It's About the Economy Stupid

It's About the Economy Stupid

So Hillary Biscay arrives at the awards ceremony for Ironman Malaysia where she had just come third, to pick up her trophy – and nothing more. Under the new Ironman pro rules, prize money will only be awarded to finishers within 8% of the winner. Saddle problems out on the course cost her the two minutes(and then some) she was outside that 8% - thus, $4,000. Of course those behind her also failed to grab a paycheck. On the men’s side the money was given out four deep. The race organizers saved themselves a total of $11,000.

Now this development would have come as no surprise to Biscay, as the rule change was announced near the end of last season.

When I heard this I responded emotionally, as I so often do, and posted a status on my Facebook - something to the effect that the 8% rule was shameful. Thirty nine comments later the thread died out. Paulo was first on with the statement “The total prize package is shameful and the % rule is spot on.” Peter Reid agreed.

Before I gave myself a chance to think it through I disagreed with them – but of course Paulo is mostly right. The total prize purse for Ironman is the shame but I still have troubles getting my head around the 8% rule.

Another poster wrote “It’s absolutely fair, so long as it’s known at the outset. A 2nd or 3rd tier pro does not bring in the same attention and thus dollars to a race as a more competitive athlete. The business model would fail if payouts went to athletes that no one watched or knew of. So no, it doesn’t hurt the sport to reduce prize money in this way…“

Whereas my thinking is simple economics – reduce the prize money – reduce the number of pros.

Here is how Ironman presented the new guideline as a positive for the sport:

“(it’s) an effort to streamline and enhance the quality and athletic standards of Ironman branded events as a global brand.”

I would buy that line had it been followed with – “The unearned prize money would be redistributed to the real pros”

But here’s what it was followed with:

There will be NO redistribution of the unearned prize money.

So they’ll be keeping the cash.

It is my opinion that the Ironman organization is moving to phase out the pro field.
I draw this conclusion based on the above points and a few more as well.
If I wanted to cull the number of pros racing, here is what I would do:
I’d make it harder for them to race and I’d do that first by increasing the cost of racing and decreasing the ability to enter races. And then I’d decrease prize money.
These actions, based on laws of human behavior, would virtually guarantee to reduce the participation of any professional endeavor.
And what did Ironman do?
* Introduced a $750 annual racing fee for pro athletes.
This fee grants the pros free entry into any official Ironman race(save Kona and Clearwater) – something, with very few exceptions, they have enjoyed for years.

* Introduced entry deadlines for athletes.
In the past professionals have had the ability to jump into a race at almost any time, within reason, before the gun goes off. I know this offends the sensibility of many an age grouper who has been forced to stand in line for hours, a year ahead of the race start to pay close to $600 to race, but for the professional to plot their season out a year in advance and stick to that plan is virtually impossible. There are simply too many variables to factor in. You can hit you’re “A” race on the Saturday and have a mechanical pull you from the event ten miles into the bike. You fail to qualify for the championships, make any money or promote your sponsors with a good result. If you’re a real pro, you are on-line before you’re in bed booking a flight somewhere across the globe and prepping to race again in two weeks time. You need to be able to gain entry into that race and it seemed race organizers were operating under the assumption that a deeper pro field brought positives to the race. They wanted the pro there.
Of course, under the new guidelines, the intrepid pro can simply sign up for all the races and have their bases covered.

* Reduced prize money.

Now here’s where the absolute brilliance of the 8% rule comes into play. With this one simple line the law of averages dictates that the race organizers will, on many occasions, pay out less money to fewer athletes. And even if you do manage to finish within the 8%, the races are now only paying out five deep as opposed to the eight deep that most used to pay – and remember, the unearned money is kept by the race organizers.

So if the top level pros gain nothing by schooling those behind them, what’s to stop them for standing before the finish line and waiting for the next fellow pro? I suspect they’d be a crowd favorite in a hurry but I also suspect the keepers of Ironman would lay down some swift and stern penalties before it happened again. I believe that if the WTC was truly trying to “streamline and enhance the quality and athletic standards of Ironman…” they would roll that unearned money back to the pros who did finish within the 8%. This would serve two purposes. First it would clearly demonstrate that the policy was not simply a move to save money and secondly it would encourage the tier 1 athletes to really lay it on the line when they were out there. There’d be no more pulling up once safely in the lead. Granger and Niederfriniger would have had an additional $9,000 to divide between them. With that kind of money at stake we might see more athletes coming to the sport, even it was harder to make a living on the way up.

