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Bike brands: savior of the pro peloton?

Published March 21, 2013
From the magazine

Editor's note: The following article appeared in the March 1 issue of Bicycle Retailer & Industry News.

By Nicole Formosa

WESTLAKE VILLAGE, CA (BRAIN) — Bob Burbank refers to the days of Mario Cipollini and the Cannondale-sponsored Saeco race team often as he discusses the brand’s latest venture, Cannondale Pro Cycling. 

That sense of camaraderie and fun represented through a personable and reachable character like Cipollini is a dynamic that Burbank, Cannondale’s general manager, hopes to bring back to the sport with the new title-sponsored team and Peter Sagan, the 22-year-old breakout sprinter who became known last year for his quirky finish line celebrations in the Amgen Tour of California and Tour de France.

“We have to change the way the public views professional cycling teams,” Burbank said in an interview at the team’s global launch in January in Southern California. “Look at the new stable of riders coming in. The future’s bright. It’s just a matter of what we do with it.”

Professional cycling is no doubt in the midst of one of its roughest patches in history, culminating with Lance Armstrong’s doping confession and allegations that the UCI, cycling’s governing body, played a role in covering for the former seven-time Tour de France winner. Longtime non-endemic sponsors like Rabobank have distanced their brands from the sport and team budgets are likely to drop as sponsorship dollars run short.

A lack of sponsor interest was not the reason behind Cannondale’s decision to bump up its commitment this season after six years as co-sponsor with Liquigas. In fact, Burbank said he had numerous offers for title or co-title sponsorship, but turned them down in lieu of a greater commitment from other longtime sponsors like FSA, SRAM and Fizik. The team is managed by Brixia Sport, an Italian company partially owned by Cannondale and made up of the former Liquigas staff. 

Burbank said it’s possible the team will take on another headline sponsor during that time, but the priority is to focus on product development and setting the team’s vision and future direction. Regardless of future sponsors that may come and go, Burbank wants to make sure the net goal stays the same. 

“I think that’s really difficult in this business because of the turnover of riders and sponsors and teams and all that stuff. It’s really, really tough. We were less inclined to worry about finding another partner. As a matter of fact, we kind of did the opposite. We were approached by a lot of people, believe it or not. We had a great year [in 2012]. The next phase is going to be what other companies out there that can helps us change and elevate the cycling experience,” he said.

Although Burbank could not discuss the financial terms of Cannondale’s sponsorship, he did say it was a commitment the brand could not have made three years ago, but recent sales success has led parent company Dorel Industries to make greater investments in the brand. Sponsoring a WorldTour team can cost anywhere from $6 million to $25 million depending on rider salaries and staff costs. 

Typically a bike manufacturer covers about 30 percent of that cost if it’s an equipment sponsor, but often does not benefit from product development or marketing opportunities because the team owner is laser-focused on winning, said Gerard Vroomen, co-founder of Cervélo, one of the first bike manufacturers to venture into team ownership with 2009’s Cervélo Test Team. 

“You put in a ton of money and what you get in return is pretty poor,” he said. 

For a nominal financial increase, depending on supporting sponsors, a bike manufacturer can own the team and better control its return on the investment. Vroomen believes that is the only way forward for the tainted industry. 

“As soon as you become the owner, the responsibility becomes enormous,” he said. “It would be great if now all of a sudden bike companies were team owners. Riding clean definitely becomes much more important than winning.”

Sponsorship should not be about winning, Vroomen said, but what else a brand does around the team, whether that’s dealer or media events to generate exposure, collaborating with engineers on new product development or driving other marketing initiatives, like producing documentaries.  

And it may become more attainable and logical for bike brands to step up sponsorship when budgets and salaries inevitably decrease as non-endemic sponsors shy from the sport.  

“Companies are now going to be incredibly sensitive to who they’re having partnerships with,” Burbank said. “I think you’ll see that moving forward. It’s not going to be as simple as a handshake. Whether it’s more contractual implications or whatever else, I think what you’ll find is they’ll be a lot more scrutiny on those relationships.”

Burbank believes the title sponsorship model is sustainable if teams leverage the strengths with team management and avoid duplicating costs and keep rider salaries in check. 

Cannondale Pro Cycling is not only an opportunity to build brand awareness and create long-term stability for the team, but Burbank also views it as a chance to reconnect fans to professional cycling. 

“We have to rebrand cycling,” he said. “We have to talk about all the wonderful things that cycling can do. It’s not just the highest competitive level. It’s about advocacy. It’s about people going out and not playing Xbox 360. There are all these things. It’s health and wellness; it’s all those other elements that are going to resonate with a broader audience.”

Topics associated with this article: From the Magazine, Competition

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