.
