Spartan & Tough Mudder – Ongoing Coverage
Editor's Note: This article is a work-in-progress, and we'll post updates as we dig deeper and more news becomes available. We are in touch with all parties involved and will share pertinent details along the way – please check back here for updates.
It's been a big week for Spartan and Tough Mudder. We've learned that the sale of Tough Mudder to Spartan was moving forward and would be completed sometime this week. Yesterday, we announced that the OCR community wouldn't have to wait long to find out the new Tough Mudder Schedule.
And not waiting long is correct! The sale closed today and Spartan announced their plan for Tough Mudder's 2020 events. Here is the 2020 Tough Mudder schedule. Registration has now opened for the following events:
- Virginia May 30-31 2020
- Twin Cities July 11-12 2020
- Toughest Mudder Chicago August 22-23 2020
- Chicago August 22-23 2020
- Tri-State September 12-13 2020
- Seattle September 26-27 2020
- Dallas October 31-November 1 2020
- Worlds Toughest Mudder – Dallas November 7-8 2020
- SoCal November 14-15 2020
- Colorado- TBD
Tough Mudder's sale to Spartan is moving forward! Spartan will purchase Tough Mudder's US operations for $700k and assume any remaining liabilities, rumored to be in the $7-10 million range. Previous objections by Navy Federal have been resolved, allowing the sale to move forward. Navy Federal will continue as a sponsor for any remaining races in 2020 and have the option to continue sponsoring any additional races. The sale will close on February 28th, assuming all financial transactions go through.
You can read the entire legal filing here.
Navy Federal Credit Union (“Creditor”) hereby opposes the Chapter 11 Trustee Motion to Sell Assets Free and Clear and to Approve Assumption of Contracts
“On January 30, 2019, Creditor and Debtor entered into a sponsorship contract (the “Contract”) whereby Debtor was obligated to provide publicity and allow the marketing materials from Creditor at the covered events during 2019 and 2020. As consideration, the Creditor was to provide the marketing materials and personnel at covered events and make a payment of $250,000.00 for each year of events. The second installment of $250,000.00 was paid by Creditor at the beginning of 2020 and covered the entire year of sponsorship in certain locations and races during which the marketing materials and publicity were still required to be provided.
On January 7, 2020, before Debtor could perform on the obligations for 2020, Debtor was forced into an involuntary Chapter 11 bankruptcy. A Trustee was thereafter appointed. Creditor filed its Proof of Claim as claim 6. Judicial Notice is requested under FRE 201. The Trustee filed the Motion seeking Court approval to allow certain assets to be sold to Spartan Race, Inc. (“Spartan”), including some specified contracts and events.
In the Motion, in Schedule 1.1.10, all assumed contracts were listed. The Contract with Creditor was among them. The Trustee also filed a Notice of Assumption at docket 33-2 which also assumed the Contract. The day prior to the deadline to oppose the Motion, Creditor was notified, though its counsel, by email from Spartan’s counsel, that the Contract was not being assumed after all. As a result, Creditor was forced to expedite an opposition out of an abundance of caution given the result this could have on the unsecured class of creditors. At this time, there is no filing with this Court indicating that the assumption of the Contract has been withdrawn.”
From Mud Run Guide's legal expert:
Multiple objections have been filed to the sale by creditors. Most of them are low-dollar and may not make much noise but this one from Navy Federal Credit Union possibly could:
- Trustee says Spartan will assume all open Tough Mudder open contracts
- Spartans lawyers told Navy Federal Credit Union lawyers that it did not include them, informing NFC of this the day before the filing deadline
- Navy Federal Credit Union's lawyers argue that there has been no filing to exclude Spartan from executing their open contract with Tough Mudder for 2020.
- Essentially: “NFC has $250,000 dollars invested in marketing with TM for 2020 and if Spartan is going to hold the events, NFC should be able to get what they paid for.”
Spartan Acquires Tough Mudder UK
“We’re proud to welcome Tough Mudder UK to the Spartan brand umbrella,” said Spartan Founder and CEO Joe De Sena. “The company’s dedicated team has built an incredible, passionate community and we’re excited to support their efforts to continue to transform lives.”
