PTO’s ‘diversified revenue model’ key to landing US$10m Cordillera investment
March 19, 2025
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- Capital will be used to support PTO’s growth initiatives
- Cordillera eyeing more investments in emerging sports league and formats
- Firm looking at “more compelling, less crowded” opportunities
The Professional Triathletes Organisation’s (PTO) diversified revenue model played a central role in Cordillera Investment Partners’ decision to invest US$10 million in the sport, according to the San Francisco-based firm’s co-managing partner.
Cordillera manages over US$1.6 billion of capital, with a focus on niche, non-correlated assets ranging from boat marinas and live performance rights to music royalties and agricultural lending.
The firm’s investment in the PTO will be used by the organisation to support growth initiatives and comes ahead of an expected Series C funding round for the organisation.
Speaking to SportsPro, Cordillera’s co-founder and co-managing partner Gus Araya said the firm was focused on investing in areas that “are not already crowded with a lot of institutional capital”.
“Our approach is really to go after what we call the nooks and crannies of sports,” explained Araya. “Obviously, you’re seeing a lot of interest in NFL teams or Premier League teams, which is great. [But] that is not our mandate and we think that’s an area that is most likely to get crowded or be crowded sooner.
“For us, the PTO really fits in that category of an emerging league commercialising a popular sport.”
‘It’s not all about media rights’
The PTO was established to professionalise and promote the sport of triathlon, including through its T100 Triathlon World Tour joint venture with World Triathlon.
In January, the PTO struck a long-term hosting deal with Qatar, which Araya said highlighted the organisation’s “diversified model for bringing in revenue”. That strategy is part of what made it a “compelling value proposition” for Cordillera, he added.
“It’s not all about media rights,” Araya continued. “The mass participation piece of it is really interesting. It is a revenue stream that, again, is not purely driven by media rights. It’s bringing a global fanbase to some of the most iconic cities around the world to compete and have fun and be part of what we think of as a festival.”
Araya also cited the “hosting element’ of the PTO, with this year’s T100 Triathlon World Tour expanding to nine races in a global calendar that includes events in Singapore, Canada, France, the UK, the US, the United Arab Emirates (UAE) and Qatar.
“The third bucket really is around sponsorship,” continued Araya. “Formula One and a few other sports are a great example where they’ve been able to consolidate a very valuable audience. Triathlon has one of the most valuable and fragmented audiences around sports out there. And the PTO is now providing world-class content that you can watch and get excited about.
“If you can bring all of that together, then you have something very valuable for sponsors that want to associate themselves with professional sports, with health and fitness, with a sport that is very modern.
“We like that this was not a business that relies on trying to get some big media deal that is really the driver of the business, although certainly that would be a very nice outcome over time.”
‘We hope to be busy’
The PTO deal is set to be a precursor for more sports investments by Cordillera, with Araya stating that, over time, “maybe a quarter or a third of what we do” will be in some way related to sport.
Investing in emerging leagues and formats across soccer, ice hockey, sailing and motorsport are possibilities, according to Araya, as well as organisations involved in the wider ecosystem, such as agencies and consultancies.
Women’s sport is also another area of interest.
“We have various lists [for women’s sport],” said Araya. “It can be some of the well-known sports across the globe, certainly football fits into that. And there are opportunities in Europe, in North America related to football overall, different formats of that game.
“Then there’s also, within the whole [of] women’s sports, things that are related to youth sports too, that are not just about professionals and leagues. One trend that we see across the globe is more girls at a young age participating in sports and how that’s changing the landscape for investing. I think that is really, really interesting.”
He continued: “We hope to be busy. Most of the attention has been on the very well-known leagues. We hope most of the attention and capital will remain in those areas so that we can stick to our knitting and find these areas that are more compelling, less crowded.”
Finding the ‘nooks and crannies’
A recent report from financial advisory firm Oaklins found that 2024 was a record year for mergers and acquisitions (M&A) in the sports industry, with private equity accounting for 45 per cent of transactions. Deloitte also expects global private equity assets under management to reach US $5.8 trillion by 2025.
The rate at which institutional investors have been funnelling capital into sport shows no signs of slowing, with the National Football League (NFL) the latest to relax its private equity rules.
Araya said sport’s appeal to investors was obvious given it is “one of the few things that you might watch live and, if you follow a team or a sport, you’re willing to pay for whoever is going to give you that content”.
However, he cautioned about the industry becoming too crowded with external capital, which could make ROI more challenging.
“In a best-case scenario, you can bring patient capital with really good management teams that are supportive of athletes and leagues and bring it all together and have a great outcome for everyone,” he said. “And I think that’s what the industry is aiming for.
“But all investments have risks and if things get too crowded too soon it is something all investors have to be mindful of.
“This is why finding the nooks and crannies we think is a good approach to try to avoid some of those landmines.”
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