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hippy
Comparing TT-ing with IM isn't even comparing apples and oranges, it's comparing apples and badgers.
100-200 people riding round on open roads shouting numbers to volunteer marshals with pencils and clipboards and simple timing setups (no timing chips/mats), etc. You can run a TT pretty much on goodwill alone, just have to collect a bit of money to cover CTT and event insurance and maybe some expenses for the volunteers.
or:
3000+ people in the sea for (more often than not) more than an hour, closed roads for 10+ hours, changing marquees, portaloos, timing chips/mats, medics and St John Ambulance on site, live updates on a website, etc.
The bigger an event gets the more it costs. Take PBP for example. It's way more than twice the cost of even the most expensive 600km Audax, and you don't even get free food. You don't get economies of scale as you have to start providing for things in bulk where you didn't really have to consider them before.
Sure you're obviously paying extra for the Ironman brand, but most other 'iron distance' tris are still ~70% of the cost of an IM. Ironman taking over Challenge Weymouth has only put the fees up by 15% or so. Triathlon is inherently expensive because there's a load of stuff that can't be done for free, then you lump the IM branding on top for extra cash monies.
Outlaw triathlon (ironman distance) is £285. Bastion (Hever Castle) Full iron distance tri is £324, etc.
£43 for my local Sprint Triathlon entry (Thames Turbo). Multiply that by 8 times for equivalent distance and that's £344, not far off the £395 for IM Wales entry. That Sprint Triathlon is much easier to manage as it's a pool swim with on site toilet facilities and no road closures required as the run is in Bushy Park.
Also, you can make a cheap event cost way more than it could. My Brighton Marathon weekend is going to cost more than my IM entry (and probably close to my IM trip all in) because I'm making a long weekend out of it with the family and staying in a nice hotel (I could just nip down on the train on the day but where is the fun in that) compared to a fairly minimalistic plan for the IM (advance train tickets, local B&B, etc).
The fee is also matched or dwarfed by some of the other costs. By the time I get to the start line of my IM in September I would have spent more on running shoes alone than on the IM entry fee.