Friday, February 20, 2009

No, Triathlon Is Not Recession Proof

In December, Running Network and Runner's Web picked up a press release from USA Triathlon, "Is Triathlon Recession Proof?". I can't find this press release on the USA Triathlon website, but Pete Williams's "special to USA Triathlon" poses an interesting question--and a questionable answer.

A few highlights:

  • The press release concludes that, as of December, triathlon is recession proof.
  • Williams's bases this conclusion on an "informal survey of race directors across the country"
  • The p.r. cites the growth of the number of triathlons from '07 to '08 as evidence.
  • It cites this New York Times story which describes triathlon as "a luxury hobby that does not seem to lose its luster even in an economic downturn"
There is a conflict of interest in Williams's data. Race directors are among some of the most desperate promoters in the nation. They have a very personal stake in maintaining the momentum of triathlon's growth, in part because of the huge expense of producing an event. Race directors often inflate their numbers, especially when trying to sell expo space. The last thing a race director wants to tell is that his registration numbers are down because athletes, especially image-conscious triathletes for whom race prestige equals bragging rights, immediately want to know why. You don't spend months preparing for a race and then register for one that has zero parking or no shade or huge crowds or a cramped transition area (except Danskin Denver, of course).

Citing the number of races in '07 vs. '08 proves nothing. First, the recession wasn't really underway until mid-2008. Second, it takes months for people to adjust their spending habits. Third, you register and pay for a race months in advance. And you definitely don't skip the race once it's paid for. Fourth, the median household income of a triathlete is over $150K and they report spending around $4K per year on the sport.

It looks like party time's over. According to this early February poll of over 500 triathletes on Slowtwitch.com, 7.1% of triathletes have lost their jobs as a result of this recession, compared to the 7.6% national unemployment rate. Slowtwitch first ran this poll in August, when 4.1% of triathletes had recently lost a job, compared to 4.6% national unemployment. It appears that, at least anecdotally, this recession is affecting everyone and not just lower wage workers.

So how is triathlon likely to adapt to the recession?

  • No one in his right mind will start up a new triathlon race or race series.
  • Newer and smaller local races will be cancelled for '09 as they struggle to find sponsors and registrations. The ones who try to weather the storm will slash race registration fees to fill their registrant list. It's already happening. Check it out.
  • Municipal races (like the Louisville Legacy, rest in peace) will get cut from the budget as local governments scramble to cover the tax shortfall.
  • Mid-sized races will experience mixed impacts. They'll discount race registrations to lure triathletes onto the course. They'll scrap for sponsorship dollars. Some will cancel their '09 events.
  • Big races will see little change other than flat or slightly lower registration numbers. The "core enthusiasts" in triathlon will cut their sports-related expenses last. After all, triathlon is a lifestyle.
  • Race series like Danskin, Iron Girl, and (upstart) Trek will be protected by their multi-year contracts with national brands but will see a pronounced decline in registration numbers as fewer non-triathletes commit to the expense of a new sport (bike, tri apparel, race registration, nutrition products, gym passes at the local pool, etc.).
  • Ironman, with its limited qualifying races and huge waiting lists, will see no change in demand for race registrations, but is likely to lose its sponsorship with, um, Ford Motor Company.
  • Triathlon coaching, which is almost an industry within the industry, will implode as less credentialed coaches get dropped by their money-scrimping clients.
  • DIY triathlon training resources, like websites, books, and DVDs, will benefit.
  • Across the board, tri manufacturers will take a drubbing in 2009. The average triathlete spends nearly $4K on the sport, generally in attempts to buy speed. Triathletes won't leave the sport, but they will be too scared to spend money on new (mostly redundant) gear or they will realize that--just this year--they will still enjoy the sport without spending as much on it as they have historically. My guess is that overpriced nutrition products, bike manufacturers, and apparel makers will lose biggest.

2 comments:

Jason said...

I totally agree with you. I'd actually read the same story a while back and thought it was unlikely the Ironman and Ironman 70.3 brands would suffer, but as far as the smaller races go it's definitely going to hurt.

It also seems like people with a passing interest in giving the sport a try and the "prove I can finish a sprint" crowd might opt to take on a less costly challenge.

Unknown said...

Thanks for your comment.

Now that we're midsummer, I'm finding a lot of evidence that running and triathlon are actually doing quite well--because of the economy! I've got a blog post in the works on this.