Contract reveals details for Challenge Penticton

Licensing agreements outlines perks for top athletes, but details of financial arrangement are still being kept secret

Challenge Penticton Licence Agreement by Joe Fries

After finally coming to terms with its new triathlon partner, the city is preparing to flip its deal to a local society, but the price of the brand-name race remains a secret.

Challenge Family earlier this month signed off on the licensing agreement to authorize the Challenge Penticton triathlon here in August. It replaces the Ironman-branded races that had been held annually since 1980s.

The licensing agreement is between the City of Penticton and the Challenge Family. However, the city is working on a separate deal with the Penticton Triathlon Race Society to assign the licence to that group, which will operate the event.

A copy of the licensing agreement was provided to the Western News, but key sections related to the cost of the deal were redacted ostensibly to protect third-party business interests.

What isn’t blacked out indicates the Challenge Family is to be paid “an annual basic fee for marketing and organizing” the event, plus a percentage of application fees.

Paulette Rennie, who chairs the board of the local race society, said all money paid to the Challenge Family will come from revenue generated through sponsorships and registration fees.

“The whole (licensing) agreement is being transferred from the city to the society, and we will pay the obligation to Challenge,” she said.

The society intends to transfer any race profits to an arm’s-length non-profit group that will disburse cash to local charitable causes.

Rennie is still going through the separate licence-transfer deal, and expects to sign off within two weeks.

“We’re just trying to do the best thing we can for our community, so we want to make sure it’s a fair agreement, that the right transfer of liability is there,” she said.

That deal will also spell out the city’s in-kind donation to the race for items like policing and cleanup, which cost about $100,000 last year.

Acting mayor Garry Litke said although the city intends to spin off the licence, it still felt compelled to act as a middleman in order to maintain some control, which he felt was lost under the Ironman brand.

He also noted that the city had been paying Ironman’s owners an annual marketing fee that hit $60,000 in 2012, and that no such cost is included in the new deal.

Other items of note in the licensing agreement include:

n Challenge Penticton will “make a particular effort to invite renowned athletes” to enter the race, who may “enhance the publicity and significance” of the event. Local organizers will pay their “reasonable costs,” plus expenses like accommodations and food.

n A $75,000 prize purse will be provided for the top 10 men and women racers, with prizes ranging from $12,000 for first place to $500 for 10th place.

n The licensee keeps all sponsorship revenue it secures itself, and must organize an expo near the venue where “dealers of sports articles, regional companies and shop owners” can sell their wares.

n Challenge Family “will spend the majority” of its percentage fee on international advertising for Challenge Penticton, including in its corporate magazine, plus on its website, athlete database and social media platforms, and at race expos.

n The agreement runs for five years, with the option to renew for an identical term. A half-distance race could be added if both parties agree.

By late April, the race had 1,400 athletes registered, about half the number who competed in Ironman last year. Rennie is confident that as word gets out about Challenge Penticton, which allows for relay teams and includes five other days of family-oriented festivities, it will attract more participants.

“I guarantee you they will come back in large numbers next year,” she said. “I anticipate we’ll be double next year.”

This year’s race is competing with Ironman events the same day in Whistler and Louisville, Ky. Challenge Family, headquarter in Germany, operates 19 other races around the world, although Penticton will be the first in North America. The city parted ways with Ironman shortly before last year’s event.