(UPDATE: This story, originally written in May 2009 and published in the Maddux Business Report in July 2009, became worth posting online for the first time when the Tampa Bay Times reported on August 28, 2015 that Dalian Wanda Group of China paid roughly $900 million to acquire the Tampa-based company.)
Ben Fertic was 14 the first time he ever heard of a triathlon. He and his brother, Cole, who is six years his senior, were watching ABC’s “Wide World of Sports” coverage of the running, biking and swimming event in Hawaii and it changed their lives.
“I was watching Julie Moss cross the finish line and we knew we wanted to do that race,” Fertic says.
Two years later, Cole led the way, running his first triathlon in 1984. Not that it was easy; Ben’s older brother was electrocuted as a teen and lost his right arm and right leg.
“When he did it, which was at that time unheard of, he was like, ‘Why don’t you do one? If I can do one, you should go do one.’” Fertic recalls.
He couldn’t resist the challenge and the CEO of Tampa-based World Triathlon Corporation (WTC) has been racing ever since. He’s also the guy who now negotiates and signs the company’s TV contracts, which includes the Ford Ironman World Championship held every October on Hawaii’s Big Island, plus three additional televised events on NBC and even more on the Vs. cable network. (There is also a live, 18-hour webcast of the Hawaii championship.)
There are more than two-dozen officially sanctioned, qualifying Ironman events held around the world, from Monaco to San Francisco and China to Lake Placid. Every November, Clearwater is host to the Foster Grant Ironman World Championship70.3 (a shortened version of the Hawaii triathlon) and St. Petersburg hosted its first IronKids National Triathlon Series event in June 2009.
The Ironman triathlon’s biggest competition, Fertic says, isn’t other triathlon organizers but televised football, baseball, basketball, hockey, tennis and golf. He’s competing for sponsorships and eyeballs.
• • •
For almost two decades, WTC was part of the Dr. James Gills business empire in Tarpon Springs. Gills first rose to fame and fortune thanks to the revolutionary cataract surgery techniques he pioneered at St. Luke’s Cataract & Laser Institute. With that foundation, he became a land baron in North Pinellas/South Pasco, where he developed the sprawling community known as Trinity. And in 1990, Gills acquired ownership of the original race, which takes its name from three back-to-back endurance events, consisting of a 2.4-mile swim, 112-mile bike and a 26.2-mile run. He named the company the World Triathlon Corporation and created a charitable arm, The Ironman Foundation. If it seems an odd fit, it wasn’t; Gills was a triathlete himself who ran the race many times before buying the company. And once he owned it, the ophthalmologist became the world’s biggest promoter of the nascent competition.
In the mid-90s, Gills’ son, Pit, was in medical school, on his path to eventually working alongside his dad at St. Luke’s. His wife Joy met Dara Fertic at the retail store where they both worked. The Fertics often entertained Joy when Pit was at school or studying. Ben—a University of Florida trained engineer—and Pit discovered a shared love of triathlon and began training together with both racing in the 1996 Ironman. It was the start of a friendship that endures to this day.
The business relationship began when the Gills were unhappy with the results of outsourcing the IT and website work for the triathlon company. “I told everyone, ‘I have this friend, a really sharp guy.’ He revamped our web site and it was the beginning of the site really growing.”
Fertic’s performance on that assignment grew into a new one: design an ambitious new business plan for WTC.
“He did a nice job,” Pit Gills says, “and we promoted him to president. Ben has got an engineer’s mind, so whenever he has a problem, whatever it is, he’s going to find a solution to fix it. That’s the way he’ll be till the day he dies. Ben’s engineer personality combined with his love of triathlon makes a perfect match.”
Last year, the Gills gave Fertic permission to find a buyer and ultimately negotiate the sale of WTC to a private investment firm, Providence Equity of Rhode Island.
“Selling the company was a little rough but it was the right thing to do for the company and for us,” Pit Gills says. “They’ll be able to grow it more than we could. We had it for 20 years and grew it quite a bit. I think the group that has it now will do a good job with it. It was hard to let go. But it was the right timing and it will be the best thing for the company as a whole to go to the next level.
“Ben lives two blocks down from my wife and I,” Pit adds. “Our kids are close friends and he’s one of the guys on my speed dial. I joke with him that this will be a lot easier on our friendship. I was upstairs almost everyday, managing.”
The changes in the business’s size and complexity have already been dramatic. In Tarpon Springs, as part of the Gills empire, WTC occupied 3,500 square feet and had 27 employees. (Five years ago, it had six fulltime employees.) Now operating from the scenic top floor of the Island Center building on Rocky Point, the company leases 10,000 square feet and employs 40 on site and 100 worldwide.
“Within the next few years, it wouldn’t surprise me if we hit 150 worldwide,” Fertic says.
