Asking Congress for Gym Relief (w/CrossFit’s Brett Ewer)

People understand this massive economic toll that this have taken, especially on gyms. Some members and senators say, “We need to do something that’s broadly applied.” That can work. If that’s the case, then there need to be tweaks to existing programs or the proposed programs so that they meet the needs of gyms.

Welcome to the “BarBend Podcast,” where we talk to the smartest athletes, coaches, and minds from around the world of strength. I’m your host, David Thomas Tao, and this podcast is presented by barbend.com.

Today, I’m talking to Brett Ewer, Head of Government Relations at CrossFit. Brett is also a driving force behind the Community Gyms Coalition, a group of fitness industry companies and gym organizations, including CrossFit, Zumba, Orangetheory, Anytime Fitness, Jazzercise, and more — lobbying Congress to provide direct relief to gyms hit hard by the COVID-19 pandemic.

In today’s special episode, Brett joins me to discuss the Coalition’s origins, and what it takes to get so many different organizations united behind this cause. He also explains why the Coalition is pushing for direct relief to gyms, along with the specific needs of gym owners, trainers, and fitness professionals, that he believes are being missed by existing relief legislation.

I do want to take a second to say, we’re incredibly thankful that you listen to this podcast. If you haven’t already, be sure to leave a rating, and review of the BarBend Podcast in your app of choice. Now let’s get to it.

Brett, thanks so much for taking the time to join me. I know it’s a very busy start of the year for you and for the work you’re involved with, with the Community Gym Coalition. I want to get right to it. Tell us about the Community Gym Coalition. How did it come about and what are the goals?

First, thank you for having me. That is a lofty question. I won’t take too much time.

We can slice it up into smaller chunks, if we need to. [laughs]

I’ll start with where we started. Going back to March and April, I’m sure you’re aware that that’s when gyms were first beginning to be closed down, the first slate of closures.

All of the members, we hadn’t officially formed at the time, but all of us were acting independently. We were going state by state and interacting with officials.

We were asking them, “Hey, are there guidelines that we could help with? Is there any way that we could lend expertise?”

In some cases, we were successful. By the summer when things started to reopen again, we all realized the damage has been done to too many small and mid-sized gyms around the country. We need to effectively unite and fight.

We need to make sure that there is some support that’s given to those gyms that were closed down for months and months on end. Even those gyms that were closed or that were allowed to open, many of them were open with severe operating restrictions.

We saw that the damage was done. We said, “We need to help get something to keep these gyms afloat.”

Why do you say “We.” You’re referring to a bunch of different organizations, can you give us a little background on what the royal “We” is? I’m kidding, not the royal “We.” Who “We” is in this case?

We are far from royal. The “We” is CrossFit, Mindbody, which is a software company. I’m sure many of you now, works with a lot of gyms. Orangetheory Fitness, SE Brands, which has Anytime Fitness under it. Xponential Fitness, which has a number of other brands under it and Zumba Fitness as well.

You know the cliché, “Politics makes strange bedfellows.” We are a perfect example of that. We came together. We all recognized that despite our different methods, despite our different culture or different approach to fitness, we all recognize that small gyms especially need support. They need help. We had to unite forces to make sure that was the case.

I want to talk a little bit about the origins of this grouping, and this collaborative effort before we get into some of the specifics about what you’re doing. There’s a lot to cover on both of those. It informs the genesis of this organization, informs how we look at the work you’re doing today.

It is an interesting group, it is a group that if you’d asked me five years ago, if CrossFit and Zumba and Anytime Fitness would be working on something collaboratively. I don’t think I would have said impossible. I would have said highly unlikely. Let’s put it that way.

What made this group come together to these organizations? You represent in CrossFit obviously. These organizations have existing relationships, or was it an open call, organizations that were interested signed on? How did it really start? How did the communication start happening between these organizations?

In the summer, for people who are following a lot of the federal COVID relief news, I had noticed that the restaurant industry, the live venues industry, all of these industries that were getting hit especially hard, all came forward with really meaningful, direct proposals to make sure that there is some kind of compensation or remuneration for closures so that their industry could survive.

I had noticed that. I was toying around with a bill idea, a policy proposal. Very fortunately, our new CEO said, “Hey, this is a great idea. Let’s unite and fight.” He reached out to a number of his colleagues in the fitness industry, and they connected us down the chain.

