COMPETITOR CEO SCOTT DICKEY RESPONDS

(Yesterday’s post generated a great deal of interest in the state of the sport given Competitor Group’s decision to end its elite athlete program as currently constituted. One of the responses to my column came from Competitor CEO Scott Dickey. I didn’t want his detailed review of the situation to be lost in the comments section, so I have placed it here as a guest blog.

I want to thank Scott for his respectful and candid remarks, and hope this back-and-forth helps shed light on both CGI’s decision, and brings those concerned about the state of running to a better understanding of what we need to do to improve that state. My response follows.)

Toni, after reading your post I thought it might be best that I reply publicly to clear the air a bit. Let me start by reinforcing my respect for you and all you have done for the sport. There are very few individuals that have dedicated so much energy, passion and hours to the sport of running like you Toni, and for that we all owe you a huge debt of gratitude.

I was somewhat surprised to read your post today especially after yesterday’s public quote in the Runner’s World? For those that didn’t have a chance to read that piece Toni’s quote started with: “I don’t blame them,” Reavis told Runner’s World Newswire. For the full quote and story, here’s the link.

>http://www.runnersworld.com/races/rock-n-roll-series-significantly-lessens-elite-program

I don’t fault you for reviewing our decision and for changing your mind after further reflection. But I do want to clear up a few things.

“Poof” as you put it when referring to the overnight decision is a tad inaccurate. Our decision to no longer pay appearance fees for Elites in our North American RnR events was a difficult one to say the least. This is not a ‘practical end’ of our support of the sport, but it was a clear strategic acknowledgement of investing in elements that impact all 500,000 runners at RnR events not just the 50 or so at the front of the pack.

Competitor Group is at it’s core a health and wellness company dedicated to promoting and enhancing an active lifestyle. Lifestyle is the key word, not Sport. Rock n Roll marathons have always been about the journey, the commitment, the personal dedication required to train and finish a half or full marathon. We’re not about how fast you complete the race, we’re about the fact that you showed up on the start line and the commitment one has made to complete the journey.

We will always celebrate the achievements of the greatest athletes in the Sport and hold them up as inspiration for all of us to enjoy. We will do this through our media assets like Competitor mag, Competitor.com, Triathlete mag, Triathlete.com, Women’s Running mag, Women’s Running.com. We have more staff dedicated to reporting on the Sport than any company in the world other than Rodale. With regard to RnR, we will always welcome the elites, we are just not going to spend in excess of 7-figures annually to simply have them show up. It represents a disconnect from the brand and the very promise of participating in a RnR event. We’re going to reinvest those dollars into entertainment, the experience, more staff to execute more flawlessly, and in our continued efforts to increase participation.

While we are the largest series in the world, we’re not the only ones who have taken this position. Of the 5 top marketshare properties in the U.S. (Competitor, Disney, NYRR, US Road Sports and Nike), only one of them, NYRR, has a significant investment in Elite Athletes at their races. So while our decision may disappoint, it certainly is not without precedent.

With regard to TV component of your post, I want to remind you that it wasn’t until last year that NYRR and Mary were able to secure a national broadcast deal with ESPN after so many years of having a local ABC time buy. As you know, the media landscape has changed dramatically in the past five years, and while we continue to seek broadcast partners on a market by market basis (KLAS in Vegas, WRAL in Raleigh, etc), the ability to sell advertising in support of such broadcasts is difficult to say the least and a much more complicated process than the picture you are painting. I know you understand this intimately.

While I understand that financial investors are always an easy target, I find the whole private equity discussion somewhat naive. You don’t have to look very far for great analogies to understand that increased public and private investment into a Sport can lead to tremendous growth for all. Private equity investment strategy is all about growth. You don’t cut your way to growth. Our decision to reinvest in other areas of the experience is a strategic decision and not one that we take lightly for a moment. You don’t have to look far, maybe start with the annual Running USA participation studies, to confirm the facts about RnR’s contributions to the sport and the growth of the industry. We have taken more risk, invested more dollars than anyone in the history of the industry and whether it is the highest percentage of female participation in the industry or the highest percentage of first timers joining the fun, I’m not sure it is valid to question our dedication or commitment to promoting running and growing participation.

And by the way, let’s not forget that almost all of the industry’s dominate players operate as public equity or private equity operations: Active, Disney, Nike, Lifetime, World Triathlon Corp and Competitor. WIth outside investment industries grow, innovate and become more sophisticated. I don’t think Competitor needs to apologize or hide from this basic fundamental premise.

