The organiser of the London Marathon is expected to take over running the Brighton Marathon if councillors give their backing at an urgent meeting on Monday (28 November).
A report to councillors said: “The current organiser of the Brighton Marathon, Grounded Events, is going into administration.
“To preserve the monies paid for entry into the 2023 event, Brighton and Hove City Council is seeking to license a new operator who is willing to honour the existing entries from individuals and charities.”
Councillors are being asked to grant London Marathon Events a three-year licence in principle, with the prospect of a two-year extension.
The licence would be granted subject to agreement on its terms, with talks expected to completed much more quickly than would be usual.
It is not just that the event itself is at stake but the weekend-long boost to Brighton’s visitor economy from thousands of runners, their families and friends and many more spectators.
The marathon has been credited with helping to bring the start of the tourist season forward, increasing takings for hotels, restaurants, bars and other traders. But the coronavirus pandemic restrictions fatally weakened the event’s finances.
The Brighton Marathon has been regarded by some runners as a warm up event for the London Marathon – and is probably Britain’s most popular marathon after London.
And if London Marathon Events does take charge, the report said, “the Brighton and Hove area will become eligible to apply for funding from the London Marathon Charitable Trust.”
The council is among those owed money by Grounded Events, with about £150,000 outstanding.
The report was prepared for the council’s Tourism, Equalities, Communities and Culture Urgency Sub-Committee which is due to meet at 11am on Monday at Hove Town Hall.
It added: “Members and officers have met with representatives of Grounded Events Company’s administrators (FRP Advisory), London Marathon Events (LME) and the London Marathon Charitable Trust to examine the potential for LME to take over the running of the Brighton Marathon as a result of the recent local business failure.
“Following receipt of an initial proposal from LME, the council responded by putting forward the points it would require LME to meet. These are under negotiation.
“The council would also wish to see any Grounded Events Company staff who wish to transfer their employment to LME being offered a role in this business. LME are headquartered in London. They have indicated this is possible.
“The council have also requested that local businesses who have lost money supporting the marathon are prioritised for work associated with the new Brighton Marathon.
“The council has been clear from the outset that it was important for the marathon organisers GEC to pay everyone due money in order to be in a position to grant a licence to operate in 2023.
“At a meeting on (Friday) 11 November it was made clear to officers that the sale of its assets would not resolve all of the debts. The council withheld landlord’s consent on this basis.
“At no point to date has Grounded Events received consent to run the 2023 event from the council.
“Officers have received confirmation from FRP Advisory that their notice to appoint expires soon. On expiry, either liquidation of GEC or sale action must be taken.
“FRP Advisory therefore requires agreement of heads of terms between the council and LME by the end of November.
“This constrains the time officers have to carry out the sort of due diligence process which would be standard practice before entering into a long-term arrangement.
“The short timescale afforded by the process means there is limited opportunity to appoint a suitable alternative licence holder.
“Officers have been made aware of one other company who would be interested in running the Brighton Marathon and there is therefore a risk of challenge if the council does not comply with procurement and subsidy control rules.”
The report added: “The council is also a creditor of GEC and is likely to lose in the region of £150,000.
“Regardless of council actions, there will be a substantial loss to businesses and individuals from the failure of GEC. The extent of the losses are unlikely to be met by LME.
“LME have indicated that agreeing a three-year licence, with the option between both parties to extend for a further two years, will secure circa £1.1 million of individual and charity payments for the 2023 marathon that otherwise will be lost.
“However, officers have not seen any written evidence of this sum from LME or GEC and are unable to verify this.
“Consideration has been given to not providing a licence, meaning the Brighton Marathon as an event to fail in 2023.
“The council could then issue an invitation to submit proposals for a three-year licence in 2023 with the marathon restarting again in 2024.
“This option would result in the loss of all monies associated with runner entries in 2023 and endangers the event in the long term.
“Alternative operators could be sought who may be more willing to work within the council’s existing model.
“It is understood that, in the sale process, FRP Advisory received a number of bids, none of which were equal to the offer from LME.
“In unofficial conversations with other operators, the majority would not be willing to take on the existing runners for 2023.
“Due to the commercial sensitivity and highly restricted timelines there has not been time for in-depth consultation on this matter.
“Lead councillors have been consulted throughout and some discreet industry research and consultation has been carried out.
“In order to minimise the impact of the failure of GEC, it is favourable to find a licence holder who is willing and capable of delivering the event in 2023.
“For that to be commercially viable for any operator a multi-year deal will be required in order to facilitate the recuperation of investment.”
The report also said: “The nature of outdoor events means that they often involve a range of potential sustainability impacts (both positive and negative) from travel, energy and water use, food, local economic and social impacts, use of outdoor spaces and production of waste.
“Event organisers continue to be strongly encouraged to sign up to the council’s ‘sustainable event commitment’, helping them to improve sustainability at their events.
“Factors such as location, size, type of event and what ground protection measures the event organiser has confirmed will be considered when agreeing if a reinstatement bond is required – and the value of this bond.
“Event organisers will be responsible for the reinstatement of the grounds used if damage occurs as a result of their event.
“It is important to recognise that the impact on our open spaces by some events is inevitable but the positive social and economic impacts of these events outweigh the immediate effects on the land.”
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