The Pro Road Map

The problem that professional triathletes have is leverage. Of second order importance is exposure, but these two, combined together, can solve many of the problems that currently plague the interaction between current professionals and organizers such as WTC and Challenge. To understand how to change the landscape of the sport, all one needs to do is look back to other sports and how they came to be the monster revenue generators they are today.

Let us look at basketball. While it may be hard to believe, professional basketball players were underpaid, underserved, and underexposed. Until 1964, when the athletes took a stand. At an All-Star game, the athletes threatened to boycott the game, understanding that the fans were there to see them. This lead to the acceptance of a players union and gave them the leverage to share in the increased revenue from the sport once television became involved.

Well, triathlon is not basketball or like many other televised sports, so that comparison may not be apt because of the team aspect of the sport. Yet is it different from tennis or golf? Technically the answer is no. There is huge participation in all these sports at the non-professional level, the events take significant time to complete, take place in beautiful locations, and cost lots of money to participate in.

The major differences lie in the way the sports are marketed and managed. Tennis and golf professionals are organized, have a voice, and are the backbone behind the revenue generation of the governing bodies. Nobody would watch the Masters if Dark_Mark was playing, or the French open if DC_Rainmaker was the top seed. We watch to see the best. Here in lies the problem with triathlon, it is not regular weekend viewing, and when it is on, we already know the results.

The reason for this is that there is no need for WTC or Challenge to grow the sport when the revenue driven by the participation of recreational athletes and small race sponsorships continues to meet the bottom line. It provides a steady cash flow stream that is entirely predictable and allows for an easy return on investment. Why grow when you don’t have to? This short slighted thinking and the approach pros take in challenging it is wrong. There is a huge pie out there and nobody pushing to take advantage of it. Let me suggest a way.

First. There are, according to my Direct TV package, over 7 full-time dedicated sports networks. They have to fill their programming with something. I have seen many shows that have nothing to do with sports that occupy airtime. Fishing. Check. Bowling. Check. Talking heads. Check. Why is there no coverage of major ironman events live? I mean the Kona broadcast on NBC is horrendous. That isn’t a race, it is a soap opera.

Broadcasting triathlon is not difficult or costly. Is it interesting watching people race for 8+ hours. Well it can be if you do it right, such as adding in GPS tracking, watt feedback, pace needed to catch person ahead, etc… In essence bring in Formula 1 and Tour de France technology. Will advertisers buy it? Hell yes. Triathlon has the highest median income participation of any sport and a large participation rate. That means financial, automotive, technology, and other large market-cap companies willing to inundate the triathlon community with their corporate message. That means money for any and all involved in triathlon. Which brings me to the second point.

Second, it is critical for the athletes to organize. Now as a financial economist, unions don’t actually improve the wages of the people they represent, but in sport it is different. I won’t use the word unions, but an Association of Professional Triathletes should, and can easily form, to represent the whole. This association can form to negotiate not only with WTC and Challenge but the TV networks themselves. If the athletes own the TV rights to these races, then they immediately establish leverage, and a revenue stream that is not related to prize money. An association would also allow athletes a better voice not only in issues such as#50womentoKona, a better KPR system, and the establishment of a junior program. This is how you grow the sport.

Additionally, they then can work directly with corporations as spokesmen. TV time represents huge advertising dollars. Corporations could buy teams of professional athletes as their spokesmen, which would offer these companies great exposure not only on air, but filter down to the participation ranks. I could imagine a draft where corporations pick five athletes to represent them over the course of the year. This could lead to a team type competition that could be just as interesting as routing for our favorite individual athletes. I would definitely root for Team JP Morgan if it had Rinny, Joyce, Butterfield, Don, and Frodeno over Team Exxon with Kienle, Hoffman, Swallow, Ryf, and Wurtele. I may even buy the kit.

Which brings me back to my original point. For the pro athlete to prosper they have to stop thinking small. They need to organize and get leverage, because throughout the course of history, professional sports have grown in conjunction with the rise and marketability of its stars. However, the method for change has to come from the stars themselves. Just like the basketball players in the 1960, until they realize the leverage they have, and start to think beyond the prize purse, nothing will change.

Now this is just a small part of what needs to happen, but the talent, intellect, and desire are there to make it happen. The question is one of commitment.

photo credit: Minnesota rally in solidarity with Wisconsin union protesters via photopin (license)

About the Author

James Doran is a hedge fund manager in the volatility space and former finance professor. He has written numerous esoteric articles about volatility and option pricing. He is a very average triathlete and was once a decent soccer player.

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