Running: Private firm Competitor Group gets tax dollars to stage big-money Rock 'n' Roll Seattle marathon

Monday, June 29, 2009 - 04:08 PM

When the horn sounds today for the 25,000 runners at the inaugural Rock 'n' Roll Seattle Marathon, it will be thanks, in part, to more than $800,000 in tax money promised over three years, as well as the efforts of thousands of volunteers. But behind the scenes is big business that's found a way to tap into both capitalism and civic pride.

When the horn sounds today for the 25,000 runners at the inaugural Rock 'n' Roll Seattle Marathon, it will be thanks, in part, to more than $800,000 in tax money promised over three years, as well as the efforts of thousands of volunteers.

But what many may not realize is who stands to make money from the sold-out event: a private equity firm based on New York City's Park Avenue. Behind the marathon is big business — a business that is growing so fast, in fact, it's transforming the landscape of endurance athletics across the nation. It's a business that taps deeply into both capitalism and civic pride.

Few have heard of the race organizer, Competitor Group, a company that was created just 18 months ago with backing from the equity firm Falconhead Capital. But already it has vacuumed up underperforming marathons in Las Vegas, Denver, Seattle and New Orleans, and started a new race in San Antonio, adding to a stable of Rock 'n' Roll events it acquired when it bought San Diego-based Elite Racing.

What the Competitor Group is doing is something new. By replicating a fun and successful race model — in which bands blast out music every mile and cheer squads entertain — the company is appealing to big sponsors that wouldn't be interested in any single event. Those sponsors include the Miller brewing company and Nutrilite, a line of health supplements owned by Amway.

The Seattle Times is a media sponsor, which involves providing advertising space in exchange for promotional signs at the race.

The man at the center of it all is Peter Englehart, the Competitor Group's CEO and an operating partner at Falconhead. Englehart, who has an MBA from Harvard and a background in television management, said he studied the endurance-sports market for a couple of years before making his move.

"What we saw out there was a very fragmented landscape. None of the races had the right kind of scale to be able to market and sell nationally," he said. "We liked what we saw."

By next year, Englehart said, he hopes to have 17 Rock 'n' Roll marathons and 350,000 runners. He said it's possible the company's annual revenues could top $100 million within a couple of years. The firm also publishes fitness magazines and operates a Web site.

Runners' fees — approximately $100 per person for the race in Seattle, for a total of $2.5 million — account for only about 30 percent of the total business, he added.

People who run marathons tend to be among society's most affluent, Englehart said, a group prized by advertisers.

In Seattle, the Competitor Group last year had its eye on the Seafair Marathon, which had never turned a profit in five years and had run into logistical problems. Seafair organizers, with a paid staff of just 14, were ill-equipped to grow the event.

Competitor Group has about 170 full-time staff.

By Nick Perry
Seattle Times staff reporter