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Endurance Registration Market Analysis – September 2019

We do a US Registration Market Analysis every 6 months:

We try to improve on it with your feedback (so feel free to send suggestions or corrections to bob.bickel at runsignup.com). We do this as part of our own internal market evaluation processes but share it because we have not found other good sources of information like this. We also tend to give our opinions in this report on the implications of trends that we see, and how they play out strategically for RunSignup and others.

Sales Tax

The online registration market is being shaken to its core with the implementation of Marketplace Laws in a rapidly increasing number of states. This makes registration providers responsible for and liable for (in addition to races and nonprofits) collecting and paying sales tax. By the end of 2019, this will be required by 35 states and by the end of 2020 it is expected in all 45 states that collect sales tax. You can read more about the history here.

We have reached out to all of the vendors we know since this is a common problem we are all facing. Some, like RunSignup, EventBrite, Race Roster, Athlete Reg and Active are putting plans in place to address this. Others are taking an ostrich approach hoping they are not caught.

The potential implications are pretty large. Let’s use RunSignup as an example. Say we did not implement sales tax all of next year. We would rack up a sales tax liability of $Millions. If we were audited, then we would be forced to pay, and would then likely come back to races since they also have liability for those sales taxes. For some registration providers, this would be very difficult as processing fees are typically about 6% and taxes are that or more, and the registration companies also have paid the credit card fees as well as their employees and technology costs. And most have small capital reserves. If registration companies go out of business, then the states would pursue the races directly.

Of course the problem is to figure out how to carry that potential liability on your financial statements. Some individuals may be willing to carry that risk, but if a nonprofit or company has a board or CFO or accountant, there is fiduciary responsibility to report accurately.

The fall out will begin in October when RunSignup releases our highly automated and compliant sales tax system. We expect some races to move off of us because they don’t want to pay and are willing to take the risk. We expect more races to move to our platform as a safe haven. So it will likely be positive for our business, which hopefully offsets some of our $Hundreds of Thousands of expenses in getting legal, sales tax, accounting, and development costs.

Market Moves

It has been a busy half year! There are so many moves that have happened. Our perspective is this is being driven by a flat market and companies trying to adapt to financial pressures. We expect more consolidation as not many of the companies have the resources to complete the sales tax technology, and the expectations of a system have evolved from simple registration to a complete integrated lifecycle system.

ChronoTrack – Athlinks – RunSignup
The companies announced a significant partnership in July. It involves technology collaboration and integration, as well as ChronoTrack migrating their customers from their registration platform to RunSignup. This is beginning in September as the initial technology integration has been completed. This could be a migration of around 1 Million registrations over the coming year as races gradually move over. (RunSignup is growing from about 5 Million registrations last year to 6 Million in 2019 – this could boost us to 7.5 Million or more in 2020 with additional growth coming from GiveSignup).

Wanda Goes Public
Wanda is the owner of WTC, which owns and operates Ironman, Rock & Roll and a variety of other races. We did a deep dive on their S1 statement, and uncovered some very interesting statistics. One of the common comments is that many races wish they could get those types of sponsorship, broadcast and merchandise sales on their races. Their recent quarterly report showed growth, but from the commentary it seemed like much of it was in China and international.

Hot Chocolate / Enmotive / RAM Racing Sale to New Media
Rugged Races acquired the Hot Chocolate Series. This continues a trend for Rugged of expanding beyond the OCR business after Rugged’s acquisition by New Media for $10M in August, 2018. Hot Chocolate has 8 of the Top 100 races in the US, and has 200,000 participants per year. Rugged also acquired 10 other races as well. Rugged now has 90 races and 450,000 participants per year, or nearly 2.5% of the market using the RunningUSA number of 18.1 M participants.

This is a more complex deal than that, however. Rugged is part of Gatehouse Live which operates a number of other events, which is owned by New Media, which is mostly a Newspaper company. In Q2, New Media, which owns 154 newspapers in 39 states, reported revenue of $404M and Gatehouse Live was $22M of that, or about 5% with excellent growth due to the rapid acquisition pace in the race and non-race space (they operate over 300 events each year).

It gets a bit more complex. Gatehouse “acquired a majority stake in RAM Racing’s proprietary online ticketing and race management software platform, EnMotive”. We assume this also includes the timing business as “EnMotive is also one of the largest timing and third-party event production companies in the United States.” So Enmotive registration is now owned by Gatehouse Live, which also owns Rugged Races. This probably means that Rugged Races will move off of the RunSignup platform to the Enmotive platform (from a RunSignup perspective, Rugged Races represents less than 0.2% of our business, so the loss will not be significant to us).