Clearly, WTC has already benefited from the sale.
“There are always certain times in your business where you just have to sit down and say, ‘Are we going to invest the money to get it to the next level?’ That always involves risk,” Fertic says. “Providence Equity is one of the largest funds in the world. They were willing to take the bull by the horns and take it to the next level. As much as Dr. Gills and his family loved Ironman, it’s one of those things where, if you love it so much, you have to set it free.”
The Gills were not actively looking to sell WTC, which had been profitable for the last 10 years.
“In the last two years, equity companies were just continually calling because Ironman was becoming much better known and it was privately held by family,” Fertic says. “That’s kind of a fishing ground for private equity firms. They go looking for that opportunity and we were on a lot of people’s radar as a potential opportunity. My thesis was, let’s form a group that can bring products to market with our brand name, and we’ll build this as a separate entity. That’s the road we were heading down to get the dialogue started. It wasn’t necessarily about selling the company. Providence was the right partner and we put together a proposal for how to grow it, and the Gills liked it.”
The sale price was not disclosed and neither the Gills family or Providence Equity will disclose WTC’s annual sales.
“Dr. Jim Gills absolutely created the market,” Fertic says. “I think that it takes somebody that’s passionate, even when it’s not a profitable entity, and he was willing to take the risk. It shows an amazing amount of commitment, and it took somebody special to do that. Because certainly when he bought the company, it was not profitable. Its value increased over time, but there was a lot of heartache there and a lot of work.”
• • •
The World Triathlon Corporation is best known for its “Ironman” events and brand. It’s largest revenue streams come from sponsorships (Ford, Timex, Foster Grant, PowerBar and Gatorade, to name a few) and from products and product licensing fees (an Ironman Timex watch, Ironman sunglasses, IronKids Gummies multivitamins), endorsements and media and broadcast revenues.
Event entry fees—and there are 120,000 worldwide participants in the three branded Ironman competitions: Ironman, Iron Girl and the newly acquired from Sara Lee Corporation IronKids—make up a portion of revenues, but not the largest by any means. There are only so many people out there who will do an Ironman, but there are so many more that will watch.
And even those who watch will buy merchandise with the Ironman name. One of the growth strategies Fertic engineered with the financial strength of WTC’s new owner is more Ironman products but many now produced and sold directly by WTC, rather than middlemen.
Two years ago, WTC licensed all of its merchandise sold at all of its venues. Not any more. “We took over all of our own merchandise,” Fertic says. “We do all of our own designs. And we’re taking over all the risk, too. I wouldn’t say it’s that much more profitable, but I know that our level of service and the quality of the product are ten times what it was. We are able to provide a much higher quality product and still maintain our margin from the event. Our athletes are getting something that’s of so much greater value. We’ve focused on that. People look forward to coming to the merchandising stand to buy stuff that they could either train in or that looked really good and they knew the stitching wasn’t going to fall out of it two weeks later. And that was the other thing about our brand–we didn’t want anything to associate with our brand that was going to fall apart in three months.”
There are exceptions. Timex still licenses the rights to produce its Ironman watches. The arrangement is acceptable to WTC because Timex, despite its lower price points, is known for making “indestructible” products, according to Fertic.
“That’s why they are such a great partner for our brand; it’s an endurance product that fits us perfectly.”
Another development in WTC’s evolution under Providence Equity was its purchase, on Jan. 1, of a Boulder, Colorado, licensee that previously fulfilled product orders and operated some Ironman events independently for WTC. Providence bought the company and made it the headquarters for WTC’s new merchandising group.
• • •
The Boulder acquisition brought up a natural issue to Fertic from WTC’s new owners: You’re no longer tied to Florida; where should the company be located? Tarpon Springs? Boulder? New York? Somewhere else?
“I could have literally, from a strategic business perspective, picked any place, and we would have moved,” says Fertic, who has been married to his wife Dara (herself a triathlete and marathon runner) for 14 years and is raising three children in Clearwater. “But we built roots within the community, from our professional lives and obviously our personal lives. I’ve lived internationally, and I’ve lived all throughout the U.S. and a lot in the Southeast. This is an amazing place. From the cost of living and a lot of other things, it’s got a tremendous amount of strategic advantages from that perspective.”
Among those is the time zone convenience that Florida offers.
“We do a lot of business in Europe, it’s one of our biggest markets, so an East Coast location is probably the best because of all the time changes we have to deal with. Germany is six hours ahead of us, so all those calls basically have to happen at 6:00 in the morning, which is noon in Germany.
“Combine that,” he continues, “with the saltwater and the incredible convenience of the airport and everything else, and this is just a complete natural fit.”
• • •
The IronKids program is deviously brilliant in its simplicity and likely to explode the sport around the globe for generations to come. Just as watching the Ironman competition on television 27 years ago piqued the interest of young Ben Fertic, it continues to inspire athletic boys and girls.
