Marathons, and their accompanying half-marathons, have become quite popular over the past years. These long-distance runs are so expensive, time-consuming and in-demand that companies are spending money on races either for prestige and the advertising of a permanent corporate sponsorship or simply a lucrative return on investment.

Today, there’s a marathon for everyone: from people who just want to have a good time to those seeking an obstacle course to those who are checking races off their bucket lists. Marathons, surprisingly, are a relatively inelastic good. Registration fees are up, yet more people participate in running events each year. Some of the elite races, such as the New York City Marathon, are able to charge $11 for entry into a selection lottery just for a chance to participate in the actual marathon, which commands a whopping $255 registration fee. Where does all that money go?

Before The Race

The costs of putting on a marathon begin to accumulate months before the race is set to happen. First, the organizer has to examine a map and decide where to hold the race. Armed with a meticulously planned-out route, the organizer needs to get the necessary permits from the city and permission to use any private property – parking lots, for example – and quasi-public spaces.

Once the permits are secure, the organizer needs to consult a USA Track & Field Road Course Certifier about having the distance certified; no one wants to be that person who held a 25-mile marathon by mistake. The road course certifier will charge a small fee for his services.

Finally, it’s time to start advertising. Hopefully, social media will pick up the race and advertising costs will be small, but if not, the budget will have to include radio, print and online ad space. As an example, a Canadian marathon budgets 11.5% of its event cost on marketing alone.

During The Race

Race day is the most expensive part of a marathon. Not only does the course need to be set up with water tables, food tables and portable toilets, it all needs to be done by people. If no one volunteers, the event organizer needs to pay its staff for the day. (For more, see Four Common Questions About Hiring Staff.)

Staffing expenses come on top of the cost of having a medical team on site in case of an emergency – as necessitated by the insurance policy the race organizer will also need to buy – as well the immense cost of security to ensure crowd control. A Philadelphia half-marathon tweeted earlier this year that police cost between $30,000 and $120,000.

The racers who have paid a hefty registration fee to run are also an expensive part of the race. According to the Washington Post, participation t-shirts, bibs and pins, goodie bags and medals cost the Marine Corps Marathon about $13 per person. Smaller races would have a higher cost per person as they can’t benefit as much from economies of scale.

Race timing systems are perhaps the biggest hidden cost to the racers. Usually consisting of a cheap radio frequency identification (RFID) attached to a race bib, a timing system can cost $15,000. Hiring a company to time a smaller event can be cheaper in the short term, with machine and chip rentals costing between $2 to $5 per runner.

Why Organize A Marathon?

The biggest source of revenue for marathons is the entry participation fee. For races that are organized as charitable fundraisers, high registration fees aren’t a large concern as the runner knows that any excess will go to help fight breast cancer or to build a new school track field.

Races that are run in the name of a charity can attract big sponsors who want to give back to the community and benefit from supporting a good cause. The Washington Post broke down the cost of hosting a marathon and found that for every $99 a runner paid to participate, sponsors contributed $58.

Corporations are incentivized to organize running events and prestigious marathons because of the races’ popularity. As with all goods, the more popular and in demand it is, the more an organization can charge. Realistically, the Boston Marathon, London Marathon and New York City Marathon could double their prices, and although there would be an outrage, their limited good (racing spots) would be filled by people who value the experience enough to pay the inflated costs. (For more, see What’s Next In The Athleisure Trend?)

The same is true for other less prestigious but uber-popular races, such as the Rock n Roll Marathon and the Walt Disney Company’s (DIS) Walt Disney World Marathon, as well as Color Me Rad, Tough Mudder and other running events. Races belonging to the latter category also have the financial benefit of being untimed, which leads to more money for the organizer.

The Bottom Line

While modern marathon racing is over a century old, the participation numbers have increased wildly in the past decade. As more people embrace the healthy benefits of running, along with its low-cost and minimal barriers to entry, marathon organizers are shaping up to see their numbers continue to grow each year.