A former RAGBRAI director has launched a Facebook group that wants to “Save America’s Greatest Bike Ride from the corporate giants threatening to destroy it forever.”
“Because friends don’t let friends let RAGBRAI die,” is how Dieter Drake begins the Save RAGBRAI group’s About statement.
Ventures Endurance, the Gannett subsidiary that has run RAGBRAI since late 2019, as well as more than 100 other “running, cycling, and obstacle-course” events around the country, dismissed Drake’s concerns as unfounded, in response to questions from Axios Des Moines, which first reported on Drake’s Save RAGBRAI group on Thursday.
“It’s not going anywhere,” Anne Lawrie, cycling director of Ventures Endurance, told Axios’ Linh Ta regarding RAGBRAI. “It’s been around for 50 years. It will be around for much longer.”
Ventures Endurance is part of Gannett’s USA Today Network Ventures, which describes itself as creating “impactful consumer engagements and experiences through world-class events, promotions, races and technology. We strive to exceed expectations, create unforgettable memories and drive value for our partners while leveraging our reputable institutions, including USA TODAY and more than 250 local media brands.”
The Des Moines Register, which created the Register’s Annual Great Bike Ride Across Iowa almost 50 years ago, is one of those “more than 250 local media brands.” In 1973, when two Register writers first invited friends and readers to cycle across Iowa with them, the Register was owned, as it had been for the previous 70 years, by the members of the Cowles family of Des Moines. In 1985, the Cowles sold the Register and its other papers to Gannet Co. Inc., one of the largest newspaper chains in the country at the time. GateHouse Media purchased Gannett in November 2019 in a $1.4 billion deal, and took Gannett Co. Inc. as its corporate name.
At the time of the deal, GateHouse was the largest owner of daily newspapers in the country with 156 dailies, mostly in small markets, as well as 328 weeklies. Gannett owned 109 daily papers across the country and had the largest circulation of any American newspaper chain. Between them, the two companies published one out of every six daily newspapers in the country, with a combined daily print circulation of approximately 8.7 million.
GateHouse is a holding company for New Media Investment Group, which is controlled by Fortress Investment Group, a New York City-based investment management firm. Fortress is owned by SoftBank, a Japanese holding company, best known for its ownership stakes in tech companies. In the five years before the Gannett deal, GateHouse spent more than $1 billion to acquire newspaper groups in small markets.
By the time GateHouse bought Gannett, both had earned reputations for ruthlessly cutting budgets and staff at the publications they owned, as well as mergers of news operations that diluted local editorial control in the name of efficiency. Since the purchase, cuts and mergers have continued.
Earlier this month, Gannett announced it was suspending both hiring and the company’s contributions to employee 401(k) plans. In addition, Gannett is requiring employees to take five days of unpaid leave before the end of the year. It is also offering buyouts to reduce its staff numbers and encouraging some employees to voluntarily reduce the number of hours they work.
Gannett had already laid off 400 employees in August, and eliminated another 400 unfilled positions it had been seeking to fill. The cuts came in after Gannett posted a loss of $54 million for this year’s second financial quarter. Those actions de not appear to significantly improved Gannett’s fortunes. On Oct. 12, Poynter, a nonprofit journalism center, reported “Gannett stock is now trading at $1.40, down 77% over the past year.”
“The company also is saddled with more than $1 billion in debt from its merger with GateHouse in 2019,” Poynter noted. “Earlier this month, Gannett reported it had paid down $55 million of that debt since June 30. It also will be selling $65 million to $75 million in real estate and other assets.”
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Gannett’s financial problems, its response to those problems and his own experiences with Ventures Endurance are what Dieter Drake cite as the source of his concerns in his posts on the Save RAGBRAI page.
Drake was hired as RAGBRAI director in December 2019. He came to the job with extensive experience both as a cyclist and as an organizer of cycling events. Drake had organized “more than 100 rides and cycling races over 15 years,” the Register reported when his hiring was announced. “He started in 2004 with a small race in Cambridge, New York, that grew into the annual Tour of the Battenkill, now one of the largest pro-am cycling events in the United States. He has since put together cycling events throughout the country.”
In January of this year, Drake was promoted to events operation director of the cycling division at Ventures Endurance. Matt Phippen was hired as the new director of RAGBRAI. The Register described Phippen as “an active member of the Iowa cycling community and a longtime Scheels manager” who has “ridden at least one day of the ride each year since 1998.”
Drake left Ventures Endurance earlier this year. “Neither he nor [Ventures Endurace] publicly shared why he left the company,” Axios said in its report on Thursday.
Drake summarized his main concerns in a Sept. 6 post on Save RAGBRAI’s page.
The danger is that 1. Gannett will hurredly sell VE in a fire sale to the highest bidder with no ties to Iowa & its most successful event. Or 2, VE will go down in a bankruptcy with Gannett and will be held as an asset for as long as possible, further eroding all of their events including RAGBRAI.
Nine days later, Drake posted, “With the help of some interested parties, I’ve reached out to two large Iowa-based retailers in the last several weeks to gauge their interest. Gannett/VE would have to be willing to split off RAGBRAI from their portfolio of events, however and this would take some effort and pressure from the RAGBRAI community & fan base.”
Selling RAGBRAI would be a major decision, because it would deprive Ventures Endurance of a significant asset, and Gannett of a high-profile annual event known worldwide that generates a lot of goodwill for the company. Since Register writers John Karras and Donald Kaul set out on their six-day ride from the Missouri to the Mississippi in 1973, RAGBRAI has grown into “an epic eight-day rolling festival of bicycles, music, food, camaraderie, and community,” its site states. “It is the oldest, largest, and longest multi-day bicycle touring event in the world.”
“I hope I’m wrong,” Drake posted on Oct. 8. “RAGBRAI was the most amazing experience of my cycling events career and it transformed me forever. I want it to continue as much as anybody else. I’m doing other things now, but I still care very much about the friends I made and the businesses & towns that rely on the success of this great Iowa tradition.”
Registration for the 2023 RAGBRAI begins on Nov. 15. The week-long ride is scheduled to start on July 22.