There are age-appropriate IronKid distances, for example, a 25- or 50-yard swim, a 3-mile bike, and a one- to two-mile run. The events are completely tailored for 6- to 15-year-old.
“Our Ironman events are 18 and up, so we never really reached into the kid market,” Fertic says. “We knew through our television and media that we were having an influence on kids in triathlon as far as them aspiring to be an Ironman or to compete in that event, so it’s a natural fit for us to go into the market.”
Think of the opportunity! IronKids workout gear! IronKids bikes! IronKids swimsuits! IronKids Timex watches!
That’s not cynicism. Marketers are always selling to kids. Would you rather see them buy into physical activity or stationary videogames and computer programming?
“We pick up the paper every other day and see the obesity epidemic and the obesity trends in the United States and what percentage of the kids are obese,” Fertic says. “We have this healthy lifestyle platform, and we can make an impact, we can make a difference. Ours is a lifestyle that you can do forever.”
WTC isn’t going to just rely on word of mouth, either; Fertic foresees IronKids programs breaking out in schools and recreation programs around the world much like soccer programs, Little League baseball and Pop Warner football. And unlike those three, the IronKids program feeds into adult events that participants can run into their 80s.
“A lot of kids play football, but when they hit 21, unless they go to college or the pros, they’re done,” Fertic says. Triathlon is something you grow up with. That’s what our team and I started to focus on. I have three very young girls, and they play softball and soccer, and they also race triathlon, and they are sports enthusiasts. Our goal is that when somebody is in eighth grade and saying, ‘I want to be on a team,’ one day triathlon will be somewhere in that mix.”
He expects IronKids to be a big factor for the company and young participants in three to four years because that’s how long it took the Iron Girl events to take wing. There could be as many as 10 official IronKids events this year.
There are a couple schools in the country that have triathlon teams, but you could probably count them on one hand. Back when Fertic was a University of Florida engineering student in the late 1980s, he was part of the school’s triathlon team. Him and two other guys.
Is it any wonder that Provident Equity bought Fertic’s vision?
Currently, the average age for Ironman participants is 41—an age considered over the hill in every major sport with the possible exception of baseball pitchers—and that number is skewed because WTC doesn’t allow anybody under 18 to enter. But the true development of this sport will come from the youth and exposing people to the brand and the lifestyle.
• • •
Boos Development Group of Clearwater has been a sponsor of the 70.3 Half Ironman event in Clearwater for the last three years and company president, COO and triathlete Rob Boos calls Fertic a close friend.
“Ben can drill down into the details and still fly at 30,000 feet,” according to Boos. “He’s done a great job leading the company to growth over the last five or six years he’s been in charge. His ability to have balance in his life is incredible. His intensity in work is the same as the intensity of how important his family to him.”
Like Jim Gills, the man who hired him, Fertic, 40, is in it for the passion. Getting well compensated is just the gravy.
“There’s a saying that goes, ‘If you love what you do, then you’ll never work a day in your life.’ And this is a passion for me. There are a couple of things in my life that have been passions. One of them is racing triathlons. When you have something that you’re really passionate about and you get to work in that space, you just feel incredibly blessed and lucky that that happens. I’ve surrounded myself with people that are equally passionate. We’re kind of all rowing in the same direction, and we love the sport. We love Ironman, we love the sport of triathlon.”
Mom and Dad must wonder what happened to the UF engineering degree in which they invested, right?
“This is the question that people ask me all the time,” Fertic says. “Even to me, it’s hard to understand. My first four or five years out of college, I worked for a Fortune 100 company in engineering, McDermott International. I was in the power generation group.
“I was the lead engineer, building projects and running large-scale projects. I lived in Venezuela for a year. I lived in Thailand. I traveled all over. There were two skill sets that I learned that McDermott taught me. One was running large-scale projects with a lot of vendors on tight time schedules, which is what we do here. And the other thing is the international aspect, because we’re very international. I’ve had three calls today, one to Switzerland and two to Germany with German clients, and you have to appreciate how other cultures approach business, how they react to contracts and what their methodologies are. We have a race in Malaysia. We have sponsors in Malaysia. Somebody from Malaysia is going to approach something very, very differently than someone from New Zealand or someone from Germany. I lived in these other cultures. My eyes were opened to the fact that not everyone conducts business the way that business is conducted here in the States.
“Yeah, my parents wonder what happened to me, absolutely. They still don’t understand it. To this day, they are like, ‘What do you do?’ But engineers, ultimately, are problem-solvers, and that’s really what business is about.”
And Fertic still races in Ironman events.
“I’ll do them past 80,” he says. “It’s the fountain of youth.”Click here for reuse options!
Copyright 2015 Will Eisner: A Spirited Life by Bob Andelman