Sport Today

Well, it seems that finally someone is doing something about those
people that sell and purchase entries in violation of the race rules.
This has been an issue for some time and finally USAT is taking , in
my opinion , a very appropriate action to prevent this and send a
message at the same time. As the article clearly indicates, this is an
issue that affects us all and I will be glad to see the verdict.

Risk management: the fourth event

By Timothy Carlson

This report filed September 20, 2002

With the lawsuit filed against two San Francisco area men who
exchanged IDs to transfer an entry to the sold out 2001 Escape from
Alcatraz triathlon, USA Triathlon has declared a state of war to
preserve the sport from possible calamitous insurance increases.

USA Triathlon filed suit late last month in San Francisco Superior
Court against Dakin Ferris, a member of USA Triathlon who sold his
2001 Escape from Alcatraz entry to Charles Martin, who is not a
member. In the race, Martin was hit by a car, which illegally entered
the course, and suffered a broken clavicle and other injuries. Martin,
who obtained his entry by falsely presenting Ferris' identification,
later sued both the driver and Tri-California, the organization in
charge of the race, for injuries and damages. Tri-California is
insured through USA Triathlon, and any awards or costs to defend
Martin's lawsuit will be borne both by the insurance company and by
USA Triathlon members in the form of raised membership and race-entry
fees.

USA Triathlon attorney Howard Jacobs said that the normal athletes'
waiver required by race organizers "indemnifies the race organizers
against damage complaints in California courts. However, if the waiver
is forged, the waiver may not apply" and may ironically help the case
of the plaintiffs who have fraudulently entered the race.

Both Ferris and Martin are being sued for intentional
misrepresentation, negligent misrepresentation, contractual indemnity
and declaratory relief. Ferris is also being sued for breach of third
party beneficiary contract for selling the race entry.

"Lawsuits like [Martin's] could put our sport out of business," said
Steve Locke, USA Triathlon executive director. "That's why we must
work to keep people from buying and selling race entries and reprimand
those who do."

Locke said that the insurance picture for triathlon has been good
thanks to heightened safety awareness among race directors, but
increases are looming. USA Triathlon paid $500,000 in insurance
premiums in 2002, but that figure is likely to increase to $600,00 to
$800,000 in 2003. Locke said the loss ratio (payouts versus premiums
collected) have ranged from 5 to 15 percent in the past three years,
well below the threshold of other sports. But only a few lawsuits like
Martin's and other pending suits could turn those figures upside down.
In a worst-case scenario, says Locke, "Triathlon could lose its
insurance coverage altogether or have rates rise catastrophically."

To put the current situation in perspective, Mike Price, President of
ESIX (Entertainment Sports Insurance Experts) of Atlanta, the firm
that handles risk management for USA Triathlon and many other sports
such as cycling, gymnastics and volleyball, says the impending rate
increases arise from a combination of factors both inside and outside
the sport.

"The World Trade Center attacks of 2001 have had a big effect on the
overall climate," said Price. "The insurance industry as a whole
offered $160 billion of coverage in the US. Estimates are that $60
billion of that coverage will be paid out for victims of the September
11 attacks, leaving $100 billion coverage available. That turns
insurance into a seller's market, with insurers being more selective
and raising rates across the board."

Price added that many sports are now facing 100- to 150-percent
increases in premiums. While triathlon has much better loss ratios
than those sports, he noted that one or two major lawsuits could push
triathlon over the 75-percent loss ratio threshold into a higher
increase category.

In addition, said Price, the very rise in popularity of the sport has
increased the risk. First, the sheer numbers increase odds of payouts.
"And with more races selling out," said Price, "you see a lot more
impulse for bandits to try to sneak into races."

Yet another reason to hate USAT.  Rather than serve the ATHLETES, by
mandating a reasonable entry transfer policy, USAT sees the solution in
perpetuating the racket by RD's of selling out early and then screwing
those unable to make a race six months later.  There is NOTHING
insurance related mentioned in the article that would not be eliminated
by a reasonable transfer policy.  In fact, the current policies actually
increase the chances of lawsuits by economically pressuring injured or
otherwise unprepared athletes to compete anyway.

How is races selling out early the fault of the RD or a racket.  Races
selling out early is the result of everyone and their brother taking up the
sport.  Due to to rising insurance costs and the difficulty of finding
suitable venues I predict this problem will only get worse.  Why do you
think scam artist like Pacific Sports LLC stay in business.  It is a sellers
market, with a "bigger fool than you" ready to plunk down $400 12 months out
for an IM race.

