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Running Chicago Marathon: What does it cost to host?

Posted by George Parker on
Running Chicago Marathon: What does it cost to host?

As we enter August, the end of summer is approaching. For runners, the end of summer also marks the beginning of the Fall Marathon season. First big stop - the 2017 Chicago Marathon in early October.

The 40th anniversary of the Chicago Marathon will be even more exciting this year with the recent announcement of Galen Rupp and Jordan Hasay joining the field. Both Galen and Jordan are coming off strong finishes in April at the 2017 Boston Marathon, so are, in least in my opinion, strong contenders in October. Below is the rest of the American elite field: 

American men’s field
Galen Rupp: 2:09:58 (Boston, 2017)
Luke Puskedra: 2:10:24 (Chicago, 2015)
Jeffrey Eggleston: 2:10:52 (Gold Coast, AUS 2014)
Aaron Braun: 2:12:54 (Houston, 2015)
Diego Estrada: 2:13:56 (Chicago, 2016)
Andrew Bumbalough: 2:13:58 (Tokyo, 2017)
Sam Chelanga: —
Chris Derrick: Debut
Noah Droddy: Debut

American women’s field
Jordan Hasay: 2:23:00 (Boston, 2017)
Becky Wade: 2:30:41 (Sacramento, 2013)
Dot McMahan: 2:31:48 (Duluth, 2011)
Sarah Crouch: 2:32:44 (Chicago, 2014)
Alia Gray: 2:34:00 (Chicago, 2016)
Michelle Lilienthal: 2:34:50 (St. Paul, 2013)
Danna Herrick: 2:34:53 (Boston, 2017)
Kristen Heckert: 2:39:37 (Chicago, 2016)

But, I started wondering. What does it cost to put on the Chicago Marathon?

Much research exists about the cost for participating runners, including entry fee, travel and lodging; however, there is much less information on the cost to host the event. Each year, the Chicago Marathon is executed by Chicago Event Management ("CEM") and its CEO/Race Director Carey Pinkowski. CEM runs the annual marathon from the money collected from participating runners and sponsors.

One approach for estimate the marathon cost would be to create an exhaustive litany of associated costs such as security and prize purse all the way to trash cans, cups, and portable toilets. This bottoms-up approach - if captured at sufficient detail - should work. Another approach, which from my research seems more novel, is a top-down methodology. 

The starting assumption is the CEM does not lose money hosting the Chicago Marathon. This seems reasonable given that the event is now entering its 40th year. Therefore, at a minimum, the marathon cost equals the revenue collected from participant entry fees and sponsorship fees. In 2017, the entry fee for runners is $195 (U.S. Residents). The remaining analytical work is the sponsorship costs, which I estimate based on the activities the sponsorship covers (e.g. food/drink, timing, apparel). 

The below graphic illustrates my findings:

 

So there we have it! I estimate it costs $276 per runner (70% paid by participating runner / 30% paid by sponsors) to host the 2017 Chicago Marathon. At 45,000 runner participating, the total event cost is $12.5 million. 

Of course, I do not know exactly what it costs to host the event, but the above analysis seems rationale. Any suggestions for improvements? As always let me know.

In the meantime, best of luck to all Chicago Marathon runners! 

 

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