Wed, 15 Jul 2020

Following on from the in-depth look at the Comrades Marathon Association's decision not to refund 2020 entrants, this article evaluates the 'refund / no refund' decisions of South Africa's other large marathons and ultras who've been forced to cancel their 2020 events during the coronavirus pandemic.

READ | Money or the Goody Bag? The Great Comrades Refund Debate article

Two Oceans Ultra Marathon

South Africa's other premier ultra marathon is the Two Oceans Marathon (TOM) which was due to be held for the 51st time over the Easter weekend. In terms of numbers, the event is even larger than Comrades with 34 000 participants across the various events (11 000 in the ultra marathon, 16 000 in the half marathon, 1 000 in the trail races, 1 000 in the International Freedom Run and about 5 000 in the Good Friday family fun runs).

The formal cancellation of the 2020 Two Oceans was made by the TOM Board on Saturday, 14 March, with the official communication going out the following morning. Later that day, a National State of Disaster was declared and all sporting events nationwide were subsequently cancelled.

The cancellation communication confirmed that no entry fees would be refunded. However, race shirts would be delivered to all ultra and trail entrants as well as a commemorative buff (the latter to all entrants including half marathon runners) and payments for peripheral charges like parking and medal engraving would be reimbursed.

Aside: What if I don't want the shirt from a race I didn't run? Runners who don't want their 2020 shirt can donate it to charity through the Two Oceans Marathon Initiative: tomi@twooceansmarathon.org.za

This decision was not a popular one.

Two Oceans was already on the backfoot after being plagued by negative publicity in the build-up to the event. A widely circulated open letter from founding Two Oceans Marathon board member, James Evans, questioned the 2019 financials, spending and integrity of certain TOM board members (whether these claims are legitimate or not is beyond the scope of this article, but they have been strongly denied by the TOM board).

There was also self-inflicted PR damage like accidentally publishing unconfirmed 2020 entry fees and the news that the ultra entries would be allocated on a ballot system* for the first time on the official race website - and then sending out an ill-conceived press release censuring Sport24 for reporting on the information displayed followed by an embarrassing official apology to runners and Sport24.

There was also wide speculation as to the reasons behind the unpopular change of route resulting in the 2020 Two Oceans Ultra Marathon being extended by 2km (not to mention that news that the ultra would be 58km in 2020 was widely known in running circles long before an official communication went out).

On top of this, the 2019 race was impacted by several events outside of the organisers control like the loss of live television coverage when Athletics South Africa (ASA) were not able to reach a deal with the SABC (or any other broadcaster) and the extortive threat of on-route violence resulting in a last minute route change over Ou Kaapse Weg.

"No refund" decisions are always going to be contentious and the official communication to runners seemed to hide behind the race's "terms and conditions" with the result that the message that it was not financially possible to refund runners was lost on (or not believed by) many frustrated runners.

However, taking a closer look at the financials and considering the advanced state of planning (the event was cancelled three weeks before race day), there really was no possibility of refunding athletes.

To put on a world class event of this scale is expensive and, like Comrades, TOM has significant fixed monthly overhead costs of R490 000 (which includes the salaries of eight full time staff). In addition, Two Oceans supplement their staff with 15-20 contractors in the four to six months leading up to the event.

The event itself costs approximately R30 million to stage. When the race was cancelled, about R10 million already had been physically spent (the precise figure I was given was R9 756 454). However, this figure excludes significant additional committed expenditure ahead of race day.

Race director, Debra Barnes, who was appointed to the position in October last year, explained, "We have concluded arrangements with most suppliers regarding contractual payments and appropriate refunds of deposits paid. The TOM board made a decision in principle to honour contracts with local suppliers, such as the manufacture of t-shirts, medals and goodie bags, and where expenses had already been committed."

With the loss of R15 million in sponsorships for the 2020 event, Two Oceans was always going to be under financial pressure. The pre-cancellation budget projected a deficit of approximately R4 million with the shortfall being covered by tapping into the race's reserve fund.

According to Barnes there was still a possibility that new sponsors would have been added to the 2020 event, "At the time TOM was cancelled, we were still in discussion with several sponsors that would have reduced the projected loss. With the cancellation of the event, these discussions with potential sponsors, though far advanced, understandably stopped."

Ultimately the cancellation has resulted in the shortfall swinging from a significant deficit to a surplus of R1.4 million. Barnes elaborated, "With the non-payment of costs such as prize money, our exposure to the CTICC (Cape Town International Convention Centre) and the associated Expo costs, other venue hire and event infrastructure costs at the start and finish, our savings have increased. Our current projected surplus is R1.4 million excluding the cost of distribution of t-shirts and refunds."

The courier and distribution costs for the shirts as well as refunding parking, medal engraving and other incidentals (plus the bank charges thereon) is likely to eat into a significant chunk of this R1.4 million. In the event of a post-cancellation surplus in 2020, the amount will be allocated towards the reserve fund, which will in turn be allocated to the next event.