There is NOTHING

You, like many people may have some misunderstanding about economics.
Economics is not the study of money, but the study of CHOICES.  The theory
of sunk cost applies in this case.  One of my college econ professors summed
it up best.  You buy ticket to a movie, spend like $9, and after 30 minutes
it is clearly a dud.  Do you sit through it  (you already spent your $9) or
do you leave.  Economics says leave, it is a sunk cost, then you don't waste
your money and your time.

Why would you race injured, just because you already spent money on the
race.  There is no economic benefit, and I say that in non-pecuniary terms.
(Pecuniary benefits are benefits in terms of money only, which unfortunately
is the driver in many bad decisions, because many costs are measured in
non-monetary terms; for example the risk of complicating an injury by racing
hurt.

You know the refund policy or lack thereof when you enter.  Ever figure that
the RD assumes a certain amount of no shows in pricing the event.  If
everyone who entered started showing up I bet entry costs would rise a
little bit, due to added expense to the RD based on fixed revenues (i.e.
they get your money whether you race or not, but if you show up it costs
more in terms of volunteers, support, food, etc.)  Example a popular sprint
series I do takes 850 entrants a race, sells out, but rarely sees much north
of 700 racers, the RD must expect this, since it happens every year without
fail..

I agree the policy sucks and there are some poorly run races.  Since I
myself have not put on a race (I have been looking into it, but suprise even
without the logistics of putting it on I can't find a suitable venue) I must
accept what the marketplace has to offer.  If being an RD was easy and led
to high profits, I am sure a lot more people would be doing it.

My solution, discourage the casual athlete from the sport.  This will help
free up race entry spots for people who are somewhat serious about
competing.  A bit unorthodox, but it is an actual course of action to keep
races from selling out as opposed to just complaining about it.

Since we organize 25 events a year we would allow athletes to transfer
between races during that calendar year.  But what we found happening
was that if there was a forecast for rain the week before the race,
half the field would want to transfer to a different race.
As for the No refund, no exception policy= here's a story for why most
RD's stick to that.  This year on June 16 there were two popular races
that sold out quickly - our Spud Triathlon that filled up at 1000 and
the Great Chesapeake Bay Swim that filled up at 750. Afraid that they
would get shut out of both, a lot of athletes signed up for both
races.  When they realized how their training was progressing and
which race they wanted to do - the athletes then started calling both
RD's and tried to get their money refunded for the race they didn't
want to do.  Regardless of the fact that both race apps stated - no
refunds, no exceptions.  The two RD's contacted each other and stuck
to their guns on the policy.   On the 17th - you could compare the
results of the two races and sure enough the people trying to get the
refund from our race showed up on the results for the Swim and vice
versa.  This wasn't just one or two athletes, but nearly 200.
For our Spud race, we had nearly 200 no shows for that race - 1/5th of
the field.  What athletes fail to realize that if there are no shows-
we are still responsible to pay for their portion of the event - even
if they don't show up.  The insurance company, t-shirt people, port op
ottie people, awards, food, etc.  suppliers don't credit us for no
shows - we still have to pay those fees.

Combine this with 150 no shows for our other large race - RiverWatch
and if we allowed transfers that would have meant that we would have
organized a 350 person triathlon at another time for free.  If that
had happened, we would have had to shut down the remainderof our
schedule for the year.  we don't mind breaking even on races, but
doing them at a loss is another story.

| Since we organize 25 events a year we would allow athletes to transfer
| between races during that calendar year.  But what we found happening
| was that if there was a forecast for rain the week before the race,
| half the field would want to transfer to a different race.

You are talking of a different sort of transfer than is Brian. Brian wants
the ability of an entrant to sell his entry to another racer. Then everyone
is happy because the original entrant recoups some, if not all, of his entry
fee and the new entrant gets into a race that may have been full. The RD
gets a larger race field which will, in turn, make race sponsors happy.
Furthermore, the RD can charge a small fee to handle the transfer paperwork
much the same as you charge a slightly higher entry fee to register on race
day.

Brian has been pushing this for a year or so now and I've yet to understand
why this proposal is anything but reasonable and profitable for everyone.
Especially if you, an RD, say that your costs remain unchanged regardless of
the number of no shows.

