What's the point of cycling teams?

[taiwan]

I don't understand the business model for some teams. For instance, Katusha and Astana are names which apparently promote no product or brand. Of course they may just be seeking a title sponsor like Leopard, I don't know. There may be other similar examples, I can't think of any just now. Am I missing something?

 

[Anonymous]

I don't understand the business model for some teams. For instance, Katusha and Astana are names which apparently promote no product or brand. Of course they may just be seeking a title sponsor like Leopard, I don't know. There may be other similar examples, I can't think of any just now. Am I missing something?

Well Astana is promoting the capital city. Had you ever heard of Astana before the team came along. Probably not. Guess they hope it will benefit tourism.

Katusha is more about promoting russian cycling. I guess within the country the contributing sponsors get publicity through it, rather than appealing to the worldwide market.

 

[taiwan]

Sort of quasi-national teams then. I suppose there are a few others like that, probably most pro teams lean that way.

 

[The Hitch]

I don't understand the business model for some teams. For instance, Katusha and Astana are names which apparently promote no product or brand. Of course they may just be seeking a title sponsor like Leopard, I don't know. There may be other similar examples, I can't think of any just now. Am I missing something?

Yeah I always think the same. Astana, Leopard. Katusha. What do the companies behind them get out of it I suppose Astana might benefit tourism but how many people would go to Astana because they saw it on a cyclist. Why not ALmaty. And what do the companies behind it get?

Even with some real companies. I mean how much does it cost to run a cycling team. FIrst of all wages for all riders and mechanics, soignours (however thats spellt) managment. Then theres the money for the buses and the cars and the fuel costs alone for those and transporting them must run into the hundreds of thousands. Probably have to buy a few extra cars for the US and Canadian races too unless they transport them around the world.

Then theres the bikes. ANd the UCi money. And the hotel costs for all the riders and feeding them.

I mean your looking at millions and millions.

And for a company like Liquigas i mean, how many people are going to change their gas supplier because they saw the word liquigas written on a cyclist.

And for teams like Androni which only make 1 gt a year anyway and have like 50 sponsors on their shirt. How many people are going to even see the sponsors written on the shoulder. Heck, the riders probably dont even see it themselves.

Im glad that there is so money in cycling and so many companies willing to sponsor, but the advantage they get from it, well it just goes straight over my head. I dont understand it personally.

 

[Elko66]

I'm no cycling historian but Back in the '60's didn't they experiment with trade/national teams, I think T.Simpson was riding for an ad hoc G.B team in the Tour the year he died.

Agree that the benefits of sponsoring a cycling team not directly linked with cyclists seems vague, Is Astana is more of a national pride thing as much as anything, Katusha may be a Tax write off! who knows tax may be the reason any company or corp' sponsors Sport-as well as the advertising,product placing deal.

 

[spalco]

Meh, if I was really, really rich, setting up a cycling team sounds like more fun to me than buying a football club or a big-*** yacht or whatever (and it's probably cheaper too). I'm sure love of the sport or simply fandom plays a role for many team owners, and probably many of the sponsors too.

 

[Libertine Seguros]

Some of these teams don't have anybody willing to be a title sponsor or a leading sponsor, but if there are many companies willing to throw in a bit they can put together a team but without a lead sponsor. Katyusha and Russian cycling in general get a lot of funding from Itera, who sponsor the feeder team, whose logo are prominent on the jersey and who also sponsor the national team, similar to how Sky sponsor the British national team as well as the track team and road teams in their name. Clearly, apart from Samruk Karyzna, nobody puts in equivalent money to the Astana project.

For some places, there's a matter of pride. You will notice that Euskaltel are an ersatz national team for Euskal Herriko, and throughout the lower echelons you will find various cities and regions who contribute financially to the running of teams in order to promote their area. KTM-Murcía, Tavira-Prio, Xacobeo-Galicia, Andalucía-Caja Granada, Vorarlberg-Corratec, Team Tyrol, and so on. Some companies in places like Russia and Kazakhstan are willing to sponsor minorly because drawing more attention to their country gives them more business opportunities, if not opportunities full stop. Not to mention that national pride and the country's higher ups may see sporting success as a matter of national pride, and wish to associate themselves with it - Kazakhstan would celebrate Vino's success, but if he has that success on a nationally funded team it makes the government and country look good for contributing to making Kazakhstan look good on the world stage and giving joy and entertainment to many Kazakhs, or so the theory goes.

