I do some risk analysis work, so here is how I would think about it...

Active is a $200M company with thousands of employees... so, they are pretty big. They can furlough employees in the short term to control a chunk of their fixed overhead and indirect costs. So, they may not have much short-term risk (say totally closing the doors within the next 30 or 60 days), but they could have to make some tough decisions if they continue with near-0 revenue into the summer.

Is the risk $20K all at once, or is it smaller chunks spread over time? If spread over time, then that reduces your total risk considerably. If it is all at once, then can you mitigate that?

What is your exposure and timing? Are you talking about doing the registration now or in a couple months? If now, then risk is lower. If a couple months, then tough to gauge. Is your financial exposure only the $20K within a 1-month registration period? If so, then your window of risk with Active is much smaller. As a mitigating action, could you time your registration to either occur during a smaller timeframe (say, start registration on the 15th, and encourage everyone to register before EoM). Or, could you split the window so the remittance action occurs over 2 calendar months.

Next, what is the value of their services versus the risk. If your scenario is $20K at $100/participant, then that is 200 participants. Could you handle that manually? Instead of CC handling, what if everyone used Venmo/PayPal/Cash/Zillo and you just tracked everyone with a spreadsheet. Not ideal, but it takes risk to 0 for the season.

The other angle to the risk is what happens to you & your organization if Active stiffs you. Can you carry out the leagues at a lower cost? Is anyone personally at financial risk? If so, can that be mitigated? Can you transfer the risk to the participants-- that is, if Active steals the money, the league is cancelled with no refunds.

The TL;DR - identify the likely scenarios that might go bad, and determine your risks and risk tolerances. Then, decide.

Thanks so much. This lays out the issues really well. The registrations would happen immediately. We could give people a short registration window, in which case the remittance would happen about July 1st. So that's roughly one month worth of exposure.

We're investigating other vendors like venmo and square. The payment part of it isn't a problem as much as the need to develop a replacement for tracking the athletes, communications, and the like. It's all doable -- years ago we did all this stuff with checks, spreadsheets, and phone call -- but we're mainly a volunteer organization so putting something together on the fly is a challenge.

As for our risk, fortunately this organization is financially robust enough to survive a $20k hit but we'd be forced to lay off our coaches which is something we're desperate trying to avoid.

Thanks again. This gives me some scenarios to present to our board.

Hi BlackStumpGumby,

I work for Active, and I'd be glad to speak with you directly on your concerns. But, I also encourage you to contact your account manager to discuss your particular . You should NOT be concerned for our abilities to pay your remittances as scheduled. All client remittances are held separately from our operating accounts. As part of Global Payments, we're underneath an $8B organization within the FInTech space and adhere to stringent accounting practices in this regard. It also ensures we have the internal resources to endure this downturn and continue being a valuable business partner for our clients. I know the endurance market tends to bash corporations (vs independent, mom and pops business), but at in this moment you should find the comfort in this matter. In fact, I'd argue there's no solution more secure to be doing business with during this time.

Since the covid concerns started to appear we quickly pivoted our development teams to focus on supporting virtual events and other features our clients can leverage to steer through these uncertain periods. We also know the post-covid world is going to be fundamentally different. Our tools will need to pivot to accommodate a new set of guidelines RD's will need to follow in order to produce successful and safe events. We're working with our clients to implement those changes now.

Yes, we expect our clients to fund their accounts to support processing of refunds. As you noted, that's because we've already remitted those funds to the RD in previous periods. In my mind, that's a smart business practice.

I appreciate you being a client of ours. Rest easy, your remittances will be delivered as usual.

Please message me directly if you'd like to chat more.

As viable as TicketMaster. Most of the big races do their registration through the Active platform.

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Washed up footy player turned Triathlete.