The Highroad paradox

Wednesday, 15 June 2011

Degenkolb

On some measures HTC-Highroad is the most successful professional team going. At the time of writing they have 29 wins this year, the next UCI ProTeam is Rabobank with 17 wins. It was the same story last year, with the team finishing a long way ahead of Liquigas at the end of the season. And that’s before you include the wins of the women’s team too. Victory wise, this is the equivalent of a solo breakaway, dropping every other team going and finishing far ahead of the pack.

Yet for a team so far ahead of its rivals, it’s struggling to find a sponsor. I covered this subject back in March but now want to revisit the idea to explore a couple of new angles.

Background
Note the “Highroad” name, this is the name of the corporate entity behind the team and essentially a giant “insert your name here” call to a sponsor. Indeed, it’s not even as if the team is thwarting interest with big demands for money. The team’s owner Bob Stapleton isn’t looking to make money from the team, besides he’s a billonaire and there’s precedent too: previous sponsor Columbia got its name on the jersey for an apparent bargain rate. But there’s no co-sponsor and, worse, HTC is pulling out at the end of the year.

Surely if there was a sponsor interested in the sport then this squad would be interested? Since the days when T-Mobile fled the sport, a lot of effort has gone into cleaning up the team, cutting links to suspicious doctors and if some team staff have confessed to EPO use in their day, the idea is that this has allowed them to put such practices firmly in the past. Today not a single rider is linked with an investigation.

So we have a winning team with a good reputation yet no sponsor? Some thoughts here:

  • First up, it’s possible there is a replacement and we’ll get a proud announcement in July, possibly with the new backer appearing on the team jersey for the Tour de France.
  • The team could be paying the price for the sport’s endless doping scandals. Sponsors don’t seem to differentiate between teams, at least not from afar. Perhaps some marketing managers are saying “Cycling? No way” thanks to the endless saga of Contador’s positive case and the worsening outlook for Lance Armstrong’s image in the US. As such even the safest teams for a sponsor to join up with can suffer.
  • It’s great to boast of so many wins but the sponsor will want to know what they’ll get in 2012. Yet the longer the uncertainty goes on about the team, the more the riders will be tempted to leave. I’m near-certain Mark Cavendish will leave, taking some loyal riders with him. Similarly Matthew Goss is going Aussie start-up Greenedge. Tony Martin might well pop up at Rabobank. Anyone looking at the team will ask who is left.

If anything the team is a victim of its own success. As an astute twitter commentator has pointed out before on here, the team brings on young riders but in converting the raw talent into a polished pro, it can add a zero on to a rider’s salary. Come the end of their contract and its impossible to hold on to all the riders. An annual exodus and refocus is almost the norm for this team. That’s obviously a big plus but it’s not without its difficulties too.

Wider picture
But the point to take here isn’t the challenges and dilemmas of a successful team in isolation. For me this isn’t so much about the choices made by the team, nor whether it’s good at marketing itself to potential corporate backers. Instead, this is more about the state of the sport than one team. If Highroad can’t get sponsors queuing to join, who can?

One issue is obvious: as much as cycling tries to put doping stories behind it, failures in the past to take a lead mean old stories just keep coming back to scare sponsors and make TV viewers doubt what they see today. This doesn’t explain everything but I fear even the better teams suffer from this legacy. There are other factors too, for example I don’t think cycling handles corporate VIPs too well, a day in the team car can be punishment and there’s little chance for dealmaking and schmoozing on the margins of a bike race, unlike in a box at a soccer game or reserved seats at a tennis match.

Who’s your sugardaddy?
Indeed several other teams are hunting for sponsors. Bjarne Riis has his work cut out right now to find a replacement for Saxo Bank, the Danish brokerage agreed to one more year once they heard Contador was joining Riis but they’re on their way out. Riis probably has a hard sell to find new backers. Leopard-Trek would probably sell the naming rights to the right bidder and Greenedge too doesn’t have sponsorship to cover all its costs, again it relies on a wealthy backer, just like BMC Racing. All told we seem to have several squads functioning thanks to sugardaddies.

Finally, it’s important to note that the Highroad team is not winding up any time soon, it’s got valuable ProTeam status for 2012 and, to repeat, a billionaire backer.

Summary
The most successful team in the sport, and one with a safe image too, shouldn’t have to call itself Highroad. But looking around, I note several teams exist thanks to deep pocketed backers. Now I quite like this, it’s fantasy cycling turned real for these wealthy patrons. But the longer a team searches for a sponsor, the more riders begin to head for the exit. In turn new sponsors might back away if stars don’t stick around and even team staff will head for the exit. If a team can’t line up a sponsor early then a self-fulfilling dynamic starts.

