Hotels booked, fees paid, legs stretched, Marathon canceled.

My BER class at NYU started an online publication a couple of weeks ago to cover how the New York City area is getting back to business after Hurricane Sandy. I wrote a story about the fallout of the cancelation of the NYC marathon, consulting runners, the New York Road Runners, a PR expert, and marathon supporters. The consensus? The cancelation sure was a suspicious one.

Chicago resident Andrea Hutchins planned to run the NYC marathon this year, but when she found out the race was cancelled she and her friends and family went to Staten Island and helped a NYC Police officer start rebuilding his home in Midland Beach.Photo Credit: Andrea Hutchins

Chicago resident Andrea Hutchins planned to run the NYC marathon this year, but when she found out the race was cancelled she and her friends and family went to Staten Island and helped a NYC Police officer start rebuilding his home in Midland Beach.
Photo Credit: Andrea Hutchins

By Sonya Chudgar

As news broke of the decision to cancel the New York City Marathon late on Friday, Nov. 2, in the wake of Hurricane Sandy, many runners grieved.

“I got a little emotional,” said Chicago resident Emily Hutchins, 32, who had trained for the marathon since March. “And then I just lost it. You don’t even think about the fact of the race itself. You think about the time and the energy you spent training for it, to get there, and of course, the money.”

The marathon brings a minimum of $340 million to the city annually. With most of the race’s 47,500 runners and their supporters already in the city by Friday evening, 36 hours from the race, some wondered whether NYC leaders held off on a cancellation after Sandy in order to capitalize as much as possible.

The lack of communication about future plans from the race organizer — the New York Road Runners — further frustrated runners, leaving a massive branding problem on the hands of the NYRR, its president Mary Wittenberg and its biggest sponsor, ING Financial Services.

The Suspicious Cancellation

The former treasurer of the New Orleans Track Club, Bonnie McAfee, 56, flew to New York on Friday before the cancellation decision was made. She traveled from Pensacola, Fla., with her husband, Scott Hoxie, who planned to run the marathon.

“The NYRR, they’re the same as any local track club, except for the fact that they’re like a normal track club on steroids,” McAfee said, adding, “[The NYRR] works with big numbers—millions and millions of dollars instead of, maybe, hundreds of thousands of dollars.”

Total revenue for the NYRR was more than $1.7 million for the fiscal year ending March 31, 2011. The organization hiked up the cost to enter this year’s race by $60, asking $216 from NYRR members, $255 from non-members living in the U.S. and $347 from international applicants. It cited rising police costs as the impetus. 

Communication from the NYRR about the fallout—why the marathon was canceled so late and whether runners will be refunded or at least grandfathered into next year’s race—has been sparse.

A press release issued by the marathon’s organizers and Mayor Bloomberg cited a couple reasons for canceling the event, including the controversy of holding a race so soon after the storm and the marathon’s distraction from recovery work.

Few runners first learned of the eleventh hour cancellation directly from the NYRR. Hutchins heard it on CNN and got an official email a couple hours later. McAfee and her husband learned of it when they went to pick up his race package at the Jacob K. Javits Convention Center on the West side of Manhattan.

McAfee said the city should have figured out some way to hold the marathon, perhaps by moving the location.

In a request for comment on this article, the NYRR responded with its latest message to runners—a three-paragraph statement that said the cancellation was an unprecedented event, the NYRR’s priority it to address runners’ concerns and that it is working out the details.

Cheryl Snapp Conner, founder and managing partner of public relations agency Snapp Conner PR, said the NYRR should have realized it might be forced to cancel and thought through a Plan B.

“An organization this substantial should always have at least a template PR plan in place,” she said in an email.

Runners

But with no apparent plan to fall back on, the NYRR’s muddled actions left runners and supporters puzzled. Some began drawing their own conclusions.

“I’m thinking maybe what happened was, intentionally or unintentionally, Bloomberg got the $340 million because people were already there,” McAfee said.

She said she’d had a bad feeling since she arrived at LaGuardia Airport on Friday.

“We find out the first thing is that there’s a ration on gas. And our shuttle is going to be three hours late, ‘cause he’s sitting in New Jersey getting gas,” she said. “That’s the first indication that things were not hunky-dory in New York.”

Her journey to the marathon cost about $4,000.

Andrea Hutchins, 36, flew from Michigan to NYC to support her sister Emily in her first marathon.

