The July 25th article, 2017 Newport Beach Triathlon – Oct 1, 2017 – Buyer Beware was a consumer alert about the viability of a small SoCal race.  The first in a series of three articles, Update #1 focused on typical race venue permitting and municipality relationships.  Pacific Sports’ claim that race cancellations are typical does not jibe with others’ experiences.  Four race directors with over 600 races between them have not experienced one non-weather cancellations, suggesting that cancelling a race is abnormal. So why is Pacific Sports particularly susceptible to this phenomena? Is Pacific Sports simply unlucky or are there underlying causes for their unique misfortunes?

 

Following Update #1‘s release last week, there have been no shortage of inbound emails and phone calls.   Dozens of vendors, municipalities and past participants wrote to express their experience with previously failed Pacific Sports events.  For this article we have selected three examples of unfulfilled promises from Pacific Sports between 1995 and 2015: a contractor, a former employee and a vendor.  Others are publicly documented, for example the lawsuit between Pacific Sports, LLC & Santa Catalina Island Conservancy & Spectrum Sports Management, and LLC.  It is insightful how a relationship between a race director and a municipality can sour.

 

The Contractor.  GRAHAM FRASER - FOUNDER, NORTH AMERICAN SPORTS.  Graham Fraser was inducted into the Ironman Hall of Fame in 2012.  Why?  After founding Ironman Canada, Fraser brought Ironman to Arizona, Florida, Lake Placid and Wisconsin and was critical in growth of the sport in North America.  He has been the race director for over 400 races including 60 Ironman events.  Fraser has fond memories of growing triathlon in the US, but one painful lesson came in the mid-1990s while with Pacific Sports and Jack Caress.  In 1995, Caress hired Fraser’s company to support the World Cup Series in Cleveland.  Fraser transported a truck full of triathlon supplies, including racks, buoys and cones from Canada to Cleveland. Over four days, he and four others worked to insure the 1995 World Cup Series was a success.  According to Fraser, shortly after the race concluded he was informed by Caress that he was withholding $15,000 of their payment because Fraser and crew did not remain to assist a separate company who had provided barricades.  This expectation was not in the scope of work previously agreed upon and served only as an excuse for lack of payment, in Fraser’s opinion.  Having already paid his crew Fraser had to choose whether to sue Pacific Sports for the $15,000- over international borders- or write it off as an expensive lesson.  He elected to write-off the expense. Fraser’s experience with Pacific Sports was anomalous in his long and successful career, but one that remains embedded after 22 years.

 

The Employee. JENNIFER BERGER - GENERAL MANAGER, PACIFIC SPORTS - 2013.

In my 20 years working in professional sports, I operated in an ethical and professional manner and never experienced a work environment that was outside standard business practices. This changed in 2013, when I began working as GM for Pacific Sports a company that appeared to be a successful industry leader.   In the following months I started to realize my perception of the Pacific Sports was inaccurate and the image of the company’s success in my opinion is a false façade.  In July, a hardworking and reliable colleague resigned because he told me “he could not take it anymore.” At this time, I had started to suspect a pattern of poor business practices and I was growing suspicious; yet I still did not fully understand what the employee meant.

 

From my first day of work and throughout the race season, staff complained to me about getting a lot of calls from many previous and current vendors asking for why their bills were not paid. Many calls and inquiries were escalated to me and it became routine to have to tell vendors that the payment was “in process” or “I’m checking on that” as I waited to hear from Jack or the accounting firm what was going on with the particular situation. It was hard to produce upcoming events, because so many vendors would not work with us until we paid them for previous services rendered.  Many of these bill collectors were calling about money owed from a year or two beforehand and it ran the gamut from city/county municipalities, to EMT providers, portable toilets, truck rentals, barricade/fencing companies, sign companies, radio rentals, hotels, parking services, merchandise providers, timing companies, former contracted employees, permitting agencies and the sanctioning body. At one time or another, basically every type of service provider it takes to produce a race, was calling to complain that they had not been paid yet for services rendered.  My hands were tied; I would approve an invoice, give it to the accounting firm to pay and wait and see how it played out.

 

It became clear to me that this was a pattern going on for a long time and the standard method of operation for Pacific Sports.  Many of these vendors were small business people and would call very angry and insistent.  Some came to the office looking for Jack to try to get paid.  I remember one evening in early December, 2013; it was already dark outside and I was working alone upstairs in an office when an unsavory looking character came in and was calling out “hello, hello” and was waiting for a response.  I went downstairs to greet him and he handed me papers saying “you have been served”.  Apparently, Jack Caress and Pacific Sports was served notice of lawsuits due to non-payment from a company I had never heard of or that we did business with in 2013 that I know of.  This incident was unnerving and made me feel uncomfortable and I did not like to work in the office alone.  It also lead me to believe that many other vendors could bring up possible legitimate lawsuits against Jack for non-payment.  On this evening, I fully understood what that former employee meant when he told me, “I can’t take it anymore.” Shortly after this experience, I amicably resigned.

 

The Vendor.  RICHARD SPENCER - PRESIDENT, KASSMO PRODUCTS, a RICKYBRANDS LLC COMPANY.  On October 29, 2015 the Circuit Court of St. Louis, Missouri ordered that Pacific Sports pay a judgement of $12.279.46 to Ricky Brands.  Per Richard Spencer, President of Kassmo Products, the payment was for shirts, medals and lanyards his company produced for the 2015 Rose Bowl Half Marathon.  Unlike the two Brooklyn Triathlon races and LA Marathon at Torrance - referenced in our previous article- the Rose Bowl Half took place and shirts and medals were appropriately awarded to participants.  The problems arose around payment for these services rendered and Pacific Sports paid Kassmo only after a court proceeding and subsequent judgement in their favor.  According to Spencer, “My experience with Pacific Sports was that their version of good business was taking the goods and negotiating on the backend for pennies on the dollar or forcing you to take them through a long and expensive court battle, which most small companies can’t do.”  

 

UPDATE #3:  2017 Newport Beach Triathlon – Oct 1, 2017 – Buyer Beware, will ask some of the industry’s biggest players what their consumer protection business practices are and how they are working to protect the most important stakeholder in the ecosystem, the athlete.

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