Things Organizers Wish Racers Could Know in the Time of COVID-19
Nothing more really needs to be said about the COVID-19 pandemic and how it is wreaking havoc on the race calendar, and the racing community. What had been looked at as a “what if?” worst-case scenario back in mid to late February became in only a matter of weeks, the new norm for racing events across the country and around the world.
With the deluge of race cancellations being announced (and with more unfortunately to come), the effects of this new norm have come hard and fast. Both racers and race organizers have been forced to very quickly come to grips with the disappointment of having months and months of preparation come to a crashing end; the unpleasantness of refund policies that may have otherwise not needed to be so strictly imposed; and the harsh reality of financial loss.
As is very evident through any number of social media exchanges, there has been a LOT of chatter around these subjects. Some of it positive, some of it unmistakably negative. It's been an awful lot to unpack in a very short amount of time, and emotions will understandably run high given how much personal investment is made in our racing. The greatest takeaway that I see, is that the COVID-19 crisis has openly exposed a major disconnect between participants and organizers in terms of how race events work.
While it’s natural that most racers couldn’t possibly know the intricacies of all that happens behind the scenes of their favourite race, it’s important that we organizers understand in turn, that it would be impossible to have such knowledge when you don’t live and breathe events as we do. To that end, I wanted to provide some insight from the organizer side, given that there are far fewer of us than there are of participants (making our voice less often heard). The following are some tidbits that I’m hoping might be shared amongst the racing community:
Refunds for Racing Events are Essentially Losses Passed from Racers to the Organizer
If there were one thing I wish racers could know about me, it would be that I absolutely hate my refund policy. I hate that it exists; I hate to have to answer questions about it; I hate to enforce it. But it exists, and it exists for a reason.
It exists because anything less stringent had too often been taken advantage of. It exists because by the time racers start asking about refunds, I have already invested heavily (both time and money) into the race they paid me to put on for them. And in cases where the largest expenses have already been paid out, there are really no savings to me if those racers aren’t there on Race Day. It exists because refunding fees that were collected to put on a race is basically the same as taking a loss on behalf of a participant.
The best analogy that I've heard on the subject of race refunds was one made by another organizer. He likened the scenario to one where a person is paid a fee to manage a year-long project, but in the final weeks before its close the project is determined to be no longer needed, or is stopped for reasons beyond their control. If the work was completed and the project would have otherwise been delivered on time and as agreed upon, should that project manager be required to return the fee?
In the case of the COVID-19 crisis, the landscape has changed very quickly. With so many events being forced to cancel in such a short timeframe, the question of refunds has instantly become the first thing on most racers’ minds. This makes it extremely difficult to shield an event with even the best and most thoroughly-written refund policies, in the exact type of situation those policies were written for in the first place.
“Why can’t I just get a refund?” “Such-and-such race gave me one.” “Isn’t all our money just sitting in your bank account?” In the face of this pressure, race organizers are being forced to make brutally critical decisions, for an event that they’ve likely invested several months to a year of their time and money into. Take a stand in the best interests of your financial well-being and face the wrath of your customer base, or bite the bullet and risk taking what could potentially be an event or business-ending loss. Trust me - there is no right answer.
Deferrals are Refunds, or Better Yet - Deferred Losses
Many racers assume that a deferral of their race fees becomes the automatic default in the situation of an event’s cancellation. Most understandably believe that they are actually supporting the race organization by taking a deferral over a refund. Here’s the thing. Take an entry from one year’s race and move it to the next year’s - all that remains is either no revenue for that entry in the current year, or the comp’ing of an entry from the next. Either way, two events are now splitting one entry fee, and costs already incurred for the current year’s race or that will have to be paid next year, aren’t getting covered.
I will readily admit that I have not thoroughly investigated this topic myself, but only because all I’ve heard from others in the race organizing community has been the same. That 1) event cancellation insurance policies are prohibitively expensive; and 2) that insurance providers will protect themselves from extraordinary circumstances such as the COVID-19 pandemic through exclusions (just as home and auto policies have exclusions) that may render such policies invalid anyway. It's not yet known how this will play out, as it is all-new ground for everyone involved. That said - any event typically does (or certainly should) carry some form of insurance, but no general liability policy or pay-per-racer sanctioning fee will provide support for loss to the organizer in the event of a cancellation due to such an unprecedented crisis.
Race Organization Types and How They Differ
All racing events generally fall somewhere along a spectrum of organizational formats which are generally made up of:
• Passion-project/volunteer led-events
• Charitable/fundraising events
• For-profit event businesses
There are of course numerous hybrids and variations of these three. Some passion-project events are run to generate at least some level of profit; some-profit-based events generate funds for charities; some event businesses are run by those who operate their races like passion-projects. And because the organizational structures of races are so widely varied, so too are the means by which the organizations behind them choose to (or are able to) respond to unprecedented situations like what we’re facing now.
The result has been, and will continue to be played out in the coming weeks and months. There is no standard for what a racer can expect from an event that is forced to cancel, because there really is no consistent standard for how racing events are organized. No organizer wants to disappoint, frustrate or enrage their participant base, as customer service is (for the most part) at the core of any race’s success. But the approach they can take to this wildly unexpected turn will inevitably vary, based on the realities of their event’s operations.
