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“If you’re going to urinate on me, at least have the decency to pretend it’s not raining.” I’ve paraphrased to lessen the crudity, but it’s still a response that leaves no room for doubt over the mood of one triathlete towards Ironman over the contentious issue of race refunds.
It’s a highly emotive subject and one this column chose to duck during the early throes of the Covid-19 outbreak as tri’s prognosis for 2020 blurred, and hasn’t enjoyed much clarity since. But what now sticks firmly in the spokes is the curious, surely misguided, assertion from Ironman chief executive Andrew Messick in a New York Times article that most athletes he heard from “were not interested in getting money back” from postponed races, which informed Ironman’s decision to not offer refunds.
Perhaps Messick needs to broaden his polling beyond Ironman investors, because this line is likely to raise hackles as much as it raises eyebrows. It’s not that triathletes do not want their money back for cancelled events – in a Twitter poll by Brick Session podcaster Mark Livesey over two-thirds would prefer a refund to deferring – but that the majority understand why it’s not always economically viable.
What they do want, however, which should be within the gift of any race organiser, is to be treated in a fair and reasonable manner, with communication lines kept open and honest responses from those in charge. What they’re less keen on is some kind of post-truth flannel that pretends no-refund rationale is customer preference.
Right-minded triathletes understand that event organisers cannot issue full refunds without the risk of jeopardising the future of the business. Often smaller race organisers, possibly because they can be more personable in their communication, receive more grace from spurned entrants because of the perception of tighter cash flows and aborted credit lines. But make no mistake, Ironman is not immune to the financial pressures either.
If it paid out millions in refunds instead of an increasing list of deferred races, it would hit major liquidity problem. Sources tell me staff have been reduced to working four days a week with a concomitant 20% reduction in salary, with senior management taking bigger percentage cuts as the company prioritises safe working conditions and jobs. It’s not alone among firms in this and few customers would quibble if this was open testament. We are, after all, in unprecedented times. However, there are a couple of caveats.
Firstly, cancellation insurance can be sought for a pandemic, albeit at great expense. For example, it’s understood The All England Lawn Tennis Association, which organises Wimbledon, will recoup almost half its losses from cancelling the 2020 event thanks to the $2 million pandemic insurance policy it has taken out every year for the past 17 years. The premium might seem high, but is dwarfed by the $141million pay-out according to Forbes (Report: Wimbledon’s Organizers Set For A $141 Million Payout After Taking Out Pandemic Insurance). Either this type of foresight seems almost unique among event companies or privately run businesses are keeping details withheld because a chunky pay-out changes perspectives on how customers and employees are treated. As for Ironman, it doesn’t have a valid policy, or if it does, it’s keeping schtum. We have asked.
The second is the moral stance of the company to shoulder more of the burden, by offering the option of a partial refund, for example. The current offer of a race deferral does still see Ironman take a hit (as it eats up future spots it could have sold, although potentially with lower future demand). But many triathletes, who have already paid for travel and accommodation and cannot make the rescheduled dates, feel it is they who pay the heaviest price.
A more cynical view still is that Ironman is only protecting its interests. Its Initial Public Offering flunked and it’s a debt-laden business agreed to be sold as a cash purchase to Advance, a family-owned group, but with co-investment from Orkila Capital, a private equity company. It needs to make the balance sheet look good for the sale to go through, and customer satisfaction and long-term reputation don’t factor highly here.
The overarching point is that the financial health of Ironman, or any other events company, is really only known to its core stakeholders, and it’s down to trust that they’re attempting to do the best for their customers, while planning for a grisly trading environment. Armed with this knowledge, triathletes will continue to pay their money and make their choice, but even if the financial impact of cancellations can be stomached by the individual, it’s a sucker punch to claim – as Messick has – that it’s their preference.