2020 Cape Epic Cancelled

You will be surprised what the overheads amount to in an event like the Epic. Keep in mind that for me and you it is 8 days but for the organizers it's a all year round job. 2 months ago the 2021 route was basically finalized with with new sections to be built soon. There's literally more than a hundred service providers that recieved there money upfront. Does the Epic make money? Sure they do but a cancellation like this will hurt them.

So a little birdie that is involved in the event from a supplier perspective mentioned to me over the weekend that the event organiser is trying to wiggle out of paying service providers.

Very ttricky times for them because if they annoy enough suppliers they're going to find themselves either with a bundle of law suits or being blacklisted as customer not worth doing business with. I can't see them getting out of it without either WANDA bailing it out or the banks which is going to drive entry fees even higher.

This is a very difficult time and the future of the event could be balancing on an edge. Patience indeed

I am not convinced yet there will be a 2021 event. 

Think about it.

1. Before there isn't a vaccine Covit-19 will not be over.

    This won't happen in 12 months.

2. Businesses go down, people retrenched. It will be tough.

    Very tough. Who will have the money to ride Epic?

3. After the financial knock of all events cancelled Wanda

    may be in trouble. They may push out assets or close them down.

    This is what Corporates do. So ACE may be no more altogether.

Maybe this offers an opportunity for a restart. Downscale. Normal fees that people can afford. Performance entry criteria for the race. A short version for the corporate sponsors. Many possibilities.

For what that may be worth.

 

Recall that the 2008 financial crises went from a trickle to catastrophe when it became clear that AIG (who insured the banks against counterparty credit default) was incapable of meeting the claims. There were just too many of them and when AIG went bust, so did everyone who had believed they were covered, and the the rest followed.

 

I suspect that no insurance underwriter foresaw this level of cancellation and am sure none has the resources to deal with it.

Off the bat, Financial crisis’ are a lot harder to insure against than natural disasters. Pandemics are predictable to some degree. Also, co-insurance and reinsurance treaties are setup specifically for this. They are also very aware of their risk exposure for certain risk types, eg: events. If there is over exposure they will adjust.

When there is a government sanction cancellation, extra clauses come into play. Like Catastrophe events. When this happens there is extra protections.

This is only on the insurer side, the event organizers still need actually take out insurance with the correct cover amounts. edt: this is where I think there might be an issue. However the holding company of the Epic are well versed in running events and the legalities around it.

I am not privy to the details of the epics finances, but have been involved with enough events to know that they are most likely suffering at this point. Even with the massive entry fees charged on events like the epic, the margins of events are pretty small. Without the sponsors Cheques, most big events would not be viable business ventures. Essentially the event fee you pay might just cover the actual costs of the event, and the organizers make their money from “selling” advertising space to the sponsors.

 

Epic is a totally different animal to anything else on the scene, but ja i doubt they're coming out ahead of this.

was a really good opportunity to buy some goodwill and have some compensation, we will have to see if they can ride this one out.

okes who sold their entry in the final weeks must be smiling, sort of.

Guy I know is struggling to get his R4000 back that he paid a bike shop for a mechanic service package during the Epic.

 

I know it's not a lot of money, but guys are trying to get whatever scraps they can back to soften the blow should they lose their entry.

Looks John,

 

everyone loves an overpriced jacket t-shirt and assos cycle top. Because.......EPIC BRU!!!

Funny enough my t shirt has never been worn, lying forlorn at the bottom of my t shirt shelf

I really should treat it better considering how much i paid for it 

How can you retain money for services not rendered. It doesn't work like that. That LBS should be named and shamed

While I agree, those same bikeshops bought spares, kit, etc which they likely can't return specifically for Epic. While I believe there should be some return, the knock on effect of the cancellation and 'already spent' income is difficult to measure.

But there should be some recourse. 

While I agree, those same bikeshops bought spares, kit, etc which they likely can't return specifically for Epic. While I believe there should be some return, the knock on effect of the cancellation and 'already spent' income is difficult to measure.

 

But there should be some recourse.

How can you retain money for services not rendered. It doesn't work like that. That LBS should be named and shamed

As much as I agree with you .... I know some of these shops ordered LOTS of stock !  Talking hundreds of thousands rands worth of stock, as they must have everything at the ready each night when the riders finish.

If they cant hand it back to the importers, they are in for a world of hurting !!!

Wonder to what extent the various other service providers were exposed .... LOTS of people taking a serious knock !!

MAYBE - as a gesture of goodwill, and a way for both to come out on top - the LBS sold a number of services in the package, provide this service over a period of time (IF the rider is locally based ...)

You do know that you can take out your own insurance against event and travel.

I would certainly do so when spending the kind of cash that the Epic requires.

Agreed...I have factored in spares bought especially for the event... But then the compromise is that that person should be given all the spares that were going to be used

I don't think too many people would know what to do with fork oil, cable inners/outers sealant, shock and fork seals and wipers, pivot bearings etc....

What they SHOULD get is free servicing from that shop to the value of what they paid.

So the shop rolls over the stock but isn't left with no money to pay their rent and the customer gets a year worth of good service

While I agree, those same bikeshops bought spares, kit, etc which they likely can't return specifically for Epic. While I believe there should be some return, the knock on effect of the cancellation and 'already spent' income is difficult to measure.

 

But there should be some recourse. 

Most of the shops take parts on consignment from the distributors. Damaged packaging often means that the shop will have to buy it, but most is returnable.

