Garmin, the next team to die

[BroDeal]

We should start a dead pool.

The team has to run back to its rich backer to fill a 3.5 - 5.0 million dollar hole in its budget.

http://www.cyclingnews.com/news/garmin-moves-on-after-bigmat-sponsorship-deal-collapses

It is rumored that another two or three teams narrowly escaped financial collapse this year. The Pro Tour/World Tour plan of giant teams has been a disaster.

 

[ElChingon]

All these fractured teams... the solid pieces of each need to be collected by someone and they might make a ProTour team.

Lots-o-riders to be on the un-employment line or at the local Gran-Fondo?

I wonder what happens when not enough teams can pony up the money to be ProTour? Will the UCI lower the fee's and bank guarantee needed? I think that's the next step even if it risks the riders otherwise there will be just a handful of ProTour teams.

 

[JRanton]

Certainly wouldn't surprise me if there are less than 18 applications for 2013 WT licenses.

 

[ingsve]

I don't think it's too serious for them. JV wants the team to compete at the very top and that's the reason for looking for extra sponsors like the BigMat deal. It doesn't feel like an all or nothing situation. If push comes to shove they could always scale back and be a mid to low level WT team rather than pushing for number 1. Their foundation seems stronger than the recent big budget projects that are struggling.

 

[Martin318is]

Sad to say but this thread makes sense....

Its a ridiculous model. Why would anyone be surprised that it is hard to get money out of a sponsor when you say, "There is a CHANCE we will get to go to all the big races, but we won't know until after you commit your money and we apply". "Your return on investment will be either worldwide exposure, or relative obscurity - but the amount you need to give us is the same"

 

[BroDeal]

I don't think it's too serious for them. JV wants the team to compete at the very top and that's the reason for looking for extra sponsors like the BigMat deal. It doesn't feel like an all or nothing situation. If push comes to shove they could always scale back and be a mid to low level WT team rather than pushing for number 1. Their foundation seems stronger than the recent big budget projects that are struggling.

I am not so sure about that. Garmin has never been a big budget team. They have always been mid-level, even a little below mid-level. 3.5 - 5.0 is a big number for them. They were looking for a sponsor to replace Cervelo's contribution.

I still think teams in races should be limited to seven riders and WT teams should have the option to skip a certain number of events including one GT. Team size would be smaller and budgets could be smaller. There could be twenty-five or so WT teams.

 

[Eric8-A]

I've actually been shocked they've maintained ProTour/WorldTour status up to now. I've always seen them as more of a ProConti team. It surely seems that this entire year JV has been looking hard to get additional sponsorships to further fund the team. If it doesn't fold, it will surely go down in rank from a WorldTour team down to a ProConti team. And it can be seen due to their presence in the transfer market. Garmin being one of the top teams in the sport aren't really known for signing a big name rider. They get riders and nurture them to be good. We've seen that with Dan Martin. But I think that in order to get additional sponsors, they need to sign big riders, get bigger results. Their Tour success this year was largely due to Thor being there. It's hard for me to see what they achieved this year without him. I wonder what their situation would be like sponsorwise had Thor decided to stay.

 

[ingsve]

I've actually been shocked they've maintained ProTour/WorldTour status up to now. I've always seen them as more of a ProConti team. It surely seems that this entire year JV has been looking hard to get additional sponsorships to further fund the team. If it doesn't fold, it will surely go down in rank from a WorldTour team down to a ProConti team. And it can be seen due to their presence in the transfer market. Garmin being one of the top teams in the sport aren't really known for signing a big name rider. They get riders and nurture them to be good. We've seen that with Dan Martin. But I think that in order to get additional sponsors, they need to sign big riders, get bigger results. Their Tour success this year was largely due to Thor being there. It's hard for me to see what they achieved this year without him. I wonder what their situation would be like sponsorwise had Thor decided to stay.

Calling them ProConti is a little harsh I think. Even when they first became WT in 2009 their team was clearly above ProConti level, though it was a very uneven team back then.

I don't think there is any risk of them dropping down to Pro Conti level. Resultswise they have always been very strong and even if you were to gut out half their team and replace them with youngsters and cheaper riders they would still be a class higher than the best ProConti teams.

 

[ingsve]

I am not so sure about that. Garmin has never been a big budget team. They have always been mid-level, even a little below mid-level. 3.5 - 5.0 is a big number for them. They were looking for a sponsor to replace Cervelo's contribution.

I still think teams in races should be limited to seven riders and WT teams should have the option to skip a certain number of events including one GT. Team size would be smaller and budgets could be smaller. There could be twenty-five or so WT teams.

The point is that eventhough they don't have the budget of the biggest teams they have always performed better than what their budget might suggest. So even if they don't find another title sponsor I think they'll still have enough to be a solid mid tier WT team just by virtue of their solid performances.

 

[just some guy]

Garmin will find a way they seem to have a good model.

The system is broken however. The UCI needs to look at the model and as I said earlier this year the team owns the licence which gives then security. As part of the ownership they must perform at a certain level, follow a code re PEDS, have a women's and under 23 team.

