The art of misdirection is a fundamental tool for any magician. It also just so happens to be vital for any good pick-pocket.
All things being equal, a short distance triathlete can make money in the WTCS, in Super League Triathlon or even by stepping up to the Professional Triathletes Organisation (PTO). There is a veritable smorgasbord of racing. With racing comes prize money, the lifeblood for the careers of most triathletes, and on that front there are reasons to be optimistic.
Has your attention been suitably misdirected yet?
Ahead of the 2023 season, World Triathlon made changes to the WTCS prize money structure. Aside from the shifting dynamics of how deep the field was paid, the main takeaway was the rise of 17.5% in total prize money from 2022 (up to USD 3,480,000).
Meanwhile, the PTO and Super League have pumped money into their products to attract talent. For example, the winners of the PTO Asian Open, European Open and US Open each took home USD 100,000. Ahead of last year’s Super League final, Hayden Wilde had the chance to pocket USD 185,000 as the highest earner in the competition.
Are you now distracted by the shiny prize money? Good.
Take a look beyond the question of prize money and the real picture emerges.
Put bluntly, triathletes will be last ones to see the real profits from the growth of the sport.
World Triathlon is a legal not-for-profit institution based in Lausanne. Although they turned a profit in 2020 and 2021, in the broader picture their revenue is miniscule. In 2021, for example, they declared a total revenue of USD 6,522,653. Taken in the ecosystem of sporting finance, World Triathlon is a minnow. And sharks swim in the same waters.
The financial heavyweights in this picture are the PTO and Super League Triathlon. From their current positions, both will be the ones to profit from what happens next.
Super League are backed by the billionaire Leonid Boguslavsky. In brief terms, Boguslavsky founded RTP Global, a major investment firm that is now a name sponsor of one of the Super League teams. RTP Global is also an investor in Super League Triathlon.
With the financial might of Boguslavsky and RTP Global, Super League will in all likelihood become a major player in the triathlon scene.
Currently, Super League Triathlon has a Memorandum of Understanding with World Triathlon. Under the current status quo, neither will fight one another and cooperation is the order of the day. Super League, though, may have no need to quarrel with World Triathlon when the governing body cannot hope to compete financially.
If we turn to the PTO, the new partners of World Triathlon in a long distance world series, we see another financial heavyweight creep up.
While the PTO has a “not-for-profit” tag to it, in legal terms it is primarily operated as a limited liability company. Just like Super League, there is a clear profit direction behind it.
PTO Commercial Ltd was founded in London in 2022, with PTO Commercial LLC, a Delaware company, as its shareholder. When assessing the PTO, PTO Commercial Ltd can be considered the operational wing of the organisation. For example, on the PTO website, you will see that PTO Commercial Ltd holds the copyright.
Under the proposed PTO partnership with World Triathlon, the PTO will host age group races alongside its world series. This represents almost a kind of synthesis between the Ironman business model and that of the WTCS to create this new product. This approach will ensure up front revenue from age group athletes while also expanding the PTO’s footprint in the triathlon community.
There is also pressure on the PTO to return a profit.
In March 2022, Eckuity Capital became a shareholder in PTO Commercial Ltd through investment. Venture capital firms like Eckuity are not charities.
To quote Eckuity’s website, they “believe investing early and often to help our partners create value”. They would not invest in triathlon if there was not value to be found.
The athletes, then, do not control PTO Commercial Ltd and the company is under no legal obligation to act as a not-for-profit like World Triathlon. Similarly, the athletes do not control Super League Triathlon (for example, they do not have a stake in the UK company Super League International Ltd).
Companies like RTP Global and Eckuity are not alone in this game. They are simply some of the more prominent fish in sea. Compared to the financial power they wield, the athletes will be no match for them.
To understand why these companies are investing, it is helpful to turn to the words of Charles Adamo in his capacity as PTO Chairman.
“Soon after I started helping the PTO, Frank and Lorenzo Fertitta sold the UFC for USD 4 billion, having bought it in 2001 for USD 2 million.”
That is the end goal for companies like RTP Global and Eckuity. Investors in Super League and the PTO have entered early in the hope of driving up the value of the sport to then maximise profits down the line; buy low, sell high.
Growing the sport, then, will look a lot like growing the PTO and Super League Triathlon. The prestige of the Olympic Games should ensure an enduring attachment to the WTCS, however World Triathlon is not in a position to compete. It cannot weaponize venture capital in pursuit of growth in the same way and it does not answer to the same profit motive.
Should triathlon ultimately be worth anywhere near USD 4 billion, the “not-for-profit” tag to the PTO will fall by the wayside as Eckuity takes its share. Likewise RTP Global will gladly accept its returns in on its investment.
Naturally, triathletes should make money if the sport makes money, yet it will be a drop in the ocean compared to what the owners will make.
Without a meaningful financial stake in the sport, it will be impossible for triathletes to truly reap the rewards of its growth. At the end of the day, a $100,000 prize money cheque, or even a million dollar payday, does not move the needle when placed next to a potential billion dollar valuation of the sport.
Perhaps now is the point to return to the UFC given it was raised as a point of inspiration to the PTO. Since the acquisition of UFC for USD 4.2 billion in 2016, the company has paid between 80 and 85% of its gross revenue to executives and shareholders. In 2022, as the company generated USD 1.14 billion, the amount the fighters took home dropped to an estimated two-decade low.
One might say the venture capital firms are taking a risk in putting their money behind the sport and that they deserve the rewards. Note, however, this conceptualisation of risk neglects how such companies are able to manage losses on their balance sheets and how the investment in triathlon is on the lighter side compared to those elsewhere.
On the other hand, the sport does not exist without the effort, toil and love of the athletes. Without them, the sport cannot thrive. Their performances, their brands and their stories are central to the wellbeing of triathlon.
And yet, the cards are stacked against them. A handful will make a decent amount from prize money while the rest of the field labour for little and the real profits are diverted elsewhere.
Looking to the future, one party will likely reap enormous rewards from the sport and it won’t be the athletes.
Without a stake in the future, realistically through a portion of ownership, the athletes will be left to fight over the scraps that is prize money. Henceforth, when prize money becomes the talking point over the financial health of the sport be sure to take a second look.
The art of misdirection is the quickest way for someone to pick your pocket.
