There will be a press release in the next half hour that these two below are gone now from Competitor Group
Mr. Scott P. Dickey
Chief Executive Officer and President
Mr. Steven E. Gintowt
Chief Financial Officer and Chief Operating Officer
There will be a press release in the next half hour that these two below are gone now from Competitor Group
Mr. Scott P. Dickey
Chief Executive Officer and President
Mr. Steven E. Gintowt
Chief Financial Officer and Chief Operating Officer
What does this mean for the sport?
Will you autograph my copy of the press release?
Setting aside all the stuff about supporting elite racing, there is a natural life cycle to what investment capital can do with a business after the surge in demand that follows the investment. CGI pumped up a bunch of small to mid size marathons with more money, advertising, etc. and got their hands into mud runs, crossfit and glossy fitness magazines. Initially, they got a great return as races like San Antonio went from 3-4,000 participants to 25,000 and warrior/mud runs sprouted up everywhere. But recently, it has jumped the shark. The marathons are not growing anymore and some are losing numbers due to RnR's lousy race management. The market for mud runs is limited. You are not going to get the same kind of numbers as marathons. So, CGI's principals have to go back to their investors and face the fact that growth has stunted and there is no easy fixes to be made. Absent a major development in their "product" line, I do not see CGI lasting more than another 5 years. Investors will pull the plug and cut their exposure to losses. It will either be chopped up and sold off or scrapped in bankruptcy.
I think they will stabilize or scale back slightly in the US and invest heavily oversees -- Europe and Asia. They have a ton of upside with their current model, just not in the US.
Precious Roy wrote:
Absent a major development in their "product" line, I do not see CGI lasting more than another 5 years. Investors will pull the plug and cut their exposure to losses. It will either be chopped up and sold off or scrapped in bankruptcy.
That depends on how much cash they are generating. In theory they have increased the efficiency of the operation while also raising the top line revenue. That should result in a pretty nice flow of bottom line profit. That is a business that private equity loves b/c it generates the capital needed to buy more companies.
Look for more Rock & Roll events to be canceled in 2014 as well.
I'm surprised to say this, but I think you hit the nail on the head.
Perfect. Then the BrosJo can sweep in and pick up the pieces on the cheap to expand their empire.
Not surprising at all. Running/TF is produced by nearly 100% volunteers, high school coaches, parents of elites, and wealthy retirees. It's impossible to turn a profit when you are dealing with mostly all non-career pro-bono race directors, video producers, public relations, race photographers, doctors, athletic trainers, and so on.
Bingo!! Just stated this in a speech last week. A "professional" sport with its base making less than $15,000 a year from that "profession".
Precious Roy wrote:
So, CGI's principals have to go back to their investors and face the fact that growth has stunted and there is no easy fixes to be made. Absent a major development in their "product" line, I do not see CGI lasting more than another 5 years. Investors will pull the plug and cut their exposure to losses. It will either be chopped up and sold off or scrapped in bankruptcy.
Here's an article on the shakeup:
http://www.bicycleretailer.com/north-america/2013/12/10/shakeup-ousts-execs-competitor-group#.UqfW3PRDsw8You really think they are losing money?
I have to assume they make a very nice profit on a race of 20,000 especially when you throw in the subsidies they get in a lot of cities.
No way they were going to keep up their initial growth, so likely it's a case of unmet expectations for the new ownership. They sold for a reported $250 million roughly a year ago. Perhaps, the new owners kept the old management for a year, weren't getting the return they wanted so they shook things up.
Hard to see how they're losing money in running unless they spent a ton to acquire the races they purchased.
And whatever happened with an LRCer making us a banner to urge all of our visitors to boycott Competitor events? If anyone is interested in this let me know. Competitor killed off a lot of goodwill they had with hard core runners by getting out of pro running earlier this year and they way they did it (no advance notice).