It is the only way forward for teams. If a team closes ie radioshack they sell the licence and the UCI gives final approval.

But this stupid system is another UCI control problem which may kill the sport.

In fact cyclingnews should run an editorial on this imo Susan ?

 

[Epicycle]

The more fundamental problem is the fact that the teams don't get an adequate share of the revenue actual cycling races (the TdF) generate(s)...television money. Vebruggen's impatient cobbling together of the Pro Tour stuffed up any chance of that happening.

 

[ramjambunath]

Garmin will find a way they seem to have a good model.

The system is broken however. The UCI needs to look at the model and as I said earlier this year the team owns the licence which gives then security. As part of the ownership they must perform at a certain level, follow a code re PEDS, have a women's and under 23 team.

It is the only way forward for teams. If a team closes ie radioshack they sell the licence and the UCI gives final approval.

But this stupid system is another UCI control problem which may kill the sport.

In fact cyclingnews should run an editorial on this imo Susan ?

While the idea is a good one, will putting additional responsibility on sponsors help increase sponsorship in the sport?

 

[DirtyWorks]

The more fundamental problem is the fact that the teams don't get an adequate share of the revenue actual cycling races (the TdF) generate(s)...television money. Vebruggen's impatient cobbling together of the Pro Tour stuffed up any chance of that happening.

Ssshh.. Now now all this talk of media revenue is not open for discussion. If you insist on discussing it, the UCI might just find a problem or four in Garmin's World Tour license that can only be fixed by seeing Pat and Hein a little later with a suitcase full of cash.

Pat and Hein also raised fees dramatically for what broadcast rights they control. Gee, I wonder how that's going to work out....

 

[bicing]

Under the current system, JV needs to find a rich old man or a rich wife to fund the team, or get a second-tier cycling country to nationalise the project.

Certainly wouldn't surprise me if there are less than 18 applications for 2013 WT licenses.

It certainly seems that way, but despite these *** rules the new teams keep popping up and trying. I think that instead of sponsored teams we will just see rich donors and nationalised projects. There'll be a Chinese team and an Arab team pop up in the next couple of years. Eventually that Czech billionaire might want to change direction towards a Czech based team. Thor will push for Team Norway when he retires. As for the rich people, they're anybodies guess.

 

[just some guy]

While the idea is a good one, will putting additional responsibility on sponsors help increase sponsorship in the sport?

I think it will because the team can say look we own the licence so we will ride these events and will be seen by this many people in a year etc etc

 

[theyoungest]

Under the current system, JV needs to find a rich old man or a rich wife to fund the team, or get a second-tier cycling country to nationalise the project.

Garmin is already one of those rich people's hobbies... this particular rich bloke is called Doug Ellis, and he's just coughed up 5 million-or-so dollars to save their azzes.

 

[Christian]

Does BigMat still sponsor the continental team BigMat - Auber93?

 

[just some guy]

Does BigMat still sponsor the continental team BigMat - Auber93?

No idea but there were reports that they might sponsor FDJ if they make the WT even after the Garmin issues

 

[L'arriviste]

Just looking at these team budget estimates from the 2011 Tour and many people will have seen Kickstarter.com.

I'm sure this has been suggested before and I'm sure it was stupid then, but here goes...

OK, so we set up a .org (a real one, not a you-know-who one). We get 25,000 cycling fanatics around the world each to pay a minimum of €299 (c. $419) subscription a year. More would be welcome of course.

If all 25,000 folks paid the minimum, that would be enough to generate a team with an annual budget bigger than that of Saxo Bank even before you look for sponsors.

If and when you find sponsors (25,000 people with all their connections) and you rebate all the subscribers equally on their investment.

OK, so there's a lot more to it than that - like trusting the funding managers and committing to more than a single year and dealing with people like Fat - but surely it's the basis of something that might work, isn't it?

 

[Ferminal]

Just looking at these team budget estimates from the 2011 Tour and many people will have seen Kickstarter.com.

I'm sure this has been suggested before and I'm sure it was stupid then, but here goes...

OK, so we set up a .org (a real one, not a you-know-who one). We get 25,000 cycling fanatics around the world each to pay a minimum of €299 (c. $419) subscription a year. More would be welcome of course.

If all 25,000 folks paid the minimum, that would be enough to generate a team with an annual budget bigger than that of Saxo Bank even before you look for sponsors.

If and when you find sponsors (25,000 people with all their connections) and you rebate all the subscribers equally on their investment.

OK, so there's a lot more to it than that - like trusting the funding managers and committing to more than a single year and dealing with people like Fat - but surely it's the basis of something that might work, isn't it?

A new project for you

The main problems would be finding a few hundred thousand immediately just to pay for people to get it rolling. You would need to get everyone in 12 or so months in advance so you can pay for that, and the bank guarantee. Everyone would be putting their money in early for something which may not eventuate.

A rather novel concept though, one that could only happen in cycling.

 

[Christian]

A new project for you

The main problems would be finding a few hundred thousand immediately just to pay for people to get it rolling. You would need to get everyone in 12 or so months in advance so you can pay for that, and the bank guarantee. Everyone would be putting their money in early for something which may not eventuate.