“I think my sister, in a way, felt like a jerk for even being in New York,” she said. “We really saw that folks on Staten Island and elsewhere were really upset the marathon was going to happen … It probably would’ve been better if they had announced it sooner, because with the subways and everything not running and power down everywhere, we question why the decision was so late.”

The Hutchins sisters flew to New York with their parents and a friend on Nov. 2, with Emily offering to pay for everyone’s travel expenses and two hotel rooms in Brooklyn. She said the trip put her out $4,500.

The NYRR faced massive backlash from runners, many of whom flew in internationally and complained of the group’s irresponsible and negligent actions. McAfee looked into filing a class action lawsuit, inspired by a group of French runners who are doing the same.

“I think it’s caused a bad taste in the mouth of a lot of people from out of the country,” she said. “It makes me embarrassed, almost, being American. I wouldn’t handle a race like that.”

ING Financial Services, the marathon’s biggest supporter, also came under heat from aggravated marathoners. Some accused the race’s title sponsor of putting its monetary interests before New Yorkers’, despite the fact that city officials ultimately controlled the cancellation.

The NYRR pledged $1 million to Sandy relief efforts, or $26.20 for each runner, with the creation of its 2012 ING New York City Marathon Race to Recover Fund. ING donated $500,000 to the fund.

Another group of disappointed runners went after Mary Wittenberg, the NYRR president. They took issue with her salary of half a million dollars and her Tweets: “2012 INGNYCM will b run 2 show the vitality & spirit of NYC,” she sent out on Oct. 31. “Run 2 aid in recovery & show NYC will be back stronger than ever.”

Recovery

Contrary to Wittenberg’s Tweet, many runners agreed that canceling the race was the correct thing to do, especially as residents in lower Manhattan, coastal Brooklyn and Staten Island who were displaced by the hurricane had tried and failed to get hotels in the city that were booked by the marathon crowd.

“That was frustrating, to have just gotten there and just have it canceled,” Andrea Hutchins said. “But it put us in the place that I think we were supposed to be.”

Hutchins, like many runners and supporters, joined in an effort called New York Runners in Support of Staten Island. The association went live on Facebook shortly after the marathon was called off. It organized an impromptu mission to send runners to Staten Island with recovery items.

Andrea Hutchins said, in hindsight, she and her sister had a great experience in New York by helping the residents in need.

“There’s been many times that I know we’ve sat here in our Midwestern homes—where we’re not really impacted by hurricanes or things—and we see when Katrina came through and these disasters,” she said. “You see the news and you think, ‘What if there’s something else I could do? I would like to be able to help these people.’”

“However, the fact that we were there, and the experience we had, it was like, we were supposed to be here on this day,” she added. “It gave us that opportunity to look back on all of the times we’ve said, ‘We’d like to be able to help in one of these situations,’ and we were actually given the opportunity to do that.”

Her sister Emily agreed, adding that the experience made the trip worth it, despite the loss in finance.

“To be able to help those people and just bring a little bit of sunlight into their world for the hour and half that we helped them made the trip worth it,” she said.

What’s Next

Runners are still waiting to hear from the NYRR about whether they will get refunds and their qualification status for next year’s race.

Emily Hutchins, who wants to return to run the race in 2013, said the NYRR responded to her inquiry email saying it was working out details and would get back to her in a couple of weeks. Likewise, McAfee said she was still waiting to hear something definitive from the organization.

As for the future of the NYRR, public relations expert Conner said the best thing for the organization to do would be to hit the restart button: “Speak openly and candidly about where they fell down and what they’ll do differently as a re-emerged organization to ensure they emerge stronger and never have to re-learn these lessons again.”

She expects Mary Wittenberg will be given the boot or relegated to an administrative position soon.

“[It was] so badly handled that it will likely be incontrovertible,” Conner said. “Even if she didn’t handle it as badly as it looks, she has destroyed their PR and her own.”