I and my boss, we started knocking on doors, saying, “Hey, would you like to join this effort?” The more participants there are, the greater the likelihood that we’ll have of achieving success.

I have to ask, and I’m not asking you to name names here. I am curious. Did anyone say no? If so, what were the organizations that said no? What reasons were they giving for not being involved?

We haven’t had anyone say no.

That’s a pretty good conversion rate, Brett.

Right. Maybe, I should go into sales.

Any time we would reach out, obviously this is such a difficult time for the industry, so there were varying levels of support, certainly in terms of material support. Everyone that we’ve reached out to, everyone who’s reached out to us, we are glad to embrace and say, “Hey, join in this fight because this really is important.”

We’re talking about tens of thousands of jobs. We’re talking about tens of thousands of facilities. We’re talking about tens of millions of members who rely on them.

How has communication been during the time of COVID between these organizations, many of whom have, I assume, not really partnered together before? Are you all having weekly Zoom calls? Are you all having virtual conferences? How are the ideas being exchanged, and how is that communication working?

We have weekly Zoom calls that are on the books. Candidly, I have never taken so many phone calls in my life.

No exaggeration, I look back through my recent calls list, I cannot find anything from before December 29th, maybe. Really, it’s just a constant stream of calls day by day.

We are really an organizing clearinghouse for ideas, for bringing in allies, for mobilizing people, and everything else that comes up when you’re running an organization or an initiative like this.

Usually it’s been done through Zoom calls but also phone calls and texts and email. We let nothing go to waste.

Let’s talk about some of those ideas. Let’s get down to the CGC, it doesn’t quite roll off the tongue for me yet. I’ll get it in a second. The acronym will become second nature by the end of this podcast.

Let’s talk about what the CGC is actually doing. It’s a relatively new organization. Obviously, a lot of work still to be done, and I’m sure a lot of things that you all will be rolling out over the next few months. What are the initiatives that have launched, and what is the day-to-day work of the organization so far?

Those are great questions. In terms of the day-to-day work, it is making sure that these issues are in the public forum. I guess that’s kind of a lofty way of saying that we’re just making noise.

That’s half the battle, is getting people to recognize that gyms are an affected industry and are affected small businesses and trying to get the attention of people who are in a position to help. Oftentimes, that’s members of the media. That’s also members of Congress.

Our day-to-day, my work is reaching out to members of Congress and saying, “Hey, let’s get a call on the books so I can talk with your staff so you can talk to a local gym owner and understand just how devastating the COVID-19 pandemic has been, and the attending closures have been, on this industry, on local small businesses.”

“Let’s see if there are some solutions that we can craft on a granular level.”

That’s the day-to-day, is just getting our ideas in front of people who are able to make a change or institute a new policy. What those ideas are, is we are seeking direct relief, direct support for gym owners.

There’s a template that has recently been enacted, actually in the latest COVID bill that was passed in late December of last year, which provides direct grants to shuttered live venues.

If you look at any of these state-phasing reopening plans, you will find that live venues tend to be on the later ends. Gyms are, fortunately, they’re not as late as the live venues, but they are still very late. This is in almost every state.

Gyms are in the later stages of reopening. There’s been economic loss, certainly, and we’re looking for direct support. That’s our prime goal.

What pushback have you gotten? I know that anytime you get on the line with politicians, you’re going to get some pushback. That might be a broad assumption, but it’s a hill I’ll die on, let me put it that way.

What are some pushback that you might have gotten from either the staff or members of Congress directly, when it comes to what you’re asking for and what you’re advocating?

You might die on this hill.

We have generally been warmly received. People understand this massive economic toll that this have taken nationally, especially on gyms. We are usually warmly received, and people do understand.

If there is any pushback, it’s to the idea of their being a direct relief for a grant program to gyms, in particular. Some members and senators say, “We need to do something that’s broadly applied.” That can work.

If that’s the case, then there need to be tweaks to existing programs or the proposed programs so that they meet the needs of gyms. For example, the Paycheck Protection Program does not meet the needs of gyms widely.

It simply does not work for most gyms. That’s what I’ve heard. Anecdotally, I seem to hear that, probably every week, from a gym owner that they received a PPP loan, but because it’s based off of payroll, and not based off of something like rent, they’re not getting enough.

