And Now A Word From Our Sponsors...

When Faulkner wrote The Sound and The Fury, he envisioned each character's voice being printed in a distinct color.  When the publisher told him the expense of this would be impossible, he said "fine, don't pay me, but print it in colors."  The publisher refused.  As yet, I have not seen anyone take up the charge of reprinting it in color, probably due to the wish of previous generations to make subsequent generations suffer as they themselves were made to do.  And I just realized that this "where in the Sam Hill is he going with this" introduction is actually going to make two points for me: that the suffering and sins of previous generations seldom provide clean endpoints as new generations emerge, and that I am going to alternate regular and italicized text as I make what will undoubtedly be a fragmented series of points about sponsorship and current events.  Check me out on a Friday morning!

Pro cycling doesn't happen without sponsorship.  For the most part, you can't sell tickets to a street corner, much less for someone to sit in his front yard and watch races go by.  Most races aren't shown on TV and except for a very few, the ones that do don't get a whole lot of revenue from it - and they ain't sharing what they get in any case.  Without sponsors you have no riders, and it's awfully hard to have a race without riders. 

There's no bad publicity but you can overpay for bad publicity.  Some women's teams, which have a hard enough time getting sponsors in the first place, are finding it even harder now.  Men's teams are also having a hard time drawing in and retaining sponsors.  Lance's reign provided pro cycling with tremendously elevated exposure.  In '99, cycling was a huge bargain compared to other sports.  The Festina scandal had laid low a sport that had never had huge money in it (Greg LeMond was an innovator in many things, not least of which was getting paid more than crap wages for his riding), and there was a naivety and enthusiasm about it all that made people suspend any disbelief that they might have had.  The American market was tuning in to cycling and who doesn't want exposure in the American market, especially if it comes reasonably cheap?  Now, the inverse is true - cycling as a means of exposure is probably overvalued relative to reach and integrity of message, and I think we'll probably see some significant scaling back in terms of how eager non-endemic sponsors are to be involved with the sport.  This will result in smaller team budgets and lesser rider contracts.  Contraction is a bitch to manage, and often leads to vicious cycles of decline.  Fortunately, cycling's top management is well prepared to competently face such challenges!

Endemic sponsors (think "companies that make things their sponsored athletes use") are facing a good news/bad news type of situation here.  The bad news is that what went up probably will come down.  Cycling is a funny sport where, at least in the US, spectators are more likely to also be participants.  They see the pro game as a proxy for, or at least being somehow related to, their own endeavours.  A pro taking drugs to achieve greatness can feel like their own athletic pursuits are being defrauded.  In Europe, as the fantastic blog The Inner Ring pointed out long ago, the big audience for cycling on TV is housewives and retirees.  For someone looking for something pretty and not particularly demanding to look at while doing the ironing, bike racing with any level of pharmacological enhancement is a near ideal choice.  For the guy who's thinking in the back of his mind "if only I'd have started a few years earlier than I did...," doping news changes what he's looking at.  Specialized (or whomever) probably isn't selling too many bikes to 75 year old French guys, but the "I coulda been a contender" guy is the very meat of their performance bike market.  Integrity of message is a threat there, and if that group just straight up tunes out then their market shrinks and they sell fewer bikes.  Top end pro sponsorship has been an increasingly meaningful channel of both promotion AND DIFFERENTIATION for them, and if that atrophies, it's not great for them.

On the other hand, if the nut to REALLY be involved in top level pro stuff shrinks, then they can drive the bus.  Cannondale is taking over for Liquigas, and apparently Giant is going to be lead sponsor of the team formerly known as Rabobank.  They can control the message there.  On the "gigantic enormous risk" side of this ledger, if you concentrate your sponsorship closely on one team as these guys are doing as opposed to say how Specialized does it in sponsoring three (?) protour teams, that team's results become REALLY important.  Anyone see the particular risk in that????

Michael Vick, Tiger Woods, and Ben Roethlisberger and any number of felons and ne'er do wells have regained (or never lost) sponsorship with Nike and other emdemic sponsors.   Trek was a $100 million company in 1999.  Now it's a $1 billion company.  How much of that is attributable to their association with Lance?  Somewhere between north of "a ton of it" is my guess.  Vick hasn't done anything like the equivalent for Nike, so why would Trek kick Lance to the curb when you won't kick a dog kicker to the curb?  Vick can, through future athletic  achievements, make us forget his past misdeeds or better yet overcome them and be an even more inspirational story.  Lance can't do that.  He's done.  The number of candles on his birthday cake and that inconvenient worldwide lifetime ban on his participation in any WADA sport see to that.  There might be some upside left for him, but his sponsors can't see it.  In a stunning reversal, he has now served his useful life to the companies that were riding his train, and now he's been thrown under that train. 

These are all dramas and risks and rewards that play out for companies that will earn more revenue today than we've done all year, but the principles apply to us.  While reach of message is important to us, we can't and don't want to overpay for that reach.  Our story is simply our story and the story of our customers buying and using and competing on our stuff.  Time will tell if this is a valid story and way to tell it, but it's what we're going with.