 

[Waterloo Sunrise]

Yeah I always think the same. Astana, Leopard. Katusha. What do the companies behind them get out of it I suppose Astana might benefit tourism but how many people would go to Astana because they saw it on a cyclist. Why not ALmaty. And what do the companies behind it get?

Even with some real companies. I mean how much does it cost to run a cycling team. FIrst of all wages for all riders and mechanics, soignours (however thats spellt) managment. Then theres the money for the buses and the cars and the fuel costs alone for those and transporting them must run into the hundreds of thousands. Probably have to buy a few extra cars for the US and Canadian races too unless they transport them around the world.

Then theres the bikes. ANd the UCi money. And the hotel costs for all the riders and feeding them.

I mean your looking at millions and millions.

And for a company like Liquigas i mean, how many people are going to change their gas supplier because they saw the word liquigas written on a cyclist.

And for teams like Androni which only make 1 gt a year anyway and have like 50 sponsors on their shirt. How many people are going to even see the sponsors written on the shoulder. Heck, the riders probably dont even see it themselves.

Im glad that there is so money in cycling and so many companies willing to sponsor, but the advantage they get from it, well it just goes straight over my head. I dont understand it personally.

I used to work for a company which sponsored a women's cycling team. Frankly compared to a lot of other media channels, it really doesn't have to be that expensive - even a top men's team presumably costs the key sponsor no more than 10m euros, which is not a massive A&P budget if that's the way you choose to spend it - for the right demographic it could easily make sense - worked for Festina!

 

[Elko66]

Yes there's the Play boy element to it as well,even if it's not your own Money.


Was it T.mobile that quit cycling in favour of Football,because he was a Fan(how any one can like football) citing the dreaded dopage prob's as the reason ...Excuse to withdraw.

 

[Bala Verde]

I thought sponsoring a cycling team is still one of the cheapest forms of sponsorships, with a pretty big exposure/dollar ratio. Where else could you drop a mere 10M and still get global exposure via TdF, the Giro and several classics?

 

[junkie]

Speaking of Katusha... Their main sporsor is a company whose owner is a cyclist himself, and being a billionare he can afford to play with a pro-tour team. Besides, his company gains positive image in public eye by supporting quasi-national team, and the guy probably gains some political dividends.

 

[Libertine Seguros]

Sure you're not thinking of Oleg Tinkoff, of Tinkoff Credit Systems fame? He rode for Tinkoff in 2006. The team has, over the years, features Pavel Brutt, Mikhail Ignatiev, Sergei Klimov, Ivan Rovny, Salvatore Commesso, Danilo Hondo, Vasil Kiryienka, Evgeny Petrov, Alberto Loddo and Jörg Jaksche. It "disbanded" in 2008, with many of its former members finding homes with Katyusha.

 

[junkie]

The team has not disbanded IIRC, it has been sold.

 

[Parrulo]

i don't know if this is true but the french guy that joins the portuguese commentators team during the tour said that ag2r were an unknown company in france before they started their team, now they are one of the top companies in their business..

 

[jsem94]

@Hitch

The main sponsor doesn't pay everything. The bikes are paid for by the bike manufacturer because it's good publicity to have their brand in the peloton. The same goes for every part of the bike, wheels. Even the team cars... Skoda is a major sponsor in the peloton nowadays.

However if it were up to the main sponsor(s) to pay everything, no one would EVER sponsor a cycling team.

 

[Euskaltel!]

Also its crucial to note that it's more complex than seeing the sponsor's name and wanting that product. The fact that you see that sponsor's name might not be immediately useful, but what about a few months/years down the line when you want more TV channels (SKY), want a new gas company (Liquigas) etc... The devil is in the detail. And for advertising budgets the 10-15 million bracket is really pretty small considering how huge the TdF is etc...

 

[El Pistolero]

To be honest, I don't even know what sponsors of most teams sell anyway.

Some should learn from Geox. I just hope Amgen starts a Pro Tour team soon.

 

[craig1985]

I would say I had never heard of Garmin until they sponsored JV's team, looks like it has paid off. I've bought one since, and I've lost count of the amount of people I know who have since acquired a Garmin.

 

[Granville57]

Then theres the money for the buses and the cars and the fuel costs alone for those and transporting them must run into the hundreds of thousands. Probably have to buy a few extra cars for the US and Canadian races too unless they transport them around the world.

Interesting take on just that from mechanic Nick Legan:

At races like the Tour Down Under or Tour of Qatar the race organization provides the teams with cars and often a minivan. At both of those races, we stay in the same hotel everyday, so there is no need for a truck for transfers.

