Relay races: Here for the long-haul? by Daniel Roberts @FortuneMagazine January 31, 2013, 5:06 PM EST E-mail Tweet Facebook Google Plus Linkedin Share icons Camaraderie-focused, adventure-style races have exploded in popularity and are taking the country by storm (or, in many cases, by mud). “We imagined this as a side gig, not our main job,” says Tanner Bell, co-founder of Ragnar Relay Series, one of many overnight team relays. “We didn’t have any idea where it was going to go.” Where it has gone is up, up, up: Ragnar is now the largest relay series among a field that has grown quickly. Some 200,000 people likely ran in a relay in 2012. Though no organization specifically tracks annual participation in team relays (Running USA says it has data but hasn’t yet been able to collect it and present findings), Ragnar had 72,000 participants last year, Hood to Coast had 20,000, and Reach the Beach had 7,600; then there are scores of smaller relays that tend to get 2,000 people each. The web site Relay Guide lists 59 different relay-type events in the U.S., ranging in distance from 25 miles to over 200, and SFIA (Sports & Fitness Industry of America) says 1.2 million people in 2011 participated in “adventure racing,” which it defines as any kind of racing “in extreme temperatures or unconventional settings,” including mud runs and obstacle races. Bell and his college roommate Dan Hill came up with the idea for Ragnar when they were juniors at Brigham Young University in 2004. Hill’s father had participated in Hood to Coast, a team relay held every August in Oregon that runs from Mt. Hood to the coastal town of Seaside. The race began in 1982 and was the subject of a well-reviewed 2011 documentary film. “It was such a great event,” says Bell, “we started to have visions of doing a race of our own in Utah.” MORE: Turning a profit on the “toughest event on the planet” Considering that Hill and Bell directly modeled their event after Hood to Coast—both are 200+ miles long, continue overnight, and are tailored for teams of 12—the fact that it is thriving suggests that, for now, there is room for more of these events, no matter whether wholly original or derivative. June 2013 marks the 10th anniversary of Ragnar’s first race, the Wasatch Back, which is run in Utah from from Logan to Park City. Since then the series has grown from 12 races in 2010 to 15 in 2011 and in 2012. This year, it will offer 21-25 races (6-8 of them under a new format, the “Trail series,” which it launched in partnership with Salomon) in locations including Cape Cod, Mass., Tempe, Ariz., Madison, Wis., and Niagara Falls in Ontario. The Wasatch Back had 264 runners registered in its first year. It had 12,000 in 2012 (for 2013, Ragnar has added an extra day to the race and will thus end up with 17,500 participants). Other events have also grown: Ragnar’s Florida Keys race nearly doubled in participation in two years, and its Las Vegas event tripled participation in the same time frame. It appears to be a rising tide. “The exciting thing about running right now is that every single type of event is growing—obstacles, trail, team relays, every single variety,” says Jim Weber, CEO of running shoe company Brooks. According to Running USA, “mud runs” like Tough Mudder, Spartan Beast, and Warrior Dash have grown the fastest and now attract some 1 million participants each year. Also continuing to grow are “ultra” races that are not for teams, and are run on physically ruinous courses, sometimes in full darkness and without a map. Although the muddy obstacle events are receiving the most attention (a 2012 Outside Magazine cover story called obstacle races “the country’s fastest-growing sport”), the more traditional relays like Ragnar, Reach the Beach, Blue Ridge Relay, Bourbon Chase and others are benefitting from the explosion in outdoor running of all kinds. Dan Floyd, VP of business development for Hood to Coast, theorizes that current political sentiments have helped. “There has been a national focus on health and wellness,” he says. “And although the overnight relays are tough, running in general is open to people of all abilities. Simple 5Ks are really exploding too.” Brooks, which is owned by Berkshire Hathaway, will put on a 5K in Omaha immediately after this year’s shareholder meeting. (Warren Buffett will fire the starting gun.) Here’s additional good news for running—both the sport and the industry—that bodes well for the country’s obesity epidemic: obstacle races and team relays are both attracting more than just die-hards. MORE: Red state, blue state: Where Detroit can (and can’t) sell cars Graduate student Ben Hundley is one such participant. He heard about Ragnar on Facebook from a friend, and agreed, without much knowledge ahead of time, to join her team. His first leg of the race didn’t start until 5 p.m. and was about 10 miles long. At 3:30 in the morning, he ran a second leg. “Doing this was pretty much an anomaly for me,” he says. “It wasn’t the running that was hard, because I run regularly, but it was extreme because of the lack of sleep, and the steep inclines in some parts.” Surprisingly, running’s popularity may have thrived during the down economy. It helps that the activity is low-cost; you spend only on shoes and the race fee. Ryan Lamppa of Running USA posits that participation in group-running events has gone up every year for the past 15. Weber, of Brooks, says, “We had this great recession and everybody sort of pulled in, and yet… running shoes were still selling like crazy. Running made the cut.” Weber has tried a Ragnar and gives them a lot of credit. “All along the course, Ragnar had set up outposts at high schools, where you could shower,” he says “It was like five-star relay racing.” Local private equity has agreed: Utah PE firm Dolphin Capital Group invested in 2006, when Ragnar offered only one race. It now has a 75% stake in Ragnar and in 2009, Dolphin partner Chris Infurchia became CEO. Ragnar’s revenue grew by an average of 64% per year between 2008 and 2012. And based on fees and merchandise, its annual revenue is likely between $10 and $15 million, though the company would not confirm. Not everyone is a fan of the top-dog relay outfit. Paul Vanderheiden, who runs the Roads Less Traveled series (which pulled in 2,000 people last year), takes issue with Ragnar’s ethics. In 2011 he wrote a blog post complaining that Ragnar had copied the routes of other relays and scheduled races on the same days as competitors. “Ragnar is the big guy now, putting small races at risk of going out of business,” he says. Floyd, of Hood to Coast, has no issue with Ragnar and says happily, “It’s all really kind of copycat, we all do similar things and just try to do it best and offer a great race.” As for corporate sponsors, Hood to Coast has Safeway and Nike as “gold sponsors,” and its title sponsor last year was OfficeMax. Ragnar’s main sponsors include Clif Bar and Petzl. Reach the Beach has New Balance as its title sponsor. One potential roadblock for these businesses might be what video-gamers call “replay value.” How many people, after doing an event like Ragnar or Tough Mudder, feel an inclination to do it again? The appeal of these, for many, is to simply survive it once. Hundley confirms: “it would take a lot to get me to do this again, because I feel like it was almost a once-in-a-lifetime experience.” (Ragnar says 15% of participants do more than one Ragnar in the same year.) The other obvious challenge for relay companies: each other. As more and more begin popping up, it creates a crowded market. Some have already been killed off. In July, Metro Dash, which billed itself as a “gut-wrenching, muscle-pounding, make you wanna throw up” obstacle-style race, e-mailed runners to say it had gone out of business. The key for avoiding Metro Dash’s fate may be to pull in big-name brands but also, for those without the resources to do that, to truly rock social media. Ragnar has nearly 120,000 likes on Facebook; that’s more than the Boston or New York Marathon, which may seem shocking to some. Tough Mudder, meanwhile, has almost 3 million. “Mud, beer, and fire,” says Lamppa. “Something about all that is just more appealing to people.” Look for the 200-mile team relays to keep growing, though maybe not as fast yet as the muddy, fiery obstacle races.