With much respect,

Scott Dickey
President/CEO
Competitor Group

Scott,

Once again thank you for your considered response. I would like to add, however, that I didn’t change my mind at all, rather further amplified on my RW comment. I do still believe it is the long-term stakeholders who are primarily at fault for allowing “the sport” to falter, not CGI, which was a late comer into the game.

That said, I would point out that Falconhead Capital and now Calera Capital didn’t purchase the Color Run series, they bought Elite Racing, which includes its legacy of elite competition. To say you are only in the health and wellness business is like someone buying the NFL and deciding to get rid of the games and concentrating on flag football and tailgating.

So the vehemence of the community’s response to your decision comes from a deep-seeded (though admittedly naive) hope that CGI would keep the legacy alive, and maybe even provide the juice to take it to the level we had all seen before, and wished to experience once again. To you this decision didn’t come out of the blue, but it did for everyone else. Hopefully, we will use it as a wake up call.

Respectfully,

Toni Reavis

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26 comments on “COMPETITOR CEO SCOTT DICKEY RESPONDS

  1. CGI’s Mission Statement: “Competitor is dedicated to becoming the leading global sports, media and entertainment company committed to the active lifestyle by:

    Informing, engaging and inspiring individuals and communities to join and embrace the active lifestyle where they are empowered, challenged and rewarded.

    Our culture encourages passion, performance and respect that demonstrates a commitment to excellence.”

    Looks like Mr. Dickey conveniently forgot the last line. “Contributions to the sport” is more than just participation numbers. Sport includes the competition aspect as well!

  2. Brian Baker says:

    Insightful from both sides, and while I fully understand and appreciate every single point that Scott is making, I am once again disappointed that our once noble SPORT has been relegated to a mass participation event where everyone’s self-esteem is enhanced, and everyone is a “winner” and everyone gets a medal.

    Toni, your comment about football is spot-on. What if we took this attitude toward all sports? Auto racing could become a parade, and all finishers could proudly display their ribbons.

  3. Claudia Piepenburg says:

    In reading, and then this morning re-reading Dickey’s response to your initial blog, Shakespeare’s words (paraphrased of course, as they usually are) keep echoing in my mind: “Methinks the man doth blow his own horn too much.” Like you, Toni, David Monti, Scott Douglas, many of the good folks at LetsRun and others throughout the running community, my initial reaction when I heard this news was: damn! The glass is not only empty, it has a crack down the side. But during the last 48-hours I’ve come to the conclusion that the crack was a figment of my imagination and the glass is really half-full.

    I mean really, should anyone be surprised that a company who provided sag wagons to carry runners who couldn’t make it across the finish line before the cut-off time, across said finish line AND then provided them with medals as if the “runners” had motored under the banner on their own two legs, is now announcing that they’re no longer supporting elites? This news should come as no surprise to anyone.

    CGI reminds me very much of the Tea Party phenomenon: when someone from the fringe far-right wing group speaks, they cause heads to explode; heads on the shoulders of people who should know better. The Tea Party is a minority, backed by a lot of cash, who crave attention. Unfortunately the media tends to let them write the narrative, which is very similar to what’s happening with CGI right now.

    Perhaps we should all take a deep breath and move on. Yes, there are issues within the sport, important issues that you, Toni, write about eloquently on a regular basis. The concept that running has evolved into an activity and is no longer a sport, is worrisome but it can be overcome. Lets focus on what we can do and stop worrying about what someone else isn’t going to do. Look at the numbers: CGI events have been losing participants for a few years now. CGI needs runners and running a lot more than runners and running need CGI.

  4. RLS says:

    For God’s sake, the name of the company is COMPETITOR. At least acknowledge that simple contradiction, and be honest that you are changing your strategy to make more money.

  5. […] which is now starting to hurt their growth. Something was bound to give. As President Scott Dickey said in a response he gave to Toni Reavis, “We’re going to reinvest those dollars into […]

  6. Danny Mackey says:

    Scott is off with his comment “of the top 5 marketshare properties, only NYRR has significant investments in elite athletes.” Look just at the Pre Classic alone and see how much Nike (one of the top 5 marketshare properties Scott mentions) spends on elite athletes.

    I would be curious to know what the Bank of America Chicago Marathon spends for their one event on pros relative to CGI 30 events.

  7. Chris Mengel says:

    Just 1 question for Mr. Dickey: Why does a commitment to “health and fitness” & “how fast you complete the race” have to be mutually exclusive?