Spartan is still actively engaged in discussions with the Trustee managing Tough Mudder US through its Chapter 11 bankruptcy proceedings and have reached a deal that is now subject to court approval. Spartan is in active discussions to engage some former Tough Mudder US employees, with an aim to stand up as many US events as possible after the sale of the Tough Mudder US assets in its Chapter 11 case, which could be completed within the month.
United States Bankruptcy Court, Delaware: NOTICE OF ASSUMPTION AND ASSIGNMENT OF CERTAIN EVENTS AND EXECUTORY CONTRACTS AND PROPOSED CURE AMOUNTS (PDF)
Overview with analysis from our legal expert:
This is a request to the court-appointed trustee of Tough Mudder Incorporated for Spartan to purchase all Tough Mudder assets. A meeting with the trustee in court is scheduled for 2/25 to approve or refute the sale, with an objection deadline set for Thursday, February 20 at 4:00 pm ET.
The purchase price is approximately 700 thousand plus the clearing of all TM debt (estimated at 7.5 to 10 million)
From the Notice of Assumption: “Assumed Liabilities. The Buyer will assume the Assumed Liabilities, which include (i) Seller’s obligations to natural persons holding event registrations associated with an Assumed Event, (ii) for each of the Excluded Events, Buyer will exchange any natural person’s event registration for two comparable Buyer event registrations to occur on or before December 31, 2021, (iii) for every 2020 Tough Mudder Season Pass held by a natural person, Buyer will exchange their 2020 Tough Mudder Season Pass for two consecutive years (i.e., 2020-2021) of a comparable Buyer season pass, (iv) all Liabilities of Seller under each Assumed Contract, in each case, arising after the Closing (v) all Cure Claims, (vi) all Liabilities arising out of Buyer’s use of the Acquired Assets by Buyer after the Closing to the extent such Liabilities arise solely out of any matter, occurrence, action, omission or circumstance that first occurred or existed after the Closing.”
If the sale is approved by the court on 2/25 the sale will become final on 2/28. There will still be a meeting in March to address the payment of any outstanding contracts and the repayment of the 7.5 to 10 million)
(i), (ii), and (iii) above appear to be referring to Spartan offering multiple Spartan (or Spartan-controlled Tough Mudder) registrations for holders of 2020 Tough Mudder registrations or season's passes.
Tough Mudder UK and Germany have resumed operations and online ticket sales are now open.
- Germany's first event will be June 6 & 7 at Hedringen's Castle, Arnsberg, NRW
- The first UK 2020 event will be April 17 & 18, North London Finsbury Park
A text from From Spartan's Joe De Sena this morning: “We got ticket sales open in Europe – now we're working on US!”
Sports Business Daily: Tough Mudder’s European subsidiary resumes operations as administrators appointed
“Spartan remains the most likely buyer for the US and European parts of the business, provided the US business resumes operations soon. A separate sale of the European affiliate would be complicated by the fact that the Tough Mudder brand and its intellectual property is controlled by the US branch.”
Delaware Bankruptcy Court – “status meeting adjourned”
This usually means a deal is on the table and the court is allowing both sides to see if they can come to a deal. We reached out to Spartan’s Joe De Sena:
“Long road still ahead but we are trying everything we can. Right now we are working around the clock to try and get ticket sales turned back on.”
Reading between the lines, the Spartan / Tough Mudder deal looks to be heating up.
We’ve also been made aware of an offer being tendered by another national OCR company – so maybe Spartan has some competition?
1/21/2020, United States Bankruptcy Court, Delaware:
A. Tough Mudder Incorporated and Tough Mudder Event Production Incorporated have consented to involuntary Chapter 11 relief and The United States Bankruptcy Court for the District of Deleware has granted Involuntary Chapter 11 relief for the creditors (download PDF).
B. Tough Mudder Incorporated and Tough Mudder Event Production Incorporated have been directed for the immediate appointment of a chapter 11 trustee (download PDF).
(from Case 20-10036-CSS Doc 18 Filed 01/21/20)
- ORDERED, that the United States Trustee shall promptly appoint a Chapter 11 Trustee in the captioned involuntary chapter 11 cases.
- ORDERED, that the Chapter 11 Trustee shall manage the operations of the Alleged Debtors and develop a restructuring or sale strategy, whichever is in the best interests of the creditors of the Alleged Debtors.
