The mass participation events industry is undergoing a consolidation as participation levels at some second-tier events fall, but Infront’s dominant position in delivering the top events has enabled further growth, according to Hans-Peter Zurbruegg, the vice-president of the agency’s Personal & Corporate Fitness unit.
Infront first established itself in the mass participation events industry through an agreement signed seven years ago to market the Berlin Marathon rights and quickly followed up by the purchase of the Germany-based B2Run corporate running series in 2014.
The agency has now established itself as the market leader after rival Lagardère Sports backed away from the space and IMG moved out of the UK mass participation events sector and focused on licensing events.
Mass participation revenues at parent Wanda Sports have increased steadily in recent years on the back of acquisitions and general sector growth buoyed by global health and fitness initiatives driven by city authorities, employers and governments, along with the development of an experiential economy.
Infront continues to display that growth, according to Zurbruegg, but there is evidence of saturation elsewhere in the market.
Zurbruegg told SportBusiness: “We watch what’s happening very closely. For example, in Germany we know how all the marathons develop and the second-tier marathons last year declined in participation whereas the demand for Berlin Marathon goes up and up. People want to do the top events, that’s what they strive for but not every village needs a marathon.
“There was just too much growth. Very small running companies tried to set up sorts of events and it’s just natural to see a little bit of consolidation after a good strong phase of growth. These small companies realised that it’s not that easy to make a business out of it.
“The participants want a fantastic experience. They want to have top security and top organisation and, increasingly, only professionally set up companies can deliver these type of things.”
He added: “The top marathons still grow but there is a consolidation phase going on at the moment for the small- to mid-tier marathons. The growth is slowing or in some marathons you see a decline in participation. But for the top marathons the demand even goes up.”
Given heightened security obligations from city and regional authorities, coupled with the “push for professionalism”, Zurbruegg claimed that “only bigger companies can fulfil these requirements and make this a good business”.
The agency’s marathon portfolio expanded this month as the Rome Marathon was added in a long-term agreement.
Infront has built up its active lifestyle business through various acquisitions and rights agreements, including a deal in 2014 to handle the World Marathon Majors’ sponsorship platform and the acquisition this year of Threshold Sports, the UK agency that organises the Ride Across Britain. In 2016, the Wanda-owned Ironman also acquired Lagardère Sports’ mass participation business and South Africa’s Cape Epic mountain bike race.
According to figures files in its recent IPO prospectus, Wanda Sports generated €284.1m ($309.3m) in mass participation revenues in 2018, a healthy jump on €251.5m in 2017 and €196.4m in 2016. The revenues include those generated by Ironman and Ironman 70.3 events, which do not form part of Infront’s Personal & Corporate Fitness unit.
The Professional Triathletes Organisation, a non-for-profit entity, this week launched an audacious bid alongside “financial advisors and certain selected partners” to buy Wanda’s Ironman and mass participation business, calling for more self-determination for athletes.
Athlete entry fees represented 44 per cent (€124.1m) of Wanda Sports’ mass participation revenues in 2018, followed by €69.2m derived from sponsorship, €25.5m from host city fees, €21.8m from merchandising and €10.6m stemming from licensing. A total of 326 mass participation events spanning 48 countries – including Ironman and Ironman 70.3 events – were held in 2018, a jump of 60 on the 2017 total.
Gross profit of €100.9m was reported Wanda’s mass participation activities in 2018, a rise on the €90.3m and €74.9m filed in 2017 and 2016, respectively.
Organic and inorganic growth
Zurbruegg attributed the steady growth in revenues at the Personal & Corporate Fitness division to both the inorganic growth through acquisitions and organic growth given rising participant numbers.
He said: “Even in the most classic types of runs, such as the business runs in Germany, our events are growing. In Munich we had almost 35,000 participants in the B2Run in Munich which was a new record. There is definitely organic growth but we accelerate the growth through acquisitions and partnerships.
“It remain part of our growth strategy. When there are good opportunities coming up then we’ll look at them. It’s about growing organically with the current portfolio but also establishing potentially new formats, and capturing growth opportunities through acquisitions.”
Since the acquisition of the B2Run business nearly six years ago, Infront has expanded the series to Switzerland, Portugal, Spain, Romania, Poland and South Africa, the Balkans, Greece and the Netherlands. Unlike some other mass participation events, the B2Run events derive larger revenues from sponsorship as opposed to entry fees.
The UK market, which is Infront’s biggest in Europe in the mass participation space together with Germany, has taken on heightened importance for Zurbruegg and his team since the Threshold acquisition. He explained: “Now it’s about replicating some of our events in the UK market and also replicating some of the formats outside of the UK where Threshold is very successful. They have some concepts that we want to leverage across Europe.”
Quizzed on possible expansion markets, Zurbruegg said that Infront is looking at opportunities in Central and Eastern Europe, such as Poland and Turkey, where, he said, “there was no real mass participation events business in existence ten years ago.”
He noted: “The focus for our division at Infront is particularly Europe. Obviously, Wanda Sports China looks after China and Asia and Ironman is very strong in other continents, particularly the Americas. The growth prospects correlate a little bit with purchase power in a country.”