The Honolulu Marathon is big business in Hawaii, but it owes much of its financial clout to another Pacific island chain.
Japanese visitors often make up the largest share of participants in the race, and have ever since the late 1980s when the number of entrants from Japan first surpassed 50 percent. This year Japanese runners didn’t quite hit that mark. The marathon had 30,586 entrants with 13,577 coming from Japan, which was enough to help the city’s bottom line.
But the marathon’s strong ties to Japan are also one its big potential pitfalls. Without Japan, the Honolulu Marathon would no longer be able to claim its spot as one of the largest 26.2-mile races in the country. In fact, the race might not even exist.
“We have been lucky enough — or smart enough — to have all these participants from Japan,” said Jim Barahal, president of the Honolulu Marathon Association. “Without that, the Honolulu Marathon is just a small running race.”
According to the Honolulu Marathon Association’s most recently available tax filings, the nonprofit took in more than $6.2 million in revenues for its 2011 race. About $4.2 million came from entry fees and other race-related services, such as photography. The remaining $2 million came in sponsorships from Japan. The major sponsor: Japan Airlines.
When Barahal first began working for the nonprofit 27 years ago, he said, there was a “pent-up demand” in Japan for long-distance running, which allowed the Honolulu event to flourish with residents there.
He explained that a sudden drop in interest in the Honolulu Marathon in Japan would be among the biggest threats to the race.
While he doesn’t anticipate that Japanese participation will dry up anytime soon, the growing number of marathons in Japan have caused some concern for his organization.
In the last six or seven years, Barahal said, major races in cities throughout the country — including in Tokyo, Okinawa and Kyoto — have stirred real competition for Japanese runners. “Somehow we have to find a way where they will still want to come to Hawaii when they have so many domestic marathons.”
The Honolulu Marathon Association, which has a full-time office in Tokyo, spends a large share of its expenses on advertising and promotions. The nonprofit has hired the third-largest ad firm in the country, Asatsu-DK Inc,. to handle these duties.
Barahal said the nonprofit and its sponsors also pay about $1 million in support of a television show about the Honolulu Marathon that typically airs in Japan on New Years Day.
While such a program might not get much play in Hawaii — or elsewhere in the U.S. for that matter — Barahal describes it as a lifeline for his organization.
“If that show went away you would see a precipitous drop in participation and the end of the marathon as a world-class marathon,” he said.
Honolulu’s race doesn’t have a lot of cash reserves so it could be vulnerable to unexpected events, like a major natural disaster or the weakening of the yen.
“Most of our revenue comes in from Japan and most the revenue is in yen,” Barahal said. “If you have a sponsorship in yen and the yen weakens by 15 percent, you lost 15 percent of your sponsorship.”
For the Honolulu Marathon, if the race pulled in $2 million in sponsorship funds as it did in 2011, such a decline would mean a loss of about $300,000.
Unlike other major sporting events, the marathon doesn’t rely on government subsidies or long-term corporate contracts, such as a recently signed deal that will keep the PGA Tour’s Sony Open in Hawaii through 2018.
This is something race organizers are proud of. The $4 million that the state pays to the NFL to bring the Pro Bowl to Hawaii offers a marked contrast to the marathon. Gov. Neil Abercrombie has equated that payment with bribery.
The marathon also provides funds for overtime for more than 400 police officers who work the event and it pays for other city workers who monitor traffic and clean up Ala Moana and Kapiolani parks after everyone has crossed the finish line.
“We always pay for the cops, the cones, the barricades, and other things,” Honolulu Marathon spokesman Pat Bigold said in an email. “The marathon receives no subsidies from the state or city.”
This year, however, the city decided to open its Emergency Operations Center as part of a beefed-up security plan that was developed after this year’s Boston Marathon bombings.
City officials say those costs as well as others associated with the marathon will be absorbed by the city, although no specific numbers were available.
The lack of public funding could be seen as somewhat surprising considering the amount of money the marathon brings to the islands.
An economic analysis performed by a Hawaii Pacific University professor estimates that the marathon generates more than $100 million in sales. (The Pro Bowl, on the other hand, is believed to generate about $30 million in economic activity.)
The marathon, of course, doesn’t receive any of these proceeds. But that doesn’t mean organizers aren’t compensated for their work.
In 2011, Barahal earned a $259,563 in reportable compensation through the nonprofit.
Other directors of the marathon also earned hefty paychecks that year, including Jeannette and Ronald Chun, both of whom brought in six figures.
Jeanette Chun, who is the nonprofit’s secretary and treasurer earned $132,300. Her husband Ronald, a vice president, pulled down $119,587.
These salaries might appear eye-popping, considering the marathon is a one-day event that relies on 10,000 volunteers, but organizers note that putting on the race is full-time work.
Barahal explains that the compensation is comparable to other large scale races across the country, including the Boston Marathon.
His counterpart for that event, Thomas Grilk, earned just over $202,715, according to the latest publicly available tax filing. Grilk’s nonprofit — the Boston Athletic Association — reported $12.5 million in income that year.
Mary Wittenberg, who heads the nonprofit that puts on the New York City Marathon, earned $542,396 in total compensation. The New York Marathon had more than 50,000 finishers this year and pulls in more than $50 million in revenues.
But six-figure salaries appear to be fairly common in the marathon business.
“I think I’m grossly underpaid, but we think it’s a number that reasonable people would not find objectionable,” Barahal said. “We worked for many, many, many years where we were not being paid.”
He added that although the race directors now have set salaries — his is $154,000 — when the money isn’t there, they don’t get paid.
That said, Barahal is searching for ways to keep the compensation stable, not necessarily for him, but for future race directors. He’s 61 years old, and hopes to put another 10 to 15 years into the job, but he says its time to search for a successor.
Without the promise of steady income that can be a problem, he said. The hope, too, is that the marathon will retain — and perhaps expand — its draw for Japanese runners.
“We’re not the Denver Broncos, we’re not the Montreal Canadiens, we’re not the L.A. Lakers, we’re not even the University of Alabama,” Barahal said. “We’re not something that is so solid, that is such a given. It’s not like that. It’s not smoke and mirrors (but) it’s fragile. And I think there needs to be an appreciation of that.”
Read the Honolulu Marathon Association’s latest tax here: