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Iditabusiness: the Iditarod is not only the last great race, it's also big business.

Dog mushing. Whether it's hitching up the family hounds or competing in organized racing in events from Anchorage to Coldfoot, it's big in Alaska. And out there at mile 2.5 on the Knik road north of Anchorage, it has also become big business--Iditabusiness.

Here, in a spacious $425,000 log building on more than nine acres of birch-forested land donated by the city of Wasilla, is the home of the Iditarod Trail Committee Inc. A paid staff of 10, plus numerous volunteers, conduct the $2 million-a-year, full-time business of promoting, running and selling the undisputed top dog of organized mushing. The Iditarod is the world's longest, richest and most famous sled dog race.

The Iditarod has come a long way since 1967 when musher Joe Redington Sr. of Knik and historian Dorothy Page of Wasilla conceived and organized a 56-mile event following the abandoned dog-team mail route linking Knik to Nome. In 1973, the race expanded to cover the full length of the trail -- some 1,100 miles across the heart of Alaska. It took the winner of that race 20 days. For his efforts he received $12,000.

In 1992 Martin Buser of Big Lake mushed his team to victory from Anchorage to Nome in 10 days and 19 hours. He brought home more than a shiny trophy. There was $51,000 in prize money, and another $1,600 from the "finisher's club," the keys to a new $25,000 Dodge diesel 4X4, and the opportunity to cash in on his new-found fame with a variety of advertising endorsements. Gained, too, was enhanced credibility for his dog breeding and training kennel, what Buser calls a "spin-off" business.

Like any enterprise, professional dog mushing and its spin-offs require long-term investment; in Buser's case, it took about five or six years to build his kennel and competitiveness to its current level of eminence. A working, supportive wife helped, as did financial sponsorships from local and regional companies looking to link their products or services with a well-liked and respected musher on the rise.

Following his 1992 win, the sponsorships and advertising endorsements have become substantial, according to Buser, and help cover the annual $60,000 to $70,000 cost of maintaining a 70-dog fleet. The win has not netted any new national endorsements, but has shored up existing sponsorships, including a national dog food and a local pizza chain, a lumber yard and a Ford dealership. It was Buser's relationship with Nye Ford in Wasilla that prompted him to sell that new, heavily-promoted Dodge 4X4 he won and keep the cash instead.

While mushers passionately declare they race not for the money but rather for the thrill of the sport, the love of the dogs and maintenance of a tradition with deep Alaskan roots, there is no denying big dollars are at work here. Iditarod officials are quick to point out that except for a financially-strapped 1988 race, the first place $50,000 prize has remained constant since 1985 (when it was more than doubled from the previous year). Officials also say that they need to offer high stakes to attract top mushers in what is a very expensive sport. In the 1992 race, a total purse of $387,000 was distributed, ranging from Buser's prize to 20th place finisher Joe Garnie's $8,772. For the other 43 finishers, there's the pride, the bruises and a check for $1,000 -- $249 less than the entry fee. And for the dozen or so mushers that don't finish, there are just the bruises and the bills.

But the prize money only accounts for about a fifth of the Iditarod's expenses. It costs another quarter million dollars to actually run the race and $569,000 to run the business. Add in other operating and advertising expenses, and you have a $2 million-a-year, tax-free non-profit corporation.

Where does the money come from? Unlike a professional basketball game or a hockey tournament, there are no ticket sales at the gate. What organizers can sell is the mystique and macho of Alaska and "The Last Great Race On Earth." It's packaged and sold in many ways. For a little money you can buy a piece of Iditarod hardware to buckle your Uncle Toby's belt. For a lot of money, Lee Iacocca can lay claim to some big machismo and a spot on the remote trail reserved for one of his tough Dodge trucks. The opportunity for the public and for corporate America to be a part of The Last Great Race means money and the survival of the Iditarod.