Tour of Qatar is similar to Down Under, but instead of cars they supply small pick up trucks with bizarre racks for the bikes where wing-nuts hold the front forks.

At Tour of Langkawi, the race provides cars and drivers for them.
So, to answer your question quickly, we get cars and vans wherever we go and make do the best we can.
http://velonews.competitor.com/2011/01/bikes-and-tech/technical-faq/ask-nick-getting-team-vehicle-down-under-the-pros-and-cons-of-two-step-chain-lubing_156249

I would say I had never heard of Garmin until they sponsored JV's team, looks like it has paid off. I've bought one since, and I've lost count of the amount of people I know who have since acquired a Garmin.

Yeah, I had never heard of HTC until they were a new sponsor to Highroad and Cavendish did his "phone salute" after winning the sprint. I remember Liggett explaining the connection between the gesture and what HTC actually made. This was before they really had an ad campaign in the U.S., but since then that has significantly changed. So it planted a seed for me but I can't believe it any effect whatsoever on the average person who now owns an HTC phone but doesn't know what pro cycling even is.

JV provided some interesting info on the sponsor/financial return aspect of cycling teams. It's still hard for me grasp the effectiveness of it all though.
That's why I loved seeing the Cervelo Test Team. It made perfect sense.

A: I am a little harder to schedule these days, huh? One of the things I’m doing is we just did our media evaluation with IEG – how much value your team has. And we’re pushing like $90 million in value. We may be the highest total publicity to investment dollar ratio in cycling ever.

Q – How do they track that?

A: Say for example a 30-second ad on one TV program costs $100,000. So 30 seconds of direct advertising to consumer costs $100K at this slot on TV. Or this amount of print costs this amount of money. Anything – print, tv, radio, whatever. So in the TV example, let’s say the program’s an hour long. 40 minutes of that is actual coverage. Of those 40 minutes, they find that Team Garmin received two minutes of direct commentary and in-focus logo exposure. If it’s out of focus, a helicopter shot where you can’t make out the jersey or whatever, then it doesn’t count. But if the commentators are talking about the team, the logo’s on screen and in focus, let’s say you get two minutes. If 30 seconds cost 100K, you’ve got a $400,000 value.

They do the same thing for print –what’s it cost for a full page ad? Now, what’s the word content for that amount of space, did you get a photo, did it not have a photo, and so on. And they have a calculus that if a full page in the NY Times costs X amount and you got a quarter page article and there was a photo, we’ll call that X dollars. Add it up worldwide and here you go.

Q: And you guys are the highest-producing team ever? Even over, say, Postal or Discovery?

A: I’m sure there are a couple of Lance years, like 2005, where they outstripped the total value but, put it this way, for a non-Lance associated team, it’s unprecedented. And they don’t count value in markets that don’t matter to Garmin. Meaning like, they don’t sell Garmins in Uganda, say, so if you get 20 hours of live coverage, it doesn’t count.

Q Is there any kind of qualitative aspect- the direction and trends of the coverage, so on?

A: Yeah, negative stories count as neutral or very limited. Positive stories are counted 1:1 with ad space. I was pretty pleased with the results. It’s $60 million just in TV. Once it gets to all the other stuff…
http://bicycling.com/blogs/boulderreport/2009/09/01/jonathan-vaughters-interview-evolution-at-garmin-not-revolution/

 

[Marcus135]

I would say I had never heard of Garmin until they sponsored JV's team, looks like it has paid off. I've bought one since, and I've lost count of the amount of people I know who have since acquired a Garmin.

Agreed, The fact that Garmin sponsor a cycling team was the thing that made me choose to get their product over another companies.

 

[Konfronto]

Yeah I always think the same. Astana, Leopard. Katusha. What do the companies behind them get out of it I suppose Astana might benefit tourism but how many people would go to Astana because they saw it on a cyclist. Why not ALmaty. And what do the companies behind it get?

Even with some real companies. I mean how much does it cost to run a cycling team. FIrst of all wages for all riders and mechanics, soignours (however thats spellt) managment. Then theres the money for the buses and the cars and the fuel costs alone for those and transporting them must run into the hundreds of thousands. Probably have to buy a few extra cars for the US and Canadian races too unless they transport them around the world.

Then theres the bikes. ANd the UCi money. And the hotel costs for all the riders and feeding them.

I mean your looking at millions and millions.

And for a company like Liquigas i mean, how many people are going to change their gas supplier because they saw the word liquigas written on a cyclist.