Didn't they get bought out recently by a PE group or something along those lines? If so, then I would think that this move is related to that (new investors wanting to place their own guys in charge).
wejo wrote:
Perhaps, the new owners kept the old management for a year,
That is fairly typical in a buyout. The two scenarios that usually play out:
1) "Old company" execs don't make the transition from day 1 (but are paid handsomely to go away)
2) "Old company" execs stay on through a transition period, with gradually diminishing roles, or are kept around as "consultants" (then are paid to go away)
Many times there is a fair amount of friction between new company execs and old company execs, especially when there is some "buyer's remorse", which is often the case. It would be like having a new home buyer and the seller living in the same house at the same time.
wejo wrote:
I have to assume they make a very nice profit on a race of 20,000 especially when you throw in the subsidies they get in a lot of cities.
.....
And whatever happened with an LRCer making us a banner to urge all of our visitors to boycott Competitor events? If anyone is interested in this let me know. Competitor killed off a lot of goodwill they had with hard core runners by getting out of pro running earlier this year and they way they did it (no advance notice).
No, you don't HAVE to assume that. You CHOOSE to assume that.
And stop spreading this lie that they got out of pro running, they still offer prize money, don't they?
isi wrote:
And stop spreading this lie that they got out of pro running, they still offer prize money, don't they?
Let me correct myself. I should have said when they greatly reduced their commitment to pro running in the United States.
There is a big difference between having races with Mo Farah and paying $1000 to the winner of a race.
wejo wrote:
isi wrote:And stop spreading this lie that they got out of pro running, they still offer prize money, don't they?
Let me correct myself. I should have said when they greatly reduced their commitment to pro running in the United States.
There is a big difference between having races with Mo Farah and paying $1000 to the winner of a race.
How is giving all of the money to one guy (whose primary racing tactic is bad for the sport in my opinion) help the sport? To me, it seems like the more people getting money, the better as opposed to just one or a few guys getting money. And people on Farah's level don't need more money. Developing runners and fringe runners need money. That's what's good for the sport.
Also, do you not recall how Competitor was trying to set up a huge prize structure for prize money this year (or maybe last year, I can't recall)? I don't know what happened with it, but at least they made an effort. You should be thankful for them trying instead of trying to boycott them. You should be thankful that they gave out as much support as they had been. They didn't have to.
http://www.runnersworld.com/races/rock-n-roll-launches-half-marathon-grand-prixLastly, it is not their job to support professional running. That is the USATF's responsibility. You should criticize THEM for the lack of professional support financial or otherwise (if you believe such a lack of support exists). For starters, you could ask them why they haven't published the qualifying standards for USATF Indoor Nationals considering that the meet is something around only 60 days away.
Unless you have made the Olympic Team, Outdoor Worlds, or have a great marathon time, the truth is: your parents are paying for your elite runner dream. Damn! Stop acting like $5K from USATF or $10K from a shoeco money makes you a Pro. You are not a Pro at any job unless you can live off the earnings for what you do.
come on dude wrote:
Also, do you not recall how Competitor was trying to set up a huge prize structure for prize money this year (or maybe last year, I can't recall)? I don't know what happened with it, but at least they made an effort. You should be thankful for them trying instead of trying to boycott them.
I'm starting a new company (The Swindler Group) Our initial plans are to have a series of 8 races across the United States with prize purses of approximately 2.4 million dollars/race. We are currently soliciting sponsors for this endeavor. We are planning 4 roadraces (4k, 9k, 25k, marathon), 2 trail races (14k,120k) 1 mudrun (8 miles 14 obstacles) and one track marathon limited to individual winners of the first 7 races(anyone lapped will be removed from the track so they will NOT be able to come back and win). Please stay tuned for future announcements. We will be trying really hard to make this happen.
wejo wrote:
Let me correct myself. I should have said when they greatly reduced their commitment to pro running in the United States.
There is a big difference between having races with Mo Farah and paying $1000 to the winner of a race.
Quite the opposite.
Farah doesn't need money from RnR races. And how does it help pro running in the US if all the $ goes to noname Kenyans?
A price money only policy without appearance fees helps hard working blue collar American runners.