A Wrong Turn for Pro Cycling?
When Coast, a midsize clothing chain in Germany, began financing a pro cycling team last year, it seemed like smart marketing. Wrong. Turns out, Coast couldn't afford the millions it cost. The company isn't commenting, but it was suspended repeatedly from the European circuit by cycling's governing body for failing to pay riders, including 1997 Tour de France winner Jan Ullrich. In May, after months of bad publicity, the team disbanded.
For Coast's riders, the story had a happy ending. Bikemaker Bianchi took over the team in time for its riders to qualify for the Tour de France, which celebrates its 100th anniversary on July 5. Still, as Lance Armstrong of the U.S. Postal Service team aims for a fifth straight victory, the Coast saga has raised unsettling questions about the financial health of pro cycling in Europe.
Cycling has long been a sport that depended on the sometimes unreliable largesse of cement makers, purveyors of baked-goods, and other sponsors that weren't exactly household names. Now, pro cycling is suffering from cuts in corporate marketing budgets even as it recovers from the doping scandal that marred the 1998 tour, when eight riders on Italian team Festina admitted to taking performance-enhancing drugs. In viewership, only the Olympics and World Cup soccer top the estimated 1 billion worldwide who watch the Tour de France. But unlike soccer or Formula One, the Tour lasts only three weeks. And the demographics are hardly enticing: The Tour's biggest fans are over 40 and concentrated in Belgium, France, and Spain.
The International Cycling Union has been concerned enough about finances to require proof from several pro teams that they were paying riders on time. Nevertheless, Alain Rumpf, director of pro cycling at the ICU, insists "the return on investment is huge" for most sponsors. That's certainly true if your rider wins. It costs $10 million a year to equip a cycling team. Lance Armstrong and crew generated $19 million in free advertising in the U.S. last year for the Post Office, says ad agency Foote, Cone & Belding.
Returns from lesser teams are not so dramatic. While there has been no wholesale defection from the sport, organizers clearly worry that there could be. On June 6, the ICU agreed to reduce the number of teams competing in headline events over the next few years. That will provide more predictability for sponsors by ensuring them participation in the Tour. "It would be better to have fewer teams but have them be more solid," says Daniel Baal, director for cycling at Amaury Sports Organization in Paris, which organizes the Tour.
Fears of another doping scandal still linger. France's Crédit Lyonnais, which pays $5.3 million to be an official partner of the Tour and gets to display its logo on the yellow jersey of the lead rider, recently inserted a clause into its contract giving the bank the right to drop its sponsorship if doping mars the event's image. That's the sort of publicity sponsors can do without.
By Jack Ewing in Frankfurt and Christina Passariello in Paris