On top of that, they have limits on what they can spend it towards. 60 percent of it has to go toward payroll. For many gyms, their biggest cost is rent. They end up getting a loan, that a portion of which might be forgivable, but they end up kicking the can down the road. They’re left with something that doesn’t really do much to help.

Some of our advocacies has been focused around that too.

If I have to die on that hill, if I’m wrong, I’m OK being wrong about this, if you’re actually getting a positive reception. What are some of the other gym-specific concerns, needs, that might not be as obvious off the top of our heads?

You mentioned how the Paycheck Protection Program isn’t the best for gyms, because some of these specific economic considerations of how small and medium-sized gyms are run in their actual cost structures.

What are some other things that, when we’re casually listening to this podcast or for not running gyms ourselves, we might not necessarily realize off the top of our head about the specific challenges that the COVID-19 pandemic has presented to gyms and their financial situations?

Absolutely. The root of the financial issues are that there are, on one end, you have outright closure. You’re not able to go into the gym at all. You’re not even able to do appointments. You might not even able, literally, to physically enter the building to exercise. That’s on the far end.

You have something like what’s in Washington State right now, where you can have one-on-one appointments, but you max out at 45 minutes. That means that if you’re working all day, 18 hours, then yeah, you could potentially be viable, but it’s not likely.

On the more common end of restrictions is that you have occupancy limits state-by-state. In some states, it’s as low as 25 percent. In California, on a county-by-county basis, it’s as low as 10 percent.

I have yet to find a small or mid-sized gym that can bring in 10 percent of their maximum occupancy and pay the bills. That’s impossible.

You have these occupancy restrictions that lead to people not being able to come even though they want to. There’s simply not enough revenue to meet costs. The aid that’s existing, like PPP or EIDL grants, they don’t get the job done in terms of the amount or the ability to use them on certain expenses.

Gym owners are left in this horrible position of, there is demand and there are costs. Those are two constant things. Demand, that’s artificially reduced because of the occupancy limits. You can’t bring in the revenue to address those attendant costs. I wish I could come up with a better word for it. It is just a bad situation all around.

In an ideal world, direct relief to gyms, to small and medium-sized gyms, what might that be based around? Specifically, how might that be weighted?

PPP was based largely on payroll, for example. What structure might you all suggest or might you all advocate for when it comes to, we have direct relief, how much do we decide each gym must get?

There are three ways to approach it. There’s one, which is approaching it by looking at 2019 revenue and deciding, “OK, the maximum loan amount that we will permit to be dispensed by SPA or by whichever agency is administering the program, will be XYZ number.” Maybe it’s 45 percent. That’s one way.

The second way would be to look at it quarter-over-quarter so you could say, “OK, well, if your revenue dropped more than 30 percent or 25 percent in quarters two, three, and four of 2020, we will recoup the losses compared to the same quarters in 2019.” That’s another way of approaching it.

There are different ways of approaching this. All of them should be considered, but the real struggle is getting these ideas on the map.

One other thing that I think could be a potential wrinkle, I’m not going to decide to die on another hill, because I don’t want to be proven wrong twice on the same episode. We have a limit of David being catastrophically wrong once per recording.

One thing that is the reality in the fitness industry is that many gyms are compensating their trainers as independent contractors.

That is not a blanket statement. That is not the case for every facility. It differs between gyms. It differs sometimes between gyms that are associated with each other. That seems like it might throw an additional complication in how trainers are compensated, how people make a living, and how gyms operate. Is that something that you all have had to consider in your advocacy?

100 percent. The way that current relief through the Paycheck Protection Program is structured is that the maximum loan amount is two and a half times your average payroll. How they determine payroll is by looking at benefits, a number of other like group health insurance benefits, retirement benefits, as well as who is considered a legal employee.

Now, if you have a lot of trainers that are 1099 contractors, the payments that you make to those trainers are not going to be considered for PPP. You end up getting a smaller loan amount. The rationale for this was that, technically independent contractors are their own discrete businesses.

They need to go apply for their own PPP loan. Here’s the rub, is that I’ve talked to some lenders who say, if you have a 1099 contractor, let’s say who’s making $100,000 a year — which is too high of an estimate — if they’re making $100,000 a year, then let’s say they’re probably going to get something in the range of $25,000 in terms of PPP dispersal.

The lenders I’ve talked to said that, that amount is almost too low for them to be able to actually recoup the administrative cost of actually administering that loan. You ended up getting this gap where the gyms don’t end up getting anything. The independent contractors don’t either. No one wins out.

