Endurance race organizer Ironman oversees more than 235 events in over 50 countries, a global footprint that’s made the company a valuable acquisition target. In March, Wanda Sports Group agreed to sell Ironman to Advance (Sports Business Journal’s parent company) in an all-cash deal that valued it at $730 million. But the event-reliant company is also feeling the squeeze as COVID-19 restrictions wipe away months of the race calendar. Now, Ironman finally has its sights set on a return to racing and a detailed strategy to do so safely.
According to Ironman CEO Andrew Messick, roughly 65% of the company’s revenue is made up of race registration fees, with another 25% coming from sponsorships and the last 10% from merchandise. “All of it relates to events,” he said. “To the extent that events don’t happen, what we see is extraordinary reductions in our revenue.” If the rest of this year’s race events were to be canceled, Messick predicted that company revenue would fall 87% short of initial projections.
“That’s if there are no more events,” Messick said. “We think there will be some.”
Messick said roughly 120 events, or about 70% of the races that have been affected, were rescheduled to later dates. And the latter half of the year’s original race schedule is still largely intact. “We may be able to sneak something in in June or July,” he said. “And at least as of now, we have a schedule of more than 100 events around the world that are currently scheduled to take place in 2020.”
Future races will follow Ironman’s newly instated “Safe Return to Racing” guidelines. Staffers will wear masks and gloves, while competitors will also be provided masks and expected to wear them when not actively competing. Organizers will institute temperature screening, minimize interactions at registration and the finish line and, perhaps most importantly, reduce the density of competitors who often pack together throughout a race.
“It’s a flow problem,” Messick said. “And like all flow problems, there’s ways you can solve it.” Planned solutions involve more staggered race starts and expanded triathlon transition areas. Messick also noted that a “meaningful and material” number of entrants have deferred their race entries to next year, which means a smaller number of athletes to manage in the near-term. As a result, “we can reduce interactions by as much as 90%,” he said.
In the meantime, Ironman is focused on reducing spending while keeping its workforce intact. “We’ve all taken pay reductions,” said Messick. “So far we’ve avoided layoffs and furloughs. And we are hopeful that we’ll be able to continue that.” Ironman is too big to qualify for PPP relief, though it has secured government assistance overseas in parts of Europe and Asia. And it has introduced a new virtual race series that has so far attracted some 183,000 registrants.
