The business of running

Prince Mathews Thomas | Updated on January 20, 2018

It may have started as an inexpensive fitness fad, but running is now the new golf.

As legions of fitness enthusiasts lace up around the country and splurge on fancy kits, marathon races are becoming moneyspinners. It also helps that running is the new golf, a networking opportunity for business magnates and sundry celebrities

Until 2013, Rahul Verghese had never heard of Sri Ganganagar. The founder of Running and Living Infotainment, a company that organises marathon races, today never tires of mentioning this remote district — known as the ‘food basket of Rajasthan’ — close to the international border with Pakistan.

“In 2013, I got a call from Sri Ganganagar. The person wanted to organise a marathon there for 5,000 people,” recounts the IIM-Ahmedabad alumni, who had launched his marketing company in 2007 after working 25 years for various companies, including HUL and Motorola. He advised his caller to launch a smaller event with fewer participants, make it a success and then grow it gradually.

Though Verghese didn’t hear from him again, that episode, he believes, sums up the running industry in India since 2011. “Not just metros and mini-metros, but even smaller towns and districts want to host marathons,” he says, adding that he gets at least 50 enquiries from across the country each year.

India’s first annual marathon was launched in Pune in 1983, barely a few years after this form of running grew popular in the US in the 1970s. The current craze in India did not start until 2004, when the Standard Chartered Mumbai Marathon (SCMM) grabbed attention with its sheer scale — over 40,000 participants vie for prize money worth $377,000. Today, nearly 320 races take place round the year, says Dilip Jayaram of Procam, the company that organises many of these marquee running events, including SCMM.

Exclusive miles: The huge turnout in Delhi for the woman-only, multi-city marathon Pinkathon Photo: RV Moorthy

Pace of growth

Organising a marathon is no less challenging than running one, at least in terms of preparation. Each year, Procam has to liaison with 30 government departments for approvals for the route, timers and traffic control, among other requirements. The challenges peak on race day. At the Mumbai marathon, more than 40,000 apples, an equal number of sandwiches, and nearly 40,000 litres of water were distributed. At the Wipro Chennai Marathon (TWCM), an army of 1,600 volunteers took care of water stations, markers and food deliveries, says CV Bhaskar, director of Show Space Events, the organising company. The costs involved are barely covered by the registration fees, even after the yearly increases. “Our average registration fee is ₹900, but we end up spending ₹1,200 on each participant,” says Bhaskar.

The Indian runner is certainly pampered. “Apart from the [identification] bib, every participant wants a medal, certificate, photographs, timing chip, water stations and a meal after the race,” says Vidyuth Sreenivasan, a co-founder of Chennai Runners Club, the brain behind the Chennai marathon. International races are nothing like this, he insists, pointing out that some even require runners to bring their own water. The club he started with his friends in 2006 has mushroomed into more than 15 chapters citywide and has 7,000 members.

To cover additional costs, organisers depend heavily on sponsors. As a marathon is very different from, say, cricket or football, as the participant is also a spectator here, the organisers are selling it differently. “In a marathon, there is 2.5 lakh sq ft of branding possible. I ask companies to look at it from the point-of-sweat perspective,” says Jayaram, in a reference to the running route.

For instance, at the Mumbai marathon, Nestlé was the ‘nutritional partner’ and positioned itself at the water stations along the running route. And pain relieving balm Volini was the ‘recovery partner’, so runners ended the race, in joy and some pain, surrounded by Volini posters.

The organisers even hard sell the bib distribution event, which can potentially attract up to 30,000 footfalls as runners arrive to collect their kits. Ahead of the Chennai marathon, the bib distribution was timed together with a health and fitness expo.

It helps the running industry that marathon is the new golf, a networking opportunity that brings together the crème de la crème of customers — from Reliance honcho Anil Ambani and TCS chief N Chandrasekaran to Bollywood stars Katrina Kaif, John Abraham and Milind Soman. Additionally the races also tug at your heartstrings, with their share of philanthropy. Runners can top their registration fee with a donation to charity; some organisers set aside a part of the race proceeds for a cause. “Marathons have become the largest single source for charity raising in the country. In the last 12 years, the SCMM has contributed ₹187 crore in charity, distributed through 700 NGOs,” explains Jayaram.

In the larger scheme of things, however, the anchor sponsors such as Standard Chartered, Airtel and Wipro (TCS is the title sponsor of the New York marathon) are crucial. According to industry grapevine, an anchor sponsor can bring in nearly ₹5-10 crore a year.

Milind Soman is the brand ambassador of Pinkathon

“Once you are assured of a mega sponsor for, say, three or five years, it helps in building the run as a property and attract other sponsors,” explains Rajat Chauhan, an orthopaedic who founded the La Ultra – the High, the world’s highest ultra marathon of 333 km in Leh, Ladakh.

On the flip side, the marathon boom has serious runners worried about misplaced zeal and priorities — more than love for the sport, the focus seems increasingly on creating records. “Everyone is besotted by numbers, and everyone wants to create a record,” says Verghese, who organises about 20 races a year across the country.

