Lifetime Fitness Merger with Ironman/WTC? Is it Possible?

Almost responded to your FB post. Held off. But you're persistent. So here goes. 

No. For one very simple reason: LTF is run by one of the most savvy businessmen and marketers in the world. WTC is run by a venture capital group. Based on what I know about each, they could never get to a deal where either party would be viewed as a winner, either in public perception or real $. And that's incredibly important. 

WTC would want to be 'acquired' at a premium valuation. Not gonna happen. Swim deaths, changes in race management leadership, confusion on 5150, etc, plus the fact that IronMan is maxed as a brand have devalued the asking price. You have no opportunity to grow the brand as every avenue reasonable thought possible has been exploited. There's no real upside, except for the idea that people would join LTF? Doesn't seem like an equation that will work, given the current calculus. I'll note that there could be other calculus, as I'm not an insider.   

Now, let's look at the other side: Lifetime would want to acquire WTC in order to grow the 'healthy way of life' brand. In order to do that, they'd have to figure out what to do with IronMan as a brand - they'd be acquiring races, yet be either adopting the brand (and throwing away their brand value with Leadman, etc) in that space, plus devaluing their brand, or renaming the entire thing under Lifetime. Taking two valuable brands and combining them sheds value, in the short run. That's a fact. LTF knows that. Plus there would have to be more sell through than memberships to make it work. Again, maybe they're figuring that out. 

I won't say never. But there are some pretty tall business hurdles to go over. Directionally, it make sense. There are synergies. WTC needs a buyer. LTF is a buyer, and in the space, and committed to tri. If the decision is completely financially-based, there's no way, given the margins in the race production business LTF would buy WTC. Opening 20 more clubs would be a better investment (by 10x). Starting 20 more races yourself would be a better investment. There may be other criteria.

But the betting person, at this point, would say 'not gonna happen'.    

ETA: They may have different calculus. I hope so, I think it'd be fantastic. 

Do not question that. LTF would buy WTC. 

LTF is one of the most profitable enterprises on the planet, and WTC needs a sell-off as their margins are relatively thin and not meeting venture capital standards. Look how quickly IMNYC got shut down when it was determined they ran at a loss. That tells you everything. If you can't bank $1-2M per event, you're done.

And in the corporate world, that's really not a lot of money. LTF dwarfs that.  

Can you provide a link to the article, or share more about it?  Because the only thing from the article you have shared is the bolded.  And I have no idea how you took that statement and somehow twisted it into triathlons, the WTC, and IMNYC.

Is Lifetime also planning to buy the NFL, NBA, and MLB?

I think it would be much more interesting if McDonalds bought WTC...

OK, i really do have nothing to offer in this thread.  lol

bingo.. very well said on both post's

It definitely is looking more and more likely that Providence Equity is looking to sell off WTC.  Of course, given all the issues with WTC races and everything over the last year or so, that can't possibly be good for the value of WTC...  Hopefully, WTC can be bought by someone, whether it's LF or someone else, that will actually seem to care about producing great events.

I work for LTF, maybe I'd get a discount on IM events.  That would be cool!

WTC is in the business of polishing up companies to sell them.  It's what they do.  LTF has been buying up venues all over the place, IM is the logical next step.  I'd like to see this.  LTF has a much better perspective on running these events and satisfying the customer.  I'm reasonably sure this would be much better for participants if LTF owns them. 

I personally think that the Lifetime events are really well done. But I don't think that this would be in Lifetime's best interests to buy them.

I don't know about the business side of things, but 99% of the members at lifetime are not even in the range of being able to do well in a small sprint, let alone anything IM related.  Most are likely to be uninterested in IM.   There is undoubtedly a proportion of IM'ers at LTF, but the opposite is probably not true, and probably never will be true.  

Whatever happens, I hope IM doesn't dilute itself and its high standards.  

"I don't know about the business side of things, but 99% of the members at lifetime are not even in the range of being able to do well in a small sprint, let alone anything IM related."

Then your numbers are spot on according to the article in Outside. They agree with what Bahram Akradi (Lifetime Founder) says about the percentage of revenue generated from event promotion compared to club revenue.

Here's the thing; Until WTC and a few other very isolated event promotion companies, event promotion has not been run professionally or managed in a way to monetize it optimally from a business perspective. Why doesn't WTC own a massive piece of the coaching pie in triathlon? Where are the "Ironman Certified" coaches?

That's one example in literally 10 seconds of thought. There are so many possibilities to promote, grow, monetize and generate revenue streams for a company with the adequate capital and focus. Lifetime could be that company.

On the flip side, when Nautilus fitness got into specialty sports apparel by acquiring Pearl Izumi, the Pearl Izumi brand tanked and never recovered. Now Shimano owns it and it is an underperforming brand.

Interesting times. The article, and for that matter, this month's entire issue of Outside, is worth a look.

USAT is the governing body. They aren't going anywhere fellas. Various leaders might change again soon, and from what I understand USAT is our federation and the only way our athletes can get to the Olympics.

Stop making silly talk Tom.

Yep, just Demmerly making something out of nothing. What else is new?

You mean other than the three page splash in this month's Outside magazine about Lifetime Fitness acquiring other businesses and becoming the, "...best athletic-event company in America". (Bahram Akradi, Lifetime Fitness co-founder) with a two page splash photo of him on a bike in an aero helmet?

Oh, and it's Demerly. Not Demmerly.

"...the Olympics" 

Quick, without Google, who were the top three in London????

Who?

It might be a safe bet the average U.S. triathlete recognizes these people:

No Americans. To the participant triathlete the Olympic Triathlon is not as relevant as Ironman. Most U.S. age group triathletes have no access to draft legal, ITU/Olympic style triathlon. They are only a Visa or Mastercard away from Ironman.

"Stop making silly talk Tom."

It's what I'm paid to do...

Damn, typed this once and the computer ate it. Before I start, I'm not privvy to any inside information. I just study this space fairly closely. Not an insider. That said, here it goes again:

1) Still think it's low probability. Mostly because LTF would have to pay a premium valuation for WTC AND, probably most importantly, accept another strong brand into their portfolio (IM). 

2) LTF doesn't accept others' brand into their portfolio as major players. They grow their own (with the exception of Zumba). Case-in-point: Spinning (TM) is a non-LTF brand, with formats, certifications, etc. LTF doesn't offer a Spinning (TM) class. They are all CYCLE classes. They've done the math, and doing their own class development, certification, and quality control is either better for their idea of a 'healthy way of life', margins, or both. 

3) To acquire WTC, they'd have to decide that the premium they'd pay would be offset by additional memberships, additional sell through of nutrition/personal training/food/other services, and improved margins in event production, and do so fairly quickly. Remember - LTF is public - markets aren't gonna give 'em 5 years to make it work. 

And lastly, LTF has lots of incentive to play the waiting game for WTC: PE firms make investments with a scheduled payout, on a scheduled date, and known (target) margins, and manage to that. If the investment doesn't get liquid before that date, partners get nervous and careers end. The WTC investors will sell, and the pressure will mount. It's who blinks first. And especially with the unknown and untested liability related to swim deaths for tri, I'd assume LTF would hold off to understand how that changes the viability of a race. 

If I was LTF, I'd wait. You can get incremental growth in the short term, learn the business, provide some competition to WTC without *huge* investments of time or money, and let WTC sweat. The only competition to buy WTC, at this point, appears to be Active.com, or an apparel manufacturer.

That's just me.