The Triathlon Market

This year World Triathlon Corporation -- a/k/a/ Ironman -- is branching out into mid-distance races with its new 5150 series. (51.50 is the number of kilometers in an Olympic/International distance race like the Chicago triathlon). I'm running one such event in DC in June and I just signed up to do some volunteering during registration at the same event. For some reason this got me thinking about market power in triathlon.

This post is unburdened by much research. I'm sure there are errors in what I think I know from observation.

WTC dominates the long-course race series with dozens of 1/2 iron and iron-distance races yearly around the globe. Competitors include the relatively new Rev3, which appears to run six races, mostly in the US (although there is a Costa Rica race). Most Rev3 races are 1/2 iron and olympic combined; only Cedar Point includes a full iron distance race. Sommer Sports is an event management/promotion firm that doesn't actually own the races it promotes, but it has some presence in the long-course business. Sommer Sports -managed events tend to be funky local races which may have a unique schtick, like the Savageman in western Maryland and the Great Floridian near Orlando. Then there is a host of independent events that are not part of a larger series, like the Grand Columbian (Washington State), the Silverman (Nevada), and the Vineman triathlon, the last of which is run every July in California wine country. (The Vineman happens to be my "A" race for the year.)

WTC occasionally, or maybe not so occasionally, buys an independent event. The Vineman 1/2-iron is now a branded 1/2 Ironman, as is the Eagleman 1/2 iron in Maryland (which Ted ran last year).

Long-course triathlon is a big dollar business. An average Ironman might have 2500 competitors paying $550 each for the privilege (> $1 million in entry fees). At least half of that is pure profit; there are very well-run races with entry fees of $200-$350 (e.g., the Chesapeakeman, Great Floridian, Great Illini and Vineman). Merchandise sales and licensing revenues must be quite large. There may be incentives provided by the host venues; Ironman St. George promises to bring 2500 athletes with their families -- maybe 6000 people? -- to a small town for at a minimum two nights each in the tourist off-season. Ironman Cozumel filled that island during a lull between cruise ships. Certainly if you are a consumer ("competitor" -- quotes intended quite ironically) it is real money; I'm already out $1000 or more in entry fees for this year and I'm still looking for a fourth race.

Although I don't follow it quite as closely, it seems to me the mid- and short-course market is pretty diffuse. That would make sense; it doesn't take much expertise to put on a home-town sprint triathlon, which are the province of PTAs and YMCAs, and any serious triathlon club can put on a more substantial race (like the DC Tri). You pretty much need a school with a swimming pool, or a lake-side park, which nearly every town has. I'm sure there are some players with more market share; WTC's 5150 series is clearly at attempt to consolidate some of those races under its umbrella and Sommer Sports promotes a substantial Florida-based short- to mid-course series. My first two races were "Bud Light" series (see the third paragraph under "history" at this link) olympic-distance races in the mid-1980s.

Deciding whether WTC has some amount of market power would be difficult. First, is the market long-course triathlon? Triathlon generally? Or even simply "endurance sporting events"? Can we segment further -- maybe define a market to be 140.6 (the iron distance in miles) races only, or how about the new 222/111 races -- 2 km (1 km for the half) swim, 200 km (100 km) bike and 20 km (10 km) run? Grand Columbian is running a longer-than-140.6 event this year: 5 km swim (rather than 3.9), 200 km bike (rather than 180) and 50 km run (rather than the 42.__ km marathon).

Is the market worldwide, nationwide, or regional? The triathlon crowd is pretty well-heeled, and for branded races people will travel the globe, or at least the hemisphere. I have no doubt that Ironman Cozumel competes head-to-head with the Silverman, run at about the same time of year.

What other than market share might inform WTC's possible dominance? The brand is (so far) pure gold, although I personally believe they are diluting it with too many halves. They are careful with the 5150 series (note that you won't see the word Ironman associated with that series). WTC has lots of pull with governing bodies, like USA Triathlon, because of its market position. Access to an adequate supply of elite athletes is a must for a major event. WTC locks them up somewhat because the grand-daddy of all races is Kona, and you only get to go by qualifying in an Ironman-branded race. But money talks: the 222/111 series (new and not yet profitable) is paying two-time Ironman Kona winner Chris McCormack to run and tout its races. Rev3 has managed to get top contenders interested. But the Great Illini? Well, I managed a top-15 finish in 2008; there's not much of an elite field there.

Not sure what this all adds up to. I do wonder this (if you made it this far): what thoughts on a paper written on competition policy issues in triathlon?