A rather novel concept though, one that could only happen in cycling.

An interesting concept, but people would have to be OK with having no input whatsoever on the team, otherwise you would never get anything done. Also everyone can only buy 1 share (not 20), that way if someone drops out it's easy to find a replacement.

Definitely an interesting idea though! These "investors" could be attracted with special perks, like access to VIP sections at races, a ride in the team car, ...

 

[theyoungest]

Just looking at these team budget estimates from the 2011 Tour and many people will have seen Kickstarter.com.

I'm sure this has been suggested before and I'm sure it was stupid then, but here goes...

OK, so we set up a .org (a real one, not a you-know-who one). We get 25,000 cycling fanatics around the world each to pay a minimum of €299 (c. $419) subscription a year. More would be welcome of course.

If all 25,000 folks paid the minimum, that would be enough to generate a team with an annual budget bigger than that of Saxo Bank even before you look for sponsors.

If and when you find sponsors (25,000 people with all their connections) and you rebate all the subscribers equally on their investment.

OK, so there's a lot more to it than that - like trusting the funding managers and committing to more than a single year and dealing with people like Fat - but surely it's the basis of something that might work, isn't it?

You might as well get 25,000 people to buy a share in Garmin

It's a cool idea, but try and find so many people to pay 300 euros each... it's not a huge amount, but still significant. And you'll get the problem that each shareholder really wants his or her favourite rider on the team, and if you don't get him they'll retract their offer. So it will purely be an act of charity, to invest in the future of cycling, and to be honest I can think of more worthy charities to give 300 euros to.

 

[L'arriviste]

A new project for you

The main problems would be finding a few hundred thousand immediately just to pay for people to get it rolling. You would need to get everyone in 12 or so months in advance so you can pay for that, and the bank guarantee. Everyone would be putting their money in early for something which may not eventuate.

A rather novel concept though, one that could only happen in cycling.

You might as well get 25,000 people to buy a share in Garmin

It's a cool idea, but try and find so many people to pay 300 euros each... it's not a huge amount, but still significant. And you'll get the problem that each shareholder really wants his or her favourite rider on the team, and if you don't get him they'll retract their offer. So it will purely be an act of charity, to invest in the future of cycling, and to be honest I can think of more worthy charities to give 300 euros to.

An interesting concept, but people would have to be OK with having no input whatsoever on the team, otherwise you would never get anything done. Also everyone can only buy 1 share (not 20), that way if someone drops out it's easy to find a replacement.

Definitely an interesting idea though! These "investors" could be attracted with special perks, like access to VIP sections at races, a ride in the team car, ...

All valid points. I guess I'm just looking for excuses to take a poke at the corporate hegemony. Perhaps a one-day race à la Strade Bianche or whatever is more feasible. That must have been discussed on CN before.

 

[ramjambunath]

I think it will because the team can say look we own the licence so we will ride these events and will be seen by this many people in a year etc etc

It may, but will the teams bear (or try to) the additional costs of running an U23 and women's team when clearly it will not necessarily mean that they will make a gain in exposure (in these two disciplines). If the sponsors/ teams have extra money, inevitably gained mainly from the GTs and monuments, to spend on other facets of cycling, I think that many might.

This will bring the discussion back to the point Epicycle made about sharing of TV rights among teams. The responsibility there lies (I believe) primarily with the ASO and RCS, which have most of the money spinning events in cycling. That could create a problem, though, of teams and riders turning similar to USPS (not just in the Clinic fashion) and Armstrong/ Schlecks.

Just looking at these team budget estimates from the 2011 Tour and many people will have seen Kickstarter.com.

I'm sure this has been suggested before and I'm sure it was stupid then, but here goes...

OK, so we set up a .org (a real one, not a you-know-who one). We get 25,000 cycling fanatics around the world each to pay a minimum of €299 (c. $419) subscription a year. More would be welcome of course.

If all 25,000 folks paid the minimum, that would be enough to generate a team with an annual budget bigger than that of Saxo Bank even before you look for sponsors.

If and when you find sponsors (25,000 people with all their connections) and you rebate all the subscribers equally on their investment.

OK, so there's a lot more to it than that - like trusting the funding managers and committing to more than a single year and dealing with people like Fat - but surely it's the basis of something that might work, isn't it?

A few very small teams in football run a system similar to this and it could easily work, if as Christian pointed out a stakeholder has a very small upper limit of shares.

The problem though is the inflexibility of the system (as it is a .org, it basically is a trust not a commercial entity). To increase the budget there may have to be something like an IPO and if that isn't successful, then there may be a few problems with team planning which would need a fixed budget months in advance and if the IPO does succeed and investers may look for immediate gains in the level of success which is never a guarantee.

With the current system, it's hard to see the UCI invite such an innovative team into the World tour (regardless of success).

 

[Frosty]

Nowhere near the same scale as a pro cycling team but the idea of a lot of people putting some money has been done with Ebbsfleet United i think. They are in english football's fifth tier.

http://www.myfootballclub.co.uk/ebbsfleet-united