[Update] Tough Mudder Founders Dispute that Spartan Race is Acquiring Them

In a previous post we provided details that Spartan Race, Inc. was acquiring Tough Mudder (TM) in 2020, but Tough Mudder co-founders Will Dean and Guy Livingstone are now disputing this.

In a recent interview with Obstacle Race Media’s (ORM) Matt B. Davis, Tough Mudder’s Will and Guy try to set the record straight on:

  • Their current financial situation
  • The lawsuit between them
  • The lawsuit with their payment processor Active/Global Payments

Will and Guy are Still Working Together


Will starts the interview by saying that he has apologized to Guy and that they are happy to still work together. Guy mirrors this sentiment.

Will is staying on as a Tough Mudder board member and Kyle McLaughlin is the current CEO.

Was also interesting to hear that Guy hasn’t actually sued Will and at no point were Will and Guy in a direct legal battle.

Spartan Hasn’t Acquired Tough Mudder … Yet


The acquisition is currently not happening but Will sees this potentially happening in the next 12 months as the two brands could certainly exist under one banner, but as of right now Joe Desena from Spartan has “no enforceable option” to acquire Tough Mudder’s international assets. It’s subject to board approval (which from the sounds of it is Will and Guy) but most likely will happen sometime in the future.

Guy also confirmed that there’s a pathway to get the deal done in the future as there are some good revenue and cost savings synergies there to have the two leading obstacle course race brands working together.

Negotiations are ongoing.

Tough Mudder is Financially Sound


According to Will, TM’s CEO Kyle is doing a great job controlling costs, providing an excellent customer experience and that the fundamentals of the business are in great shape, despite the trend in OCR, which is seeing smaller brands (like Warrior Dash) leaving and larger brands (like Spartan Race and Tough Mudder) establishing themselves. Sounds to me like the industry is maturing with some organizations in the process of merging or being acquired.

Guy added that event satisfaction is incredibly important to keep racers coming back plus they also need to ensure that media sponsors are happy with the results as well.

Tough Mudder Ticket Sales Closed … for Now


If you go to Tough Mudder’s website, as of today, you can’t sign up for one of their races in 2020.

Here’s a screenshot as of 12/31/2019:

Tough Mudder

The reason for this is that Tough Mudder is suing their payment processor Active/Global Payments but Will is confident that this will be resolved quickly. Obviously not being able to process payments long term will be detrimental to their business.

Some additional details:

  • Tough Mudder owes Active/Global money via a quasi debt instrument that needs to be paid over time
  • Active/Global is withholding registration money (several million dollars) therefore Tough Mudder was forced to shut down ticket sales
  • Some vendors are being stretched with being paid
  • Employees are still working and being paid contingent on getting a deal with Active/Global Payments (which hinges mainly on detail on the debt repayment)
  • Although the OCR industry is seeing a drop in ticket sales, Tough Mudder is back making a profit

Suggested Reading


Here are some additional articles you might consider reading that’ll give you further detail on the situation:

Full Interview


You can listen to the full interview here, although it’s interesting to hear that what ORM’s Matt B. Davis is hearing from his sources is different than what Will Dean is saying. Will let you judge for yourself. Enjoy!

 

Have any insight on this or an opinion? Leave a comment below!

About the Author: Scott Young

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