The mystique is also sold internationally in the form of T-shirts, books, calendars, belt buckles and coffee mugs via Iditarod mail order catalogs. In Anchorage's Northway Mall and at the headquarters operation in Wasilla, a half dozen people are employed. Merchandise sales account for nearly half of the entire annual Iditarod revenues. For the 1992 fiscal year, Iditarod sold nearly $900,000 worth of merchandise and made a little more than $400,000 gross profit on those sales.

The most profitable slice of the Iditarod comes from selling the right to stamp a company's product with the official Iditarod "brand." In magazine ads, television commercials and in sales brochures and product point-of-purchase displays, companies like Timberland boots, Dodge trucks and IAMS dog food tout their affiliation with the Last Great Race. According to Greg Bill, Iditarod's development director, sponsor contributions account for about one third of all revenue -- about $753,000, plus another $150,000 worth of in-kind donations in 1992. "There would be no Iditarod today without the dedicated support of our sponsors," says Bill.

A trip to the Iditarod headquarters in Wasilla confirms the understandable reverence the organization has for its pre-eminent sponsor, Timberland, which is alone in the $250,000 or more "prime sponsor" category. A small sales display of Timberland boots sits quietly, almost shrine-like in the racing museum.

Other sponsor categories include "presenting sponsor" (for $100,000 or more, your company can join the likes of Dodge and IAMS dog food), and "major sponsor" ($50,000 or more sponsors like Alascom, Alaska Airlines, National Bank of Alaska, Alaska magazine and Stephan Fine Arts).

Television is what sells the sponsorship and therefore what sells the Iditarod. The contract with ABC's "Wide World of Sports" to televise highlights of the race brought in about $40,000 in 1992. But it wasn't the $40,000 that race officials really coveted. It was the audience. Three relatively short segments on three consecutive Saturdays during and immediately after the race reached some 14.5 million viewers across the nation. Additional coverage on cable's ESPN and Alaska statewide coverage bolstered those numbers. All of that looks mighty good to sponsors like Timberland, Dodge and IAMS.

It also looks good to race boosters who take great pride in the race as a vehicle to export exciting, positive images of Alaska and its frontier spirit. Tourism, both during the race and year round, is but one beneficiary, race officials point out. Another plus is the turnover and flow of dollars generated by the race. According to organizers, a 1985 economic impact study done for the Iditarod showed that the race, associated events, corporate advertising and the hospitality industry turned over about $21 million in the Alaska economy during the two month period surrounding the race. Importantly, says Greg Bill, some of that money passed through small rural communities that look forward to the annual infusion of cash. Bill says an updated economic impact statement is in the works.

The race has not, however, been without its recent detractors. Some concern has been raised about the treatment of race dogs. There has also been a flap about the race on the business level. Most notable has been the turnover in the executive director position. Citing business incompetence among members of the board of directors, businessman and former executive director Jules Mead resigned in July, becoming the third person to leave the post in as many years.

"On the board you have mushers directing and governing themselves in what has become a big, complex business," observed a former board member who wishes to remain anonymous. "It's a little like having the fox watch the hen house."

New executive director Burt Bomhoff, himself a businessman and a former musher and board member, bristles at suggestions that the mushers don't know how to run a business. "They're all business people. They have to be to run their own successful dog racing operation." Bomhoff tends to dismiss the dissent, adding, "You've got to remember that we're dealing with Alaskans -- the kind of people who voice their thoughts."

The core problem, as Bomhoff sees it, is that some of the people serving as executive director have not had "a deep understanding of the event." For that, he contends, it helps to have been a musher.

Meanwhile, Alaska's claim to sporting fame mushes on each winter treading the fine line between business and sport. The Iditarod is big business. Fortunately, it's also uniquely Alaskan and captivating. Even if you're not a musher.
COPYRIGHT 1993 Alaska Business Publishing Company, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

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Title Annotation:sled dog racing
Author:Reid, Sean
Publication:Alaska Business Monthly
Date:Mar 1, 1993
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