stacy hills
reston, va

        And this helps someone who suffers a major injury that keeps them from
racing for a year how?
See, that's the problem - the "rain check" policy serves no one, so it's
just a red herring in this discussion.
It's irrelevant to hear another RD saying "rain checks didn't work"
because rain checks aren't the issue, they don't address the issue, and
a policy that addresses the issue doesn't share the problems of rain
checks.
        The issue is a reasonable transfer policy.  It's simple.  During a
specified time window, say up until 24 hours before the race, a paid and
registered participant who's unable to compete, along with someone who
wants his/her slot, shows up with a completed registration form and
signed waiver from the replacement person, along with a reasonable
transfer fee (say $5-10) and signs over his/her registration.  Two
minutes of data entry later, it's all taken care of, and the RD has just
received $5-10 for five man-minutes of an unpaid volunteer's effort.
The RD gets MORE money than if the slot just went empty, ALL the
competitors benefit from a complete field of fully race-ready
competitors (as opposed to people like gttim who races with walking
pneumonia to avoid wasting an entry fee, causing a potential hazard and
burden, then blasts others for not wanting to waste a fee) and
everybody's happy and has a good time.  How hard is that?
        Some will respond that people will register only to scalp.  So what?
If you want to do the race, get in the fray when registration opens and
you won't have to pay a scalper.  If scalpers charge too much, don't do
that race; when they're stuck with unsold slots, they'll learn a lesson
in economics.  The laws of supply and demand are still in force, and if
registrations are being scalped at astronomical premiums, there are only
the stupid consumers paying that freight to blame.

Isn't it obvious why?  Because I'm not faster than Tim!
Gee, Stacy, I buy you books and you chew on the covers.

are selling out well in advance that the demand far outweighs the supply.
Hence RDs should really raise prices further.  There is no reason for an RD
to allow refunds or transfers (except out of true generosity)   This is a
business

The problem with allowing transfers is it may lead to scalping, or people
buying entries to sell.  How does this hurt anyone.  Since the price of
events has not risen enough to curb demand there would clearly be a market
for scalping.  Where does scalping put money, not in the hands of the person
doing the work (i.e RD), but just the sleezebag who is doing it.

Transfers would involve some work for the RD, with no additional revenue.
Although I agree it "would be nice to allow transfers, refunds etc."  There
is no incentive to do it and in fact it would cost the RD money and time.
As consumers we must live with it, boycott races, or we could put on our own
races.

Since I like racing too much to boycott (except Pacific Sports LLC) and I
don't really have to time to put on a race (I'm too busy racing myself) I
will just say oh well and be glad I am propserous enough to eat the costs of
race entry (although I have been able to plan well enough to never have to
do this) if necessary.  If you can buy a $2000 bike you can certainly afford
to eat $100 entry.

The real problem as one RD pointed out is your fellow athletes buying entry
into 2 events that are on the same day, hoping to have their cake and eat it
to.  These people are the ones really at fault, because their greed
prevented others from racing and diluted the competition for those who did.

You are talking of a different sort of transfer than is Brian. Brian wants

These are good points, but they still don't explain why it's a problem for me
to transfer my entry to another athlete who I found who wants to do the race on
that day.

For example, this summer, my wife changed our travel plans on me, which would
cause me to miss a race. I knew someone who wanted to do the race, which was
full. Why shouldn't I be able to pay, say, $10 to transfer my enttry to this
other person?

-Harold

Of course, it's consumer driven.  However, USAT is supposed to represent
the interests of the consumers.

I fully understand this.

In non-pecuniary terms, there is benefit.  What you are buying is an
experience, and you get the experience.
If you manage to do well in spite of the injury, there are also bragging
rights, something no one should have to explain to you, of all people.

We'ce already had an RD point out that attendance doesn't impact costs.
He has to spend based on the assumption everyone will show up (unless
he's Jack Caress and Pacific Sports organizing their first Towpath
Marathon.)

Again, a major promoter has pointed out this is not the practice.  Stick
around until everyone is leaving, and see how much goes to waste.

But USAT is supposed to represent the consumers, and their conduct is
contrary to the consumers' interests.

Then you lose economies of scale.

Or to generate customer good will, or because an organization funded by
consumers to represent their interests (USAT) makes it a criteria for
the economic benefit of sanctioning.

And supply and demand will limit this.  How can you be so capitalist on
one hand and not trust capitalism on the other?

We've all stated multiple times that a reasonable fee (%5-10) which far
exceeds the incremental costs would be perfectly acceptable.

USAT could create one, if they were interested in doing their job of
representing the interests of triathletes.

In fact, as proposed, it would not.  It would generate additional
revenue at a rate far exceeding what the effort involved would cost, IF
that effort weren't already performed by unpaid volunteers.

Or the organization that's supposed to represent our interests could get
off their ***and do so.

I don't consider that a boycott, since you really don't forgo any
benefit in staying away from one of their races.

Not everyone has a $2000 bike (or, in my case, not everyone spent $2000
to get one.)

And a reasonable transfer policy would address this, since every one of
those who could find a substitute would represent an additional $10 in
the RD's pocket, while the rain check policy offered up as a red herring
only exacerbates it.

