Effects of coronavirus on professional races

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yaco

Jun 20, 2015
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KZD said:
It would be a great October month (although I think that there could have been another pave race before Ronde, like E3, and then swapping GW with Ronde to give more time to rest before Roubaix.

However the main reason why I think this plan won't go forward is because there will be almost surely, a mandatory 14 day quarantine for new arrivals in countries plus with much less flights the travel from Belgium to Italy could take days.
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Surely you would insist on a negative COVID 19 test before anyone enters the country to race - And this would be organised by the relevant authorities.
 
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Salvarani

Oct 15, 2017
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yaco said:
Unless we get the three-month block of racing later in the year, then I expect over half the WT teams to fold.
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A lot of companies are bleeding big time right now...

Its not justifiable to cut costs or let go off employees for example, while paying 20-30M for a cycling team. They might have planned that expense for this years budget but a lot of companies budgets are probably a whole lot different for next year and in the near future. Cash flow looking a whole lot different.

I dont know how far the commitment goes or if there are clauses in which you breach the contract or just be able to end it. If the company that sponsor dont have the money, then there is really not much you can do anyway. They gotta survive any way they can. Sponsoring a cycling team falls pretty far down the order of business to tend to.
 
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Cookster15

Cookster15

May 14, 2011
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Salvarani said:
A lot of companies are bleeding big time right now...

Its not justifiable to cut costs or let go off employees for example, while paying 20-30M for a cycling team. They might have planned that expense for this years budget but a lot of companies budgets are probably a whole lot different for next year and in the near future. Cash flow looking a whole lot different.

I dont know how far the commitment goes or if there are clauses in which you breach the contract or just be able to end it. If the company that sponsor dont have the money, then there is really not much you can do anyway. They gotta survive any way they can. Sponsoring a cycling team falls pretty far down the order of business to tend to.
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I wonder if a new low cost business model will evolve from all this? Obviously current team rider and staff costs are unsustainable. Existing 20-30M budgets will fall significantly. Most of the cost of running a team is wages and salaries. Even travel expenses will be lower now. But the question is which sponsors will still invest in cycling knowing that they too will be reviewing all their expenditure? As you say sponsoring a cycling team falls pretty far down the order of priority in these business conditions.
 
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PeterB

Feb 20, 2012
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Cookster15 said:
<snip> ... But the question is which sponsors will still invest in cycling knowing that they too will be reviewing all their expenditure? As you say sponsoring a cycling team falls pretty far down the order of priority in these business conditions.
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There are different incentives to sponsor a cycling team, such as:
  • greenwashing (Orica, Ineos...)
  • PR (Astana, Bahrain, UAE..., but also Lottos)
  • Traditional sponsors without clear business case for sponsoring cycling (Quick Step, Movistar, Lampre...)
  • Genuine global brand promotion (EF, Bora, Alpecin, Sunweb...)
  • Core advertising channel for cycling industry brands (Trek, Giant...)
Some of these will surely remain valid reasons to sponsor a cycling team even if economy is hit hard, but the question is to what financial extent. I am curious which type of sponsors will be the most resilient.
 
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Koronin

Koronin

Oct 14, 2017
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Merckx index said:
Cycling teams should have bought pandemic insurance! Wimbledon did, and now they get $141 million, covering about half their losses. They paid about $30 million in premiums, total, over seventeen years.

https://www.usatoday.com/story/spor...surance-policy-payout-141-million/5123987002/
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Mark Cuban (Dallas Mavericks owner) was asked about this. He didn't have it for the stadium the Mavericks play in. From what he said a team couldn't purchase it, it's only available for things like stadiums and arenas.
 
spalco

spalco

Feb 1, 2011
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Cookster15 said:
I wonder if a new low cost business model will evolve from all this? Obviously current team rider and staff costs are unsustainable. Existing 20-30M budgets will fall significantly. Most of the cost of running a team is wages and salaries. Even travel expenses will be lower now. But the question is which sponsors will still invest in cycling knowing that they too will be reviewing all their expenditure? As you say sponsoring a cycling team falls pretty far down the order of priority in these business conditions.
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It could also make the financial imbalance between teams even more extreme; some teams with sponsors/owners where money is irrelevant, and teams where money is minimal.

Everyone will be hit by this crisis I suppose, even Ineos and UAE, but some more than others. Many of the sponsors essentially sell luxury products - all the bike teams, EF, Bora, Sunweb (man, are they going to be in the *** right now), etc. To say business will be tough is an understatement.
 
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Roku

Aug 1, 2016
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PeterB said:
There are different incentives to sponsor a cycling team, such as:
  • greenwashing (Orica, Ineos...)
  • PR (Astana, Bahrain, UAE..., but also Lottos)
  • Traditional sponsors without clear business case for sponsoring cycling (Quick Step, Movistar, Lampre...)
  • Genuine global brand promotion (EF, Bora, Alpecin, Sunweb...)
  • Core advertising channel for cycling industry brands (Trek, Giant...)
Some of these will surely remain valid reasons to sponsor a cycling team even if economy is hit hard, but the question is to what financial extent. I am curious which type of sponsors will be the most resilient.
Click to expand...

Movistar had a clear business case for sponsoring a cycling team for more than ten years... I'm sure cycling has had a huge impact in promoting their brand through Latin America, which was a key market for the company until 2019, when they decided to launch a new business plan reducing their presence in Latin America (i think they are selling their local business except for Brazil) and increase it in relevant european markets (Germany above all).

Cycling is mainly a sport for brand promotion these days. Thinking Quick Step or Lampre did not have a clear business case for sponsoring a team is a bit naive. I can assure you their brand awareness increased a lot through cycling.
 
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Sciatic

Mar 4, 2011
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Roku said:
Movistar had a clear business case for sponsoring a cycling team for more than ten years... I'm sure cycling has had a huge impact in promoting their brand through Latin America, which was a key market for the company until 2019, when they decided to launch a new business plan reducing their presence in Latin America (i think they are selling their local business except for Brazil) and increase it in relevant european markets (Germany above all).

Cycling is mainly a sport for brand promotion these days. Thinking Quick Step or Lampre did not have a clear business case for sponsoring a team is a bit naive. I can assure you their brand awareness increased a lot through cycling.
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QS have even kept up their brand promotion during the shutdown, as I have seen at least one Twitter post with a photo of a cyclist at home doing their core strength work “on our Quick Step flooring.”
 
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Oldermanish

Jan 31, 2016
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PeterB said:
There are different incentives to sponsor a cycling team, such as:
  • greenwashing (Orica, Ineos...)
  • PR (Astana, Bahrain, UAE..., but also Lottos)
  • Traditional sponsors without clear business case for sponsoring cycling (Quick Step, Movistar, Lampre...)
  • Genuine global brand promotion (EF, Bora, Alpecin, Sunweb...)
  • Core advertising channel for cycling industry brands (Trek, Giant...)
Some of these will surely remain valid reasons to sponsor a cycling team even if economy is hit hard, but the question is to what financial extent. I am curious which type of sponsors will be the most resilient.
Click to expand...
Good categorizations. I'd wager that bikes are continuing to sell as well as components for the upper end. Bike sponsors may be able to get more bang for their buck but the real issue....EVENTS. None of it counts unless the events have sponsors and broadcast interest. Otherwise no investment in cycling makes sense based on the status quo, which was tenuous at best for the lower to middle teams. Major sponsors need to invest in both as well as some control over the actual promotion and execution of the races. This may be the largest transition in the sport for the near future, I predict.
 
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