Can the PTO Measure Up to its Promise?

August 3, 2020

The Professional Triathletes Organization (PTO) sensationally announced in March ambitious plans: The Collins Cup, a Ryder Cup styled event for triathlon, would take place in 2020 with a $2 million purse; the Daytona Challenge, a middle distance triathlon championship with a $1 million purse; and a $2 to $2.5 million awards for a season-long PTO pro points championship with $100,000 for the winners and payments through 100th place with a minimum payment of $5,000.

With the ITU and its Olympic distance showcase apparently in good hands with higher prize purses (women’s champion Katie Zaferes of the U.S. earned over $250,000 in 2019 prize money), the PTO is focusing on non-drafting long course events – events for which other organizations such as Ironman and Challenge annually offer just over $2 million total prize money for over 100 events.

The excitement was magnified by the news that the PTO was backed by investment heavy hitter Mike Moritz, who has reportedly pledged between $10 and $20 million for the initial investment in innovative, ultra high-tech broadcast capability, great commentators, and a commitment to treat talented pros with the respect the PTO believes they deserve.

Perhaps the most revolutionary aspect proving that the PTO was putting professional athletes first was its response to the COVID-19 pandemic. With virtually no races and the consequent dearth of performance bonuses from sponsors, the PTO paid out $2.5 million worth of checks in late March to the 200 top ranked pros for the largely canceled 2020 season. That payout also lent immediate credence that the PTO was in it for the long run.

With the pandemic creating chaos, 2020 triathlon schedules were thrown into disarray. Ironman first postponed the 2020 Ironman and Ironman 70.3 World Championships to February before canceling them outright. The ITU soon followed suit, canceling the late 2019 World Championships. While the world is hoping for the best in fighting the pandemic with masks, distancing, closures of the usual social gatherings and dreams of vaccines – the odds remain up in the air. Major League Baseball is already on the brink of shutting down after dozens of infections and many NFL stars are sitting out the 2020 season. The PTO has some advantages – its large investment cache is best positioned to exact the necessary patience.

Cautiously, the PTO canceled their premier 2020 May offering – the Collins Cup with teams of 12 stars representing the U.S., Europe and Internationals – and rescheduled it for May 22, 2021. And the PTO is closely watching shifting pandemic conditions that might allow its Challenge Daytona December race to go ahead with the approval of local authorities and a no-spectators format.

How the PTO handles an uncertainly lengthy pandemic hiatus will be an interesting test of its vow to avoid trigger-happy, desperate short-run decisions. Will reports of the PTO’s desire to establish a triathlon long course Grand Slam – most likely without the Ironman classics – eventually find venues that will draw major talent and big ratings, with rich purses? Will the PTO’s aim of obtaining superior production values and presenting high dramas for its races come true? Will it find enough new revenue streams to pay back its high initial investment? Will it find room – and prime broadcast openings – on the sport’s increasingly busy race calendar once COVID-19 has passed? Will it be able to satisfy the 2.1 million U.S. triathletes and the busy European triathlon market and appeal to growing mainstream audiences?

All in all, the PTO has reason to hope that its heavily stocked investment coffers, plus its high ambition to lure highest quality commentators and the latest state of the art imagery, will work. It would be nice if the PTO’s idealistic aim to offer a great theater and monetary rewards commensurate with the brilliance of its stars will prove the skeptics wrong.

Or will triathlon veterans like USTS co-founder Carl Thomas’s fundamental question go unanswered? “Follow the money,” he says. “Where will they find the income to match a risky investment?” That means, says Thomas, four major revenue streams: Linear and digital, broadcast and cable, and streaming television. Long term, he says, “You have to raise the value of your product to be worth TV rights. You won't get that to start with,” although he thinks that spectacular production values and promotional shows like the Golf and Tennis channels might succeed. "More likely, triathlon and its desirable demographics will get major sponsors,” says Thomas. Then, major mainstream sports get ticket sales, which in triathlon translates to age group entry fees. If the PTO thinks that the old school triathlon business model is bad for the pros and the sport as a whole, they might consider taking modest entry fees from a smaller menu of select PTO events.

And if the PTO does create a Grand Slam of four new prestige events within a few years, they must likely commit to a $2 million prize purse and race production, TV production and promotion for another million apiece. Once a four-race Grand Slam becomes an annual fixture, that should cost $12 million a year.

These ambitious estimated expenses will need major sponsorships. But the final hurdle is the fact that mainstream sports like soccer, baseball, tennis, golf and soccer have long traditions, and big pools of audience loyalty to competitive leagues.

After the first triathlon held at San Diego’s Mission Bay in 1974, and the very first Ironman Triathlon in Oahu in 1978, this new sport grew quickly. By 1982 the United States Triathlon Series offered a national competition for pros. And that same year, the Association of Professional Triathletes was formed – the first triathlon organization with a serious professional leadership and a forward looking structure.

Larry King, Billie Jean King’s former husband, a founder of the pro tennis tour for women, joined with Bill Leach to run it. “We had a rankings system for each distance and overall, an athlete code of conduct, and a national championship big money race in Kauai (Kauai Loves you Triathlon),” recalls pioneer triathlon pro Mark Montgomery. “I think we were viable for about 3 or 4 years, and then a concerted effort by some individuals and companies squashed us before we could get a strong hold. We had nearly every top athlete on board and it was set up professionally. Looking back I think there just wasn't enough money in the sport at the time. We were at least a decade too early. But we had the right idea, using tennis and golf as our models in setting up our group. We were even the first pro sport group to institute drug testing of its members.” While this first triathlon pro association started 38 years ago and lived for just three years, its elements – a ranking system, a national championship race, a list of top triathletes, using tennis and golf as a model – have an eerie resemblance to the PTO.

By 2015, pro women formed a single issue group led by Sara Gross – 50 Women to Kona – which argued for gender equality for pro women in the Ironman World Championship field. While Ironman listened, they did not agree to make the change. But it was a significant step.

At the same time, a group of influential pros met to form the Professional Triathletes Union (PTU), but found it hard to gain traction. It was kept alive by a smaller group including Rachel Joyce, Scott DeFilippis, Mirinda Carfrae, Meredith Kessler, Dylan McNiece and Tim O’Donnell, who continued to volunteer their time. By 2016, financial adviser Charles Adamo offered some guidance which led to a search for an investment partner.

By 2019, the PTU triathletes had reformed as the Professional Triathletes Organization (PTO) and found their heavy hitter backer – star investor Mike Moritz, who made his mark with Sequoia Capital which made fortunes as an early investor in innovative stocks like Google and AirBnB – who committed several million via his personal investment vehicle Crankstart.

Now with the biggest resources in triathlon history, it’s off to the races.

Next up will be an extensive interview with PTO CEO Charles Adamo, who will cover the roots of and the complex economic considerations involved in the birth of the PTO.