It has to be a concern that many sponsors still don’t view the sport as a viable option. Simply put, we see sporting success is not finding its rewards, brands are wary of being linked to all those wins.

benDE June 15, 2011 at 8:59 am

You mention that you like the fact these ‘sugar daddies’ are bringing their money to the sport. Although it is good for those feeding off of them I do not see how it is better for the sport. Their injections of money simply make it harder for anyone else trying to legitematly compete in the market of operating a cycling team.

It is double edged though. These same wealthy individuals add stability to teams where their own personal reputation and pride is involved, to not win at all cost but to run a respectable team. (read doping)

Oliver June 15, 2011 at 10:46 am

It must be pretty clear for a reasonably intelligent person outside of cycling that to win a grand tour you must dope. That being said, what corporation would want to be associated with cycling? Frankly, I’m surprised that there are still a few major sponsors out there.

Raouligan June 15, 2011 at 11:33 am

That’s a pretty interesting stance Oliver particularly when you look at Cycling in comparison to Tennis for example?

Team SKY are probably the largest backer of late I’d have thought in Cycling and they don’t seem to be put off by doping I think the increase in Cycling in the UK and London is a market that’s too big to loose I guess continental sponsors are entering a market that’s very mature in terms of participation.

I’m guessing that Lancegate is holding back a lot of US sponsors at the momemnt.

Vincent Garnier-Salvi June 15, 2011 at 11:36 am

perhaps a lot of win but not significant ones besides MSR in 2011. no green jersey at the tour, very few wins in the classics, no grand tour riders. That could also explains why some sponsors would refrain to get involve in that team.

Ronan June 15, 2011 at 11:52 am

With less money in the sport, perhaps the future is rosy? Riders would compete for the love of the competition, without the distraction of huge trains of marketing, ego and cash.

The Inner Ring June 15, 2011 at 11:58 am

benDE: yes, what I meant was that if someone wants to spend their money on the sport then good luck to them but it is a concern if they’re the new source of money.

Oliver: I don’t know about that, it is possible… but very hard.

Vincent Garnier-Salvi: some grand tour stage wins every year too plus a monument isn’t bad.

Raouligan: Sky are interesting, a British subscription channel with few customers in Europe (I know they have operations in Italy and Germany).

Ronan: less money isn’t spread equally. It costs money to run internal anti-doping schemes, to hire coaches to support riders full time. Do the sport on the cheap and riders start turning to local pharmacists for training plans. Yes, money is an incentive to break the rules but until we scrap every prize, we don’t get rid of that incentive, no?

I’d prefer to see stable partnerships with companies wanting to come in to the sport as a way to reach new audiences, to associate with the imagery of success and youth and to fund teams run by sensible management with healthy ideas.

JLB June 15, 2011 at 12:43 pm

Being from Aus I know nothing about the English Premier League, except that it’s not short on sugardaddies either? Does that mean they’re pushing their players to dope so they too can enjoy vicarious success?

It is interesting to note that the Armstrong driven (or at the very least accelerated) noughties’ Anglicisation of cycling teams is now at risk as a result of its patron’s reputation woes. Surely there can be little doubt that difficulty in finding Anglo sponsors is cycling reaping what it has sowed.

Yet the number of my friends who know about/watch cycling is ever increasing… at some point a supply-demand readjustment will occur and the supply of cheaply available jersey space will make corporate marketing people decide cycling sponsorship is worth the risk

Larry T. June 15, 2011 at 2:31 pm

I think it’s more the corporate Nike/Coke/Nestle days are simply over. Before LeMond revolutionized pro cycling with decent paychecks for the stars and reasonable wages for the rest, cycling was pretty much paid for by these “sugar-daddies” whether from their own rich pockets or as advertising schemes for the companies they owned. Did Molteni ever sell enough sausage to cover the cost of Eddy Merckx and his team? Does Lampre sell enough of their products to justify the cycling team as a pure business/advertising expense? All of these companies could probably find a better “eyeball for euro” advertising venue if only advertising/publicity was their goal. This seems to be the goal for US and most multinational concerns…only companies run by bosses with a passion (like Italians, Luxemburgers, Belgians, etc.) for cycling will continue to pony up the money to sponsor teams, just as they have done for years. Highroad will likely be one of the first high-profile victims of this return to more “normalcy” in the bike racing biz. When no corporate sponsor will pony up for the exposure the Schleck team will likely provide at LeTour this year, you know the corporate party is over. The sooner everyone realizes this, the better. It may go all the way back to Bianchi vs Atala vs Legnano, etc, with today’s Trek vs Specialized vs Cannondale vs Pinarello as the bike companies have the passion and the interest to keep things going. The profit margin on these Chinese -made bikes has to be pretty high, so who better to pony up the loot?

Bronzie June 15, 2011 at 3:14 pm

@ Vincent Garnier-Salvi – what about Tony Martin’s Paris-Nice win? Does that prestigious race no longer count as “significant”?

