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Published May 27, 2011, 12:00 AM

How far does the marathon dollar go?

With registration numbers up, money stretches a lot further than it used to
FARGO – With roughly 23,000 runners registered for Fargo Marathon races last weekend, it’s safe to say the word is out about the event.

FARGO – With roughly 23,000 runners registered for Fargo Marathon races last weekend, it’s safe to say the word is out about the event.

But that popularity doesn’t come cheap, and marathon Executive Director Mark Knutson has no plans to scale back marketing next year – although there will likely be firmer caps on the number of runners allowed, he said.

“I would say this is about as big as we need to get and want to get,” Knutson said.

The marathon’s rapid growth has been matched by an equally hare-paced expansion of its finances, The Forum found in a review of financial reports filed with the Internal Revenue Service by Fargo Marathon Inc., the nonprofit organization that puts on the event.

Comparing the 2009 and 2010 race years, the marathon boosted its advertising and promotion expenses from $233,556 to $363,564 – an increase of more than 55 percent.

About two-thirds of those expenses last year were in-kind contributions – mostly free airtime and promotion from KVLY and Radio Fargo-Moorhead, which sponsored the half-marathon and 10k race, respectively, said Megan Eblen, accountant for both the marathon and its hired management company, Go Far Events, which is owned by Knutson.

“Last year, our goal was to hit 20,000 people, and we felt that a big push with the local marketing would get us there, and I think it paid off,” Knutson said.

The remaining third of the expenses mostly went to stuffing promotional fliers into bags at other races, including the Chicago Marathon, and buying advertising in a variety of publications, including Runner’s World, Knutson said.

This year’s advertising and promotion expenses haven’t been finalized, but they should be comparable to last year’s, Eblen said.

Despite marathon registration growing by roughly 2,500 runners this year and a desire not to expand beyond that, Knutson said advertising and promotion probably won’t be scaled back.

“I think it’s good, especially if we bring in some new element of what the race is going to entail,” he said. “We liked the bands on the course this year. That was a big hit, and I think we’ll continue that.”

As for capping the races, “I mean, if we get to 20,000 next year, we may just say that’s it,” he said. “I know that we will for sure next year stop (accepting registrations) on May 1.”

Management structure

Fargo Marathon Inc. pays Knutson’s company, Go Far Events (formerly CasMar Events Inc.), to manage the race.

For last year’s race, the nonprofit paid Go Far Events $100,000 in management fees, up from $76,333 the previous year and $54,300 the year before that, according to the IRS Form 990 statements that nonprofits are required to file. During that same time period, the number of registered runners climbed from about 12,000 to 20,500.

The Fargo Marathon’s management structure differs from Minnesota’s two largest marathons. The nonprofit groups that operate the Twin Cities Marathon and Grandma’s Marathon in Duluth – two of the top 20 largest U.S. marathons in terms of finishers – have executive directors and employees paid by the nonprofits.

Scott Keenan, who founded Grandma’s Marathon 35 years ago and still serves as its executive director, earned a salary of $104,248 plus $3,346 in other compensation during the 2010 race year, according to Grandma’s Form 990.

Twin Cities Marathon Executive Director Virginia Brophy Achman earned $89,508 plus $6,915 in other compensation in 2009. (The Form 990 for 2010 hadn’t yet been posted online.)

Knutson’s income from the Fargo Marathon isn’t broken out in Fargo Marathon Inc.’s Form 990. He said he didn’t draw a salary from last year’s $100,000 management fee, instead earning his income from other races managed by Go Far Events. One race is a half-marathon run in Fargo-Moorhead each fall.

Knutson, who also owns Fargo Running Co., said the $100,000 was used to pay salaries for Eblen and Go Far Events’ other employee, Mike Almquist, as well as overhead costs.

Knutson, who left his job with Ottertail Corp. to form CasMar Events in 2007, said a management agreement between the company and marathon “seemed to make sense.”

“The marathon really doesn’t want to have employees, because there’s a whole can of worms,” he said, adding it’s easier for the nonprofit to have a management agreement that “puts the burden on us in terms of having employees.”

The Duluth marathon has seven full-time staff members employed by the nonprofit Grandma’s Marathon-Duluth Inc., but it also relies on 5,000 to 6,000 volunteers and 250 volunteer coordinators on race day to pull off the event, Keenan said.

In Grandma’s latest 990 filing, the nonprofit reported spending $336,136 on salaries and wages other than Keenan’s compensation. Likewise, the Twin Cities Marathon’s most recent filing showed it spent $330,944 in other salaries and wages, not including compensation to its officers and other key employees.

Whether a nonprofit pays its own employees or hires out the work, both accomplish the same outcome, Keenan said.

“Whatever works for each organization,” he said. “I can’t say one’s better than the other.”

Knutson said with only himself, Eblen and Almquist on Go Far Events’ staff, “we’re kind of commissioned to keep it lean.”

However, they’ve made up for the small staff with a dedicated race committee, an intern and some part-time help, he said.

This was the second year the Fargo Marathon paid nonprofit groups a $500 bonus if they brought 50 volunteers or more. There was a scramble for volunteers for this year’s marathon, but Knutson said the program worked well, estimating $1,500 to $2,000 will be paid to nonprofit groups.

“I think that will continue to grow,” he said.

The Fargo Marathon also gives grants to local nonprofits and charities, totaling $63,696 last year, down slightly from $69,000 in 2008.

Still making money

The Fargo Marathon’s revenues have exceeded expenses every year since 2005, by $16,178 that year and $106,096 in 2010.

One reason that’s possible is cash sponsorships, which totaled $119,486 last year. About 15 companies provide sponsorships ranging from $500 to $30,000, Knutson said. In the case of full-marathon sponsor Scheels, the company also provides in-kind services such as graphic design and producing signs, he said.

As the marathon has grown in popularity, more and more companies have asked to be sponsors, Knutson said.

The difficulty, he said, is finding something for them to sponsor. For example, Choice Financial became the sponsor this year for the race chip checking station, while State Bank & Trust sponsored the finish line. Meanwhile, the marathon lost Subway as a sponsor this year, he said.

As a nonprofit, Fargo Marathon must use excess revenue to further its mission, which is to promote a healthy, physically fit lifestyle and foster amateur sports competition.

But marathons don’t always make money.

Keenan said Grandma’s is spending a lot on celebrating its 35th anniversary and will make little, if any, money this year.

It also will likely lose money in 2012 and 2013 as it spends $166,000 each year to host the men’s and women’s half-marathon national championships.

“Money is not a real priority. It’s really investing into yourself and being the best you can and do more versus less,” he said.

Readers of Runner’s World voted the Fargo Marathon the best value of all U.S. marathons in 2009, and Knutson said he ­doesn’t want to raise registration fees.

“I don’t think so, because I think we have a niche,” he said. “If we’re seen as a good value, then let’s just stick with it. And if we get to the point where that’s causing us to lose money, we reassess the situation.”

Readers can reach Forum reporter Mike Nowatzki at (701) 241-5528