#PendingLarryQuote

  1. On Thursday, Google’s Q3 earnings premiered on the SEC website hours earlier than planned. Whoops. But the bigger shocker? In place of an obligatory quote from Mr. Page, the report read: PENDING LARRY QUOTE. The Twitterverse, as you can imagine, enjoyed suggesting what that quote might be.
  2. scotthensley
    RT @inbaggiowetrust: “Hey at least we aren’t Facebook, right? Riiiiiiiiight?” #pendinglarryquote
    Thu, Oct 18 2012 10:18:02
  3. cloggiefx
    $GOOG blaming the printer, it is always someone elses fault #pendinglarryquote
    Thu, Oct 18 2012 10:23:11
  4. JakeScottIII
    Googles taking a hit after that unfortunate misfire. I might even buy some stock but that’s #PendingLarryQuote
    Thu, Oct 18 2012 10:24:31
  5. hainsworthtv
    Shares of $RRD extend decline after $GOOG blames firm for early SEC 8K release that sent shares -9% (still HALTED). #PendingLarryQuote $$
    Thu, Oct 18 2012 10:24:41
  6. DonitaPrakash
    “Oops, I didn’t really do that did I?”, says Page, with his finger on the send key. #pendingLarryquote
    Thu, Oct 18 2012 10:26:06
  7. srabil
    Apparently Google says RR Donnelley is to blame for premature earnings release … someone’s having a very bad day #pendinglarryquote
    Thu, Oct 18 2012 10:38:25
  8. ryanbatty
    Feeling 4 #PR colleagues @ $goog. New or experienced, we all fear a #pendinglarryquote moment. Old process collides w/ 24/7 networked world
    Thu, Oct 18 2012 10:43:30
  9. savitz
    Google’s Q3 miss just cost Larry Page $1.8 billion. Maybe he had a quote, but they couldn’t print it. #google $goog #pendinglarryquote
    Thu, Oct 18 2012 10:58:20
  10. ldignan
    RT @savitz: Stock market meme du jour: #pendinglarryquote. Thanks, Google!
    $goog #google http://pic.twitter.com/UChdgp7G
    Thu, Oct 18 2012 10:58:39
  11. aram
    Whew, Mitt lucked out. It seems that #pendinglarryquote is the new #bindersfullofwomen.
    Thu, Oct 18 2012 11:43:16

Library Pivot: The Long Game

The south facade of Bobst Library.

Michael Stoller recalls the cusp of the library industry’s pivot toward digitizing.

It was 1995, when he wrote an article for the Library Trends periodical about electronic journals—and struggled to find any to talk about.

“Most of them were little operations coming out in ascii text form [without formatting] from guys in Colorado in log cabins and what have you,” said the director of collections and research services at NYU Libraries.

In contrast, upwards of 90 percent of journal content today is in electronic form, evidence of a major shift in the library industry as it turns toward digital content.

The electronic pivot is absolutely necessary for libraries, according to Marty Zwillig, founder and CEO of Startup Professionals, Inc., which provides entrepreneur assistance to startups and small businesses. He said libraries risk extinction as they squander patrons to the Internet.

“Libraries, in the traditional sense, are obsolete and rapidly dying, sort of like the train industry after the advent of automobiles and airplanes,” Zwillig wrote in an email. “Some people will always hang on to the old ways, but digital data on the Internet has so many advantages for most requirements.”

Despite the convenience of the Internet, library use remains generally unchanged, according to an annual survey conducted by Harris Interactive. In both 2007 and 2011, 62 percent of respondents surveyed said they had visited a library in the past year, indicating sustained interest in the services.

“As anyone can tell as they’ve walked through the atrium of Bobst Library during the academic year, we’re not wanting for people coming through the front door,” Stoller said. “We’ve got lots of people in this building.”

Libraries are digitizing to keep up with demand. The largest transformation at NYUL, Stoller said, has been a boost in the paper-to-electronic ratio in acquired content such as periodicals and books. Other major shifts involve the creation of a digital video library and bolstered reference functions.

Though the library industry pivot has picked up measurably in the past 10 years, Zwillig said it may not be enough, “since most are run by local governments and institutions, which are notoriously slow to change … Witness also the recent bankruptcy of Blockbuster, trying to hang onto movie rentals, when the world was changing to streaming video.”

Stoller disagrees. “Virtually, all we do is respond to what patrons’ needs are,” he said. “We do with paper when we need to, but people do increasingly expect to see information in digital form.”

Lydia Vasquez, a junior at NYU, said she uses the library not for its electronic resources but as both a study spot and for its book collection, which is five million volumes strong.

The fundamental nature of libraries is—and always will be—to connect people with information and scholarship, Stoller said, adding that the pivot may be slow, but it is ultimately beneficial.

