While Rothman Gordon has frequently provided pro bono legal assistance to nonprofit start-ups, our experience has been that the start-up begins slowly and the amount of work can be easily anticipated and performed. That was true until Rothman Gordon became the pro bono legal advisor for one of the fastest-growing marathons in the country.
The University of Pittsburgh Medical Center (UPMC) was the last of several co-sponsors, along with the City of Pittsburgh, of a marathon and half-marathon in the city from 1985 to 2003. In 2003, however, after UPMC withdrew its sponsorship and no other sponsor stepped forward, the City of Pittsburgh announced it could not be the sole financial supporter of the event and that the 2003 race was to be the city’s last.
A small group of Pittsburgh marathoners, however, refused to let the marathon rest in peace. From 2006 to early 2008, they began approaching civic leaders and identifying potential sponsors, eventually making a fateful contact with Louis B. Kushner. Kushner, himself a marathoner and a member of the governing body of the prior organization, was eager to provide support, including the pro bono support of Rothman Gordon, at which he is a partner.
Within a year, in May 2009, the first new and improved marathon weekend was held. The 2009, 2010 and 2011 race-day running events include a full marathon (26.2 miles), half-marathon (13.1 miles) and marathon relay (two-to-five-member teams running the full marathon course). Each of those races has sold out every year, bringing more than 20,000 runners to Pittsburgh annually. In 2011, with over 5,000 registered marathon runners and more than 4,000 finishers, the Pittsburgh marathon became one of the top 25 largest marathons, out of over 600 marathons, held in the United States annually. A children’s marathon is held on the Saturday before the marathon races, and in 2011, a 5K race was added on that same Saturday to accommodate demand. Such growth in such a short period of time has presented a myriad of issues that keep the lawyers at Rothman Gordon running their own legal marathon. Just a few of the legal issues that they have addressed are listed below.
To avoid assuming potential liability from the entity that owned the 1985-2003 races in Pittsburgh, the organizers decided to form a new entity to run the new races. Because they hoped to obtain government grants and donations to get them started, in addition to obtaining revenue from sponsorship fees and runner registrations, the organizers decided the new entity should be a nonprofit corporation that would seek 501(c)(3) status. They also decided that the entity could be better controlled by having a self-generating board of directors, rather than by being a membership organization. They also decided that government and sponsor support would be more forthcoming if some sponsors and both the county and city government leaders had seats on the board of directors. Each of these decisions had to be incorporated into specially drafted bylaws by Rothman Gordon, and the firm also committed to attending all of the board of directors meetings to ensure that the entity complied with all corporate formalities in its day-to-day operations. As the size of the board has grown and new issues have developed, Rothman Gordon has also assisted in amending the bylaws to permit and adapt to the growth.
While the organizers had made a promising start in establishing a marathon in Pittsburgh, none was in a position to devote the amount of time needed to follow through on those government contacts, to meet with those potential sponsors and turn the wish of a new marathon in Pittsburgh into a reality. To do that, they needed one person whose job would be to follow through on all those contacts and ideas. Hiring that person, without a source of income to fund a salary, should have been difficult. Again the organizers made the right contact and located a person whose love of running equaled their own and who was willing to be employed on a “contingent fee” basis, deferring a salary until enough sponsorship funds had been received. Drafting an employment contract to reflect that understanding presented its own unique issues, but all parties have been happy with the results and neither the race director nor the board of directors has regretted their decision. And, as the Pittsburgh Marathon has grown, it now has a full complement of paid employees and independent contractors.
Identifying potential sponsors for the running race is easier than convincing those companies to pay a sponsorship fee to an entity with no track record, a handful of volunteers and only one employee. To its credit, Dick’s Sporting Goods Inc., based in the Pittsburgh area, agreed to be the name sponsor of the marathon on race weekend and provide the monetary and in-kind support needed to ensure the money was well-spent. In addition to paying an up-front sponsorship fee that gave the organization some financial stability, Dick’s identified vendors to Pittsburgh Marathon who were willing to provide race gear and promotional items at a reduced rate, provided marketing assistance to design a logo for use in promoting the marathon weekend and advertising support to reach potential runners, and even offered some office space in Dick’s headquarters until Pittsburgh Marathon found more appropriate space.
Sponsors were soon identified for the half-marathon, relay marathon and children’s marathon, each sponsor agreeing to provide cash and/or other benefits (e.g., race-day volunteers, in-kind services) in exchange for the marketing benefits Pittsburgh Marathon would provide them. UPMC Sports Medicine agreed to become the medical sponsor for all of the events, providing talent to speak at training programs, screening services and staffing, supplies and equipment throughout the race course on race day for runners needing medical assistance.
