A Sponsor’s Perspective
Sponsorship in pro cycling is an important dimension in my professional life. I don’t normally mix my business and personal perspectives directly on this blog. It’s my personal blog. But I’m a long time fan of pro cycling. This subject brings a personal and professional crossover. I wrote this blog a year ago. Recently I contributed to a forum on the subject. It led me to revive this 2018 post.
Our Cycling Journey
I’ve got a few opinions of the state of pro cycling from a sponsor’s perspective. A number of stakeholders have been having their say recently and I can see where they are coming from. But in several cases, I believe the thinking is flawed. I work for a company heavily involved in cycling. We provide nutrition products to endurance athletes in cycling, running, triathlon and several other sports.
The revenues of the business are around five times the level of when we bought it six years ago. But now, as then, about two-thirds of our business comes from cyclists. It can be argue that cycling is slowing down in our core market of the UK. I have publicly argued that angle is overblown. It is growing in many global markets. We have expanded into 85 countries and have strongly growing businesses in countries such as Italy, Russia
Team Sky is our main sponsorship in pro cycling. This was our first year with Canyon//SRAM women’s team too. A product deal is in place for another men’s pro team. We sell our products to several other pro teams. Don’t be fooled that ‘official nutrition sponsor’ necessarily means that’s what the riders use. We are nutrition sponsors to British Cycling, USA Cycling, and Cycling Australia. Under the radar, we help out scores of Olympic and amateur athletes across the world with nutrition. Our business is
Is Pro Cycling A Closed Shop?
It’s been a
The key players in pro cycling contribute heavily to the sometimes strong insularity that underpins the traditional nature. I attended a conference with a colleague and
We later watched a presentation by a cycling team owner and at the
Why do I tell the last story? Because I think it is indicative of a semi-closed sport at the pro level. A sport which can self-pity a little, which can revel in its underdog status. One which is very traditional not only on the road or
Growth In Pro Cycling
Why do we like the sport of cycling? It’s big, it’s growing, it’s global. Amateur cyclists at all levels engage and are loyal. They like good content, they think about it and they let you know. Are open to new ideas and like to try new products. They are passionate about their sporting heroes and teams. It’s a more diverse audience and it’s getting younger according to our data. Forget the late 40s ‘cycling is the new golf’ stereotype. We are seeing the average age of our consumer fall, which tells us new enthusiasts are joining the ranks. More women are becoming involved in the sport. The enthusiasm for our engagement with Canyon//SRAM underlined the growth in women’s cycling. Our day to day audience is energetic and engaged.
Sponsorship in pro cycling falls into a few different categories. The wealthy individual who can take a short or long term view of the sport. For example, the late Andy Rihs at BMC or Oleg Tinkoff. The large corporation looking after one of its national teams, even though not primarily in the sport, for example. Whichever companies the very experienced Patrick Lefevere can put together to fund his juggernaut team. Trade sponsors like ourselves, helmet companies, clothing companies, etc. Sponsors range from huge brands with massive brand awareness, where a cycling deal is tertiary to their marketing efforts. Through to small startup businesses where a deal with a team can make or break their chances of survival.
Is The Business Model Broken?
I hear often the dialogue that the pro cycling business model is broken. It is in the respect that it heavily relies on sponsors to bring forward cash and goods and know-how. It takes £15m-£35m or so annually to fund a world tour team now. Higher rider salaries and a punishing travel schedule increase this cost. The headline sponsor is key. A big cheque is needed each year. And it’s tough to get riders and staff to commit without
I read very often about TV rights and how teams should receive a healthy share of that. How it would really help in shouldering the financial load. I’m skeptical about that, as someone who is offered TV rights to Grand Tours on a regular basis. I can say that the cost of buying a healthy TV advertising package has plummeted in the last five years. But guess what? — the audience size and therefore the potential return has also plummeted. The fragmentation of digital media has blown up the TV revenue
The next idea proposed is why don’t ASO, the owner of Tour de France and La Vuelta, divide up their profits with the teams? After all they don’t exist without the teams, right? Revenues for ASO are over 200m euros and profit is around 45m euros. But let’s keep in mind it is a diverse sports and media group. It could be that the
A New Way To Engage With The Cycling Fan?