- ORDERED, that the Chapter 11 Trustee may negotiate a sale of the Alleged Debtors’ assets, subject to Court approval and higher and better offers.
Will Dean Relents
United States Bankruptcy Court, Delaware: Notice of Consent as Majority Shareholder to Order for Relief and Appointment of a Chapter 11 Trustee (download PDF). Filed by William Dean.
By consenting to the order for Relief and Appointment of a Chapter 11 Trustee, Tough Mudder Co-Founder and majority shareholder, Will Dean, will not obstruct the Emergency Motion for Appointment of Chapter 11 Trustee in regards to Chapter 11 Involuntary Petition which was filed on 1/7.
Joe & Kyle Keep Working on Spartan / TM Deal
In a Facebook video post, Spartan co-founder Joe De Sena and Former TM CEO, Kyle McLaughlin share their “around the clock” work to save Tough Mudder and ask the TM community to “stick with us, this isn't over yet!“
United States Bankruptcy Court, Delaware: Spartan files statement in support of an emergency motion of petitioning creditors to appoint a Chapter 11 trustee.
“Spartan is frustrated that Tough Mudder abruptly stopped negotiations towards a sale transaction consistent with the LOI, and is very concerned that the value of the Alleged Debtors’ global business is quickly evaporating. While Spartan is also concerned about the negative impact on value that may result from a contested involuntary chapter 11 petition, it appears there may be no alternative for Tough Mudder. Notwithstanding these significant concerns, Spartan remains interested in certain Tough Mudder assets, and would be willing to consummate a transaction through a bankruptcy court proceeding, subject to limited diligence, reaching definitive agreements, and entry of an acceptable sale order to consummate the transaction. At this juncture, it appears that the best alternative for Tough Mudder is the appointment of a chapter 11 trustee as it will allow Tough Mudder to maximize value for the benefit of all stakeholders through an immediate sale of the Alleged Debtors’ assets.” – Tough_Mudder_Incorporated__debke-20-10036__0011.0 (PDF)
United States Bankruptcy Court, Delaware: Summons Service Executed on Tough Mudder Incorporated. Case #1:20-bk-10036
United States Bankruptcy Court, Delaware: Several of Tough Mudder Incorporated (TMI) creditors have filed for a Chapter 11 Involuntary Petition and Emergency Motion for Appointment of Chapter 11 Trustee. (PDF Downloads or see screenshot below)
$854,558.40 owed for “services rendered”:
- Valley Builders $307,189.53
- Trademarc Associates, Inc. $292, 454.93
- David Watkins Homes, Inc. $256,014.75
We reached out to our legal expert to provide some insight: “This emergency petition for appointing a trustee for the bankruptcy to shorten the response time. The petition is sealed, but the gist is they are trying to force TM's hand – fast.”
“Tough Mudder has always been about overcoming obstacles, together as a team. Only a very few people have the power to influence the outcome of this situation, but for the rest of us—we should do what we do best: support each other through difficult challenges, leave no one behind, and give every moment our honest best, not our settled best.” – Former TM CEO, Kyle McLaughlin
- We've added the response from an Active spokesperson.
- Guy Livingstone's lawsuit against Tough Mudder Incorporated has been extended until 3/13/20, as of December 20 (the same day Kyle McLaughlin was removed as CEO of TMI), Tough Mudder's attorney, Jed Weiss, filed a motion to withdraw as representative of TMI.
- (see screenshot below) Tough Mudder Canada has filed a notice of intention to file bankruptcy, listing $0 in liabilities and $0 in assets.
- We reached out to Will Dean earlier today via email regarding online comments relating to US & UK offices closing, US bankruptcy, and employees being let go as of 1/1/20; his reply was “no comment”.
Will There Even Be A Tough Mudder in 2020?
(12/30/19) The news that Spartan and Tough Mudder had come to terms to take over German and Canadian TM events en route to a full takeover of all Tough Mudder events worldwide may have been a bit premature, and there are signs and rumors of this deal rapidly falling apart. Right now, it appears the two parties are stuck in a stalemate over the future of TM, and that points to some extremely bad news for the athletes in the world of OCR that love Tough Mudder events.
- With Tough Mudder's registration currently closed during one of the busiest shopping months of the year, there are currently no positive signs of life at TM.
