Ironman owner ready to add to market share
|World Triathlon Corp. CEO Andrew Messick cheers on competitors at a 2016 event.
The owner of the Ironman brand, now 19 months removed from its sale from Providence Equity to Chinese conglomerate Dalian Wanda Group, sees the endurance business as ready for a clear leader. Dalian Wanda has aggressive growth expectations, too.
“We felt for a long time that the mass-participation event industry is one that is characterized by extreme fragmentation,” Messick said. “And that a company like ours, while we are the biggest players in the world in our space, has relatively small market share, when you look more broadly at everything that’s happening in mountain biking, tri, running, road cycling, the obstacle course part of the business.”
Messick said he thinks Ironman is the only company with the scale and experience to effectively run events in many markets at once, including in heretofore unfamiliar subcategories. In the last five years, Ironman’s triathlon revenue has gone from 100 percent to 75 percent of its business, Messick said. There’s no target mix, he added.
“We think there’s an opportunity for us to get more involved in other parts of the industry and continue to grow,” he said, singling out mountain bike racing as a segment in which Ironman wants to develop a “core competency.”
In 2016, Ironman acquired Lagardère Sports’ endurance division, whose portfolio includes 21 events with 140,000 participants in three continents. It also acquired Cape Epic, an eight-day South African mountain bike race, and domestically, the Across the Bay 10K in Maryland.
Adding market share will come slowly. Defining the market broadly, Messick estimates Ironman has less than 8 percent share. That number won’t increase substantially in any single deal, but Messick said yes when asked if it was feasible to pursue large brands.
“Sure, there are a number of those,” he said. “There’s companies that own broad portfolios, like Life Time Fitness or the Amaury Sport Organisation in France. There are single-brand series, Spartan, Tough Mudder, Rock ’n’ Roll Marathon, and so there’s lots of players out there. And whether any or all of those make sense for a company like us is part of how we spend our time.”
Executives at Rock ’n’ Roll’s owner, Competitor Group, Life Time and Tough Mudder said they’re not for sale. Spartan Race issued a statement: “As a private company we would never discuss, but [founder] Joe [De Sena] has repeatedly said death is his exit strategy.”
Aside from mergers and acquisitions, Ironman execs believe they also can use the company’s five-year-old participant database to grow revenue. After years of trials, they believe the database can now be relied upon to make decisions about when to pitch former or future participants for additional services or race opportunities.
The database can also be used to spot trends in the “life cycle” of an athlete more effectively, said CMO Christopher Stadler. For instance, pure running events tend to act as feeders to triathlons, and many participants transition into cycling-only races in late middle age. That knowledge also adds value to possible sponsors. In addition, Ironman has launched several initiatives designed to get more women into triathlons.
Messick said the company will continue to develop entirely new events where the market can sustain them, particularly in China. So far it’s launched five new Ironman properties in China, including one that was scheduled for last Saturday in Liuzhou. “That’s part of what matters to Wanda, is how do we take the capabilities we’ve developed and apply them to the Chinese market?”
But in much of the western world, serious revenue growth in running and triathlons will probably have to come from M&A. In the U.S., participation in both triathlons and running races (other than the 5K fun run distance) declined in both 2015 and 2016 after a growth trend abruptly ended, according to statistics from USA Triathlon and Running USA. However, many experts think there’s more opportunity in cycling.