Have you ever wondered how a cycling team generates revenue? Or where the money for rider salaries comes from? Or where all those shiny new team bikes come from? The answer to all those questions is sponsorship. Unlike most other professional sports where ticket sales to events generate portions of the revenue, cycling relies solely on sponsorship. In the pro ranks, team budgets are in the millions of dollars but even small continental amateur teams can have budgets exceeding 100k. And that money comes directly from sponsorship. But why would a company sponsor a cycling and what do they get in return? In this post we’re going to look at the value of sponsorship and how sponsorship affects the sport of cycling.
What do Sponsors provide to teams?
Sponsorship can range from anything from one time cash payouts, free product, discounts on products and services or a combination of any of these. What companies offer depends on what kind of company they are, what they sell, and what they want to get from the team. Nutrition sponsors usually provide teams with a few boxes of their product to use during the season and the option to purchase more at a discount. Bike manufacturers will sometimes provide the team with bikes, depending on the level of the team but generally for small teams, bikes are provided at a special team rate, as long as everyone on the team purchases a bike. At the elite level it’s usually a requirement that everyone on the team rides the same bike. Companies that want the most exposure will usually provide monetary support for the team in exchange for title sponsorship and kit design.
What do Sponsors get in return?
There are a number of reasons why a sponsor would choose to provide support to a team. The three most common reasons are product testing, brand normalization, and direct advertisement of products. When someone tells you that Cervelo is sponsoring a cycling team, you wouldn’t be surprised. A bike manufacturer has a vested interest in having their bikes seen out on the course. They might also want feedback from riders about their bikes for R&D purposes. This is quite common for companies that make products used by cyclists.
But why would a company not directly related to cycling sponsor a team and what are they getting from it? There is a team based out of Montreal whose title sponsor is DAC Jet, a company that makes private jets for rich folks. Why would they give money to a local cycling team? They probably aren’t going to encourage spectators to go out and buy a new jet. This is where brand normalization comes into play. Sponsoring a team provides almost no direct traffic to sales channels so brands rely on teams to normalize their branding into the collective zeitgeist of society. Think about Learjet. That brand is so pervasive that we often simply refer to private planes as Learjets regardless of who makes them. It’s the reason we call tissue Kleenex and bleach Javax. Brand normalization is one of the most powerful ways to get consumers to purchase products without ever knowing anything about the effectiveness or quality of the product. Because of Kleenex being a part of regular language, that will be the first brand we notice when we head down the paper aisle at the grocery store.
If a coffee shop in your city sponsors a local cycling team and you see their logo, their name, and their colours on the team’s kit, you’re far more likely to notice that particular coffee shop and go to it rather than another shop when you’re out looking for a place to get coffee. You might not even know why the brand seems familiar but because it has familiarity, you intrinsically are drawn to it. We gravitate toward what we know and what we recognize. That is the power of brand normalization.
Even companies that are already well known benefit from brand normalization. Well known companies can manipulate how they are perceived by providing sponsorship to sporting teams. Molson, for example, as result of their aggressive sponsorship of hockey in the 70s, 80s and 90s, is largely responsible for making beer part of the culture of hockey. It’s hard to think about a Canadian watching hockey without a cold beer in hand. For better or for worse, that campaign was so pervasive it has become a stereotype of Canadian culture.
How does a cycling team contribute to this normalization process?
Title sponsorship is one way of doing it. A company can pay a chunk of money to the team in return for naming rights to the team and use of their colours and branding in the design of the kit (cf Team Sky). Another way is through promotion of products by members of the team through their social media channels. The most effective ways are through posts that are not obviously advertisements like the one posted by Alex Cataford featuring his Clif bar. Posts like these are ways in which riders of teams can provide useful content for sponsors disguised as a typical social media post.
Things that affect sponsorship
Lance Armstrong. Or rather doping. Because sponsors rely on teams to help elevate their reputation and create a positive image for the brand, anything that makes cycling look bad makes sponsors look bad. An allegation of doping is enough to cause a sponsor to back away from the sport. So don’t cheat.
Another factor is the economy. Anything that doesn’t have a direct impact on sales is often the first thing to have its budget slashed when times are tough. As a result when the economy is performing poorly, sponsors are less likely to contribute money and products to teams.
How do we help teams?
Anyone can support a bike team simply by showing up to events and watching the races and talking about races on your social media platforms. Cycling is an exciting spectator sport and watching races live is free. You can go to any part of the course and watch extremely talented people from only a few feet away. You can get court-side seats to every cycling event and it won’t cost you a thing. Ultimately sponsors want to get their names out to a large audience. The more people there are at races following the sport and talking about races online the more incentive there will be for sponsors to support teams and support the sport.