Getting Rational in Crazytown

Every week, it seems like there’s bad news on the pro team sponsorship front, a steady drumbeat that began with the announcement in August that team Highroad/HTC was unable to land a sponsor. In their wake, Leopard-Trek, the hot new team of 2010 merged with Team RadioShack. Then Team Geox, fresh of their surprise Vuelta victory lost their title sponsor. Garmin-Cervélo apparently secured and then lost a French co-sponsor, BigMat, which may or may not take a leading role on the French team FdJ. There are rumblings that Saxo Bank-Sungard (about to be Saxo Bank) isn’t on sound financial footing, but there have always been rumblings about Bjarne Riis’ formations. And Euskaltel-Euskadi, a reliable formation if there ever was one, is allegedly on shaky ground after next season.

It can be depressing. But we’re going about it as the cycling fans, like the cyclists, we are. We’re worried about doping; we think it might be the state of the world economy. Rational responses, and concerns I share. But I can’t help but feeling that we’re sane people in the psychiatric ward. There’s comfort in feeling right in crazytown, but it probably isn’t the way to success.

I see this most strongly when looking at how we beat ourselves up over doping. And how we let the world beat cycling up over doping. I have no doubt that doping is a problem in cycling. I want to get rid of the dopers, and I’m sure I’m not alone in this. At the same time, I am certain that doping is a problem across the entire spectrum of sports, and cycling is doing more to root out doping than other sports. Yet when doping in sport comes up, cycling seems to get more attention than other sports, which work mightily to sweep their doping problems under their rugs. Look at how pro baseball tipped off their players when testing was first initiated. Look at how professional football barely gave a penalty for doping, and is now backing away from their pledge to test for human growth hormone. And this is before anyone discusses what seems to be common use of cortisone in pro football, something that is supposed to be strictly limited in cycling. The notorious Dr. Fuentes of Operacion Puerto fame claims he worked with football (soccer) and tennis players, yet nothing has been heard of that.

Look at sponsors in other sports. It’s easy to see that businesses have no trouble backing tainted athletes. Tiger Woods wrecked his carefully-cultivated public persona on his own, yet most of his sponsors stood by him. Accenture didn’t, but Rolex came on board. There has been no exodus of advertisers from The Super Bowl broadcast over drug use in football. Mark McGwire, the St. Louis Cardinals slugger was caught with steroids by a reporter in his big home run chase in 1998 (the reporter who noticed it in his locker): McGwire denied it, admitted it, and is still popular and employed by the team he “disgraced.” I don’t think sponsors care about perfect actors, but a patina of cleanliness and plausible deniability.

Doping isn’t a real issue. Nor is the world economy. There’s high unemployment, but corporate profits are at record levels. Products always need to be marketed. There’s a oft-repeated story told by marketers about how going in to The Great Depression, cereal manufacturers Kellogg’s and Post were about even in market share. Post decided to cut back on marketing, while Kellogg’s increased their marketing budget. At the end of the depression, Kellogg’s was the dominant player, a position they’ve held ever since.

Companies need to advertise their goods and services. Sometimes it’s something new; sometimes it’s reminding the public of something that’s already around. Some products always have a need to be marketed. Cars, banking, insurance, telecommunications, beverages, and lotteries are some of the evergreen advertisers. Massive companies with huge operating expenses and big advertising budgets. HTC, a mobile phone company, the most recent sponsor of Highroad, doubled their profits from $20 billion to $40 billion between 2010 and 2011. Whether or not this was a result of Highroad’s success is never discussed. Their advertising budget in the United States alone was $50 million per quarter, or $200 million dollars a year, starting in 2009. It’s easy to imagine their worldwide advertising budget was over a billion dollars annually. And that would make a $10 million dollar budget, probably much more than what Highroad received, for strong ProTour team is less than 1% of HTC’s advertising budget.

Highroad’s owner, Bob Stapleton claims that his team offered an amazing Return On Investment (ROI). HTC either disagreed or didn’t care. This plays against a core belief for the cycling fan: that their demographic is valuable. Let’s assume that Highroad had impressive data that showed investing in the team yielded an incredible ROI. It wasn’t enough.

American tifosi look at the growing popularity of the Tour de France in the U.S, with daily reports in major newspapers, dominating cable TV presence, and then add in the fact that the Tour is the most-watched sporting event in the world, eclipsed only by the quadrennial events of the Olympics and soccer’s World Cup, and figure that there must be advertising gold to be made out of camera time at the Tour. Mix that in with the growth of cycling both for commuting and recreation. It seems to herald a consumer who is tech savvy, spends on her health, and has plenty of disposable income.

For better or worse, perception plays a big part in determining value. Almost a decade ago, the ABC television network was poised to bring Late Night with David Letterman to their channel, which would have meant canceling Nightline. Funny thing was, Nightline had more viewers, but they were seen as less important than the Letterman viewers. And Nightline viewers made more money. They were deemed less important because they were older. Cycling could be suffering from a similar problem. Maybe cycling eyeballs aren’t important enough. Frustratingly, they will remain probably not important enough until they are.

But the reason our eyeballs might not be important enough is that ProTour-level racing has grown to cost sponsors something. It’s not nothing, but it’s not big money like a Formula One team (probably over $100 million) or an ad buy at the Super Bowl ($3 million every 30 seconds). This could put sponsoring a ProTour team out of reach for a passionate company chief, who might have sway in terms of how his company’s marketing budget is used, but not to the tune of several million dollars. At the same time, $10 million might be too small for the biggest companies to consider, as the impact might be hard to see, and consequently measure, as making a difference.

This could be why at least half the ProTeam organizations seems to have angel investors backing them. It also could be why many Pro Continental outfits have their jerseys littered NASCAR-style with small sponsors, many of whom get a benefit out of sponsorship, but the benefit is tied up with seeing themselves as good citizens or promoting their passion. These sponsors like the ROI, but it probably isn’t what drew them to get involved, nor is it what’s keeping them involved.

And this is the big place where being the rational person in the psych ward cannot only be counter-productive but self-defeating. We’re providing data that proves investing in a cycling team is a smart business decision. It makes us feel good that we can prove the value of bike racing. But in so doing, we’re giving out a means for potential sponsors to not only turn us down, but dismiss us. We’re telling potential sponsors we’re good for them, like we’re telling them to eat vegetables when they want to be sold on the idea that it’s a juicy steak.

While I’m sure there’s data demonstrating to potential sponsors of big time sport in the U.S. the value of sponsoring commercials during baseball games and the benefits of having a company name next to the scoreboard or any number of proposals involving businesses putting money into sports, I doubt the data is what sells the companies on putting their dollars behind a sport. I bet they’re sold on the passion, and yes, they have the data.

They way we’ve dealt with this reminds me of how cyclists advocate for cycling in the U.S. It makes sense on an environmental level, on a health level, on an economic level, and most cyclists are happy about that. Then a non-cyclist points out that a person riding a bike might get sweaty and the discussion is over.

We’ve tried rational. Rational doesn’t seem to be working. Maybe it’s time to roll out crazy, an attractive crazy, and start focusing on that.

Image: John Pierce, Photosport International