We’re looking for ways to fix that, obviously. That’s just an untenable situation for the industry.

I appreciate you sharing that, Brett. That was the big earmarked question I had written down before this that I really didn’t have much clarity on. I appreciate you shedding some light on that.

I am curious as to a bit about your background and a bit about how you came to work with CrossFit and are now, in many ways, a voice behind the Community Gym Coalition.

What is your background? Is your background in legislation or legislation advocacy or lobbying, or do you come from a different direction here?

Absolutely. I’ll just say I am just one of many voices and proud to be a part of that group. My background is, in 2013, I had spent some time in the House of Representatives, working in the House office.

In 2014, 2015 working in some Senate offices both in the district and in Washington, DC, doing constituent casework and then going on to press work, so doing more of the communication side of those offices.

In 2015, I joined a PR and lobbying firm and worked on a number of different clients and issue campaigns and advocacy campaigns. Working on speechwriting, drafting all their materials, coming up with policy, assisting in strategy for advancing legislation.

In 2017, CrossFit had been one of my clients. They were in my portfolio. I leapt in-house, and I was glad to do it. From 2018 and 2019 and the beginning of 2020, I was working on a lot of different state issues, working on some federal issues as well.

Like a hammer, in March, COVID happens. Our industry and our gyms, the facilities become the flashpoint and we’re all just thrown into this mess.

Would you say that this has been the most challenging part of your career? As someone who’s worked on things and issues in fitness, outside of it, does anything [laughs] even come close to the difficulty and the complexity of what you’ve been working on over the past eight, nine months?

No.

I could just leave it there and I would feel comfortable. Just the magnitude of this issue and the duration…For me, I’ve just never experienced that. However, I still got energy, [laughs] so we’re still going to chase this as much as possible.

I will say that in spring, I felt like I was back in my old casework days, working with people who were struggling, who were on the brink, who…their livelihood depends on their operating a gym. Helping them through this, it was a sobering experience.

I benefited from going through it. I hope that I was able to help enough people. Regardless, we’re going to try to continue to help more. I’m proud to work with the CGC to do that.

It’s impossible to know the long-term effects that the pandemic is going to have on anything specifically. There’s a lot of guesswork and a lot of talking heads on podcasts like this one, and “Cable News” who have broad predictions, who knows how accurate those are going to be.

I don’t want to get too specific. I don’t want to make too many enemies on this podcast. I have enough of those already. What are some things that you think may fundamentally shift in the business of gyms in that part of the fitness industry because it is one part of the fitness industry as a result of this?

There’s going to be a renewed appreciation for community. I really feel that. There is this atomized approach to fitness, where you fit into your schedule, and you get it done. For many people that works, and that’s great.

I know that for many people, they need the social reinforcement, or they crave the community. You never know what you appreciate until you’ve lost it. For so many people involved with the CGC or CrossFit, they miss their communities right now. That’s the impetus behind the coalition, is emphasizing that level of community.

There’s going to be renewed interest in communal workouts following the hopefully successful resolution of the pandemic.

If I were a lot smarter and a lot more clever, I could come up with a funny pun on distance makes the heart grow fonder but apply it to gyms.

I don’t think that’s going to happen in the next 30 seconds or a minute. I won’t harp on that too much. It is something that a lot of us have felt. We cover a lot of different types of strength and the expression of strength on BarBend, CrossFit being one of them.

CrossFit is known for having that communal sense of fitness for people drinking the Kool-Aid so to speak in their gyms. That applies in the broader fitness realm as well. Certainly in the strength community, working out and training with people, it provides a different stimulus than training on one’s own.

You can get into equipment access, and things like that as well. It’s certainly a different mental aspect of it. I’m glad you bring that up. It’s something that most of the people listening to the podcast can relate to, at least in part.

Brett, where is the best place for people to keep up to date with the work that the Community Gym Coalition is doing? If they want to get involved, how would they go about doing that?

Absolutely. Our Twitter is @GymsCoalition. I would not be doing my job as a professional advocate if I did not tell every one of your listeners, “Please go to gymscoalition.org. Go to the Get Involved page.”

“Let your member of Congress and senators know that this is important to you. It’s only going to get on their radar if they hear from you.”

Excellent. Brett, thank you so much for your time. I appreciate it.

[laughs] Thank you, David.