I listened to an excellent podcast by Cycling Tips a few days ago. The team interviewed Jonathan Vaughters of EF Education First Drapac p/b Cannondale Pro Cycling
I’m not fully convinced.
Interestingly, we tracked some riders through recent scandals. The cycling consumer at large isn’t moved much by such news, so don’t get too sucked into believing the loudest people on social media are representative of the general mood. The cycling public at large accept it isn’t all black and white.
Our Best Sponsorship Deal
I’ve dealt with Team Sky for three years now. I read a lot of stuff about their unfair advantage of a deep-pocketed sponsor. How this gives them an easy ride and how they ruin the sport. I read column inches about them being perceived as boring. but once again our consumer tracking shows they get more popular. Take the ‘boring Sky’ and ‘Sky bad for the sport’ stuff with a pinch of salt. The focus tends to be on the stuff they do on the road.
The operation that doesn’t get talked about is the backroom commercial operation. It’s populated with business development people with experience, for example, with Manchester United and Manchester City. People who know how to reach out and engage with sponsors and help them develop a viable business case.
We work with Sky and can address a substantial database of Team Sky fans with our marketing material. A good proportion of those go on to be repeat customers of ours. Team Sky products feature in our range and they sell well.
We can track very accurately the hard and soft cash we invest into Team Sky. We also track the return we get to a very granular level. It’s a very good investment. They are leagues ahead of other teams we have dealt in the sport in this commercial capability. That’s why I don’t buy the unfair advantage argument. Look behind the scenes. They earned it.
Commercial Capability In Pro Cycling
Returning to the missing capability in cycling. Many cycling teams lack the capability to know how to deal with
I made the mistake, in answering a question from a stalwart of the domestic scene, of suggesting investing in a commercial manager. Following the Team
How About Engaging With Sponsors?
My own view would be that teams and administrators in the sport should engage more with sponsors. To understand their perspective and requirements. This community too often gets taken for granted. It’s almost as though they will show up when all the stakeholders have had their discussion.
There has been a discussion around the health of the UK domestic sport recently. I was asked to consider being part of a group of sponsors who would help with a new funding platform. In principle, of course, was my broad response. Then it went quiet. When I enquired again I was told that meeting had been held with teams and race
I discussed the sponsor’s perspective with a very good cycling journalist, one I respect a lot. He patiently listened, I could tell he was nodding but not really listening. Attitudes and
There’s a gulf between what some sponsors want and what team managers think they want. A well-known team director said recently “what sponsor wouldn’t to see their name on a pink shirt on the front of La Gazzetta, that’s the ultimate.” That’s a huge assumption. Why don’t some of the key figures at least try and learn a little more about how a sponsor’s business model works?
Pro Cycling Will Endure
Pro cycling will endure, it will always endure. I have huge empathy for every team owner struggling to make ends meet year after year. Actually, scratch the word ‘every’ because some of the ‘innovative models’ used recently don’t bear the flimsiest scrutiny. You know that I don’t think the mythical TV revenues are the answer. Even if we robbed the bank of ASO that wouldn’t help much either.
The digital world does open up new revenue avenues for teams. A well-marketed team can build a following that sponsors can use to generate a return. A major blockage is that all parties don’t talk. Teams and race owners and federations talk, not always effectively, but they talk. A major theme tends to be funding. I don’t see sponsors being invited into those discussions on the future of the sport to a huge degree.
Do I have an answer to the financial issues? No. But there can be a healthier dialogue with all stakeholders. At least we could start the journey.
Anyway, that’s that off my chest. Don’t get me started on the issue of banned substances, or that will be an even longer diatribe.
A lot changed after I wrote this in 2018. But a lot stayed the same. Shortly after I published the post, Sky announced they were terminating their support of the cycling team after ten years. This dominated the pro cycling landscape for weeks. Sadly there was some unseemly commentary from a couple of leading figures. Essentially saying “good, we have a chance to compete now.” Rather than focusing on what they might do to get better.
Team Ineos came into being some weeks later. T
We signed up with Team Ineos and were glad to do so.
Also published on Medium.