Each of these sponsorships needed to be reflected in a written contract with its own unique characteristics. The risk to be addressed in all sponsorship contracts that first year was what would happen if, despite Pittsburgh Marathon’s best efforts, the events never occurred. By the time that happened, sponsorship money would have already been spent by Pittsburgh Marathon and refunding sponsorship fees in full would have been impossible. Eventually, Dick’s and Pittsburgh Marathon agreed, and the other sponsors concurred, that Pittsburgh Marathon would make a pro rata distribution of any funds remaining in the Pittsburgh Marathon coffers to sponsors if the events never occurred. Luckily, that remedy was never needed and it is no longer included in new sponsorship contracts.
One provision that continues to be included in all the contracts acknowledges that Pittsburgh Marathon owns the running events, has obtained governmental support for them and intends to use the race weekend to promote not only running and the sponsors, but also the Pittsburgh region itself. As such, the sponsorship agreements provide for private resolution of disputes to avoid any negative publicity. Luckily, this remedy also has never been used.
The range of sponsorship contracts drafted is vast, with the Dick’s sponsorship agreement the most detailed, but even the official “salty snack” sponsor for race weekend has its own agreement. Aside from sponsorship contracts, Rothman Gordon drafted or reviewed contracts with local hotels for blocks of rooms at reduced rates for race participants; with out-of-town speakers for the training sessions; with “elite” runners for their participation in the races, training events and public appearances on race weekend; with the sports and exhibition authority for space for the health and wellness expo on race weekend; and with local restaurants for a high-carbohydrate dinner the night before the races, and for a “runners’ breakfast” the day of the races.
While Dick’s agreed to provide Pittsburgh Marathon with complimentary office space, the distance of its headquarters from downtown Pittsburgh quickly proved problematic. A downtown landlord was then approached by Rothman Gordon and it agreed to provide unused office space to the Pittsburgh Marathon gratis. Pittsburgh Marathon was forced to move twice during that term, as the space it was using was leased to paying tenants, but after only two years, the Pittsburgh Marathon has now entered into a long-term lease at market rates for its current offices, and Rothman Gordon was involved in negotiating that lease.
Rothman Gordon partnered with The Webb Law Firm, a Pittsburgh intellectual property firm that also provided its services pro bono, to obtain trademark protection for the Pittsburgh Marathon logo. Once that distinctive logo, including a triangle, bridge and the words “Pittsburgh Marathon,” was registered, Pittsburgh Marathon began licensing it to vendors for use on T-shirts, backpacks, jackets, headbands, medals, mugs, umbrellas and other running gear. A reciprocal use arrangement is included in the new Dick’s sponsorship agreement, allowing both Dick’s and Pittsburgh Marathon to use the other’s logo when promoting the weekend of events. Pittsburgh Marathon has also developed a yearlong youth program to promote physical fitness and combat childhood obesity, intended for children’s marathon participants, and The Webb Law Firm has also obtained trademark protection for the name and logo for “Kids of Steel.”
Recognizing that city streets lined with spectators, cheering squads, bands, medical personnel and volunteers through which 20,000-plus runners would wind their way provides a fertile running ground for potential injury, and that nothing could derail the Pittsburgh Marathon more quickly than an unprotected judgment against it by one of its runners or volunteers, Rothman Gordon worked with Pittsburgh Marathon to obtain liability protection. First, they investigated the types of insurance available to protect Pittsburgh Marathon from liability and provide coverage for its employees and volunteers as well, and then Rothman Gordon and Pittsburgh Marathon worked with the insurer to ensure that the proper level of protection was being provided. In addition, insurance was obtained to protect Pittsburgh Marathon against misuse of any intellectual property licensed to Pittsburgh Marathon by its sponsors. And, while it does not have minimum health standards for runners, Pittsburgh Marathon did adopt the standards established by the International Marathon Medical Directors Association with respect to the minimum age of runners for the marathon, half-marathon and relay marathon, so that individuals too young to safely participate in a race are prevented from registering for it. Finally, runners are asked to sign a release and waiver as part of the registration process as an additional level of protection.
The above provide only a sense of the number of issues that had to be addressed quickly and efficiently by our corporate, tax, real estate and litigation lawyers as the firm provided pro bono legal assistance to a rapidly growing Pittsburgh Marathon. This pro bono project has become a marathon in its own right, one in which the runners, walkers and spectators of Rothman Gordon are happy to participate.
Bernadette L. Puzzuole is an attorney in Rothman Gordon’s real estate department and a member of the corporate department. Her practice centers on land-use planning, condominium and planned community development law, zoning and creation and governance of condominium and homeowner associations