For once a genuine international brand was buying into pro cycling as a means of marketing but once it got the chance to quit, Belkin exercised a break clause. The team is now scrambling for a replacement sponsor and to hold onto its core riders.
Is this a sponsorship crisis or should we confront the fact that pro cycling isn’t a vehicle for an international marketing campaign?
Pro Cycling = Ghana
Ghana’s a fast-developing country in West Africa. It’s promising, has some some valuable exports from aluminium to oil to cocoa. Better still, it’s got government bonds with a 25% interest rate. That’s right, invest 100 Cedi and you’ll get about 125 back at the end of the year if you’re lucky. Sounds great but what’s it got to do with sport? Well this is the proposition from pro cycling too – it’s such a cheap sport that if a sponsor invests €10 million in a pro team they’ll get big rewards in publicity, a rate of return few sports can match. Only with rewards come risk whether it’s marketing or bonds and in cycling this takes the form of repeated doping scandals. It’s been a while since we had one but there have been so many that the perception of cycling as a risky sport is understandable. No marketing manager gets fired for sponsoring safe sports like tennis or golf but align your brand with a pro cycling team and those valuable naming rights might prove a long term liability. The Festina scandal, the US Postal conspiracy.
Pro Cycling = France
The next problem for a global brand is that pro cycling isn’t global. There might be races in the US and China but for a sponsor it remains very Euro. Take the Tour of California, it reaches plenty of US cycling fans but doesn’t necessarily go much further with a TV audience measured in the hundreds of thousands rather than millions, great for Trek and Cannondale, less so for Belkin and 21st Century Fox. Teams like California as a way to show of their bikes to existing cycling fans but if you have a consumer product then you’re not going to crack the US market on the back of this race. Instead the sport is dominated by the Tour de France and consequently host nation France assumes a lot of the airtime, audience and attention.
The chart is from a report by Repucom, a media agency and above shows the cumulative TV audience for the 2013 World Tour. This means counting the same viewers again and again if they tune in again and again to watch a race. It’s also the World Tour calendar meaning no Tour of California and other US races. But look at the numbers, France tops with more than Italy and Spain, the next two countries combined. Obviously having a grand tour helps because it means three weeks of beaucoup television but look elsewhere: Denmark has ten times the total audience of the USA despite a population that’s 50 times smaller. Sure this chart is selective but all the same it shows the mountain to climb.
We are where we are
Whatever the talk of calendar reform might bring it’s still not going to change a great deal. It can only tweak things. Belkin rightly didn’t want to stick around and until wider reforms appear other brands might not too. There are brands looking though, don’t think cycling is off-putting. It offers an excellent way to approach a core demographic in Europe for a good price. The more the sport avoids a scandal, the more new sponsors will start to emerge.
Is there a shortage of sponsors?
No. Even the smallest Belgian, Italian or French junior race sees a field line up with club riders sporting the textile equivalent of Shinjoku by night. Instead there’s just a mismatch between the demand and supply for World Tour teams, 18 teams but not 18 sponsors with a budget to pay for it. As said on here before, reductio ad absurdum if it was cheap enough then every baker and candlestick maker would fancy their name on a World Tour jersey in exchange for €5,000 a year.
This means there’s a shortage of funding and therefore competition. Back in the real(istic) world it might be that certain local sponsors and their related marketing budgets are appropriate for a national basis. Think of teams like Wanty-Gobert and Bardiani-CSF, backed by good mid-size companies but hardly big brands. Do you, as a cycling fan, know what Gobert does? And if you don’t then is the sponsorship really working? But if they get promotion to the World Tour, whether formally as part of the UCI licence process or informally via a wildcard invitation then the problems begin. Put simply a small team might have sustainable but modest budget but they’ll bump up against a squad spending four, five or six times as much as them. And they can never compete. Sure Bardiani-CSF had a great Giro and got deserved publicity but it’s not able to beat the likes of Sky, BMC, Tinkoff-Saxo for the prized GC roles nor for the rest of the year. This matters because a sport with the same teams winning the same races loses its fun. When some teams can afford domestiques on pay deals greater than the leader gets at a smaller team the game is skewed and this is before we consider the spend on coaching and support. It’s reminiscent of the tale of a lawyer, an investment banker and a CEO who are sitting at a bar feeling well to do and then Bill Gates walks in and suddenly the three are plunged into relative poverty: we have many sustainable and well-funded teams but it’s not enough when an oligarch walks into the room.
As such the World Tour resembles the English Premiership where some well-bankrolled teams are funded by Emirs and oligarchs with near-bottomless wallets at the top tier, there’s a mid tier of teams and then a lower-tier of desperate squads trying to stay promoted. Only in cycling there are few cash rewards to promotion and no ticket sales: only the publicity coup of riding the Tour de France where teams can sell the “real estate” on their jerseys and shorts. But given the predominantly European exposure of the sport this is for European brands or companies looking to crack European consumer markets.
There’s something odd about pro cycling model’s where fans cheer on corporate brands and celebrate faceless multinationals. Beyond Apple nerds who gets excited by a company? But in cycling fans start daubing corporate graffiti on the roads: Allez Europcar, Go Garmin-Sharp!.
But these companies are needed because there are more brands than there are pro teams. If we want a steady stable of pro teams then we need a continuous supply of funding. It means that if Belkin decides to step away then Gillette, Hyundai or Michelin are waiting for this space to open up and come in with funding to match the publicity available. Note the World Tour would be fixed if we had 19 oligarchs, billionaires or Formula 1 driver chasing 18 teams too.
Belkin are leaving and in part because cycling’s audience demographic isn’t global. The company’s withdrawal isn’t an isolated case, they might be the only name leaving but look at all the companies that never came to the party in the first place. Let’s hope not but it’s possible the World Tour has fewer than 18 teams next year.
There’s no shortage of sponsors but there is shortage of large brands queuing to offer a steady source of funding for the teams. But the sport doesn’t offer a global reach, instead it has a Euro-centric market, no bad thing since we’re talking about some of the wealthiest consumer markets in the world but as such it can only be one element of any sporting sponsorship for a global company. But the promise of cheap publicity is seen as a sign of risk rather than a bargain.