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“If cycling wants to grow, the essential first step to a solution is clear: A financial model must evolve wherein event owners share revenues with its teams“. – Alex Fairly, Odd Men Out, Velo, October 2011.

If revenue sharing is the key to growth professional cycling will flat line!

“Odd Men Out” does not present a feasible business model. The cornerstone of Fairly’s argument is that the ASO (Amaury Sport Organisation) and major races should share revenue with teams and riders. What would motivate the ASO to share revenues with teams? In fact, what would motivate any event organizer to share revenue with teams? Revenue sharing is not a viable option for professional road cycling. Cycling is not the NFL, English Premier League or Major League Baseball. There are several reasons why these sports can command revenue sharing. Teams are corporate structures and rely on ticket sales and merchandise to create a large portion of their revenue. Lastly, teams in professional football, soccer and baseball rely heavily on large AND small market teams to ensure the overall success of the league.

Rather than focusing on unrealistic business models professional cycling can never successfully implement, I would propose focusing on things we can change to fuel the growth of professional cycling.

There are four realistic strategies for growing professional cycling: increase globalization, deliver on sponsor expectations, continue to clean up the sport and capitalize on capturing a larger piece of the $70 billion dollar sponsorship pie.

Embrace globalization: In 2002 – 2004 “70 – 80% of UCI races were in four countries: France, Italy, Spain and Belgium” quotes Alain Rumpf, head of the UCI’s Global Cycling Promotion division. The cyclingnews.com article “Global Cycling Promotion on Beijing and the way forward” described how lack of globalization was a major weakness which resulted in companies leaving the sport, the most notable being Motorola. Today, professional cycling is growing in continents outside of Europe, such as North America, Africa and Asia, with new races emerging. Rumpf states “….part of the thinking of GCP was to make the sport more global and there is a great opportunity at the moment because we can see countries are hungry for events and sport.” The global growth, reach and marketability of professional cycling can provide companies with a platform to directly reach consumers and clients through cycling sponsorship. Continued focus on growth is a more viable option than pointing to revenue sharing as a solution.

Stand and Deliver: Set sponsors expectations carefully and only promise what you can deliver! “…no sponsor wants to be sold on something that isn’t real…..” John Wilcockson’s VeloNews article “A Flawed System” chronicles how professional cycling’s sponsorship model derailed Pegasus and almost cost Geox their title sponsor. Consider the consequences when a benefactor or company does not reap the rewards of their sponsorship investment because their team did not compete, perform or worst deliver on the promise of increased visibility, sales and market share. A thorough understanding of what the sponsor expects is critical to maintaining a mutually beneficial and sustainable relationship. Judging what you can deliver is equally important. And, as stated in “Winning doesn’t guarantee sponsorship!”, winning alone is not enough to maintain sponsors.

Perception IS reality: Companies will not jeopardize the image of their brand! Continued steps to ensure the sport is perceived in a positive light is vital to professional cycling’s longevity and the ability for teams to attract major sponsors. The blog post “Handling objections regarding cycling sponsorship” provides a good basis for handling discussions with clients regarding the state of the sport.

Take a piece of the pie: Sponsorship is a $ 70 billion dollar industry!: Companies are investing heavily in sponsorship to connect with consumers and clients. Sponsorship provides increased visibility and awareness for their company, brand, products and services. Cycling sponsorship gives companies a unique and highly effective marketing platform to reach their targeted segment. Look at the number of fans attending races, sponsors paying for television advertising during broadcasts and the popularity of the growth of the sports demographic globally.

Let’s stick to things we can impact and change.

P.S. – Have you checked out my new e-book “Cycling Sponsorship 101: How to get cycling sponsorship!”. “Cycling sponsorship 101” is a comprehensive, step-by-step, guide walking you through the entire cycling sponsorship process in an easy to follow format. Simply stated, “Cycling Sponsorship 101” will help you get more sponsorship and funding! I am offering my subscribers a 100% money back guarantee.Want to read a FREE chapter from the book? Download your preview copy.

Thanks again for visiting. Remember, until next time, “Keep the rubber side down!”

References

“Odd Man Out: In order for pro cycling to move forward, event organizers must share revenues”, Alex Fairly, Velo, p. 23, October, 2011

“Q&A”: Global Cycling Promotion on Beijing and the way forward”, Daniel Benson, cyclingnews.com, September 7, 2011

“A Flawed System: Pegasus and Geox are two examples of how cycling’s sponsorship model can fail teams, riders and sponsors. Team managers Vaughters and Bruyneel have some answers — or do they”, John Wilcockson, VeloNews, p. 19, April, 2011

One Response to “Revenue sharing will NOT save pro cycling!”

  1. Coach JDH says:

    Hi Al,

    Thank you for putting together another priceless and timely gem. You certainly have done your homework and are very knowledgeable on this subject matter. Your passion to contribute positively to the cycling community bleeds through your words.

    As a leader of a cycling startup organization, your information is extremely helpful in guiding me in the right direction while minimizing any leaderless distractions as I can trust you as my go-to cycling sponsorship guy.

    Blessings, my friend. My sincere blessings, JDH

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