Hold a New Tournament
Reason: held annually
Events: races, fencing, jousting, throwing (javelins, etc) and magical duels
Style: round robin / points-based
Length: one day
Awards: first place winner(s)
Top Prizes: good equipment (armor, etc)
Crowd: most interested in certain event(s)
Betting: unofficial - heavily punished
Other Entertainment: local bards, staged exhibitions, trained animals and musical contest(s)
Competitors of interest:
The jaded warrior who is suspected of cheating.
The wandering fighter who has many rivals.
The devoted cleric who has an ulterior motive for competing.
The disgraced noble who is a long shot to win.