- We've also verified that on December 20, Kyle McLaughlin was removed as CEO of TMI, with the day-to-day CEO duties falling back to co-founders Will Dean and Guy Livingstone
- We've reached out to Kyle to provide some insight and will update should he choose to.
- Active (active.com) has reportedly invested over $30 million in Tough Mudder since 2017 ($15 million in 2017, $18 million through early 2018) and any “deal” for TM should activate clauses, causing payments to come due.
“Since late 2018, as a service provider to Tough Mudder, Active Network has supported its financial restructuring and turnaround efforts. Occasionally merchants like Tough Mudder are unsuccessful in turnarounds. Active Network has unfortunately been placed in the middle of disputes that have nothing to do with us. We remain steadfast in our commitment to the Active community of event participants, organizers and customers. This matter is immaterial to us.” – Active spokesperson
If you add the above bullet points together, without money coming in through additional investment or outside acquisition and no event registrations, something drastic would have to happen – extremely soon – for Tough Mudder to exist in 2020. Of course, this is a fluid situation that could potentially be resolved quickly through renewed investment and while the situation looks dire we're not prematurely calling Tough Mudder down for the count.
Should Tough Mudder Survive?
Here's the part that's on YOU, the OCR athlete – DO YOU EVEN CARE?
Tough Mudder was one of the first events I participated in back in 2011 when I was writing Ultimate Obstacle Race Training and I've happily slogged through the mud at other TM's over the years, and even froze my butt off at WTM in 2015. Personally, I like Tough Mudder and their huge obstacles that reward camaraderie and foster the community to participate in an event – not a “race”.
What do you think?
We'd love your input as to why Tough Mudder should be saved, share some stories of what Tough Mudder means to you and why you'd like to see it survive (or not) in the comments below. We'd also like your input on a Facebook post:
- Should Active continue to bail out Tough Mudder?
- Are you OK with TM going away altogether?
- Is Spartan the best hope for keeping the Tough Mudder brand alive?
- Can the OCR community help put the pieces back together?
Whose “Fault” is it?
An inevitable question – it helps us make sense of a situation by placing blame… Was it the same hubris that drove Tough Mudder to greatness that is also standing in the way of Spartan being able to save the brand? Only time will tell.
Let's also remember that Spartan just “bailed out” Warrior Dash, so they have a track record of developing a partnership that allows the previous owners some dignity while they help to rebuild a brand in-house. Whether you agree or disagree with Spartan owning multiple events from all over the world of OCR – if they didn't step in to cushion WD's fall, who would've?
What can we do as a community?
- Create a signature campaign to appeal to Active
- Send emails to Will Dean
- Social posts to appeal to Spartan to try and sweeten the deal
- Help find another source of funding – got a piggy bank to smash?
Let's also remember that when other events such as Warrior Dash and BattleFrog went under, events such as Spartan Race, Savage Race, Rugged Maniac and others stepped up and offered free entries to those affected. Some of those events even hired employees who found themselves out of a gig, so there's a strong foundation for community support.
When events fail, the first social posts we see are, well, kinda selfish: “What about MY registration? THEY STOLE MY MONEY!” and while no one can blame the athletes that individually lost $100 or more for a single registration, let's remember who really gets hosed when an event crashes & burns:
- Vendors – from t-shirts to port-o-johns, the vendors are left holding the bag for tens of thousands of dollars for services or goods rendered that they will most likely never recoup.
- Investors – “Want to know how to make $1 million in OCR events? Start with $2 million”
- Employees – It really sucks to pour your heart and soul into an event and watch it die around you – not only are you most likely unpaid for the last (few) paychecks, you've got to say goodbye to all your friends and start over at a new job – once you find one.
More to Come…
Stay tuned, we'll update this post as new information comes in and we'll keep digging.
Tough Mudder was the brand that got me started in OCR in 2018. I think it is a fantastic “first” for those considering OCR as there are no failure penalties and the ethos is entirely about helping the people behind you… hell, some obstacles you literally CANNOT complete solo.
