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Ironman’s new investors will focus on content and virtual racing to unlock value

• Advance Publications owns Condé Nast and holds a 30-per-cent stake in Discovery
• New investors believe virtual racing will unlock additional opportunities
• Race entry fees made up 44 per cent of revenues at Wanda’s mass participation business in 2018

While the sports industry news agenda was dominated by stories of postponements, cancellations and furloughs during the month of March, it was business as usual for the executives at Advance Publications and Orkila Capital. In a move that bucked the general sense of stasis in the sector, the media conglomerate and private equity firm swooped to acquire the Ironman business from the Wanda Sports Group for $730m (€675.6m).

The timeworn aphorism about the Chinese word for ‘crisis’ meaning both ‘opportunity’ and ‘danger’ seemed apposite in the circumstances. Just weeks earlier, the Beijing-based sports division of Dalian Wanda had warned of the ‘material adverse impact’ of Covid-19 on its mass participation business before taking out a $240m loan facility to refinance its debts. The feeling in some quarters is that the current market conditions are baked into the $730m price tag – some way short of WSG’s reported $1bn valuation.

“It’s obviously a longer-term viewpoint than just whatever’s going to happen in the world in the next twelve months,” says Nick Rusling, chief executive of Human Race, one of the largest organisers of mass participation events in the UK. “Ironman is a brand that’s withstood various forms of economic crisis, so the valuation now is about the longer term.”

Whenever a business has gone through as many ownership iterations as Ironman, there will always be interest in how the latest custodians believe they can unlock additional value where so many creative minds have tried before.

Prior to Wanda, private equity firm Providence Equity Partners owned the business between 2008 and 2015. Its plan was to turn what was essentially an IP-licensing business into one that owned and controlled most of its events and sold sponsorships centrally.

Wanda bought the group from Providence for $650m in 2015 and assumed debts that reportedly took the deal to $900m. Over the last five years, its strategy has been to grow Ironman both by creating new events, in China especially, and its wider mass participation business through the acquisition of some of the world’s leading aspirational endurance properties in trail running, marathons and mountain biking. Ironman purchased iconic events like the Cape Epic mountain bike race in 2016 and the acquisition of Lagardère Sports’ mass participation business in the same year also boosted its endurance event portfolio.

The 2018 Cape Epic mountain bike race.

Media capabilities

Under the latest deal, attention will inevitably turn to some of the media properties in majority shareholder Advance’s investment family. These include publishing and events powerhouse Condé Nast and a 30-per-cent stake in Discovery, parent company to broadcaster Eurosport.

SportBusiness understands Advance plans to run Ironman as a standalone business but draw on experience within the wider group. The belief is the other companies’ capabilities in engaging with consumers and sponsors across a range of media will help to drive a business that strives to cultivate a year-round commercial relationship with its participants.

The Ironman business model has diversified as it has changed hands between investors. In 2018, athlete entry fees made up 44 per cent of Wanda’s mass participation revenues (€124.1m), sponsorship revenues accounted for around 24 per cent (€69.2m), with the company making an additional €25.5m from host city fees, €21.8m from merchandising and €10.6m from licensing. It should be noted that these figures also include revenues from the Infront agency’s Personal & Corporate Fitness unit, which also sits under the Wanda mass participation umbrella but is not part of the Advance deal.

The physical challenges of an Ironman race, and of the other endurance events in the company’s portfolio, provide a huge opportunity for an always-on relationship with participants. Most competitors take up triathlon having previously specialised in one discipline, meaning they have to learn new core skills. Experienced athletes liken races to electrochemical contests, where one badly timed energy drink or feeding decision can have dramatic consequences later on in the long races. This makes for a highly-engaged audience, hungry for information and training resources, which also offers numerous marketing opportunities for equipment suppliers and sports nutritional brands.

“Ironman probably charge the highest entry fee of all in our industry,” says Rusling. “But often, even if it’s £100, it’s a far lower percentage of the total spend in someone’s passion to run, cycle, swim, because the equipment costs a lot more.

“If you can tap into some of the bigger chunks of spend, and it’s all centered around supporting a customer and what they love doing all year round, then that’s the commercial holy grail.”

Discovery, the other major media brand in Advance’s investment portfolio, has already started trying to exploit similar opportunities, developing new verticals in hobbyist pursuits like cycling and golf to supplement live coverage of these sports on Eurosport.

The acquisition of a controlling stake in the Play Sports Group, the digital media business that runs the specialist Global Cycling Network YouTube channel, was a case in point, allowing the media company to ‘super-serve’ cycling enthusiasts with expert training, tutorials and lifestyle programming.

Sources suggest Ironman stands more chance of increasing revenues from selling sponsorship around short-form content and targeted email campaigns than from televising professional events. Ironman races can last up to ten hours and don’t make for the most compelling live viewing, with the bulk of distribution being for non-live highlights and magazine content, although they do have a role to play in prospecting for amateur entries.