And for teams like Androni which only make 1 gt a year anyway and have like 50 sponsors on their shirt. How many people are going to even see the sponsors written on the shoulder. Heck, the riders probably dont even see it themselves.

Im glad that there is so money in cycling and so many companies willing to sponsor, but the advantage they get from it, well it just goes straight over my head. I dont understand it personally.

Well concerning Astana, the project was created with the intention not only to promote the city and the country, but also to give a new impulse to cycling sport in the country.

Personally I can say that this project does increase the popularity of the
country. I quite often communicate with foreign people and most of them do connect Kazakhstan with the Astana team, mainly with Vino of course. I live in Almaty and I would say that creation of the squad triggered huge wave of popularity of the cycling within the city at least. There are a lot of young, middle aged and even elderly people who cycle every day and especially on weekends and that tendency becomes more and more apparent, hence, to some extent this project leads to a better health condition of the citizens.

Concerning Samruk-Kazyna, apparently the state fund does not increase its popularity among investors around the globe via the Astana team. The scale of the fund is quite huge and I don't think that investors do get acquainted with the fund trough cycling. I mean for such mighty institutions, there are different ways to promote themselves, more at the state level. Therefore it's quite difficult to calculate the output of the project; understand how the project is worthwhile, what it’s NPV, ROI and so on. However, the project generates other indirect benefits (promotion, health issues, etc.).

Promotion of the country and popularization of the sport are the main objectives of the project Astana. The government gave a command to sponsor the project and Samruk-Kazyna, as the country’s proxy, just follows the instructions.

 

[Michele]

Sure you're not thinking of Oleg Tinkoff, of Tinkoff Credit Systems fame? He rode for Tinkoff in 2006. The team has, over the years, features Pavel Brutt, Mikhail Ignatiev, Sergei Klimov, Ivan Rovny, Salvatore Commesso, Danilo Hondo, Vasil Kiryienka, Evgeny Petrov, Alberto Loddo and Jörg Jaksche. It "disbanded" in 2008, with many of its former members finding homes with Katyusha.

And if the rumors become true, he might be back in the business.

 

[dancing on pedals]

the fact remains advertising in whatever form does work - take the example of mercatone uno who had a public awareness of around 60% in Italy, however after sponsoring the cycling team lead by Pantani and his Giro/tour victories this had risen to around 95% (figures from Matt Rendall).
Its also very cost effective considering the high price of other sponsorship/advertising deals (TV/ other sports).
In addition there is no such thing as bad publicity during the Festina scandal sales rose by around 300% - consider a man in a breakaway who is basically a sandwhich board for his advertisers and work out how much that would cost in advertising time on the TV.
As for Astana they run a tv campaign in conjunction with the cycle racing (visit Kazakhstan in the 21st centuary) and they are probably correct in their target audience (assuming that cyclists are fairly adventurous people - certainly more so than running a more expensive TV campaign during a popular soap serial with a more staid audience).
Other benefits for the sponsors is the hospitality opportunities - Garmin for instance also use events such as the Giro/Tour to woo and spoil customers such as aeroplane manufacturers/buyers who constitute a major part of their business (source Alan Sugar in cycling weekly)
In advertising terms cycling remains a comparitively cheap way to target specific audiences and is an ideal way to promote a company in mainland Europe (Sky being a good example) - how it must peeve the BBC during their track coverage (which has excellent viewing figues btw) for the comentators to have to keep saying "..... of the Sky TV cycling team".
Thanks

 

[Fester]

Cycling has a strong following of people who tune it once or twice a year for specific events; usually the TdF and their local national tour or race.

It's easy to think that cycling provides a bad return due to the poor management of the sport. One particularly striking example is the corruption surrounding access to the pro tour. I'm thinking Pegasus getting the snub and Geox also. If it was FIA or FIFA in charge, another league would be set up: If there is money to be made, why not make it? If there is a lack of events, but an obvious demand, create others. Rather than rubbish the Tour of America, help give it wings.

The point in cycling teams is that they are an extremely effective investment, even if you include the shame and scandal that usually accompanies cycling. Imagine what it would become if the w***ers in charge had a greater perception of the potential of the sport. Incidentally I found this article. The article quotes viewing figures for the last stage only of the Tour de France.

 

[greenedge]

The teams are there to promote their product/ country. They have a good choice selection unlike ( NSW Origin's squad off topic ) to make races interesting. At one stage the 1st director of TDF banned riders from freewheling. After the ban was lifted it's evolved to having leaders.