As for the next event and whether 2020 entrants can expect discounted or preferential entries in 2021 (as is the publicly stated intention of Comrades), Barnes responded, "We can only give a definite answer for 2021 once the financials for 2020 are finalised and once we know that TOM 2021 will indeed go ahead as a normal race."

Let's hope that it is indeed a return to business as usual and the freshly appointed Barnes and her team can put aside the trials and tribulations of the last couple of years with a blemish free run in 2021.

Irene Ultra Marathon

The 48k Irene Ultra, run around the Centurion suburbs has quickly become a favourite amongst Gauteng runners. The first edition was held in 2016 and the race has leapfrogged the competition to become the third largest ultra in South Africa.

The ban on organised athletics events was announced just two weeks before race day. According to Irene Athletics Club chairperson, Johan Engelbrecht, cancellation of the event resulted in 85% of the normal sponsorship funding being lost and refunding the 3 200 pre-entrants would have "killed the club".

Although the race itself does not employ staff, the organising club Irene Athletic Club (AC) employs a club manager and support staff and has fixed monthly expenditure for clubhouse rental, maintenance and cleaning. They also provide full sponsorship (running shoes, kit, race entry fees and transport) to ten gifted development athletes.

Profits from the Irene Ultra are used cover the club's running costs as well as to finance the popular Irene half marathon in September which does not have a sponsor. Engelbrecht elaborated, "At the end of the day we are there for running and not to make money. Everything goes back into the sport."

Irene AC did not want to leave runners empty handed and took an innovative approach by quickly organising a virtual ultra*. Entry was free for existing entrants and runners were allowed a week to complete the 48km (which was held during full lockdown when no outdoor exercise was permitted) to earn a race medal.

A total of 899 participants completed the virtual event. Of these, about 500 were existing entrants and 400 new entrants (including 57 foreign runners from as far away as Australia and India). One of the finishers was a 70-year-old man who ran seven kilometres over seven consecutive days on a treadmill to complete the 'ultra' after being entered by his daughter.

Spot prizes like the latest Suunto 7 watch and Irene Versus socks were awarded to participants but the major cost of South Africa's first virtual ultra marathon were the courier charges to deliver the medals. Once all books were balanced, the club was left with a marginal profit of R20,000 and this money has been used to buy blankets and masks for two local orphanages.

The Irene Ultra is the exception in the 'no refunds' races in that they managed to turn a negative situation into a positive outcome and received dozens of complimentary messages from happy runners after the completion of their virtual ultra.

Loskop Ultra Marathon

The Loskop Marathon, run from Middelburg to the Loskop Dam in Mpumalanga, is the largest 50km race in the world (and fourth largest ultra marathon in South Africa). The race has steered clear of controversies that have occasionally plagued the other big ultras and is known for its impeccable organisation*. This year's race was scheduled to be the week after the Two Oceans Marathon on 18 April.

READ | Loskop Marathon (The one with a late start & a fast finish)

If the communication from Two Oceans and Comrades left much to be desired, it was totally non-existent from the Loskop Marathon Series (LMS). An announcement of the race cancellation was posted to the race web site but there was no formal communication to entrants.

Based on the 'no refund' statements of other races, entrants assumed that their entry fee would not be refunded. Enquiries as to whether peripheral charges like bus fares would be refunded reportedly also went unanswered.

It therefore came as a big surprise when, after two months of silence, a formal communique was sent out announcing that all 6,000 entrants would be receiving a full refund.

The race is organised by the Middelburg Marathon Club (MC) with a sub-committee that is appointed for the annual marathon. The committee is filled with volunteers comprising representatives from Middelburg MC and various sponsors involved with the event.

The LMS were surprisingly cagey about the finer details of the refund decision with most of my detailed questions being deflected back to the official media release. However, they did make it clear that, "The focus of the Loskop Marathon for the past 34 years has and will continue to be the development of Sport and Recreation in South Africa, as well as supporting various local charity initiatives, not for financial gain."

I was especially curious as to how they were able to refund runners in full and whether any specific sponsor should get the credit for the race being able to offer runners full refunds but the best I could get was, "The Loskop Marathon Series and Middelburg Marathon Club will cover the refunds for the 2020 Loskop Marathon."

As for costs incurred to date, unfortunately I can't shed any light on how this compares to other races, "The committee doesn't see the relevance or significance of the costs relating to the cancelation of the Loskop Marathon."

Wally Hayward Marathon

Run on Workers' Day (1 May), the Wally Hayward Marathon is traditionally the last qualifier for Comrades. This is a popular, well organised event that also includes a half marathon, 10k and fun runs. The 'Wally', as the race is affectionately known, is the fifth largest standard marathon in the country (and the largest impacted by the Covid-19 lockdown measures to date). Last year almost 13 000 people participated across the various events.

READ | MiWay Wally Hayward Marathon (Can I be Frank with you?)

