A Battle for Kraichgau and more
The Challenge Family, producers of Challenge-branded triathlons popular in Europe and increasingly worldwide, twice surrendered to takeovers of their licensed races by World Triathlon Corporation. In Australia first, and then in Denmark, WTC purchased the companies owned by race owners producing events licensed by Challenge. In each case Challenge balked at the idea of WTC owning and producing one or more of its races and these events immediately switched from Challenge to the Ironman brand with no obvious and substantive fight.
As October, 2013, turned to November WTC announced that it had hired a new manager of its German operations, Björn Steinmetz, and that Mr. Steinmetz was bringing to the Ironman 70.3 stable two races of his, in regions in Germany known as Kraichgau and Rügen. Kraichgau had already been contested as a Challenge event since 2009. Rügen had not yet sailed on its maiden voyage, but had been built to be a Challenge event.
No one could blame WTC for assuming the Challenge Family would behave as it has historically when WTC absorbed into its employ the producer of the Challenge Kraichgau race in Germany. The actions taken by those managing WTC’s messaging inside Germany bolster the theory that this was the thinking, but if that was the assumption it was, while reasonable, wrong.
The Battle for Kraichgau
On October 31, 2013 WTC announced that it had added to its stable of races in Germany a new Ironman 70.3 in Rügen, scheduled for September 14, 2014, and "the half-distance triathlon in Kraichgau, which has operated as Challenge Kraichgau, [and] is scheduled for June 15, 2014."
The verbiage in WTC's press release announcing this was carefully parsed. It announced Ironman 70.3 Kraichgau, and on the Challenge Kraichgau website and Facebook page announced the following:
We have a new owner and in the future our race will be called Sparkasse IRONMAN 70.3 Kraichgau powered by Kraichgau Energie.
When asked about this, WTC’s CEO Andrew Messick remarked that this race was never announced an Ironman 70.3 event for 2014 and he was right. But nothing in the press release indicated otherwise, and if WTC was trying to announce a change that could have immediate effect while preserving deniability in case a one-year pullback was necessary, that subtlety was lost on the event's customers and stakeholders. A number of German triathlon sites and reader forums announced the change and it is clear many readers assumed the change was with immediate effect.
Further, letters sent to Kraichgau race registrants and postings on the Kraichgau race website noted that, "Your registration stays valid." That sentence grants comfort only to those who have already registered, and registrations had been taken only for the 2014 event.
These press releases and website announcements were the way Kathrin Walchshöfer and the rest of the Challenge Family Team found out its licensee had decamped and landed on the Ironman team. It was the same for the mayors of towns through which the Kraichgau event traveled, as well as for sponsors and all other stakeholders in the Challenge Kraichgau event.
"The whole region and I learned from the press that there was a change of ownership with the company of Björn Steinmetz," said Klaus Detlev Huge, mayor of Bad Schönborn, the hub of the Challenge Kraichgau race. "Since then there has been much unrest among the many helpers who effectively carry this event, and also in the circle of the seven mayors of the involved communities. We have told Mr. Steinmetz clearly during a talk I had invited him to on Wednesday [November 20, 2013] that we found his communication with us to be unsatisfactory. With the permits we give, the services of the city, and all the volunteers from the various sport clubs and firefighters, we are the biggest sponsor of the event."
At least one of the event's trade sponsors reacted similarly. "I learned about this development via tri-mag.de and not from Björn Steinmetz or anyone else, just a news report on a website," said Florian Brugger of Scott Sports Europe. "He [Steinmetz] then called me once but did not reach me and I called back and he did not answer. On advice of our in-house lawyer we then had to act swiftly because of the 2-week contract cancelation period and because I was not able to reach him we sent an email and a certified letter that we would end our contract effective at the end of this year.
"He [Steinmetz] then sent an email and asked me who told me that Kraichgau would no longer be a Challenge Race," added Brugger. "I responded that the evidence seems to be pointing that way and sent him a collection of links to the various news reports – I was quite angry with his response. Three days later I saw another news report that Kraichgau would remain a Challenge race and a week later our certified letter came back unopened. I sent him one more email and said that if he can guarantee that Kraichgau will indeed be a Challenge race in 2014 we would stay on board as a partner, but that I have my doubts. But I never heard from him after that."
On November 1, 2013, the day after the initial rebranding announcement of the Kraichgau race, a sale of Challenge Kraichgau clothing was announced on the Facebook page and the majority of the reactions were negative (the image below is a screenshot from the Challenge Kraichgau Facebook page and has since been hidden from view or deleted, as have the Facebook comments appending to this sale announcement that we reprint immediately below this image.)