To be clear - the situation we’re in is an absolute nightmare for every organizer, no matter where they sit on the spectrum. But their response to cancellations will more than likely hinge on variables unique to each organization, rather than following a set or established protocol. While none of these points will necessarily be 100% true for every event within the 3 general classifications, examples of those variables might include:
Events on this end of the spectrum can typically (depending on their size and scope) keep their overhead costs leaner than others, given that most or all of the planning and execution work is done on a non-paid basis. Equipment and inventory is kept generally low, and the bulk of a race’s expenses are usually around more direct event costs (souvenirs, per-racer insurance fees, food & beverage, timing, etc.) rather than over-arching business costs.
Pre-race financial investment is generally lower, and so long as registration numbers are greater than the costs to run the event, the race can usually be at least assured of breaking even. The risk of loss from a cancellation can also be minimized to a degree, as long as those costs haven’t yet been incurred.
However, in the case of the current crisis - if an event’s direct costs have already been committed; if numbers are low because participants aren’t registering due to social distancing measures; if the event is a once-a-year with no other revenues to back it up – a forced cancellation can be race-ending.
No volunteer or passionate-racer-turned-organizer wants to shoulder the debt load of an impossible-to-foresee loss, yet those same individuals are usually so personally invested in their project, that many won’t risk offending their racer base by not offering refunds or deferrals. Others just simply can't. Races that are large, long-established, well-sponsored, or series-based may be able to offset some costs to future events, but make no mistake – cancelling a race equates to a loss in at least some capacity.
Charitable racing events (or non-timed rides and walks, etc.) have a spectrum all of their own, ranging from small/local cause-based fundraisers, to mass events in support of nation-wide charitable foundations. As should be very obvious to anyone participating, the event’s cause is the primary beneficiary of the proceeds – when the event loses money, the cause does too.
The obvious impact of cancellations on small charitable events is similar to that of smaller passion-project/volunteer-led events as noted above. Organizers (often committees) are typically very careful with expenditures to ensure greatest return for the cause, but virtually any event comes with at least some level of financial risk. Fortunately, in most instances these types of events can safely ask their participants to consider entry fees as donations towards the organization that the event is in support of, with a reasonable expectation of a favourable response.
Cancellations for mass events can be more challenging, as the event’s value to the host organization is often weighted between both revenues, and the advocacy and media attention that it generates. Furthermore, a large, high-profile charitable organization is placed in a particularly awkward position when it comes to cancellation policies, in that all of its thousands of race participants are also seen as prospective fundraisers. And while such organizations might have the backing to absorb costs invested against staff time, marketing and fundraising initiatives, a loss to profitability is a loss to mission.
It’s also worth noting that most large-scale charitable events will hire event businesses to manage the operational elements on their behalf (with the support of an extensive range of event suppliers), so the ripple effect of a cancelled mass event becomes very far-reaching.
For-Profit Event Businesses
Full-time event businesses also run the gamut between small and large operations. All are considered 'small business' by definition, but they may range in size from sole ownerships to multi-event or nation-wide event producers. Most are series-based in that it usually takes several proprietary races for a business to be self-sustaining, and many will take on event contracts or sub-contracts in order to supplement their core business. But regardless of size and scope of operation, these organizers ultimately risk the most, given that they invest their actual livelihoods into an event concept they believe in, or a sport and lifestyle they are passionate about.
Event businesses also typically carry a greater overhead load, which is why the "why can't I just get a refund" question can be so hard to hear. Insurance policies are often paid on a blanket basis rather than through a per-racer system, and those policies are typically paid in full early in the year. Storage or office space is a must for most depending on their size, as keeping loads and loads of race supplies and equipment in anyone's basement is rarely sustainable. Professional fees such as those to graphic designers, accountants, bookkeepers, marketing agencies, web experts and the like are often necessary, as no matter how "jack-of-all-trades" an organizer may be, it's just not possible to do absolutely everyone on their own and still plan, manage and execute multiple events.
Once beyond a certain capacity threshold, staffing costs of varying levels become mandatory, for how many times can you realistically ask your friends or family to go to the wall for the sake of your business? And make no mistake, marketing costs are real event costs (and often significant ones), as races that draw little to no racers are obviously very short-lived. Website costs, equipment costs, repairs, banking fees, office supplies - the list goes on and on. And then there's salary. Assuming organizers are able to pay themselves a modest wage (and it's usually pretty modest relative to the hours put in), it's all they have to live off of outside of dividends if there are any. With cancellations, refunds or deferrals, the resulting revenue loss means that not everything on this long list can get paid, and salary is often the easiest to scale back (or axe entirely) if an organizer wants to see their dream live another year.
Please understand that none of the above is meant as a plea for special recognition during this difficult time. We in the event organizing community are aware as anyone that many other industries will be severely impacted by the economic fallout from COVID-19. Ours is one where our products and services literally cannot be offered until circumstances beyond our control improve, which is to say that many are facing the very real prospect of a 100% revenue loss on the year, and a high likeliness of even more losses in the years to follow. Many events will unfortunately not survive this crisis.
I sincerely hope that this information can be of value to anyone within our amazing race community. More importantly, I really hope to see you at a Start Line again soon!
Race Director, Storm Racing