Grandma's Marathon had successful weekend, but faces large deficit

Executive Director Shane Bauer said the organization is expecting to end the fiscal year with a loss of $500,000 to $600,000.

Due to the cancellation of events last year due to the COVID-19 pandemic and the number of entries being cut in half, the Grandma’s Marathon organization is anticipating a large deficit by the end of the fiscal year.

Executive Director Shane Bauer expects that deficit to be $500,000-$600,000. The last time the 501(c)(3) organization ended with a deficit was in 2014 and it was only around $7,000, according to 990 forms filed by Grandma’s Marathon.

“Over the last six years, leading up to last year’s cancellation due to the pandemic, we’ve had one of the most successful runs in the entire history of the event,” Bauer said. “So we had built up a decent enough reserve where we didn’t let any employees go or furlough anyone, which we were super-proud to be able to do as an organization.”

Bauer said the organization’s biggest revenues are race entries and sponsorship money. Sponsors stepped up in a big way this year, but race entries were capped at 50%, he said.

“Our registration revenue is far and above what we need to be able to put on the race for the runners,” Bauer said. “When they sign up we immediately start using that to organize the race, and I think that’s one of the big reasons it has the reputation it does for being so highly organized.

“Cut that in half and that’s what we have to work with," Bauer said. "But we’re not going to sacrifice the quality or the reputation of Grandma’s Marathon.”

Bauer said by canceling the race last year and holding it in a virtual format, the organization ended the 2020 fiscal year in the positive because most of the loss incurred for the cancellation ended up in the current fiscal year.

Any runner that was registered when the races were canceled last year was given a 40% discount on one entry fee to be used either this year or next year.

“We knew we would have come out way ahead if we would have just canceled the event this year, but there was no way we were going to do that,” Bauer said.

If the races were canceled again this year, runners registered at the time of the cancellation would have been given three 40% discounts to use over the next five years, which would have cost the organization even more money in the future.

"Despite the loss for this year, I think we'll be in a good position going into next year to start building (our reserve) back up again," Bauer said.

Bauer said the decision to move forward with the events this year was made with the Duluth community in mind.

“We knew we were going to be a very important event for the future of our industry and to get things going back in a safe running direction, and for the community, too,” he said. “Once we announced we were going to hold our event with the COVID-19 mitigation plan in place, we really started seeing other announcements of events in the area and concerts at Bayfront.”

The fiscal year ends Sept. 30 and registration for Grandma’s Marathon 2022 opens Oct. 1. Before then Grandma’s Marathon will be hosting its Park Point 5-Miler on July 5 and the Minnesota Mile on Sept. 10. Both of these events will allow full capacity and won't include staggered starts.

The Park Point 5-Miler has a capacity of 900 in-person entries and the Minnesota Mile has a capacity of 500. Bauer said they don’t sell out of entries for those races, but if they could somehow achieve that this year, it would really help mitigate their losses.

“It’s the 50th Park Point 5-Miler this year, so it’s a big anniversary year for the oldest road race in northern Minnesota,” Bauer said. “So it's going to be fun.”

A few changes were made this year to the events over the weekend to help with COVID-19 mitigation. One of the most noticeable was the use of Bayfront Festival Park.

Bayfront was used as the start and finish for the William A. Irvin 5K, so participants could spread out more before and after the race. It was also used as the venue for the Grandma’s Marathon "Big Top" concerts.

In the past, the "Big Top" concerts were held in a parking lot in Canal Park, but to allow people more space to spread out it was moved to Bayfront, and the feedback was great, said Zach Schneider, Grandma’s Marathon marketing and public relations director.

“Bayfront seemed like a big hit with both our participants and the community,” Schneider said.

Schneider said the organization is going to get together as a group and debrief on how this year went and that the use of Bayfront in the future would definitely be a part of the conversation.

“It’s a beautiful venue, obviously, and a venue that’s built for essentially exactly what we want to use it for during Grandma’s Marathon weekend,” he said. “I think it moves people out of the finish line area in a way that eases some of the congestion that we normally see with Grandma’s Marathon, so it’s certainly going to be discussed.”

Bayfront Festival Park Director Jeff Stark said there were an estimated 10,000-15,000 people total at Bayfront on Friday and Saturday. Stark said he also heard many positive comments about the setup and use of Bayfront over the weekend. Though, Stark said, they did hear from some marathon runners that “they felt like they were walking a marathon to get over there.”

“For the most part, it was a positive, warm reception,” he said. “I would hope (Grandma’s Marathon) would seriously consider keeping its events there.”

posted Wednesday June 23rd
by Adele Whitefoot