From a registration market perspective it will be interesting to see what happens with Enmotive registration (and their RAM Racing timing business). New Media just acquired Gannett (owner of USAToday and over 100 daily newspapers and over 1,000 weeklies). Gannett is actually almost twice the size of New Media in terms of revenue. This deal was financed by additional debt of $1.7B at an 11.5% interest rate. The deal is driven by “cost synergies”. GatehouseLive’s events will be about 2% of the new company’s revenue, and the Enmotive registration platform at say 6% of that will be fairly small within this large company. This may mean they will get funded and keep their employees, or the company may focus on other areas as race processing fees and timing services will never be a significant part of the new company. Time will tell.

Races Online partners with Race Roster
RacesOnline has had their own registration platform, and reports are they sold that business to RaceRoster and are migrating customers. We think this may be as many as 200-300,000 registrations per year.

Ryan Henry and Josh Drew Leave Stack Sports
Ryan was the founder and CEO of RaceWire and Josh was the leader at GetMeRegistered. They were both acquired by Stack Sports, a Private Equity backed company focused on growing online processing in the sports industry. As you will notice, the Alexa numbers are down considerably on both sites. There is likely to be further migration off of their registration platforms, and customers will need to understand their ability to meet sales tax requirements. This continues a consistent path of companies being acquired and founding teams eventually leaving and the business going downhill. This is one of the major reasons why RunSignup is designed for the long run by being an employee owned company.

GiveSignup and Integrated Fundraising
RunSignup announced GiveSignup at our Symposium in July. This extends our capabilities in RunSignup to include Donation Websites and Nonprofit Tickets. This has been very well received, and is bringing attention to trends. First, there is a growing realization that the endurance industry and nonprofits are linked together like peanut butter and jelly. Our survey revealed that 95% of races are connected to a nonprofit in some way, with many of them deeply connected. Second, the definition of our industry extends to Runs/Walks and Rides. Third, the concepts Crowdrise brought to our industry 10 years ago are being integrated deeply into the “Registration Platforms”, making things much more effective for run/walk/rides, participants, fundraisers, donors and the nonprofits they benefit. Finally, Facebook providing an API for integrated fundraising between their platform and fundraising. This is a huge step forward – maximizing fundraising and minimizing fees.

The Bi-Annual Numbers

As the RunningUSA report demonstrates, it is tough to estimate the size of the total market (they estimate a decline of 1%, although it is hard to understand their methodology and how it can have consistency from year to year). It is even more difficult to estimate market share since there is no one place that has ALL races, most races are open for only part of a year, and different vendors have different search tools for finding races, so we take several approaches to comparing vendor numbers.

RunSignup Numbers

RunSignup has been very public about sharing our numbers. You can read our Year End Report for 2015 to see that we had over 10,000 races use us to process 2.7 Million paid registrations in 2015, and 2016 Year End Report to see we had over 14,000 races use us to process over 4.1 Million registrations and 2017 Year End Report to see we had about 15,000 races and 4.2 Million registrations (after losing our largest customer we grew over 20%). The trend continued positively in 2018 Year End Report – with over 17,000 races and over 5 Million registrations. We also produce Quarterly Reports.

The Running USA report said there were 18.1 Million participants in 2018, slightly down from 18.3 Million the previous year. Assuming the RunningUSA number will be about the same in 2019, then the 6 Million participants registering on RunSignup represents 33% of the market (and several % more if we were to include imported participants). However, it is difficult to say exactly how large the market is and what market share each vendor has.

What has become apparent given the numbers gathered below is that RunSignup has become the largest vendor in the US market as measured by the number of races and registrations. We believe Active may still be larger in terms of revenue as they have several large customers like Ironman, Rock and Roll and Motiv who have high entry fee races. Active has variable registration fees but we believe they gain revenue from other avenues such as the provision of marketing services, online adverts and e-marketing services.

RunningintheUSA Market Share
RunningintheUSA.com is the largest calendar of race sites in the US with 47,238 races listed. This is up from 46,919 last year at his time – an increase of 0.7%. This may be a sign that the growth of the number of events in endurance may be stabilizing. RunningintheUSA uses Active.com’s, RunSignup’s, and Race Entry’s automated API to load races from each of us – that is why you see the little logos for each of us on the calendar. This probably means that we are unfairly represented as they do not get every race from every other of the many other registration providers in the market.

