Being that I'm tapering for Hy-Vee, my mind is going lots of places and it's been giving me lots of time today to think more about the situation. And there will be lots of assumptions and random numbers put out here. If that bugs you, it might be best to skip this post...
The interesting thing about race directing is 60-70% of the costs are likely sunk and fixed. Police, barricades, insurance. These are likely the bigger costs for events. No matter if the event has 100 people or 1,000, these costs will not vary much.
Shirts, swag, food, and timing are very likely sunk costs, but they aren't fixed. Figure $20/participant.
Let's say you have a 400 person event at $100 a person. That's 40k revenue. Maybe the police, barricades, insurance, tents, transition racks, and whatever else comes to $25k. I don't put on tris, but who knows what the actual number is.
$20 per person for 400 participants for the variable costs is $8k. So the total costs for the event are $33k, making the profit $7k. Is that likely? I have no idea, and that really isn't the point right now.
Let's say the event gets canceled, like this. I'll throw two scenarios out: 1. The race director says, sorry, tough shit, like they can legally do. 2. The race director rolls over the entry fee.
Situation 1. Race director still makes the profit of $7k for this event. 25% of these people never run a race again from this company. Maybe they do 2 races from the company each year. That's $300 revenue, but $260 profit that the RD loses each year. Why $260? 100*260 = 26k each year that the RD loses. There fixed costs don't change, so we are only concerned with the variable costs.
Situation 2. Race director rolls over the registrations. Maybe 75% of the entrants use it, the other 25% forget. He gets another 100 to pay the entry fee, making total revenue of $15k. Expenses are still $33k, so he loses $18k this year. Yet, the $7k help offset this and he didn't piss of 25% of his consumer base.
Yes, yes, it's all a bunch of numbers thrown together. Which would an RD prefer, though, for long term race growth? A tri race director could likely put in the correct numbers to make it more accurate, but I'm still guessing situation 2 would be better.
speedySTATES