Meet the New Boss - Stephanie Pearson

dispatches>first lookMeet the New BossFitness magnate Bahram Akradi is buying up some of the most beloved endurance events in thecountry—and he has plans to improve them. So what’s everybody afraid of? by stephanie pearsonPast the Costco, the MattressGiant, and the manicuredsuburban townhomes of EdenPrairie, Minnesota, more than50 cyclists are hurrying througha sleet storm to enter Life TimeAthletic. One of 105 of themegabox health-club chain’soutlets, which run from Texasto Ontario, the facility covers232,000 square feet and housestennis and basketball courts,yoga studios, and roughly 400cardio and fitness machines,plus a bar, a restaurant, andluxurious changing rooms. Thisevening, the spinners—fromelite mountain bikers trainingfor the Leadville 100 to hyperfitsoccer moms—will have theirasses handed to them by LifeTime founder, CEO, president,chairman, and frequentinstructor Bahram Akradi.“I’m your daddy tonight!There is no slacking off!” heyells, pedaling to an up temporemix of “Black Magic Woman.”“Find that beat! Let’s go!Quit talking! Focus! Push it!”Akradi, 51, started thecompany in 1992, and it hassince grown into a $1 billionfitness empire. Over the pastdecade, Akradi has also slowlypositioned Life Time to bethe largest athletic-eventbrand in the country, creatingor acquiring more than 200annual races in 23 states.Most recently, Akradi hasfocused on ultra-distanceendurance competitions. In2010, Life Time purchasedColorado’s iconic LeadvilleRace Series, which includes thehighest and arguably toughest100-mile mountain-bike racein the country, the Leadville100. In 2011, it purchased theChequamegon Fat Tire Festivalin Hayward, Wisconsin—amongthe oldest and most respectedgrassroots mountain-bikingevents in the U.S. And last year,Akradi launched the Leadman250 triathlon, his own versionof Ironman, with a 5K swim, 223Kbike, and 22K run. The secondLeadman 250 will be held onSeptember 22, in Bend, Oregon.The intrusion of a fitnessclubmagnate into the nicheworld of ultra races has manyendurance athletes mystified.What, they wonder, is Akradiup to? And, more pressingly,what will happen to the ultraworld’s offbeat and belovedsmall events once they’re runby corporate America?Life Time is such a successstory that last fall Jim Cramer,of CNBC’s Mad Money, calledit “the Whole Foods of thefitness business.” In 2011, thepublicly traded company,headquartered in Chan hassen,Minnesota, earned more thana billion dollars in revenue. Thisyear, that number is on track toincrease by at least $100 million.And while races still accountfor only 1 percent of the dollarscoming in, Life Time intends tobe a dominant player in thatworld, too. Akradi anticipates26 Outside Photograph by Bryce Duffy