We do a sample every 6 months and do a count of the total races for each vendor of 1,000 races in the month after the sample is taken (Sept. 14, 2019 in this count) (Also, note Healthy Kids Series was not included in count as they use RunSignup and have several hundred events in March):

RunSignup will be used by over 20,000 races this year for processing their registrations, which is 42% of the races in RunningintheUSA instead of the 32.9% in this chart, so those numbers may be off some because we do not count things like the Healthy Kids series which is nearing 600 events per year listed on RunningintheUSA.

# of Races Market Share
We report the number of races in October (and April) collected by getting actual data from RunSignup, Race Roster and AthleteReg (BikeReg):

Cancelled Races
RunSignup has started collecting data on the number of races over 500 participants that are not repeated. The data is from November 2017 – March 2019, and shows that 5.8% of races were not repeated the following year. From a spot check of races 100-500, the no return rate is 11%. As expected, there are less new races coming in to replace these very small races.

We also track which competitors have races moved from us. This seems mostly driven by timer acquisitions that happen where the timer is acquired and then asks races to move to a different platform. Fortunately, displeasure with RunSignup is fairly rare. We do not track, nor would we publish, which vendors races move from to RunSignup, but in aggregate we’ve added 1,221 new races over 500 in this analysis, for a growth of 37.5% (subtract churn for net growth of races). That compares with 191 no race and 101 losses to competitors, or 9% loss.

The list below covers races that moved from RunSignup to another platform since November, 2017 – 22 months of data.

Alexa Rankings
Alexa is a cool tool that shows the ranking of websites based on page views. It is approximate but is fairly accurate. As above, there are lots of caveats to this. For example, Eventbrite, Active and Events.com all are covering much more than the endurance market and their numbers are inclusive of those other markets.

These rankings among all US websites are from September 14, 2019.

We also have some pageview counts from several other companies we know so you can get a feel for pageviews and Alexa Rankings:

RunSignup saw a big 27% jump in our rankings from September, 2018.  Active’s 39% jump is somewhat surprising, but may be driven by a full year effect of Rock & Roll. Race Roster also saw a nice 23% jump. Race Roster also stated last spring their race count to be 4,000, compared with the 20,000 over the past 12 months on RunSignup. Based on the Alexa rankings, it seems that our size, technology and price advantages continue to allow us to grow at similar rates. And our growth times our size allows us to increase our delta in terms of races and registrations (meaning it is unlikely that any other vendor is adding over 1 Million registration this year). Race Entry is much smaller, but has a nice jump.

The black and red numbers show what is happening in the registration market generally – there are some stronger vendors like RunSignup, Haku and Race Roster that are aggregating market share from smaller vendors. There were big drops as mentioned above from GetMeRegistered and RaceWire, and IMAthlete seems to be dropping quickly as well. BikeReg is somewhat surprising to see a drop as their race count is up and in discussions with the company their business continues a positive trend upward with their recent deal with USA Cycling.

So What Does This Mean?

Our objective in doing this was trying to understand how far we had gotten with our growth. We are guessing that we are at about 20-30% market share with our about 6 M paid registrations in 2019 and expected 7.5 Million in 2020. This is based on a combination of the 18.1 Million reported by Running USA and the 60 Million worldwide Eventbrite estimates and assuming half of that is in the US.

We are really proud of the impact we are having on the endurance and race market, and that this report continues to show customers appreciate our technology and support. Especially since RunSignup is a lot more than registration, as we have grown to be a full race management platform supporting the entire race lifecycle:

CRM-w-words

The integrated CRM database give participants a better experience with things like self-serve participant management, free results, notifications and photos, while races have better promotional and fundraising tools to maximize the impact of their efforts. We find more and more races continuing to use our technology to enable their viral social marketing strategies.

The Race Director and RaceDay Scoring help Timers score and provide results for over 8,000,000 participants annually. With 300+ timers now trained and certified in the initial release of RaceDay Scoring, we expect this to continue to grow. Our RaceDay Suite of Cloud-based Scoring and Results system used by Timers and Races hosts results for over 6,000 races and sends tens of thousands of result notifications each weekend. RaceJoy is by far the leading race GPS Tracking solution in the market with hundreds of marathons, trail races and relays using the social, safety and management features to improve their races. RunSignup for Clubs is used by hundreds of clubs to help with membership management and tie to races, with new clubs continuing to join (California Triathlon Club just moved their 4,400 members to our club membership system for example). And our free services like Volunteer Management, Check-In App, Race Calendar Widgets are used by many races beyond those who do registration with us. And now with GiveSignup for Nonprofits, it gives us a firm foundation for continued growth of our technology platform – which is great for our customers and employees.

Thank you to all of our customers who provide us with great feedback on what is needed in this market, and who tell their friends about us

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