The Business of Triathlon

Over the past few years, the growth of triathlon in America has been huge.  Need some proof?  Take a look at this article in the New York Times that states participation in triathlon is up 51% since 2007, and also gives a small glimpse into the triathlon life.  World Triathlon Corporation is the parent of the Ironman brand and is now owned by a private equity firm, Providence Equity Partners.  As with anything owned by PE firms, the underlying goal is to maximize return on investment.  How is WTC going about this now?  Let’s take a look at a few things in particular.

Race Fees:

In 2007, an Ironman cost $450 to register for, now it costs $700 for 2011.  In 2007, a 70.3 cost $165, now it costs $275 for 2011.

5150 Series:

The Ironman brand has now added 13 Olympic distance races as part of a new series.  Let’s just guess and say the price of entry is $150 per person, and there’s a field limit of 5,000 per race.  That’s an added revenue of almost $10MM ($9.75MM to be exact).

Ironman Access:

Introduced today, a person can register as a member for $1000 to gain access to pre-registration to Ironman branded events.  Some of these events sell out in as little as 15 minutes when they’re opened to the public.

Now, let’s summarize what has happened over the past 4 years, neglecting Ironman Access.

2007 – Ironman (21 races, 1800 each, $450/person):                        $17.01MM in revenue

2007 – Ironman 70.3 (21 races, 1800 each, $165/person):               $6.24MM in revenue

2007 – TOTAL:                                                                                                    $23.25MM in revenue

2011 – Ironman (25 races, 1800 each, $700/person):                        $31.50MM in revenue

2011 – Ironman 70.3 (49 races, 1800 each, $275/person):               $24.26MM in revenue

2011 – Ironman 5150 (13 races, 5000 each, $150/person):              $9.75MM in revenue

2011 – TOTAL:                                                                                                    $65.51MM in revenue

Triathlon participation is up 51% in the last 4 years, and expected revenues (based solely on race participation) of the main corporation putting on races are up 282% for the same time period.  Without getting into too much discussion of cost of doing business, profits, etc., I wonder how much of the increase in expected revenue is driven by demand of its consumers.  What is the breaking point for WTC?  At what point do the athletes say that the cost of participation is too much? 

What do you think?  Hit me on here, @ me on Twitter or whatever you like.

Facts and figures are based on my own research.  Any inaccuracies are unintentional.  Any content contained here can and will be removed if I am asked.

Michael

Michael


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