And as for the team having no GC riders, I seem to remember Peter Velits finishing 3rd at Vuelta 2010 (which may well get corrected to 2nd if Mosquera ever gets his ban)……..and keep an eye on Teejay Van Garderen in Tour de Suisse…….he’s still in with a good chance with a 32km TT to finish the race.

Starr June 15, 2011 at 3:28 pm

Stapelton’s project is unbelievable in it’s quest to nurture talent.
The only explanation for having so many victories every year, is put down to the fact that they hire guys who have a “nose for the line”.

Oliver June 15, 2011 at 5:30 pm

@Raouligan: I think SKY falls into to the rich guy’s pet project category more or less. From what I have read their investment is mostly due to Murdoch’s son (or cousin or whatever) who really likes cycling.

As a purely business-related decision sponsoring a pro bike team makes no sense for a brand that has brand recognition and appeal outside of cycling. What I mean by that is that the risks of negative publicity are not worth the investment (there are people out there who think Saxo Bank is a blood bank thanks to Clentador!). As someone said above, the days of Nike, Coca-cola, Nestle are over. Until the UCI is cleaned up.that is.

I can see bike brands and smaller start up outfits looking for brand recognition on the (relatively) cheap being the main source of sponsorship along side of course a few obscenely rich individuals who like to finance entire teams at a loss as their playthings…

Beth June 15, 2011 at 8:20 pm

You pointed out that cycling is trying very hard to leave the doping scandals behind and that is certainly true. But the media as a whole are not on board. The media are trying very hard to keep it alive. TV, magazines, newspapers, websites, the blogosphere, Twitter: all are full of anti-doping rants, and fresh new angles on old sins. Since potential sponsors are part of the media universe, that is predominantly what they see when they look at cycling. A lot of people insist that we have to clear up all this old stuff in order to move on into a better future. I think that’s a load of crap. Maybe we have to clear it up, but we don’t have to wallow in it. Inner Ring has pointed out better than I can how much current harm this focus on the past is doing. I am not advocating ignoring it all and walking away. But the current atmosphere is very much like the tabloid coverage of Arnold and Maria and his love child. All the tabloids were pretty much all Arnie all the time.
When Floyd wanted to throw his bomb into the peloton, he went to the media. Tyler went on 60 Minutes. The media LOVE this stuff; they can’t get enough, and they assume that neither can we.
Until the media folks who make their living off of following professional cycling come up with a better way to cover all the doping crap, they will continue to kill the sport they profess to love. I don’t know what a better way would be: I just know that the status quo ain’t it.

twitter@track_standING June 15, 2011 at 9:25 pm

Collectively HTC is the best team in the world, but outside of Cav, there really isn’t a superstar the caliber of the Shlecks or even Contador. It’s been the individuals rather than a team wetting the appetite of investors. You have to be a fan of cycling to invest in this environment so to an investor doing lines of coke with Boonen sounds a hell of a lot more appealing than some awkward conversation with Tony Martin about his TT position.

Pirate Maboule June 15, 2011 at 9:47 pm

I think that aside from the ‘doping shadow’ that pro cycling has, there is also the problem of it not being a ‘spectacular’ sport to watch on tv for example.

The other morning, as I was waiting in line at my favorite coffee shop for my weekly latte, they were showing F1 on the tvs there. At that moment, I thought to myself: ‘wow, this certainly is a really boring thing to watch on tv, cars going round and round for hours, but yet they certainly not having any money problems, and all the races are shown on tv… hmmm…’

So I think that if pro cycling was a little bit more organized, more strategic, they could also attract a lot of money. They just have to render the excitement of a bicycle race to the people who do not know how it is to ride a bike up a hill or to go fast. Like the F1 on tv, maybe show at what speed the sprinters, the TTers are going, or show the gradient of the climb, etc., etc. Bref, make pro cycling a more visually attractive sport by this sort of little things.

Right now, pro cycling is presented like it is reserved for an already specialist audience that understands all the little things that make this sport so wonderful and challenging.

I don’t like to say that, but I nevertheless think it is the only way right now to go, that there is a serious need, if they want money, to start thinking business… Cycling has to sell itself to the world.

Maybe it’s time that those rich guys start running pro cycling since they seem to know how to make money… What do you think??

C Grade Cyclist June 16, 2011 at 8:17 am

I’ve often wondered if there are just too many teams at the ProTour and Pro Conti level to be sustained in the current sponsorship environment… It seems that new teams are constantly announced, while established teams go scrambling for ongoing sponsorship and then disappear…

It would appear (to my untrained eye) that there needs to be a contraction in the number of teams, OR the $$$ value of sponsorship (and thus cyclist wages, etc) will contract… Neither are desirable outcomes, but smething has to give…

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