Akradi trainingin RedRock Canyon,Las Vegasoutsideonline.com Outside 27

destinationscolumnsLab ratFOBfirst look1Life Time’s April2012 Nautica SouthBeach Triathlon;left, Javier Gomezwinning the eventannual revenue from Life Time events increasingfrom $10 million to $100 million overthe next six to seven years, with more acquisitionson the horizon. He won’t reveal whatthose are but says that Life Time is looking tobuy events that “are really coveted.”“Our goal is to be the best athletic-eventcompany in America,” Al Iverson, presidentof Life Time Fitness Athletic Events, adds.“Eventually, that might mean the biggest.”There’s good reason to think Akradi willmake it happen. He emigrated from his nativeIran in 1978 to study electrical engineeringat the University of Colorado, coveringhis tuition by cleaning pools and sellingmember ships at Nautilus Swim and Fitness.Upon graduating, he was sent to open a Nautilusclub in suburban Minneapolis. He left thecompany, which had been acquired by BallyTotal Fitness, in 1989 and started Life Timein 1992. At the end of 2001, the company had22 clubs, with revenue of $136 million.In 2002, Akradi entered the triathlon worldwith a bang, putting up a $50,000 prize forthe winner of his inaugural Olympic- distanceLife Time Fitness Triathlon, in Minneapolis.(The first-place prize at the ITU TriathlonWorld Championships that year was$20,625.) The next year, he increased thewinnings to $250,000.“It was like a wreck on the freeway—youhad to look,” says John Duke, vice presidentof global sales and marketing for Ironman,of the extravagant purse. “It was the richestevent in the sport. I give him credit for puttingup that kind of money. He changed a lotof triathletes’ lives. He’s almost like HowardHughes or the Wizard of Oz.”The dollar signs made Life Time an instantforce in the triathlon world, and establishedraces were forced to follow its lead. Today theprize purse for the XTerra World Championshipis $105,000. The sum for the eight-event2012 ITU World Triathlon series (includingthe year-end bonus pool) is $2 million. Forits part, Life Time awards more than half aAkradi anticipates annual revenue from Life Timeevents increasing by $90 million over the next sevenyears. “We are marrying indoor and outdoor sports ina way that no one else has thought of,” he says.million dollars in a broad spectrum of events,including a $50,000 purse divided among thewinners of the Leadman 250 in Bend.Akradi expanded into tris just as participationwas exploding—in 2010, an estimated2.3 million Americans competed in at leastone on- or off-road triathlon—but his choiceto jump into the hardcore ultraracing marketis a bigger gamble. Participation in ultraevents is increasing, but according to ActiveNetwork, a technology company that powersthousands of races, the boom is relativelysmall: over the past decade, some 317 domesticevents attracted roughly 32,000 racers.“Races like Leadville probably make asmuch money as the rest of his companymakes in a day,” says Ed McCall, a privateequityinvestor and former chairman ofSpectrum Clubs, a Life Time competitor.McCall, who has known Akradi for years anddescribes him as “a hard-driving entrepreneur,”believes that Life Time’s foray intoevents is largely a branding initiative. “If youlook at it that way, it might be really inexpensivemarketing dollars,” he says. “His businessis gigantic cookie-cutter health clubs.Maybe events like Leadville are a way for himto feel like he’s moved upmarket.”It’s a shrewd tactic in transforming LifeTime into a complete lifestyle brand, distinguishingit from other big-box health clubsand increasing membership. “Events bringa significant number of nonmembers who,once exposed to Life Time events, presenttremendous new-member opportunities,”says Akradi, whose clubs now offer organizedoutdoor rides and training camps for races.“We are marrying indoor and outdoor sportsin a way that no one else has thought of.”As for the ultraracing community, opinionsabout Life Time range from intrigue to concernthat a big corporate entity will changelong-standing events. With the homespunLeadville 100, some feel it’s like Whole Foodsgobbled up the corner deli. “There are peoplewho think the devil has run off with the race,”says Adam Stepanovic, a Boston mountainbiker who will compete in this year’s Leadville100, his eighth. “And then there arepeople who drank the Kool-Aid. The courseand the people are the same, but they’rechanging things, giving away hats and snazzysweatshirts with no character. It’s almost likethey’re tampering with its soul.”Akradi insists he’ll buy an event only ifhe can improve it. That’s already happenedwith Leadville, according to Ken Chlouber,the series’s legendary founder, who notesthat Life Time streamlined the registrationprocess, improved the food, and, most important,boosted the Leadville Legacy Foundationprogram, which, among other philanthropicdeeds, hands out $1,000 scholarshipsto every Lake County High School graduatingsenior. Meanwhile, there’s still no purse forthe Leadville 100—any racer who finishes inunder 12 hours receives a silver belt buckle—and Akradi has no plans to change that.“His passion and conviction for this race isthe reason I agreed to turn over leadership tohim,” says Chlouber, who still acts as an eventconsultant.Akradi is no stranger to the Leadville startingline himself. He’s completed four Leadville100 mountain-bike races, earning theprized buckle three times. This year he wantsto finish in less than nine hours.“If I do everything right, and if nothing goeswrong,” says Akradi, “I just might have a shotat it.” oEric Wynn (2)28 Outside