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PTO announce intent to buy Ironman
Why has the PTO made the decision to try and buy Ironman?
Ever since Providence Capital Partners first saddled WTC with $200 million debt and prepared for their exit sale, the business has been starved of investment. When WSG acquired WTC it burdened the operation with additional debt, thus restricting any ability of the dedicated management to invest and promote the business.
Our goal in acquiring the Ironman assets is free it from this excessive debt burden and we are in discussions with partners where a healthy portion of equity is injected into the business to reduce interest payments and increase investment in things like promotion, production, race standards and prize money, and maybe even a health insurance programme for professionals.
You must admit something is wrong when athletes like Matt Russell and Tim Don are reduced to GoFundMe pages and charitable sponsor donations to pay medical bills after bike accidents at a World Championship Event. It is actually heartbreaking to see, and to be honest, we are a bit surprised the community is not more upset by this.
How confident are you this will happen – has there been any signs from Wanda that they’re open to this?
While we have not had any overt signs from Wanda before our letter, our bankers, North Point Advisors, have analysed the WSG Financial Statements and the performance of the IPO, and have advised that this an opportune time to start discussions.Since we have now sent our letter and released it publicly, we will not be permitted to comment on any ongoing discussions.
You never know how these things work out. By acting through a collective body like the PTO, the professional are uniquely able to provide significant value to our partners and support and grow the sport we love. This is about athlete self-determination. Our sport is mature enough and economically large enough that, the PGA Golf Tour and the ATP Tennis, the PTO, with or with Ironman, will begin to take responsibility and control of the direction and economics of the sport, and continue to reinvest those economics so the sport has sustainable growth, instead of feeding a highly leveraged financial investor. The athlete self-determination of the sport is inevitable and is seemed to us the cooperative acquisition of Ironman at this time would be the least disruptive route, but it will happen with or without the acquisition.
Why have you decided to release this statement and not kept it under wraps?
Since WSG is a public company, and our proposal could constitute material information and be subject to leaked selective disclosure, our lawyers have advised us that it would be prudent to release the contents of our letter to the markets. We now will have no further comment on the status of our discussions.
Where will the funding for the purchase come from ?
We are in the process of talking to a number of partners and we will be quite selective as it is important for us to work with a group that shares our vision.
If successful, what will this mean for elites?
This is the first step in the logical path for self determination for the professional athletes in our sport but we believe this won’t just benefit elites – we believe we can raise the profile of triathlon for all stakeholders in our sport – sponsors, age-groupers, other event organisers. We believe Ironman is an incredible brand and business and we want to ensure its longevity and success far into the future.
Prize money is an important component here and can’t be ignored (as an example – Kona prize purse has seen zero growth in the past 8 years despite age group revenues rising 66%) – but the path to self-determination for the athletes goes far beyond that – from input into schedules, regulations, sponsor engagement, promotion – uniting to ensure our sports success.
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Our sport is unique in that professional and age-groupers both race the same course and share the same struggles, so we very much envision the age-groupers having a voice together with us as we celebrate the sport we all love so much.
How does this impact Challenge and your relationship with them? And is the Collins Cup still in the works?
Zibi and Felix and the whole Challenge family have been big supporters of the PTO and professionals from the start, and we will continue to be big supporters of them. We think the sport has not well served by the ‘rivalry’ between IM and Challenge, as we think that the organisations’ existing operations are quite compatible and we would seek to work with Challenge and they will be a big asset in helping the sport thrive.
While we will have strategic financial partners, the PTO itself is a not-for-profit entity, that means we can allocate resources to other organisations in triathlon community who we feel are looking benefit the sport.