  8. Jonathan says:

    As a small race management company I have to say that when we concentrated on elite athletes on a few of our events the overall participation in those events went down. By adjusting the marketing to women and new participants we have seen amazing growth over the last few years in most of our events. I think Competitor like Renegade Racing are adjusting to the marketplace. It’s extremely hard to close roads, pay for police, portable restrooms, marketing and everything else you need to pay for these days if you are catering to an elite few who don’t pay entry fees and expect to be paid for just showing up. IF RUNNING FANS would support elite runners like football, basketball and baseball fans do then we would have huge sponsors and TV deals too. SO before you criticize Competitor Group for having the audacity to want to turn a profit ask yourself how much are you willing to invest to watch professional running events. Because if there are really enough of you out there then the marketplace will eventually adjust to you.

  9. Brian Frazier says:

    The basic point I don’t see being made here is that Elite athletes are not adding to the bottom line. It is the elite athletes and their representatives who should wake up and come up with a game plan to prove their worth. Nostalgia does not pay shareholders. The NFL analogy breaks down because the fans come to see the game. In our sport, the fans come to run.

  10. […] Since Friday, Competitor Group Inc.’s (CGI) decision to eliminate their elite athletes program at North American events has been critiqued, analyzed and maligned. Scott Dickey, CGI’s president and CEO responded on Sunday evening on Toni Reavis’s blog.   In his post, Dickey said that “Competitor Group is at it’s core a health and wellness company dedicated to promoting and enha….” […]

  11. Anonymous says:

    This is the CEO of the “competitor group” not the lifestyle group…formerly elite racing? Nice try at a sidestep, but somebody dropped the ball in the organization.

  12. Ryan McGrath says:

    It’s also important to keep in mind that without competition, there would be no running events in the first place, no “lifestyle” – from a business perspective I understand what they’ve done, it’s just set the entire sport back 30 years. Can’t wait to see a 3 hour half marathoner on our Olympic Marathon team in 20 years because there are no more professionals in the sport.

  13. Anonymous says:

    A few personal opinions:

    1. I think the model, where the majority of the participants pays for the support of the elite runners, was a fair model. It does not however, reflect the current situation. Most of the participants in these marathon and half marathon races don’t care about the elite runners, don’t even know who they are. Instead they have been misled to believe that participation in these 26 and 12 mile races is somehow advantageous to their health. For most people these distances are not reasonable and they would be much better off participating in 5 and 10k races. My social media page is full of people who have injured themselves while training for a marathon, many of them are nor even really runners.

    2. If you say you love the sport and you haven’t spent a dime or given any time to it, what is your love worth.

    3. The problem with the US sports model is we rely too much on using colleges as farm teams for our sports industry. We are not as competitive in Track and road running relative to our size and wealth because we do not have a well developed club system (ie; NYRR) as they do in Great Britain and Japan. Look at how well they do relative to their size.

  14. Keith says:

    It’s a complicated picture with people pointing fingers. CGI is being short-sighted. Any extra money they make from lowered expenses or increased entry fees is not worth the loss of their ability to make money in the future from TV, sponsors and merchandise.

    To their credit, I certainly believe that subsidizing American second tier elite distance runners should not fall on their doorstep. Most of the vitriol we see, seems more concerned about this than anything else. I certainly agree, the American only prize-money situation and the housing of American second-string elite athletes, does not provide enough of a return for CGI, which is a business after all.

    They however have to keep bringing elite athletes to attract TV interest, sponsorship and merchandise sales. I rather get the sense that we have not seen the end of this. I still believe there is a place for prize-money only races. When I look at how paltry the prize money at big races is, compared to appearance fees and elite athlete expenses, I often shudder. NYRR big marathon and half-marathon is a good example of this.

    I hope CGI with their tinkering comes around to a good formula for something exciting happening in running. Somebody is going to say, no appearance fees or expenses paid, but a million dollar first prize if the winner breaks 2.05 or 59.30, and then let’s see what happens. Oh yes, that will certainly attract TV interest. And elite runners will come in spite of everything they say. The current monopolistic big agents will try their best to kill it, but that will just create room for emerging talent and agents.

  15. […] Group CEO Scott Dickey responded to initial criticism about the announcement on Toni Reavis’s blog, saying, “Competitor Group is at it’s core a health and wellness company dedicated to promoting […]

  16. The sport needs to wake up. Lets not jump on Mr. Dickey for trying to better his business. They have invested more for the sport than almost anyone and even with all their MBAs, lawyers, and money they could not justify the expenses of pro runners. Now we are complaining because they tried and failed?