"I am sure it is legal – but simply a very embarrassing action…. And respect and decency is obviously a foreign word for Björn Steinmetz," commented Andreas Bode in a post representative of many responses.
"On October 30th still busy posting registrations for Challenge and today the sale of the of the Challenge clothing, but in between no statement why Challenge was replaced with IronMan – no words!" wrote Jürgen Wörnlein.
Challenge CEO Felix Walchshöfer had plenty of words about the situation in Kraichgau. He was angry and disappointed with Björn Steinmetz – a man he described as not only a close business associate but also a personal friend.
"On that Thursday the 24th of October after our meeting about Rügen I walked with Björn Steinmetz to his car and told him that I was going to be on vacation the following week for 5 days and that I would not have access to emails during that time as I was not taking my iPad with me, because I wanted 5 days of peace and quiet. But should something come up I told him he could reach me on my cell phone. Anytime. And that was the last time that I saw or heard from Björn," said Walchshöfer. "On the 31st of October, exactly one week later, while I still was on vacation, my sister saw on Facebook that Björn Steinmetz has sold Kraichgau, and that next year according to a press release of World Triathlon Corporation the race would be an Ironman event, a 70.3 – on Facebook. Björn Steinmetz did not find it important to call us or to sit down at a table with us – nothing. Later that day he sent me an email to me even though he knew that I did not have email access. This was utmost sleazy. (The Walchshöfer family is seen below during happier times with Björn Steinmetz)
"I then contacted my attorneys, and one of my attorneys who looked at the contract said 'I am not sure what the WTC is announcing, but they did not read the contract' and it indeed turned out to be so," added Walchshöfer. "We don’t know how it happened, possibly Bjorn Steinmetz pulled one over on the WTC, or the WTC attorneys did not read the contract, but the fact is the contract is valid until next year. That meant that WTC had to tell the athletes with some egg on their face 'well, it won’t be a 70.3 race after all, it will be a Challenge event.' And that now makes the WTC a licensee of ours, which was somewhat amusing to many folks in the triathlon world."
On November 14th the Challenge Kraichgau team announced "Of course the race will take place in 2014. In that current public discussion about the brand name, under which name the race will be next year, we won't participate in. Currently we expect that the 2014 race will be under the Challenge label, at this time though we still seek discussions with Challenge [family] about this topic."
Slowtwitch reached out to Björn Steinmetz, the man in the center of the storm, to see what he had to say about Kraichgau and Rügen. He initially signaled a willingness to talk to us.
"Today is no good … I am racing from meeting to meeting. I will check my calendar and will contact you asap, and if all fails on Monday," said Steinmetz in an e-mail to me on Thursday, November 21st. That was the first and last correspondence from Steimetz to Slowtwitch.
Contemporaneous with our reach-out to Steinmetz, Slowtwitch contacted Ironman Europe COO Kai Walter – who will leave Ironman Europe in March of 2014 – and he said, "It is best if you talk about this to Björn – I am currently mostly involved in European affairs."
A few days later we contacted Ironman Europe CEO Thomas Dieckhoff, who replied, "I apologize for not responding earlier. I am sure you are aware of the sensitivity of these subjects. For this reason, I ask for your understanding that we want to handle your understandable interest as efficiently as possible. Would you please be so kind to provide us with your questions in writing, you will then receive our answers via our European Head of Communications, Mr. Stefan Jäger," wrote Dieckhoff on November 25th.
Questions were forwarded within the hour about the Kraichgau race, and the sale or transfer of Björn Steinmetz' company or race assets to WTC, and also about events surrounding the proposed Ironman race in Rügen.
"We do not want to contribute to the public discussion about matters which are not supposed to be discussed in public," replied Dieckhoff to our questions. "Instead, we only want to inform you about matters which relate to what our athletes mainly care about: sports and racing."
WTC’s worldwide headquarters did not equivocate in its support of its actions in Europe. "Ironman did not announce Kraichgau as a 70.3 in 2014," said its CEO Andrew Messick. "Concerning Björn and Rügen, you do not have the correct facts."
When shown the announcement of Ironman 70.3 Kraichgau Mr. Messick responded with, "A poorly written article is just that. Nothing more."
The Battle for Rügen
When Bjorn Steinmetz joined WTC he delivered to the Ironman series a pair of races: the established Kraichgau event and a race already deep in planning but not yet birthed. This event will take place in 2014 in a German region known as Rügen.
