Los Angeles Marathon bounces paychecks
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Chris Devine, whose firm acquired the event in 2004, calls the payroll problem 'an unfortunate mishap.' He also acknowledges talks are underway involving ownership of the race.
By Greg Johnson, Los Angeles Times Staff Writer
April 10, 2008
Los Angeles Marathon employee paychecks have bounced in recent weeks, the chairman of Chicago-based owner Devine Sports acknowledged Wednesday.
But Chris Devine, whose firm acquired the marathon in 2004 for $15 million, characterized the payroll problem as "an unfortunate mishap."
Devine also acknowledged for the first time that negotiations have been underway involving ownership of the L.A. race.
He linked the bounced checks to accounting issues associated with those negotiations.
"We had expected the transaction to close on a given date," Devine said in a telephone interview.
When the transaction didn't close as planned, he said, the payroll account had insufficient funds.
"Unfortunately, when the checks were outstanding, the funds hadn't been transferred to that account," Devine said.
"All that has been taken care of. We had an unfortunate mishap, but it will never happen again."
Devine Sports has had money issues surface several times in the last few years, including cash-flow problems that led to delayed prize payments to some athletes.
Rumors of a possible sale have been swirling in the tight-knit marathon community for months, although it wasn't until Wednesday that Devine confirmed talks had taken place. He declined to give details or to say whether talks were continuing.
One source closely involved with the Los Angeles Marathon who requested anonymity said Devine Sports is discussing a sale of the race to New York-based Falconhead LLC.
The private equity firm has bought several endurance sports properties in recent months, including Elite Racing, a San Diego-based marathon operator.
Devine Sports also owns a half-marathon race in Chicago and has started marathons in Las Vegas and Salt Lake City.
The L.A. Marathon has been held annually since 1986 and is popular with Southern Californians but hasn't traditionally drawn many of the world's top runners who prefer events in London, New York and Boston.
The most recent race drew 25,000 runners, walkers and wheelchair athletes.
greg.johnson@latimes.com