Wanda Sports Group Co., the China-based owner of Ironman, the Rock ’n’ Roll Marathon series, Cape Epic mountain biking event, reported total revenue was €1.03 billion (US$1,156.5 million) in 2019, a decrease of 9 percent compared with 2018. The company also warned that by April 2020, substantially all of its sports events had been canceled or postponed “and it is currently unclear when these sports events will resume.”

The 2019 decrease principally reflected a €185.7 million decrease in reimbursement revenues, largely attributable to decreased media production activities in its DPSS (Digital, Production, Sports Solutions) segment as a result of the cyclicality effect of the 2018 FIFA World Cup Russia having occurred in 2018 (and not in 2019).

Revenue, excluding reimbursement revenues, was €996.6 million (US$1,118.9 million), up 10 percent year-over-year.

Mass Participation revenue was €326.9 million (US$367.0 million), a 15 percent increase compared with 2018, principally driven by the increase in the number of gross-paid athletes from 1,322,000 in 2018 to 1,524,000 in 2019 as well as the increase in the total number of events from 326 in 2018 to 343 in 2019. The gains were mainly attributable to the successful expansion of its event platform in China and acquisitions of a number of new international events.

Spectator Sports revenue was €567.3 million (US$636.9 million), an 8 percent increase compared with 2018. The increase principally reflected the inter-year cyclicality of events in its portfolio, as well as the contribution from the FIM MXGP Motocross World Championships.

Some of Wanda Sports key events included the 2019 FIBA Basketball World Cup, the 2019 FIFA Women’s World Cup France and the IIHF Ice Hockey World Championship 2019. At the same time, Wanda Sports said it successfully prolonged major rights-in business engagements, such as with the International Ice Hockey Federation (IIHF), the Confédération Européenne de Volleyball (CEV) and the Champions Hockey League (CHL).

Wanda Sports have acquired a number of new businesses in 2019, such as the landmark deal with World Athletics granting it the right to organize in the future an annual Diamond League meeting in China and to bring new top-class track and field events to China. Wanda Sports also won the international media rights for the Diamond League for five years and new World Athletics Continental Tour events for ten years. The company also partnered with the NBA covering the sale of the NBA’s sponsorship rights in Italy and France, which marks the NBA’s first agreement with a sports marketing company to represent its inventory in these countries. A new six-year agreement was also signed with The International Olympic Committee for the media rights to Sub-Saharan Africa for all Olympic events until 2024.

DPSS revenue, excluding reimbursement revenues, was €102.4 million (US$115.0 million) in 2019, substantially similar to revenue, excluding reimbursement revenues, in 2018. The DPSS segment operates under the iX.co brand.

For fiscal 2019, the net loss was €273.8 million (US$307.4 million). The loss reflects a non-cash goodwill impairment loss of €254.3 million (US$285.5 million) for impairment of goodwill at The IRONMAN Group relating to its North America and Oceania cash-generating units.  In March, Wanda Sports announced that it would sell Ironman to Advance, owner of the media company Condé Nast, for a reported $730 million. The deal is scheduled to close in May.

Excluding the non-cash expenses of goodwill impairment loss and the share-based compensation, there would have been a net profit of €6.0 million (US$6.7 million) for full-year 2019.

Adjusted EBITDA was €167.4 million (US$187.9 million) in 2019, compared with €194.8 million in 2018. The decrease was mainly due to event cyclicality in connection with the 2018 FIFA World Cup Russia, as well as an increase in selling, office and administrative expenses resulting from our business expansion.

COVID-19 and Operational Update
Wanda Sports said, “Following the global outbreak of the coronavirus, we adapted to the changing environment and transitioned our employees around the world to work remotely for their own safety and well-being. We also implemented strict cost management procedures, including a hiring freeze and elimination of discretionary spending, while ensuring we have the resources available to continue to support partners and promptly restart all of our activities once sporting events resume.

“The COVID-19 pandemic began impacting Wanda Sports in China in January and February 2020 as races and events were postponed due to containment efforts in much of the country. During this period, we continued to host races and sports events in Europe and North America. As the pandemic spread around the world, we canceled or postponed mass participation sports events also in other markets, while sports federations and organizers postponed or canceled more sports events and entire seasons, beginning in March 2020. By April 2020, substantially all of our remaining sports events had been canceled or postponed, and it is currently unclear when these sports events will resume.

“We are working closely with our partners, rights holders, sponsors and event organizers to assess the impact of COVID-19 on timing and the protocols for future events and to manage the financial impact across our value chain. In anticipation that sports events and games might proceed in the future without spectators, we are developing additional digital and broadcast solutions to offer to and prepare partners for the expected demand for new forms of live and digital sports consumption.

“We are also partnering with leading sports organizations to provide innovative online racing and event experiences to keep our athlete communities connected and engaged. For instance, we recently hosted several virtual IRONMAN races and organized the Chengdu Shuangyi Online Marathon and Nanning Online Marathon. We are also working to virtualize part of the racing trail for the UCI World Tour of Guangxi.

“Our active support of rights holders’ efforts to develop eSports events has enabled us to benefit from the rapid growth of the industry. For example, we are currently providing post-production services for La Liga’s EA FIFA tournament, supporting the Lega Serie A’s eSports tournaments and working with the IIHF to organize and promote a virtual world championship for ice hockey fans.”

Financial Guidance
Due to the significant uncertainties relating to scope, duration and impact of COVID-19, Wanda Sports said it currently is unable to reasonably estimate what its 2020 financial performance will be and, accordingly, are not providing any updated guidance.

Photo courtesy Wanda Sports