I’m in favor of a Spartan acquisition as they are operating on a global scale and it opens up their customers to a “non-competitive” avenue to help with their goal of getting 100 million people off their couches.
i truly think that Tough Mudder saved, or at the very least, helped to extend drastically, my life. My daughter challenged me to do my first event with her in 2014 (Portland TM, held in Lebanon, Or.) when I was almost 50. I was very near or over 300 pounds and couldn’t go up a flight of stairs without losing my breath. I trained (not as hard as I should have) lost 50 pounds and completed the course, with the help of my daughter and teammates I hadn’t even met until that day. At the end, my daughter threw her arms around me and shouted “Best daddy ever!). Truly one of the best days of my life! Since then, I have continued to lose weight (a not too bad 210 now), and do more events. I have done 10 TM’s and multiple other events but if it had not been for the camaraderie and over all great atmosphere and enthusiasm that I saw out there on my very first ocr outing ever, I may not have continued. with the sport. I have made a point of taking noobs out with me every chance I get. Some have done more, some just the one, but all have finished with me! Many have said that it was the sense of family, of tribe, that kept them out there after they thought that they could not go on. My story is not unique, I have heard variations on it at every single event, even at not TM ones where people see my proud Tough Mudder tattoo. This event isn’t just another event, it is a family that loves and supports each other like no other event I have ever done. its lose would be a tragedy to the sport, to the tribe, and on a very personal level, to me. It is one of the best bonding moments of a wonderful life with my daughter and now my wife has even committed to accomplishing her first full TM this year.
Tough Mudder was the very first OCR I had ever heard of. It seemed so out of reach to me as someone just getting into fitness and not even being able to run a mile without wanting to die. I ended up training for a Warrior Dash first and then immediately registered for my first Tough Mudder. It was my gift to myself to motivate me to get back into shape after giving birth to my daughter. I loved my very first course at Mount Snow. I was by myself and very quickly realized I was never alone with the TM community there to help me when I needed it. Though I eventually got into competitive OCR, I have since run 16 various TM events and I still love them for the community and the teamwork. It’s like no other event and that is why I keep coming back year after year. I would be very sad to see TM go under. These events make me feel good about humanity. I always come away with feelings of joy, accomplishment, and peace.
I look forward to Tough Mudder every year…It’s my favorite “we are all family/finish as a Team” OCR event.
16 time Tough Mudder
Investors….sorry that is the chance you take when you invest in a company.
Vendors…. Be careful of what you invest in and the terms of the deal.
Employees…most of them are doing the job for the love of the Job.
Athletes…we made you (TM) what you are….Tough Mudder is a family of Athletes (big & small) ….we are Tough Mudder. Every person that ran across that starting line. You owe us just About Everything!
16 time Tough Mudder
I mostly agree with Rick above. Investors take that risk willingly; vendors should be careful and have contracts ensuring they’re not on the hook for thousands. I do feel bad for the employees involved full time and that the athletes are the biggest losers here.
I’m probably in the minority here, but TM was the least favorite race I’ve ever run. Backups were super long at so many of the obstacles – I skipped at least two because it would have been over 30 minutes to wait. I also didn’t like as a solo runner how there are obstacles that are literally impossible to do by yourself. I understand (even more so after attending) that they lean into the team aspect; but I was definitely unprepared for that. It’s difficult for me to find friends to race and line up schedules – I probably would have tried a little harder here if I knew. The location was also absolutely awful – it was running through flat corn fields the entire time.
I will say, they have some of the biggest and most unique obstacles I’ve encountered in OCR. It’s also worth appreciating their reach as a company. When people ask about OCR or mud runs, Tough Mudder is always the first example I give because almost everyone has heard of it and is familiar. It’s also great to hear stories, like a few shared above, of how it’s literally changed lives for some. I haven’t been following them, so this was completely shocking to me to hear how much trouble they were in. Even though I’ll never do another, it would be weird to see them disappear; hope Spartan can save them.
No joke, no exaggeration … Tough Mudder and Worlds Toughest Mudder changes my life. Because of Tough Mudder and Worlds Toughest Mudder, I found out what I was made of … who I am when under pressure and placed in the most uncomfortable environments imaginable. Their events helped shape my confidence in myself. 5 years after totally buying into the whole Tough Mudder way of life, I am a successful gym owner and a person that believes anything is possible … because your best will make you better; and that’s gonna make us all better.
I love doing tough mudder and it will be a shame to see it go! it provides an event that is unlike other obstacle course racing! All races give athletes a sense of team work and cooperation but tough mudder takes this to a new level; with some obstacles requiring help from other racers to complete. it forces you to talk to and work with others!