The real consumer to USAT is RDs.   There are more than enough athletes to
support the sport, but barely enough RDs.  If there are no RDs, there are no
races and hence no sport, regardless of how many people want to participate.
To protect themselves then, USAT must keep the race directors happy or USAT
would not exist.  In the end, the end consumer (The triathletes) should
benefit.  If it was easier to put on races, more competitors would enter the
market and the product would improve.  Until that happens I still support
USAT in their backing of RDs vs. athletes (if this is indeed true, because
this is largely conjecture on my part)
.

My solution, discourage the casual athlete from the sport.  This will help
 free up race entry spots for people who are somewhat serious about
 competing.  A bit unorthodox, but it is an actual course of action to keep
races from selling out as opposed to just complaining about it.

Not really.  Most races are already full and just could not take more
entries anyway.  Even if demand dropped slightly, since it is so far in
excess now there would not be any tangible loss of economies of scale,
because races would be more or less still at capacity.

I look at scalping in a different light in this case, than concert or sports
tickets.  Concerts and sport are big money makers with the promoters
cleaning up and ample revenue is made by selling concessions and T-shirts,
so the tickets themselves don't "hurt" the promoters as much in the sense
that they can cause them to lose money, just make less.  Race promotion is
largely a break even business (I would say this is true for about 50% of
races, although some probably are big money makers)  RDs only revenue is
from entries (They may get a little in sponsorship, but mostly product, not
hard cash), so any revenue derived from entries which they do not pocket
could be devastating, especially with thin profit margins.

spoken like a true prodigy

In the end I can appreciate how tough it is to organize a race, so that I
will not fault an RD for failure to allow transfers.  They could just say
forget it all and just can the race.

And scalpers would impact this how?  The price paid for registration is
the price paid, regardless of whether it's subsequently scalped.  This
is a basic tenet of resale.  When Mazda dealers were charging a premium
for Miatas, or Chrysler dealers were piling markup on PT Cruisers,
exploiting shortages, that didn't impact the factory's profitability.
Scalping in no way affects the RD, UNLESS he has a transfer policy in
effect that allows him to get a cut in the form of a processing fee, and
then it's a positive effect, since the scalpers actually promote the
sale of transfers with a surcharge.  The scalpers have to go to the RD
to get their inventory, and they pay full retail for it.  Scalping
actually RAISES the RD's ability to make money because it makes what he
is selling a tradable commodity, thus increasing demand.  
         There are other ways scalpers help the RD.  If the RD notices that for
every race last year, three friends who were all morbidly obese and out
of shape registered for all his races, and all transferred their entries
(making him $30 extra each race) he knows they are professional
scalpers.  If the transfer deadline comes and goes for a race without
these guys tendering their entries for transfer, he knows they couldn't
move the merchandise, and he actually has three no-shows he can count on
in purchasing food, etc.

Email me, I can tell you who Pacific Sports stole the NCB race from, and
some other dirt that will only make sense to a Clevelander.

They could, and the people you view with such derision could just stay
home and not clog up the course.
You are death on someone racing with less than a stellar commitment to
excellence, so why shouldn't an RD exhibit similar dedication to
offering the best value he can?

"Cleveland Steamer" ...
|

| > > for scalping.  Where does scalping put money, not in the hands of the
person
| > > doing the work (i.e RD), but just the sleezebag who is doing it.
| >
| > And supply and demand will limit this.  How can you be so capitalist on
| > one hand and not trust capitalism on the other?
|
| I look at scalping in a different light in this case, than concert or
sports
| tickets.  Concerts and sport are big money makers with the promoters
| cleaning up and ample revenue is made by selling concessions and T-shirts,
| so the tickets themselves don't "hurt" the promoters as much in the sense
| that they can cause them to lose money, just make less.  Race promotion is
| largely a break even business (I would say this is true for about 50% of
| races, although some probably are big money makers)  RDs only revenue is
| from entries (They may get a little in sponsorship, but mostly product,
not
| hard cash), so any revenue derived from entries which they do not pocket
| could be devastating, especially with thin profit margins.
|

Not true at all. The RD set the original purchase price of the race entry
and he received it plus a nominal fee to cover the cost of the transfer. The
RD ends up making just the amount of cash he would have if transfers hadn't
been allowed. Ultimately, he makes more because he impresses racers to come
back as well as tell their friends with his courtesy and professionalism and
he can show his sponsors larger participant numbers.

The only way scalping will occur is if the race is full and people are
willing to pay more than the original price for an entry. In that case, if
the RD is a smart capitalist he'll raise the entry fee when he sees his race
selling out year after year or he learns of the scalping.

stacy hills
reston, va