Falconhead Capital swooped into triathlon and footracing this month 5 years ago, aggregating a sweep of brands that included Rock 'n' Roll marathons, Triathlete Magazine, Competitor Magazine, Muddy Buddy, VeloNews, and it has only expanded since then. Recently it added to its stable a rash of events, both in triathlon and footracing, and it bought an online registration entine, RaceIt.com.
Over the Summer it opened its doors for business in another sense: Falconhead had accomplished its mission and now it was ready to sell what it built. Dozens of interested suitors were courted, and Runners World made things conveniently easy for the seller and the buyer to remain under the radar when it published the rumor that Amaury Sports Organization (ASO, owners of the Tour de France) had bought Competitor Group. As it turns out, nope. The new owner is Calera Capital, another private equity company. Here's a bit from Competitor Group's CEO about where his company is going now that it's ready to continue under the ownership of a new group of investors.
Slowtwitch: It has been my observation that when private equity enters an industry, at the beginning stage of cycle, its first acquisition in that industry may not be its last. Is Competitor Group Calera Capital's first in a series of acquisitions in the endurance sports industry?
Scott Dickey: The focus is on developing the assets we own. We believe there’s a significant amount of organic growth available in the properties we currently own. That said, as we go forward, is there a chance of acquisition? Absolutely. At what time? It will be determined based on the market and on the opportunity.
ST: There is breadth in the properties and channels inside Competitor Group. Where do you think your company's organic growth is more available and likely?
SD: There are four primary areas where we see that organic growth occurring. First is the expansion of our event business internationally. Second is the continuing development of RaceIt [The registration engine recently purchased by Competitor Group]; third is the expansion of our digital businesses, specifically, content. Fourth is the continued expansion of our event business in North America — not just Roch ‘n’ Roll, but TriRock, Women’s running, and in the NFL runs.
ST: In the beginning of the Falconhead era, 5 years ago, there was a strategy of “bundled opportunities,” with the idea that a Fortune 500 company could engage in one-stop-shopping at Competitor Group. It could buy naming rights or sponsorship at an event; race bag drops and expo opportunities; display advertising and digital advertising. I know that in my business I have to listen closely, or else I won’t hear my business telling me what it is it wants to be. Did your business speak to you and cause you to veer from the original plan? Or is the original plan still the plan?
SD: Twofold answer. We’re still definitely rooted in the original premise. But more important is that the relationship the business has with consumers is much more easily monitored. We’ve evolved into a participant continuum, the journey we’re walking with the participants, through their evolution as enthusiasts, how we educate, inform, inspire them and then monetize it. It’s an ecosystem.
ST: It sounds as if the registration platform is the key that ties everything together. This is the fulcrum.
SD: The anchor of the company was Rock ‘n’ Roll, right? Now we’ve layered the building blocks on top of the foundation, and it’s based on data.
ST: The payment info?
SD: No, there’s all kinds of rules attached to how you use payment info. That has nothing to do with it. It’s understanding exactly what that competitor is doing. Nutritional advice, racing, coaching, what they’re reading.
ST: Would it be your hope to replace, at least inside the circumscription of that athlete's endurance sporting life, the utility for your end users of, say, Facebook? Or Amazon?
SD: We’re not going to get in the businesses of competing with our customers on the commerce side. We’ve dabbled with a daily deal site called GearBuzz, much as Active did with Schwaggle. But we don’t intend to get into the retail industry, per se. Having said that, we’ve spent countless hours educating ourselves and our customers on the industry, so, if we can benefit on a third party transaction we’re happy to do so. But the core of our business is our media and entertainment company. What has been rendered obsolete is any property or media company that has built its business in one channel of distribution.
ST: Are there any of your businesses that you feel your current paradigm and future plans will orphan? For example, Velo and velonews.com do not partner with an events component.
SD: I wouldn’t refer to any part of our business as orphaned. We’re killing it with velonews.com and Velo, the mag. We’d love to be in the Gran Fondo business but we’re not there yet. We haven’t yet found a way to do it profitably, because of the difficulties and expense associated with road closures. We will try to wrap our cycling properties around an event proposition. We do that a bit now. We can take advantage of an existing 26.2 mile road closure and we did that this year in San Antonio and in Denver 26.2.