Crowded tracks

Show Space’s Bhaskar agrees that the flurry of activity is counterproductive for the business in general. “It takes time to build a property out of an event,” he argues. “It takes time to break even… though we are still at the tip of an iceberg in terms of the running industry, there will be consolidation and some events will drop off,” Jayaram predicts.

Chauhan relies on an entry-by-invite model for La Ultra. Just about 20 runners make the cut to participate in the gruelling run. The registration fee ranges from ₹19,500 (almost double for a foreigner) for the 111-km category, to ₹1.9 lakh for the 333-km run. Again, the fee here too does not cover the costs.

An avid marathoner, Chauhan initially struggled to find sponsors and spent from his pocket. But word of mouth and exposure through documentaries in international channels have meant that the seventh edition of La Ultra this year will have sponsors, including a start-up from Bengaluru. Like La Ultra, there are several races that sell on the niche quotient. Devils Circuit, founded by husband-wife duo Adnan Adeeb and Zeba Zaidi, is a six-city race involving a 5-km route filled with obstacles that include mud, slush and ice. Maruti Suzuki Swift is the title sponsor. Another multi-city run growing in popularity is the Pinkathon, which is open only to women.

Beyond the finish line

Verghese’s R&L not only arranges runs for clients but also sets up running groups. It conducts workshops for schools and corporate houses on leadership, health and productivity development. Clients include companies looking for team-building programmes, as well as brands seeking ways to connect with customers. “We hold a run on the Formula 1 track in Noida, and the winners get to test drive vehicles of brands sponsoring the race. It is a great marketing opportunity,” says Verghese. R&L is “breaking-even now”, he informs.

From the list of races that crowd the weekend calendar round the year, it is clear that the shorter runs are the money-spinners. Of 300-plus runs, only 50 are full marathons (42.195 km). Most of the corporate and other niche events, including Pinkathon, are under 3-10 km.

Still, it is the mega-sized likes of SCMM and TWCM that make the biggest noise. “Serious runners plan their year around these marathons,” says Bhaskar.

Those accredited by the Association of International Marathons and Distance Races, such as the Mumbai marathon, serve as qualifiers for the prestigious Boston Marathon. A runner who finishes under the fixed time can run in Boston. Accreditation has sparked off greater competitiveness among the organisers. “With every major city having its own running calendar, runners have become selective,” says Bhaskar. This forces organisers to make their race memorable and attract sufficient numbers before scaling it up, he explains.

Mumbai enjoys a geographical advantage by virtue of being a linear city (the running route is free of monotonous loops) and can rightfully boast being the most popular marathon destination in the country. The SCMM is Asia’s largest annual sporting event by number of participants.

Leaps and bounds: The Standard Chartered Mumbai Marathon has more than 40,000 participants vying for prize money worth $377,000 Photo: Shashi Ashiwal

Leaps and bounds: The Standard Chartered Mumbai Marathon has more than 40,000 participants vying for prize money worth $377,000 Photo: Shashi Ashiwal

Dressed for the start line

In 2012, in Singapore for a marathon, Sriram Kanakarajan was window shopping with friends when he came across a sports shop called Running Lab. It looked like any other, lined by sports shoes, but there was one difference. On one side of the shop was a treadmill.

On entering, a salesgirl in running shoes and track pants invited him to run on the treadmill. She analysed his gait, stride and landing of feet, and then recommended a suitable shoe for him. Kanakarajan realised that he had been using a wrong shoe until then.

Sensing a business opportunity for a similar store in India, where many were avidly taking up running, Kanakarajan partnered with two friends for a tie-up with the Running Lab founder. “We opened our first store in Chennai in July 2014. The response has been heartening,” he says. His family is into the automotive business and he expects the sports store to break even in two years, after which he plans more stores in other metros.

Located in the posh RA Puram locality, the store also stocks accessories such as fuel belts, bungee laces (which don’t come untied mid-running), socks that keep feet dry, and pads that protect nipples from bleeding, a common problem among runners.

“Running is spawning an industry,” says La Ultra’s Chauhan, who is also the director of the Centre for Sports and Fitness at Ashoka University. “A runner could be wearing gear worth ₹50,000,” he says. A specialist in sports-exercise medicine, his private sessions are heavily booked despite the steep fee of ₹2,500 for each session.

“People now have four to five pairs of running shoes. They are concerned about issues such as hydration, or about recovery after a race,” says Jayaram, adding, “Running has gone beyond just being a cool sport.”

City administrators are slowly waking to the popularity of marathons and how they can benefit the local economy. At nearly 40,000 participants (including 500 foreigners in 2014), the SCMM certainly means business for its organiser and several others — especially those in the hospitality and transport sectors.

Studies in the US have shown that when affluent participants converge to run, it can result in an estimated $200 million windfall for the host city.

In 2014, 18.7 million Americans finished a race; since 2000, the number of marathons had quadrupled to 1,200. India, too, is lacing up with fervour for the running industry — a sector that is, as many gleefully point out, recession-proof too!

Published on February 26, 2016

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