    They cannot lift the sport alone. The sport (athletes, coaches, agents, meet directors) needs to work together and think about the people outside lane 8 or on the sidewalk cheering. Athletes race less and less, coaches and agents shy away from match ups that people want to see, because someone is getting paid more or it will hurt the athletes confidence.

    We need to look at ourselves and ask what we are doing to give back and grow the sport, not complaining when someone invested millions into it and now can’t make a return. It is our fault, not Competitor Group.

    To Toni’s point on the NFL, if the NFL thought it could make more money on Flag Football than in it’s current form, you better believe we would be seeing a NFFL every sunday…. And if the NFL did that it would probably be awesome. That’s the point, the NFL is trying to make a profit and that is why the game evolves. When is the last time our sport evolved?

    We should not be getting angry at Mr. Dickey-instead we should be looking at ourselves and asking how we can get that level of investment back into the sport and make a return. What do we need to do? Where do they see value in our athletes? What can we do better? Etc.

    Excuse me for any misspellings, I am typing on my phone. A big no no, but I had to weigh in.

    Mark

    • Toni Reavis says:

      No misspellings, Mark. And good points all. Except CGI really didn’t try all that hard with the elite athlete program. It limped along on just a few cylinders since they purchased Elite Racing in late 2007. In that sense it was a self-fulfilling prophecy that it would eventually fail. They bought RnR and everything else came along with it. Original CGI CEO Peter Englehart said early in 2008, “the elite athlete budget will be zero next year if there is no plan.” It was up to Tracy Sundlun and Matt Turnbull to device a plan, and their last shot was the Half Marathon Grand Prix. But that turned out to be too little, too late as other forces arose within CGI which took precedence over an admittedly weak elite athlete environment throughout the sport. But as everyone has been saying since, lets give Mr. Dickey a reason to return to the sport, rather than simply complain about his withdrawal. Thanks for the reply. Toni

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  18. Anonymous says:

    Toni and others,

    I worked for a company that was purchased by CGI and continued to work for them for a few years after.

    That said, I can explain why they made the cuts. Bad leadership, tons of bad decisions, unnecessary spending and more bad decisions.

    They wasted tons of money on half-thought ideas when the money could have absolutely been used to reinforce core competencies. They saturated their market, failed to innovate at the core, and did not invest in the assets that could have used it the most. Worse yet, the C-Level folks ignored many signs and signals from their lower level employees – the ones with their hands dirty.

    In one all-hands meeting, he told his employees that if they thought the grass was greener elsewhere, be my guest. Basically telling them this is the best they could do. We’re talking talented people here. My point is that even if that were true and they couldn’t find a better position in the endurance / print world, no good leader would say this.

    I highly doubt anyone who has replied on this post has met Scott Dickey. I’ve seen him in person twice and many times over video. He is one of the most arrogant people I’ve ever had the misfortune to have to listen to.

    All in all, I would say cutting the Elite fund would not have occurred if their profits had been high enough (obvious) – and they would have been high enough if they hadn’t made poor decisions.

    As far as moving the sport forward – invest in your local races. We have at least 4 in our area that are absolutely massive now and cherished by the community and each started from modest roots. It takes time and passion to build a quality event.The people that make it happen aren’t in it for the money.

    It doesn’t take investment behemoths to push the sport forward. Start a race. Build a reputation. Provide for your local community and everything else will follow suit. I’m all for capitalism, but don’t let wall street take over the running industry. There is nothing wrong with a strong network of races that are locally owned and operated.

    As far as getting the sport on TV – as someone mentioned above, if enough people want it, it would have happened by now, or will in the future. To me, that is a non issue.

  19. […] COMPETITOR CEO SCOTT DICKEY RESPONDS […]

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  21. […] active lifestyle. Lifestyle is the key word, not Sport,” former Competitor Group CEO Scott Dickey wrote at the time on running commentator Toni Reavis’s website. “Rock n Roll marathons have always been about the journey, the commitment, the personal […]

  22. […] One year ago the big story in the sport was Competitor Group Inc.’s decision to significantly deflate its elite athlete program just weeks before the Rock ‘n’ Roll Philadelphia Half Marathon. Ex-CGI CEO Scott Dickey wrote in this blog at that time: “We will always welcome the elites, we are just not going to spend in excess of 7-figures annuall… […]

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