The company that stages the Los Angeles Marathon has been sold to a Chicago firm for more than $15 million in a deal that had city officials questioning Wednesday whether they should continue subsidizing the footrace with $370,000 in traffic control and policing each year.
William Burke and Marie Patrick, partners in Los Angeles Marathon Inc., sold their controlling interest to a subsidiary of Devine Racing in an agreement that leaves Burke and Patrick overseeing the marathon for five more years.
"We think the L.A. Marathon will be the cornerstone of our company," said Chris Devine, chairman of Devine Racing. "It's got a lot of growth potential, and we are going to infuse a lot of capital to help it expand."
This year, the race drew 24,600 runners, but Devine sees the marathon growing to 40,000 to 45,000 participants, which would make it one of the largest in the country.
Devine said the merger involved paying Burke and Patrick about $10 million in cash, but sources said the pair also received stock in Devine Racing that brought the total value to more than $15 million. Burke will also sit on the Devine board of directors.
Burke, who remains president of Los Angeles Marathon Inc., declined to comment on the price but said he and Patrick earned it, having started the marathon 20 years ago against daunting odds.
"There were five different marathons before Marie and I came along, and everybody else went broke," Burke said. "I took the risk. I put in 20 years, and I've earned mine."
Others, including City Council President Alex Padilla and Councilman Jack Weiss, said Wednesday that they planned to review the deal and determine whether the marathon company, because it is now flush with cash, should continue to receive the subsidy.
The city contract with Burke requires his company to pay $130,000 annually for traffic control, street closures and extra policing for the race, which city officials have estimated actually cost $500,000.
"It deserves looking into," Padilla said. "If we have been contributing to the success of the marathon financially or in kind, we have a vested interest in looking at this."
It is unclear whether changes could be made under a deal Burke cut with the City Council that made the multimillion-dollar sale possible. Earlier this year, Burke sought and won council permission to allow the transfer of the marathon to a third party without the city's being able to terminate or renegotiate the terms, as long as either Burke or Patrick remained in control for at least three years after the transfer.