Effectively, many of the entry level pros will now be cut out of the money. It will be harder for them to make a living in the sport so there will be fewer of them and without the top end money increasing there won’t be any increased incentive to be a top end pro. This is not an issue of character. It’s an issue of simple economics.

So let’s talk more economics.
Is the Ironman organization a pit of greedy vipers? No, they’re board of directors looking at the bottom line, as is their duty to shareholders. There is no good and evil here – just a business model.
I understand the WTC is currently owned by a hedge fund that has made no secret of it’s intention to increase the value of the race over the next seven years then flip the brand for a substantial profit. We live in a free market society and this is a perfectly legit endeavor.
If I were handed the task of increasing the value to a potential buyer I would look at the obvious places to increase income and decrease costs.
Many of the races are filling up a year in advance within days of going on sale. With this kind of demand I’d increase the supply and increase the price. This clearly has been done.
I would further look at ways to decrease the costs of putting on the events. One obvious expense to look at would be the cost of the pro field. The prize purse paired with the fact that the pros bring in no measurable value to the event, after all they get free entry, would make it a no brainer.
In a flurry of twitters over the weekend, Jordon Rapp pointed out that these races are filling up before a single pro has entered the race. This, he felt, was evidence that the age grouper doesn’t care if there are pros in the race. I would argue that there is an expectation by some that there will be a pro field come race day.
Time and time again, we hear that one of the enjoyable aspects of the sport is the ability of Alan Ager to line up with Percy Pro.
When Percy Pro is no longer lining up at the Ironman races will Alan Ager fly across the country, rent a car and stay in a hotel for a week to do a race he had to stand hours in line and pay close to six hundred dollars to enter? Or will he choose to just race locally? Some will. Some won’t. I have not the foggiest idea of what kind of numbers we’re looking at.
One thing I’m certain of though, is I would not for one moment trust what people “say” they would do. I would only trust what they did – and I believe it would take several seasons before the true effects, if any, would become apparent.
During the course of this weekends barrage of social networking discussions I learned there are great many people who encourage this shift at Ironman.
Greg Nicholson of Sherwood Park felt “The sense of entitlement in triathlon from most AG's and elites (but not all) is ridiculous. STFU and race. If you want to earn money, train harder, or find another job.”
I don’t know Hillary in the least but to suggest she needs to STFU and train harder seems a little ill informed.
But is he right? Do pros (and apparently age groupers) have a sense of entitlement unearned? Again, the free market society will sort it all out.
If Ironman continues to diminish the participation of the pro in their races, will an alternative rise to fill the void?
Many will point to the failed 101 series. They worked hard to attract the pros – too hard some said, and it resulted in the quick demise of the events. It’s evidence that surely must give the WTC some comfort.
Maybe the Rev 3 series will succeed where the 101 failed.
One of the early conversations I had concerning the new guidelines came after Ironman Canada this past summer with race director Joe Dixon. We’d both had a few drinks so neither of us held back – not that Joe ever would. He emphatically stated that Ironman Canada (Not owned by the WTC) would be going in a different direction. He believed that pros added to the Ironman experience. He intended to “increase the reasons for pros to come to IMC – just you wait and see” he said.

In the future I hope there’s a place for the pros, both entry level and top tier, but if, as so many seem to believe, there is no need for them then I’ll settle for being grateful to have been involved in the sport during a time when it was believed otherwise.
As Adrienne Stedford of Penticton wrote “Tri is a new sport- the level of competition will increase, but only if athletes are encouraged to participate and race.”
For now the ability of the athlete trying to make the next step to pro has become more difficult. It follows then that there will be fewer athletes making that step. Ultimately that will mean fewer truly elite athletes. If the current economy and economic models in place can not support these new athletes then there is little to be said about the matter. Supply and demand will win the day.

If, however, an alternative for the long course professional triathlete surfaces, and the age groupers follow, then many a finisher may have to look to a new corporate logo to tattoo on their ankles.