Rusling is skeptical the new owners will be able to squeeze much more value out of Ironman simply through better content, arguing that the company already boasts very sophisticated marketing and digital capabilities. He also warns that plugging Ironman into a publishing giant like Condé Nast doesn’t guarantee success. He cites the example of Cycling Weekly publisher Time Inc. buying leading sport organiser UK Cycling Events in 2015.

“What they found very quickly was the logic of having a single customer base and buying magazines actually didn’t transpire and it wasn’t quite the same customer at all,” he says.

“Cyclists really want to be talking about cycling, and triathletes want to be talking about doing triathlons, and runners want to be talking about running and there’s very little overlap. As soon as you deviate from Ironman into a slightly broader sphere of media, you’re not necessarily offering what the customer wants.”

That said, the new investors might have more success leveraging Condé Nast’s portfolio of women’s publications – which includes Vogue, Glamour and Teen Vogue – to engage female audiences. Ironman events tend to skew towards male participants and previous efforts to address this, by creating a less challenging ‘Iron Girl’ series, have been derided as patronising towards women.

The new owners should have enough knowledge about the business to mitigate against missteps like this. To supplement Advance’s experience in media and live entertainment, minority investor Orkila Capital’s founder and managing partner Jesse Du Bey will rejoin the Ironman board of directors.

Du Bey was previously managing director of Providence Equity Partners and led the firm’s investment in Ironman 12 years ago. A triathlete himself, he was personally involved in recruiting members of the company’s current management team, including president and chief executive Andrew Messick, and led the strategy to bring licensed races in-house between 2008 and 2015.

Orkila’s investment portfolio includes the Bellator mixed martial arts promotion and several conferencing and events businesses, including independent live music and art festival company Crash Line Productions.

Orkila Capital founder Jesse Du Bey with his wife at a culinary event in New York in 2010.

Virtual racing

SportBusiness understands the private equity firm sees an opportunity to use the latest generation of interactive and connected fitness applications like Zwift, Strava and Rouvy to deepen engagement with Ironman participants and integrate the Ironman brand even more into their daily lives.

The Covid-19 lockdown might have already provided the catalyst for the evolution the new owners want to instigate. Just days before the Advance sale, the Ironman Group launched Ironman Virtual Racing, in which athletes using wearable technology and fitness tracker apps will be able to compete in a series of challenges over the course of a weekend. The first race, Ironman VR1, took place on April 3.

The new series has already delivered new sponsorship deals with virtual cycling app Rouvy and fitness equipment manufacturer Technogym, who will also provide the platform for the races.

Beyond developments like this, the indications are the new investors will not seek to move Ironman too far away from its core offering of elite endurance events. One well-placed source said they are mindful of the deep affinity followers feel for the brand and will be wary of changing too much. The Ironman logo, which legions of competitors have tattooed on their bodies, denotes a degree of toughness and the latest custodians do not want to dilute this.

The new investors are said to have been impressed by Ironman’s customer retention figures and click-through rates on email campaigns which are said to be above 80 per cent. They think of the brand as more of a lifestyle choice than a consumer product, which means it has fewer direct competitors than some obstacle racing events.

This standing is thought to insulate Ironman against some of the wider trends in the industry, whereby participation at some second-tier mass participation events is falling. But it also makes it difficult to create new competition derivatives. The group created Ironman 70.3 half-distance races as far back as 2006, but if it shortens distances any further to try to attract a broader consumer set, it risks diminishing its core concept.

A runner in action during a half Ironman Triathlon in Eilat, Israel. (Artur Widak/NurPhoto via Getty Images)

City fees

Another question is what the current social distancing measures and bans on mass gatherings might do, both for the appetite to watch and participate in races, and for cities to host them.

One possibility is hosting budgets will be cut as public sector bodies prioritize health spending and social security. Indeed, 43 per cent of cities surveyed in a recent poll by Burson Cohn & Wolfe’s Sports Practice said they thought the pandemic would have a high impact on sports hosting budgets in 2021.

The new investors will hope that Ironman’s proven record in attracting large numbers of high-spending competitors and tourists to host cities will encourage existing partners to continue welcoming races to boost their coffers. They would be heartened to see that just 17 per cent of cities in the BCW survey believed city hosting budgets will be affected after 2021.

Rusling thinks customer service is a more pressing priority during the Covid-19 lockdown, pointing to the flak Ironman is receiving on social media for not issuing refunds to postponed or cancelled races.

“People are savvy and if you can see them trying to make money in different ways, or taking a policy where they’re not going to issue refunds, they perhaps start to look for alternatives,” he says.

“Ironman really is unique brand – it’s the Hoover in a way of long-distance triathlon. For me, the next layer is making sure they get the passion at head office right, with a long-term view. That, in itself, could easily build percentage growth through loyalty and tattoos.”

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