Monday, January 12, 2009

where da money at?

This past summer/fall I tried to help a friend launch a new road racing team comprised of amateur (cat 2-4) racers focused on racing in the northeast. Since I wasn’t working, I didn’t mind lending some time to the effort but I have to admit I was not very optimistic. I’d never really done the math to calculate how much money or product would be needed for a team of 10-12 people. Once I did, it was pretty easy to see that success was highly unlikely. To make a long story short, we failed to gather any monetary support after almost 4 months of trying and although cycling companies were willing to offer “team” deals or even free products we decided not to continue our efforts.

I was reminded of this quest for sponsorship when I read a few cyclingnews.com articles recently. The first one was the review of Lance’s specially painted race bike that he’ll be using for his return to competitive road racing this month. The next article was an interview with the male and female mtb ultra distance series (NUE) winners who are both losing their sponsorship from Trek/Volkswagen and may not compete in 2009 as a result. It immediately struck me that huge dollars are being spent to paint and ship Lance’s frame (they supposedly closed their custom paint shop for a week in order to work only on this frame) while other racers are being completely cut from the payroll. Initially I thought it was unfair that these two very successful mtb racers were essentially being put out to pasture while seemingly excessive amounts of money were being thrown at an already-established superstar. Then I realized that the factors that make it highly unlikely for a group of Boston based amateurs to raise money for their new road team are also making it harder for the professionals to keep their existing money.

ROI, or return on investment. Truth be told, there is not much ROI for Trek and Volkswagon when it comes to their mtb team. Heck, Trek will probably generate more Fuel sales as a result of Lance’s mtb racing this fall than it will as a result of Jeff and Cheryl’s NUE series victories. In the same way, sponsoring 10-12 “guys” who race in New England is not likely to yield a high ROI, no matter how little money a sponsor puts forward.

Bringing more to the table. To be appealing to a potential sponsor, groups, or individuals will need to deliver outside of cycling. Let’s face it, our “community” is not that big, even in the athletic world, so being able to reach a broad audience beyond cyclists will be a key to securing dollars. Lance has used cycling as a spring board to reach millions of people who could care less about racing but are able to relate and support his Livestrong program because their lives were affected in some way by cancer. Those people are more likely to buy a Trek bicycle or Oakley sunglasses or Nike running apparel (remember that silly marathon stage he went through?) if they want to “be like Lance.”

Smell the coffee. Lots of people point to the tough times as a generic reason for why athletic sponsorship is decreasing. Underneath that excuse is the added reality that many companies are waking up and realizing they need to make smart (i.e. safe) marketing investments with their limited pool of funds and so the areas in which they will/did spend money are being more heavily scrutinized. It will be interesting to see whether or not companies continue to act this way when the economy turns around and travel and leisure spending goes back up. In the meantime, unfortunately it looks like fewer and fewer athletes will be able to subsidize (or make a living at) their sport without a j-o-b.

3 comments:

Feltslaves said...

R - nice post, well said.
Matt

Colin R said...

It seems to me like sponsorship is more trouble than it's worth for the gainfully employed amateur athlete. This post makes me appreciate that my bike racing habits aren't dependent on someone else's generosity.

rosey said...

colin, i agree. i'd rather keep a regular job and race with a group of people that I like than be part of a team I have no affinity for just because they get a better "hookup."
I probably don't ever have to worry about making a career out of bike racing either. :p