Ironman Access - A Analytical Uneducated View

So here I my thoughts on the issue of the day which would appear to be about Ironman Access. In reality there should be many more issues in the world that we should be a lot more worried about but this does seem to be the one in my universe at the moment.

What Do we Expect of WTC

WTC stands for World Triathlon Corporation. Only one word is important in this description which is corporation. Corporations are generally structured to serve the best interests of their shareholders which in this case is a private equity company called providence equity.

Private equity normally targets a brand which it perceives to be undervalued, add as much value as it can in a short time period and then flip the brand. This is what Providence has done with WTC. 

When it bought WTC most of its races were licensed out and most probably at sub maximal value. So by taking back these races and running them itself it created economies of scale and by running them itself replaced the middleman (Independent Race Directors) with its own employees. These savings were not passed on to the consumer (Demand still exists) so this increased profit.

It then expanded the race series, firstly with the expansion of the 70.3 series, with a small expansion of the IM series then to the huge move into the Olympic Distance market. This made sense, in 70.3 they have a product that can have many more repeat visits (Racing 2 IM's in a year is a huge commitment but racing 2 or 3 70.3's may not be) then the Olympic Distance market in the states seemed somewhat fragmented and lacked a brand that had national scope. 

WTC has also branched out to other potential revenue sources, through both aligning their key brand - the word IRONMAN with products that have direct and indirect relevance to triathlon (I would have picked up a IM mattress from the kona expo but was a bit to fit in my luggage). They have looked to maximize their merchandise income (Although I think to some degree they could improve this aspect through a stronger online presence).

So when it came to IRONMAN Access they saw a market. The opportunity was as follows;

Opportunity 

- Many people get stressed out about if they will be able to enter a event online - even going to the extreme of travelling to the race site

- A lot of these people like to be able to control as many aspects of there life as they can and for a certain amount of this demographic money is not really an inhibitor

If we can charge people to alleviate these fears and guarantee entry in their chosen event then we have fulfilled the opportunity. 

Benefit

So we see the opportunity, however how as a private corporation whose boards job it is to maximize value for our shareholders (Not our customers) do we benefit from this opportunity.

The answer was IRONMAN access. By charging $1000 to alleviate this fear they stand to make a tidy sum of money. Lets say that 1000 people sign up each year - that equates to $1 Million dollars of revenue that is essentially 95% profit. That is a pretty impressive figure for setting up a website.

So is the WTC doing the Wrong Thing?

Most likely no. The fact is that WTC has a mission and that mission is nothing to do with triathlon. Its mission is to maximize profit and this move does exactly that for its shareholders. This is what it has done with this product and from that perspective it makes total sense. 

The only risk it has with this product is the potential fall out from its repeat customer base who is offended by this approach to preferential treatment to those who can afford it. However the reality is that this "membership" concept allowing early access to pre-sales is not something new and is seen in many other industries. However it does in some aspect take away some of the tradition around race entry that did exist although with things like CEO, corporate and community fund slots I am not sure how much this really existed.

As much fall out that there is around this the real impact to individuals is likely quite low. It may mean that 100 or so slots at certain races are pre bought decreasing the available pool of entries by around 3 to 4%. If you are ready to enter in person at the site this likely has no impact (IMC had huge lines this year but I think only 60% of spots were sold at site) and to be honest if you at sat at your computer at 10am on the Monday chances are it would have no impact either.

From a PR perspective they could have done this better (strong alignment with charity) however in the end they are going to make $1 million dollars plus a year.

Should we expect more behavior along this line?

YES .................. WHY

Just read above - Maximizing Profit is the clear mandate of the WTC - PLAIN AND SIMPLE. 

This is not the first thing along those lines, the new pro rules were set up to protect the brand and the prestige of their race series. Making PRO's race 2 WTC IM's a year is designed to prevent them supporting and racing other series. They are making business decisions to protect their brand. 

There was not a huge uproar about the Pro rules because most people did not see a direct impact on them (Although one could argue that by weakening local races there is a potential downstream affect through lower quality fields - which equals less media - whic equals less sponsorship which equates to higher entry fees). 

