PTO and IRONMAN Talks Heating Up, Maybe Not in a Friendly Way?

By Bill Plock

Below is a news release we just received from the Professional Triathletes Organization regarding their attempt to engage with IRONMAN for eventual purchase and/or collaboration. It’s no secret the Wanda Sports Group is hoping to sell its triathlon business (IRONMAN). If you are keeping up with this saga, here is the latest.

From afar, does this in some ways parallel what is happening in the National Football League, but on a much, much smaller scale? The NFL is trying to get the players union to accept a new collective bargaining agreement that is actually valid until 2021. But from all accounts, NFL owners want to leverage a long term players agreement as they approach upcoming, multi-billion dollar television contracts due for negotiation this year. If there is a “shaky”, one year agreement players contract still in place, it is thought the NFL will not be able to maximize television contracts due to a possible strike and loss of games to be televised. Makes sense.

Is this a similar situation? It seems the PTO is basically telling IRONMAN that with a supportive professional triathlete organization, they will have a better product to sell and a stronger brand. So why are there no conversations happening–at least publicly? It will be interesting to see how this moves forward.

LONDON, ENGLAND–: The Professional Triathletes Organisation today released the following letter sent to the Board of Directors of Wanda Sports Group Company Limited on 3rd March 2020 advising the Board that in its view the value of the Ironman® Business in any possible sale would be adversely affected by its failure to engage in constructive discussions with the PTO.

Board of Directors, Wanda Sports Group Company Limited, Wanda Plaza, Tower B, 9th Floor, 93 Jianguo Road Chaoyang District, Beijing, China, Attn: Mr. Yimin Gao–CEO

Andrew Messick, Chief Executive Officer, World Triathlon Corporation, 3407 W. Martin Luther King Blvd, Suite 100, Tampa, Florida 33607

Dear Members of the Board:

We are writing on behalf of the Professional Triathletes Organisation (the “PTO”) and note with interest your public announcement that the Wanda Sports Group Company Limited (“WSG”) is in preliminary discussions concerning the possible sale of its worldwide triathlon and mass participation business (the “WTC Business”). We further note that the WSG Board has yet to respond to our letter dated 3rd of February 2020, in which we advised the Board that the PTO is prepared to enter into discussions regarding the acquisition of the WTC Business and to consider an all-cash transaction or one in which the existing shareholders of WSG are able to participate in the growth of the WTC Business that the PTO and its professionals are uniquely able to deliver. In our letter we also advised the WSG Board that we are prepared to work with other groups who may be interested in acquiring the WTC Business.

We strongly believe that our involvement in the sale process will enable the WSG shareholders to maximise the value of any sale of the WTC Business, and failure to allow the PTO the opportunity to be part of any sale process will adversely affect the WSG shareholders. We believe that this proposal represents a unique opportunity to realise significant value for WSG shareholders and the employees of WTC, and that the PTO can uniquely provide a healthy and growing environment for the WTC Business. The PTO and North Point Advisors, our financial advisors, are prepared to begin discussions forthwith with your senior management and your financial advisors and to sign a customary confidentiality agreement in order to commence certain due diligence.

We hope that you share our enthusiasm and that the WSG Board, in the exercise of its fiduciary duties, delivers a prompt and favourable reply to us. As the WSG Board has failed to respond to our previous good faith approach, we will publicly release a copy of this letter. We would urge you to convey to any potential bidders with whom you may be in discussions our view that the cooperation of the PTO in the operations of the WTC Business is vital to its valuation and its ongoing and future success and, further, in our view, the continued failure of the WSG Board or any potential bidder with whom you may be in discussions to engage with the PTO in a constructive and cooperative manner may have an adverse effect on the WTC Business and the WSG shareholders. We would accordingly request that if there are any restrictions in any Non-Disclosure Agreements prohibiting potential bidders from engaging in discussions with the PTO, that they be waived so that WSG shareholders are able to maximise the sale price of the WTC Business.

Respectfully yours,

Charles Adamo –– Chairman

Sam Renouf –– Chief Executive Officer

Rachel Joyce –– Athlete Director

Dylan McNeice –– Athlete Director

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