I hope that it can be saved. however that may look like. If it survives and lands on it’s own feet (great) or has Spartan take it over. There is a lot of good that can come out of it if done correctly.
Tough Mudder is, by far, my favorite OCR event. And I do every single OCR that is within a 4 hr driving distance. I look forward to it every year! I love all the challenging obstacles. The teamwork it promotes is great. I also like that there isn’t a penalty for failing. It sucks to get farther than you ever have on an obstacle only to have to do burpees or a penalty lap instead of being able to rejoice in what you just accomplished. I really hope spartan can do something to save it.
I come from a background of racing ATVs and Dirt bikes. A friend of mine that I race ATVs with mentioned this Tough mudder thing, I was interested as it could push myself with just my body and mind, no motor, I did one a few years back and fell in love with it. It even has helped me push myself to be better on the ATV race track, both physically and mentally. I have plans of trying other OCR events such as savage, spartan etc, as it is always cool to try something different, But I will always want to go back to tough mudder, because my experience was so awesome! it will be sad if it goes away. So lets hope for the best!
TM delivered or delivers a great product and experience; however, leadership is another story. Reading the 16 page law suit, reading editorials, and watching Will’s response on OCR Media I think a board of 2 members is not really a board. It is human nature to have differences but ethics comes to mind. I cannot see Active writing off $30M. If leadership changes for TM, there may be a future.
From the outside, this looks like a CFO problem. Normally business models that take money first and deliver services later can easily scale using the positive cash flow registrations generate. Somehow the brand needed cash infusions to stay alive and that makes me wonder if the business model was viable at all. Unless someone gets a chance to review a few years of audited financials, my guess is we will never know.
The loss of TM would be a blow to the OCR community and the “family” that exists with in this culture. I ran my first TM in NJ 2013 with my good friend and work partner. You learn a lot about people on the course. Coming from a law enforcement background, I see people at their worst…..OCR and TM provide that team/family commoradre and give me back a piece of humanity sometimes lost after months of my job. My partner and many others have and continue to come out to race and TM and its kick a$$ obstacles are always something to look forward too. Hope they stick around!
Tough Mudder is my favorite Obstacle Course event and I would be very sad to see it go. The new obstacles they introduce keep the events interesting and fun each year.
I remember when I first heard about the event, I thought there was no way I could do it, but then in 2014, I decided to just go for it, and I did it. Gone back each year and I want to do more. I don’t know what has led to this situation or the best way to fix it, just wanted to say another fan here that hopes it can continue somehow.
When will the next update be?! My work are really wanting to take part in the Finsbury Park race on the 18th of April 2020! Should we make other plans? We are raising money for charity!?
Any information would be much appreciated.
TM left me with the most amazing memories…in my 50’s, with my son. We rocked. And we bonded like never before. We aren’t typical “athletes” but do work out, run and have fun…we were looking forward to bringing more into the TM forum.
I always buy my ticket as soon as available. That means I have mine already. Question… Will I be able to run this year or not
TM is the first OCR that my boyfriend and I did together (or at all). Since then we continue to do it every year and are up to 6 races under our belts. It’s something we look forward to, gives me a reason to train during the year, and ultimately is one of our favorite things we do all year. We love that the focus is on doing your best and teamwork, not competing against each other. I think it would be a devastating loss to the OCR community if TM goes away all together.
I have participated in several TM’s and am currently training for World’s Toughest Mudder in November. Doing these races over the past few years has changed my life in so many ways. It has given me a goal to strive towards each year in regards to bettering myself both physically and mentally. I have researched some of these other obstacle races out there and NOBODY compares to TM. The obstacles, the team mentality, the vendors, and the team are unmatched by any of their rivals. Come back to us TM or else I will just be running around my neighborhood swamp in a wet suit for no reason!!
No IFs, Ands or buts… I am a die-hard fan/participate! I’m looking forward to running in more events. In fact I already have a ticket bought for this Summer! 🏃💪🏃💪👍👍👍
I love TM. It helped me prove to myself what I can do, esp. in the mud. I refused to do a timed race which is why TM is for me. I love the teamwork, never leaving anyone behind, support each other, etc. if Spartan buys them out, I would look into them, untimed race that is,