The Wally is organised by a sub-committee of volunteers from the Alpha Centurion Runners and Walkers. The race does not employ full-time staff but does contract some temporary support staff in the five months leading up to the event.

Trivia snippet: The current Comrades Race Director Rowyn James ran 10 Comrades in the colours of Alpha Centurion who organise the Wally Hayward Marathon - and on completion of his 10th Comrades, James received Green No 1024 from Wally Hayward!

The organisers clung to the hope that the current Covid-19 situation would subside and that they would be allowed to host the Wally at a later date, as well as the possibility to be rescheduled as a qualifier. However, once it became clear that this was not possible the difficult call was made to cancel the race.

Despite paying over R750 000 to date for goods and services, the event confirmed that they would offer all entrants the choice of a full refund, deferral to the 2021 event or to have their entry fee donated to charity.

In stark contrast to Comrades, who kept their substitution entries open, the Wally Hayward organisers had the foresight to suspend pre-entries as the Covid-19 crisis spread. The result being that just under 3 000 of the expected 14 000 entries had been received when the entry system was put on hold.

Race director, Francois Jordaan, summed up the impact of the 2020 cancellation, "Some of the expenses, like the medals, are 'recoverable' in a sense that we can use them next year by changing the ribbons. The biggest portion of our expenses cannot be recovered. We are yet to determine the full impact. This will only be done by the end of June. Of course, next year will not be an easy one either as we deferred the entries. So, the real financial impact will have to be taken over a two-year period."

As for how they were able to offer refunds and deferrals, it seems that the race sponsor (MiWay Insurance) should get the credit. MiWay had already paid their committed sponsorship money in full and did not request a race cancellation refund, instead pledging their support to the organisers so that participants could be offered a full refund.

Jordaan explained, "Although we have a 'No Refund' policy (like most other races) we felt that during this time of uncertainty we will not enforce that. We ultimately decided to be sensitive towards our participants, many of whom lost their income, or a big part of it. Our title sponsor, MiWay Insurance, have walked this path with us and also felt that we should offer a refund to the participants."

Although most of the traditional media attention as well as social media commentary (and anti-social comments) have focussed purely on each event's decision whether to 'pay back the money' or not, Jordaan also drew attention to the far reaching economic impact that the cancellation of a race has to vendors "like the sound system and the MC, crowd barriers, race photographers, route cleaning, security, Coke and Water, ice suppliers, medics, tables and chairs, food vendors and timing partners." This further extends through to local schools who lose out on race day parking donations and the five charities that the race supported with contributions of over R500 000 over the last few years.

A fascinating statistic is that 91% of the entrants chose to defer their entries to 2021, with just 7% requesting a refund and 2% donating their entries to charity. It looks like the short term pain will reap long term gain for the Wally Hayward Marathon.

Looking Ahead - Refund Policies of Future Races

The three largest standard marathons in South Africa (Cape Town, Soweto and Kaapsehoop) are all scheduled for the last quarter of the year.

- At the first sign of Covid-19 cancellations, the Sanlam Cape Town Marathon made it clear that all entrants would receive a full refund in the event of a race cancellation.

- The Uniwisp Kaapsehoop Marathon confirmed via email that the race would offer a full refund if cancelled and that the situation would be assessed at the end of August.

- Soweto Marathon has not yet opened its entries and no reply was received to enquiries on the event's refund policy.

However, it is not fair to compare the refund policies of these events with those in the first half of the year. A far longer lead time to evaluate and mitigate the Covid-19 cancellation risk as well as the ability to defer expenditure and negotiate cancellation clauses with suppliers, reduces their financial exposure significantly.

What is clear though during these times of uncertainty, is that there is an ethical responsibly for every event to explicitly state their refund policy. It is highly unlikely that anyone will enter a race in the second half of 2020 without the promise of a guaranteed refund.

Runner Centric Approaches

Based on size, scale and sponsor support, it is impossible to compare the "pay back the money" decision of races like Loskop and Wally Hayward with the "shirt happens" stance of Comrades and Two Oceans. Having taken a look at the facts, figures and financials of each event independently, all the refund decisions are correct in the context of that race.

It appears that a great deal of the commotion, controversy and conspiracy theories that abound on social media derive from an underlying fear that the running community is being taken for a ride. No authentic ultra marathon runner likes being taken for a ride (unless of course it's to warm-up for a marathon during the Ironman) and, although every race professes to put the runner at the centre of their decision-making process, this often does not come across in communications.

Race relations are always tenuous in South Africa but if there is one thing to be learned from Covid-19 cancellations, it is that transparent, frequent and thoughtful communications will keep the majority of your customers happy.

About the author

Stuart Mann has run over 240 marathons and ultras all around South Africa and the world (including all the races mentioned in this article). He writes the popular "Running Mann" blog and his articles have featured in numerous local and international publications. He assisted over 80 athletes with sponsored and subsidised Comrades and Two Oceans entries in 2020. You can follow his adventures on Facebook, Twitter and Instagram.

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