However the Pro rules are most probably the most aggressive in protecting the WTC product by indirectly preventing pros who wish to compete in Kona (A huge financial perspective from a marketability perspective) from supporting other major series at the HIM and IM distance (Rev 3 , Challenge etc)

In addition to this field sizes should be a concern - from a competitive aspect it is hard to run a fair race in regards to the large swim packs that come out in terms of drafting. To decrease fields sizes is not going to happen so this would seem to be a ongoing issue (more for athletes than the WTC). However there are likely solutions but none of these are easy and to be honest the WTC likely has little motivation around this.

So what is the real problem?

Well if their is a concern about the WTC dominance in the North American Triathlon market place then it could mostly be blamed on KONA. While WTC owns this brand and this race from many Pro's perspective this will still remain a key target. Also form a top age grouper perspective this will also be the case. These individuals (through competing, coaching etc) tend to be the top influencer's in the triathlon marketplace.  

However for everyone else who competes in an IM then why would they do a IM race if they do not have their sites set on KONA? The answer is that WTC tends to put on a good show and has a large stranglehold on the IM distance market. This will not be broken till a series (either a single brand or a collection of races) competes with WTC by attacking from a niche perspective. To some degree this seems to be what Rev 3 is doing by offering a improved customer experience.

Is WTC all bad

I say no - although their prime purpose is not the success of Long distance triathlon they do have a vested interest to a limited degree. There are more IM races than ever before, the sport is growing from a participation and that has to be good. 

They are also definitely not the most community focussed of all organisations and are definitely focussed on a high profit low cost (Maximize volunteer to employee ratio, minimize officiating costs (less referees)) product.

I am still annoyed then what can I do?

If you are not shooting for Kona or Vegas (The new Clearwater) then race independent races or other series. From a Olympic Distance and Half IM perspective there are many options out there that are worth considering and many fantastics races. From a full IM perspective the options are a bit more limited and the race experience may vary but my understanding is that some great races do exist.

Understand who the WTC partners are in your purchasing decisions and let those companies know why you are avoiding their brands. Letters to the partners are likely to be more effective than letters direct to WTC. These partners pay WTC money or provide services in exchange for their partnership.

What do I see as the pressing problem with the WTC - PRIZEMONEY

If you know what it takes to do an Ironman then you should have a appreciation for how hard the pros train. I am not a PRO so this is not self serving but to have the winner of the world championships take in only $110000 is plain embarrassing. Heck if you win something like IMC you only get $12K (total purse $75k) - that is pretty embarrassing for a event which generates $1.75 Million in entry fees (Plus maybe some sponsorship) . even if you assume costs of $1 million dollars (No idea if this is accurate) then that equates to paying out 10% of your profit to who should be stars of the event. 

Now the pros need to do what they can to maximize their value but in terms of winning an Ironman their should be some sort of incentive and $12k sounds like something that would just pay the travel costs in a year for a Pro who is trying to make it. The fact is there is no incentive for WTC to do more on this front unless their is a potential impact to its bottom line.

Conclusion

I have no firm conclusion - this is more of a brain dump. For me my displeasure with this approach by WTC is it more reflects the consequences of having a for profit private company in charge of our sport vs a real governing body who looks out for long distance triathlon (ITU's prioirties are Elite Olympic Distance, Elite Olympic Distance and Elite Olympic Distance). WTC is doing what it needs to do which is to make money.

I like racing so will continue to do so but in the years I am not targeting Kona or Ironman Canada I will likely try and support races that support the sport at a more grass route level while at the same time making a commitment to paying a reasonable amount to the pro field (As i believe that is important)

So those are my intial thoughts - until something replaces KONA or KONA is brought back into a not for profit organisations hands I sense these issues will continue to exist. 

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Note - I did not research or reference this blog so figures, numbers and history may be incorrect. However I have commented to the best of my knowledge.


Also IRONMAN ACCESS is not a product I would buy. However in a consumer society that demands certainty and access I can see why there is a market