Sport Business Evolution - from Spectators Sports to Participation Sport: the IRONMAN case

15 December 2017
Adv Arena2

3,8 km swimming, 180 km cycling, 42 km running, without breaks, in the same day. The one who first crosses the finishing line wins. This is IRONMAN, the toughest sport in the world. Or, better, to say, the brand owned by Wanda Sports Holdings.

Ladies and Gentlemen, the moment has come to fire that mental coach, or motivator, or whatever. The person who told us that “once you run a marathon, you can do everything in your life”. Running a marathon, indeed, is not enough anymore. There’s something better. There’s something more. This is called IRONMAN and it is a sport done by thousands of athletes last year only.

We cannot hide behind the usual assertion: “these are professionals”. Most IRONMAN athletes, indeed, are amateurs that do other jobs in their life.

A more and more popular challenge

IRONMAN has become a conversation topic, a kind of lifestyle, a challenge for those who are looking for news goals: Radio Deejay, one of the most famous radio stations in Italy, often speaks about that; celebrities like Joe Bastianisch and Gordon Ramsay have tried it. Being proud for taking part in IRONMAN has been part of the game since the beginning, as we will see.

Let’s start from Cervia beaches. This is where 2,500 athletes - including only 70 professionals - met for the first edition of IRONMAM Made in Italy. It was such a success in terms of participation and results that the registrations for the 2018 edition are already open. How much does the participation cost? Nowadays the starting prince is 2,525 € a person. We say nowadays because places are limited, and as slots are bought, prices increase, and they might arrive to a maximum of 4,560 € a person (multiplied for 2,500 athletes).

The brand

Why is that so interesting for us? Because IRONMAN is a model that tells us a lot about the evolution of sport business and entertaining marketing and, above all, because IRONMAN is not a sport. It is a registered brand. A property of Wanda Sports Holdings, a division of the Chinese Wanda Group, which is defined as the biggest private real estate developer in the world, founded by Wang Jianlin in 1988.

Wanda Group Twitter

After the real estate boom in the People’s Republic of China, Jianlin invested in entertainment; in 2012 it acquired the American AMC Theatres for 2,6 billion dollars, then the production company Legendary Entertainment for 3,5 billion dollars in 2016, becoming the biggest cinema operator in the world and a giant in the sector.

When Wanda entered the world of sports, it used the same methods: huge investments to acquire properties and distribution assets. First step: one share of Atletico Madrid - with soccer you never fail - then the acquisition for 1,2 billion dollars of Infront, a Swiss company specialized in sport marketing, TV images production and distribution, TV rights management (they work with FIFA, Serie A league, AC Milan, International Ski Federation, just to name a few). In the end, it acquired the American brand IRONMAN for 650 million dollars.

Ironman Ironkids

These investments aim at the integration of the event-marketing-promotion-production chain, and they were capitalized by Wanda through a progressive diversification of the offer that included the introduction of a portfolio of events under the brand IRONMAN (IRONMAN Triathlon Series, IRONMAN 70.3, 5150 Triathlon Series races, Iron Girl, Ironkids etc.). In 2016 it succeeded in involving 680,000 participants in 260 events organized in 44 different countries.

Kids Ironman

A new sport business model

To make it simpler, the business model is that of “Participation Sport”, which aims at a large participation of athletes paying for registration. The event (swimming, cycling, running) and the prestige coming from taking part in it are the product; athletes are clients. A model that contrasts with the traditional “Spectators Sports” like soccer, where athletes are part of the product and the spectators sitting on the sofa or in the stadium are clients.

“Participation Sports” are an ever-evolving business and IRONMAN is a great example of this. Athletes invest in training, coaching, materials, drinks, food, software, travels and entry fees for competitions. However, the event organization costs are not that high. A sport without fixed costs for plants (a stadium is not required), with a staff made in large part of volunteers and passionates, spectators that do not expect that much in terms of services and just want to live the moment, and a high number of participants that create opportunities for the territory, making it simpler to gain access to public contributions and incentives.

A new target: the athlete

Athletes - or, better to say, enthusiasts - are the target of the product IRONMAN, and this is a qualified target. A market research carried out by MultiSport Research (MSR) in UK in 2014 revealed that the average annual expense for taking part in the event was 2,790 pounds. The esteemed average salary of participants was 47,500 pounds, the average age 41, and many participants were professionals and businessmen.

Sponsors are interested in this type of target and, as a consequence of the success achieved by the format, they are interested in IRONMAN as well. In Italy Arena has signed an agreement to become technical sponsor of IRONMAN for 104 events in 2016 and 2017. In Europe, Redbull is involved as personal sponsor of some athletes, single events and broadcasters through its multichannel platform.

Arena sponson Ironman

And to think that the origins of all of this are to be found in 1978, in Hawaii, in an argument on who were the strongest athletes: cyclists, swimmers or marathon runners? A challenge that gave birth to the IRONMAN format as we know it nowadays, 40 years after.

“Swim 2,4 miles! Bike 112 miles! Run 26,2 miles! Brag for the rest of your life”. This is the famous sentence written by John Collins, co-founder of the brand, on the regulations of the first race.

A hand-writing on a Hawaiian beach, to inaugurate an experience that has now become a registered trademark. An extraordinary success, which goes far beyond the sum of the three sports it is made of.