The Kraichgau event did not begin as a Challenge race. According to Stefan Hellriegel, the brother of Thomas Hellriegel, he and Mr. Steinmetz started the Kraichgau Triathlon Festival in 2005 and developed it into a major German triathlon. In 2008 Hellriegel brought Felix Walchshöfer and Challenge to the table, and in 2009 it was first run as a Challenge race. In subsequent years, due to time commitments, Mr. Hellriegel says he removed himself from the Kraichgau event and handed it all to Mr. Steinmetz. This is important because – while athletes and stakeholders may themselves decide what it is they want to race, sponsor, volunteer for, and grant permits and abate service fees for – there is some sympathy for the notion that it is Steinmetz’ race to brand as he wants.
That may not be the case in Rügen, depending on who’s telling the story.
"We were approached by various business people, hotel owners and the tourism office in Binz [in Rügen]," said Challenge’s owner said Felix Walchshöfer. "They desired to have a Challenge race there. Then our CEO Zibi [Szlufcik] flew up there and had talks there, and we then agreed that we would do it… That brought up the question as to who would run the race as they had no one in place to do so. I then said there are a few options, either we build up an agency there with locals, or we go up there with the team from Roth, or we give the race to Björn Steinmetz because of our close connection and also as a thanks for the 5 years we have worked together – and an opportunity for him to run a second race. We then talked to Björn about it, and he gladly accepted. There were also some good bonuses on the table and those would have all gone to him and not to us."
Correspondence between Knut Schäfer, the tourism director of Binz – the largest community in Rügen – and Mr. Szlufcik beginning in November of 2012 seem to validate this narrative. "I am happy to report to you that the representatives of our community unanimously declared in yesterday’s meeting wanting to hold a Challenge Half Triathlon in Binz… Kind regards also from our mayor to your team," wrote Schäfer on December 14, 2012 at 8:27am to Szlufcik, with Karsten Schneider, the mayor of Binz, copied on this and other emails.
In an email posted several hours later Szlufcik wrote to Schäfer "As discussed Björn Steinmetz will lead the project on our behalf and his expertise to guide a race from nothing to 4,000 athletes, and to one of the best (events) worldwide, speaks for itself."
"On the 24th of October we had a big meeting with Björn Steinmetz about Rügen/Binz," said Felix Walchshöfer. "In this talk we went over complete marketing plans, press releases, the press conference and sponsor contracts and among them was New Balance. We for one discussed how New Balance could be involved in the press conference, because that is something they desired."
A marketing manager representing a large company that sponsors triathlons recalled having first heard about the Challenge Rügen event during the Sailfish Night of the Year in November of 2012.
"In January of 2013 it was announced then that the [Rügen] race would not occur in 2013 but instead in 2014 because the negotiations were not so simple," said the manager, who is unnamed because the statement was not first cleared with the company CEO. "So the whole thing was dragged out and around July of 2013 it was said that it pretty much had been settled … It was always about Challenge … A week before Björn’s switch he sat at a table with me and we talked about numbers and the next steps for Rügen and Kraichgau. One week before he switched.
"Rügen approached Challenge, that I know, it was thus running via Challenge," added that marketing manager.
The Battle for Germany
"What the WTC really wants is [Challenge] Roth and Roth will not be sold,” said Walchshöfer. "I feel that they have not yet comprehended that. Roth is a big problem for the WTC. They can buy each individual race of the Challenge Family, they just have to put down enough money and eventually everyone will fall. I have no illusions along those lines, but Roth is not on the market. Their problem is that out of Roth new races are born on a regular basis and thus they can’t kill us. But should they get Roth, they would have the whole Challenge Family in their hand because nothing else could come from Roth. And that is the problem for WTC. They think if they increase the pressure they will get Roth, but that is not the case.
"My dad and my mum have built this up back then when we decided to no longer work with Ironman, and they basically built this up with blood, sweat and tears. My dad actually died over this and I then had to jump on board. These are sentimental reasons and things that can’t be bought with money. Money will also not buy what I promised my dad on his deathbed that I will take care of it," added Walchhöfer. "It just isn’t up for discussion and that is something that Ironman or Providence Partners seem to have a hard time grasping."
The contract between Kraichgau is over at the end of 2014 and the question is what brand name will sit just in front of Kraichgau in 2015 and onward. He who owns the stock owns the company. But he who owns the permits owns the race. Will it be an Ironman 70.3 race with its founder and builder Björn Steinmetz at the helm? Or will the loyalty of the Kraichgau community flow to Challenge Family and Felix Walchshöfer instead?
Stefan Hellriegel, says of Mr. Steinmetz, a man he still considers his friend, "With his personality he has stepped on quite a few toes in the past, but it was accepted because of the race. In the organization team there were always critical voices, and that was true with others too, but now the situation is such that they are all coming to the forefront and are speaking out. He simply has overplayed his hand," said Hellriegel when asked about the mood in Kraichgau. "You can sell a company, but you can’t sell a race. It is about the community and you need the thumbs-up from all those involved, the communities and sponsors."