The cost that is sunk is the fee for operating at the absa Cape Epic. The bulk of the service charged to riders is to pay for that availability. and the event demands that money upfront, not post event and services delivered,...up front and its a big cost. Back in 2009 we were knocked R15K!  Must be more than triple that now.The event organiser is not refunding those fees so the shops can't refund their riders. Its a **** situation for everyone but I feel the least for the event office. They really should have had the required insurance in place. They knew how many riders were coming from abroad and should have taken contingency plans including insurance. Maybe they didn't think about it, we all learn something new everyday.

I really feel for the biks shops as those are SME's and can't afford the kind of write downs that has occurred as a result  of the cancellation.

You do know that you can take out your own insurance against event and travel.

I would certainly do so when spending the kind of cash that the Epic requires.

I did in 2018. couldn't afford the loss. Still cant!!

I did in 2018. couldn't afford the loss. Still cant!!

Well exactly, my $10k bike is insured, so why not insure your $10k event.

Most of the shops take parts on consignment from the distributors. Damaged packaging often means that the shop will have to buy it, but most is returnable.

The cost that is sunk is the fee for operating at the absa Cape Epic. The bulk of the service charged to riders is to pay for that availability. and the event demands that money upfront, not post event and services delivered,...up front and its a big cost. Back in 2009 we were knocked R15K!  Must be more than triple that now.The event organiser is not refunding those fees so the shops can't refund their riders. Its a **** situation for everyone but I feel the least for the event office. They really should have had the required insurance in place. They knew how many riders were coming from abroad and should have taken contingency plans including insurance. Maybe they didn't think about it, we all learn something new everyday.

I really feel for the biks shops as those are SME's and can't afford the kind of write downs that has occurred as a result  of the cancellation.

I agree

I feel very little for the event but lots for the businesses being affected by the fall out.

Bike shops and other suppliers that rely on the income.

I'm in the same boat with our holiday rental company. The loss of income over the next few weeks could cripple the business and leave me with too many overheads to keep running.

Wanda as the umbrella company should be insured, never mind the Epic part of the corporation.

Most of the shops take parts on consignment from the distributors. Damaged packaging often means that the shop will have to buy it, but most is returnable.

The cost that is sunk is the fee for operating at the absa Cape Epic. The bulk of the service charged to riders is to pay for that availability. and the event demands that money upfront, not post event and services delivered,...up front and its a big cost. Back in 2009 we were knocked R15K! Must be more than triple that now.The event organiser is not refunding those fees so the shops can't refund their riders. Its a **** situation for everyone but I feel the least for the event office. They really should have had the required insurance in place. They knew how many riders were coming from abroad and should have taken contingency plans including insurance. Maybe they didn't think about it, we all learn something new everyday.

I really feel for the biks shops as those are SME's and can't afford the kind of write downs that has occurred as a result of the cancellation.

Wait.. do mechanics ALSO have to pay the epic a fee for the "privelidge" of providing mechanic services to teams?

Well exactly, my $10k bike is insured, so why not insure your $10k event.

Many insurers have a built in product when you take out bike insurance. I know my CycleSure policy has event cancellation cover... I don't know the details of it to be honest, but that's just because I don't really do expensive events. I'll probably have a good look over it when I plan a stage race / multi-day event again.

Well exactly, my $10k bike is insured, so why not insure your $10k event.

Would the insurance pay out if it is a worldwide pandemic though, same for event insurance? Insurers only have so much capacity (even with reinsurance), worldwide pandemics affecting events in every single country might very well be excluded.

Wait.. do mechanics ALSO have to pay the epic a fee for the "privelidge" of providing mechanic services to teams?

probably - they charge volunteers a fee! think there are a few stores that cough up to be in the village and you buy packages directly from epic.

others have a side deal, that cuts out the middleman but not as conveneient.

Wait.. do mechanics ALSO have to pay the epic a fee for the "privelidge" of providing mechanic services to teams?

you have to ask?

I don't think too many people would know what to do with fork oil, cable inners/outers sealant, shock and fork seals and wipers, pivot bearings etc....

 

What they SHOULD get is free servicing from that shop to the value of what they paid.

 

So the shop rolls over the stock but isn't left with no money to pay their rent and the customer gets a year worth of good service

I hope you patented this idea before broadcasting it to the world ...

The only way a mechanic can rwndeesedvic

Wait.. do mechanics ALSO have to pay the epic a fee for the "privelidge" of providing mechanic services to teams?

Yip if you in tweede kamp then you are paying to be there and you are paying a lot. I doubt any of the shops are making money out of their presence at the event but rely on the marketing to generate loyalty and a retained customer base.

I heard that the event was planning to charge tweede kampers for the water for bike wash and the air that they breathe too

Many insurers have a built in product when you take out bike insurance. I know my CycleSure policy has event cancellation cover... I don't know the details of it to be honest, but that's just because I don't really do expensive events. I'll probably have a good look over it when I plan a stage race / multi-day event again.

Check your policy schedule, there will likely be limits.

Would the insurance pay out if it is a worldwide pandemic though, same for event insurance? Insurers only have so much capacity (even with reinsurance), worldwide pandemics affecting events in every single country might very well be excluded.

There will certainly be exclusions. But there should some provision to call on CAT bonds.

There will certainly be exclusions. But there should some provision to call on CAT bonds.

Not an expert on this but catastrophes are usually localised so insurers can spread their risk, but if the whole world starts claiming for the same incident then insurers are stuffed.

Unless the claim amounts are small enough for insurers to handle I guess