Lately, sponsorship uncertainty has shadowed the apex teams of professional road cycling like a Grim Reaper. Potentially, this creates a trickle-down alert for prospective sponsors seeking to engage even at UCI Continental levels – destabilizing the sport’s future funding pipeline. It’s diligent to have a wider arsenal.
Of course, it helps to have a wealthy private backer that is passionate about cycling to the point of philanthropy, but few teams get so lucky. From the outside looking in, attracting sponsorship appears akin to pulling teeth. It’s critical for every professional team to have a “brand” – with associations like “clean”, “global”, “excitement” – that creates a broad enough net to cast into the corporate ether.
And still, it ultimately comes back to questions like “what’s in it for me?” and “where’s my return?”. It seems the answers aren’t always satisfactory. If the existing business model of cycling isn’t an optimal individual platform for delivering stakeholder value, what are the complementary funding streams? Crowd funding, found also in the form of memberships, is one grassroots method which is being used across cycling, from teams to independently-run websites.
Roadcycling.co.nz, a popular independent cycling news site based in Wellington, New Zealand, recently installed a donations portal to supplement advertising revenue. The site’s owners, Ben and Sarah Christian, had previously generated significant goodwill by openly confiding to their loyal reader base that commercial (advertising) partnerships alone could not cover the cost of on-the-ground race reports. This is especially poignant given Roadcycling’s report [from which this article was inspired – thankyou Sarah] on the funding problems of NZ-registered UCI Continental team PureBlack Racing.
PureBlack Racing was launched in July 2010, with ambitions of becoming New Zealand’s first UCI ProTour (now UCI WorldTour) road cycling team by 2015. New Zealand was finally emerging, in global cycling’s eye, as a serious road cycling nation (there are now three Kiwi riders in RadioShack-Nissan’s 2012 roster alone), whilst the team’s management would be spearheaded by Carl Williams – bringing across the requisite commercial network that being an America’s Cup yachtsman and Olympian yields. Finally, the Prime Minister John Key had unilaterally announced a national cycling network in late 2009. The backdrop was compelling.
And yet, merely 18 months later, the team is apparently at risk of severly winding back its international racing calendar due to lack of sponsorship funding. Which brings us back to funding alternatives. PureBlack had also reached out to “friends” of the team. As stated on the PureBlack website:
“We are seeking contributions from friends and family of PureBlack Racing and the wider New Zealand cycling community to establish the Friends of PureBlack Racing. The money raised will be used to fund the following activities:
develop our U23 rider performance management and development programmes
provide education services that build the professional athlete capabilities of our young riders
provide financial assistance by way of international scholarships to a number of our U23 riders every year to enable them to gain valuable international cycling experience
enable us to build links with schools and the wider cycling community to further the development of cycling as a healthy environmentally friendly pursuit.
Contributions of over NZD2,500 will qualify for our VIP Club, which will see you receive a free team kit and an invitation to ride with the team at special VIP days and events.
Contributions of over NZD250 will see you receive a free PureBlack Racing Team T-shirt in addition to your Cartel membership.”
Great idea. Cycling fans are a generous lot; surely NZD2,500 (AUD1,900) seems like good value to an affluent supporter that wants to hang out with some of NZ’s rising cycling stars. But ultimately, the horizon-less pool that demographic floats in is a small one. For most people, a $250 T-shirt doesn’t have the same allure. Contrast this with the four-tier membership program lauched today by Australian-registered UCI WorldTour team, GreenEDGE. In a nutshell:
‘Green Team’ membership = AUD77 for T-shirt + schwag + discount on other merchandise
‘Domestique’ membership = AUD149 for replica team cycling jersey + above
‘Podium’ membership = AUD495 for full team replica kit + other schwag + invitation to ride with team
‘Peloton’ membership = AUD990 for the whole shebang + spend full day eating and riding with team
In isolation, GreenEDGE’s like-for-like packages – the AUD77 “Green Team” and AUD990 “Peloton” packages are also better-elaborated than those offered by PureBlack – give amazing value when compared to that of PureBlack Racing. Given the added context of UCI WorldTour versus UCI Continental, PureBlack’s offer looks over-priced and poorly conceived.
Though, as a proud Kiwi (albeit living in Australia…), it hurts me to say this, GreenEDGE has taken time to understand the diverse demographic structure of its audience and conceived a broad membership program to match. In spite of PureBlack’s exquisite commercial partnerships (in simple image terms, Audi versus Subaru is no contest) and on-road presentation, the team has not effectively leveraged one of the most powerful potential sources of complementary funding – Kiwi pride. Whilst it will probably not eliminate the need for commercial sponsorships, crowd funding should not be overlooked as a budgetary pillar. As painful as it may be, perhaps PureBlack should look across the Tasman for inspiration.
I agree. You have to offer a lot more for less. 1,000 bucks to ride and eat with O’Grady and Gossy for the day will be a very very profitable thing for the management company. Prices may go up someday but if you get can 500 people paying that in the first year, 750 the second, and so on it can be a big cost off-setter. You can fund the U23 and women’s team from this money for example. Cycling has too many non-business people making “business” decisions that effect the livelihood of dozens of people in Pegasus’s case (Chris White AKA “Dickless Unicron”) or the people behind PBR.
Thanks alot for your experienced input, Reed.
As for the comparison between Pegasus and PBR, I have to defer to the comments made by PBR’s riders today in Roadcycling.co.nz’s latest article on the team’s apparent disbanding. My take is PBR’s management has been superior to that of Pegasus; but that’s only based on a snapshot. Besides, who knows how comments will alter after the dust settles.
It would be interesting to see a comparison of the current World Tour sponsor’s annual cycling spend(s) as a proportion of their overall marketing budgets. Is there an example where the ‘bang for your buck’ is high enough to class sponsorship as an investment one could measure a return on, rather than just a perceived, and nigh-on-impossible to track, marketing benefit? Having recently seen Moneyball (thanks for the tip there Cam) there aren’t a hell of a lot of purely philanthropic Major League (insert sport here) team owners. Are crowd revenue and lucrative broadcast rights the missing pieces? The ASO’s asking price can’t be all that high given the current Australian TdF broadcast partner – with the greatest respect to SBS. I’ve heard people liken yacht racing to standing the shower tearing up $100 notes. Perhaps they’re only 10 euro notes being torn up by the AIGCP.
The Greenedge model is not dissimilar to how the AFL club membership models are structured. The understanding that fans come from a wide range of socio economic backgrounds is the key to getting stakeholder interest and inevitably membership numbers and the associated revenue. Browsing any club site will show you at least 5-7 options alone. I have no idea how the rugby club system is in NZ but surely they would have a similar level of sophistication?