One minute you’re on top of the world, the next you’re in the gutter. Sport regularly serves up cruel metaphors for life. Cannondale-Drapac wore the king of the mountains jersey for a few days in the Tour de France, won a stage and put Rigoberto Urán on the podium. They announced a new blue chip sponsor in Oath, a US media company and were renewing the contracts of their star riders with a new sponsor set to be unveiled, apparently even the new kit and bus designs had been worked. Only it seems the funding for 2018 was never in place, the new sponsor had not signed a binding deal and now the team could vanish. Here’s a look at the chronology of events as well as the options ahead.
There have been rumours and warning signs this year. In fact the team has long had budget pressures. It has struggled to retain sponsors and changed its name so often over the years with the likes of Chipotle, Garmin and Cervélo coming and going and the team has been through two mergers to bring new sponsors onboard, a lively history even in the insecure sphere of pro team sponsorship. It’s kept riding with help from team supporter Doug Ellis despite some near misses for example previous sponsor Cervélo got into serious financial problems and the plug was almost pulled.
Back to 2017 and earlier this year there were articles in the US press about what a good investment the team is. At first these seemed like open appeals to the US corporate sector but on second reading they were more like reassurance for those dipping a toe in the water, a tool to take into boardroom or marketing strategy meeting in order to win over colleagues to a pro team sponsorship. In July the first good news arrived as the team announced a link up with Oath, a company you might not have heard of but it’s US telecoms firm Verizon’s media operation, the umbrella group for content-hungry online firms like Yahoo, Tumblr, AOL, HuffPost and Flickr. But the press release was a head-scratcher. It didn’t mention naming rights and it was hard to tell if the deal was significant or not. Soon after the Oath logo appeared on the shorts for the final stage to Paris suggesting it was valuable but that’s an interpretation rather than a certainty, we’ve seen sponsors get on team kit at bargain rates.
Whatever the Oath deal is worth it can’t keep the team on the road. This summer Spanish website Zikoland said Cannondale was stopping, a story which was shot down. L’Equipe also wrote the bike sponsor would be reducing its commitment which seems more likely. Indeed this can explain why the team has its current sponsors in place and Oath on top too but still faces a sponsorship shortfall: the Canadian-owned bike brand could be scaling back.
Another reason for the budget shortfall is that the team’s fortunes have picked up. Rigoberto Urán’s second place finish in the Tour de France comes at a price, his contract extension will have been on the basis of a substantial pay rise.
Flicked in the boardroom
All of which brings us to the current problems and the surprise. In an interview with team boss Jonathan Vaughters on The Cycling Podcast it appears that a new sponsor was being lined up for 2018 but that the deal had not been signed off by the company’s board and that at least one director had doubts and this lack of consensus meant the sponsorship could not happen. In other words no deal had been signed: the money for 2018 was never in place even if it was hoped or even expected to happen. This is a concern because it implies the team was renewing rider contracts for 2018 and beyond – and designing team kit according to the interview – without a watertight contract. It seems the sponsor could have been Unibet according to Dutch newspaper AD but the identity is immaterial because the story is the funding shortfall.
There’s never a good time for this to happen but at least the transfer market is still active which means some riders so credit to the team for not stonewalling riders… even the rumours emerged before the news went public. But already some teams have filled their rosters and any Cannondale-Drapac rider going elsewhere will face a reduced “take it or leave it” offer from another team. Some riders won’t find room and most of the team staff’s chances are even slimmer. There’s also an extra effect for riders who are not on the team but still in talks about their contract renewal because the prospect of extra riders hitting the jobs market will depress wages across the market.
Can a new sponsor be found?
It’s happened before. The team’s predicament is news and might tempt another sponsor to step forward, especially since they can set the terms and get a bargain. Vaughters says he gives it two weeks. This is the team’s decision rather than a formal deadline imposed by the UCI or others. There is an annual licence review process in October and the UCI appoints auditors to test team accounts but this can run to December. You’ll remember the Lampre-Merida team was going to have a new Chinese sponsor but over the winter the UCI delayed announcing their World Tour licence as the sponsorship turned out to be a mirage and in the end they were saved by money from Abu Dhabi and now on their way to becoming one of the biggest budget teams in the sport. So the Slipstream adventure need not halt in 10 days.
The problem is a Catch-22 scenario emerges. Current star riders may prefer to jump ship rather than wait for a rescue deal/ The moment the team loses the guy who just finished second in the Tour de France is the moment a potential substitute sponsor gets cold feet. The more “assets” like Urán and Rolland are minded to leave, the harder it gets persuading a new backer to come on board. We saw before when Bouygues Telecom ended its sponsorship of Jean-René Bernaudeau’s team and Europcar was coming on board but only if their leader Thomas Voeckler stayed. He’d already signed a contract to join Cofidis but by stroke of luck had yet to fax it back and the adventure went on. Urán and his agent will surely be studying offers from other teams, it’s said Astana are interested but they are always linked to every transfer tittle-tattle.
There’s now a crowdfunding campaign, an appeal for donations. But this means raising a lot of money from a lot of people. It is difficult to manage compared to negotiating with one sponsor and only buys the team a year’s space and it’s unclear what is on offer, is this fundraising just to keep the team on the road or will subscribers get a share of the team or merchandise? We’ll see but it’s not as unusual as it might first seem: the likes of Belkin (now Lotto-Jumbo), Euskatel-Euskadi and Europcar (now Direct Energie) have tried this but the sums involved have been smaller, helping to buy a vehicle or hire a rider rather than underwrite the whole team budget. Can Slipstream team raise millions? That depends on you. It’s hard to measure the support available but the team has roughly 250,000 followers on Facebook, about 150,000 on Instagram and 200,000 on Twitter. For generosity let’s assume these are all real people and unique rather than overlapping followers and that’s 600,000 in total who need to pay about $12 each to keep the team going. Now this is too simple a calculation but it illustrates how keeping the team afloat requires big sums. The team acknowledges this, to register support and you’re asked how much you’d like to donate and the starting sum proposed is $100 with options going up to $100,000. In short this looks like a desperate move, understandable given the circumstances but otherwise unsustainable.
The team could continue in cycling’s second division knowing that even without some marquee riders it still has an attractive roster and could get an invite to the Tour de France. The team got its break all those years ago when ASO invited it to take part in the Tour de France, in part swayed by the team’s stance against doping which was pioneering at the time (and being American helped given this is a crucial market). Only the invite is not certain and even if it was 95% likely some sponsors will not deploy their marketing budget on a gamble, especially since Vaughters has made sideline in public taunting of the Tour de France’s owners and could find a large Gallic cockerel returning to roost. So the route of running a competitive team in cycling’s second tier looks risky and unlikely for now, a technical possibility under the UCI rules but for now neither a choice nor a preference.
A World Tour with 17 teams in 2018? We’ll see. Here’s a team that’s made a habit of getting out of tight spots and operating on a tight budget. The $7 million shortfall may not be set in stone, if one or two riders leave the team then this amount needed shrinks and perhaps savings can be found elsewhere too. It seems unlikely the team would turn away a sponsor offering, say, $5 million but it also seems improbably the answer is found via crowdfunding. There’s a vicious spiral here because if a star goes then so does the appeal of a team to a new sponsor, being able to market the team with a Tour de France stage winner and podium finisher is more valuable than a promising cobbled classics roster. It’s this more than the UCI which means a clock is ticking so the situation could continue into winter but the longer it goes on the worse the team’s remaining bargaining power with sponsors, riders and staff alike get.