“Technology obviously has substantially shifted, and for the most part overwhelmingly enhanced our ability to do that, to build those connections for people.”

Click below to listen to my conversation with Michael Stoller!

When Your Credit Card Company Discriminates Against You

American Express announced Monday that it plans to reimburse $85 million to approximately 250,000 customers, according to the New York Times, for multiple violations. The company will also pay $27.5 million in fines to regulators.

The penalties come as a result of accusations, “that the company violated federal law in its marketing, billing and debt collection practices,” reports the NYT. A Business Insider article detailed how American Express was called out on multiple misbehaviors, including:

  • Age discrimination—the system intentionally disregarded applicants older than 35 for a period of time.
  • Violated the Credit CARD Act‘s rules on late fees by billing late fees based on a percentage of the debt owed
  • Failing to follow through on $300 promised to customers in the Blue Sky credit card program
  • Asking customers to overpay debt payments: “Consumers were wrongly told that if they paid off the old debt, the payment would be reported to credit bureaus and could improve their credit scores. In fact, American Express was not reporting the payments and the debts were so old that even if they had tried to report them, many of the payments would not have appeared on these consumers’ credit reports or affected their credit scores.”

Refunds to customers will materialize in March 2013.

What will be the fall out from this? Will American Express users switch to a new credit card company? What’s more, the $112.5 million fine seems rather lax. How much money do you think American Express scammed customers out of or didn’t cough up when it promised to?

With many banking institutions still feeling the heat from the public over the 2008 financial crisis (re: Occupy Wall Street), a credit card company denying customers their rights does not feel like the proper way for citizens to restore their faith in the country’s institutions or business leaders.

What Makes an NFL Team Valuable?

While I was watching the NFL season opener last night of the Dallas Cowboys versus the New York Giants, NBC flashed an intriguing figure on the screen: Forbes once again named the Cowboys the league’s most valuable team for the sixth consecutive year, raking in $2.1 billion.

This makes them the most successful brand in the professional football business. The only sports team in the world more valuable than the Cowboys, Forbes says, is U.K. football team Manchester United. But why the Cowboys? This team hasn’t been to a Super Bowl in more than 15 years (Super Bowl XXX in 1996) and while they often makes the playoffs as a wildcard, the Cowboys do not normally advance beyond the divisional round of NFC playoffs.

So what’s the secret to the Cowboys’ success? A few elements that make a football franchise attractive, lucrative, and ultimately profitable include sponsorship deals and TV contracts. Teams also continue squeezing the most out of those loyal fans who trek to the stadium on Sunday through higher rates on premium seating. 

Forbes’ Mike Ozanian makes some key points: the Cowboys pull in nearly $20 million more in sponsorship revenue than any other team, drawing dollars from Bank of America, PepsiCo, and Ford Motor. Owner Jerry Jones, Ozanian says, has the gutsy knowhow and ferocity to extend his brand beyond Cowboys Stadium in Arlington, Texas, and into national messaging:

“Jones has been able to monetize his team’s popularity because he understood the importance of sponsor activation earlier and better than any other owner. His 2010 mobile marketing deal with Direct Energy is a perfect example. Rather than fight Jones, the NFL has come to recognize that his entrepreneurial instincts are good for the league, like when he raps and dances for Papa John’s pizza, which has sponsorship deals with the Cowboys and the NFL.”

This idea harkens back to a feature story I wrote for the February 2011 issue of QSR magazine about the big risks and big rewards of sports marketing. Dallas had just hosted its first Super Bowl, and I spoke to spokesmen from Papa John’s, Pizza Patron, and PepsiCo to determine why they got involved with Super Bowl marketing and how it paid off. 

For the story, I interviewed Bill Chipps, senior editor of the IEG Sponsorship Report, who said failing to activate sponsorships is akin to buying a toy without batteries:

“Smart sponsors are not just signing the sponsorship and walking away from it, hoping they get all this return on investment. When you buy a sponsorship, you get the typical benefits—it might be tickets for hospitality, signage, that kind of thing. That’s all fine and dandy, but to really get the biggest bang for their buck, a marketer needs to allocate additional dollars to activate the sponsorship and bring it to life.”

The ROI for the Cowboys has paid off big. Using the inherent heart-mind connection that fans have to sports teams, the Cowboys remain the nation’s favorite team according to an ESPN poll, handily earning its long-standing nickname of “America’s Team.”