The Problem with Sport Sponsorship
I was saddened to read about the near-death of the Cannondale Pro Cycling Team last week. A potential title sponsor pulled out at the last minute, leaving the team $7 million short of their $16 million overall budget. So the CEO of the team, Jonathan Vaughters, had to let riders and staff know that he could not guarantee their jobs for 2018. Coming so late in the season, with most spots on other teams already locked up, this was a devastating blow. Between riders and staff, there are about 100 jobs at stake. While the team still may survive, Cannondale would not be the first pro cycling outfit to pull the plug in recent years. The number of healthy teams seems to shrink every year. Let’s talk about why team sponsorship is in tough shape right now:
- The traditional sponsorship model — “we’ll put your logo on a bunch of stuff” — is outdated and does not drive ROI. These days, sports teams and events need to think of sponsors more like partners. In fact, I just gave a talk on this very subject to a bunch of running events. Teams must now serve as a marketing agency to help a brand achieve specific business objectives. Whether it’s driving store traffic, online sales, or content creation. If the team is not creating a sophisticated, multi-channel activation for their brand partners, then the brands may take a pass.
- Impressions are a vanity metric. Just getting impressions for a brand doesn’t achieve much. Brands demand much more than that. And yet, impressions are the metric upon which many sponsorships are sold. In fact, Jonathan Vaughters wrote an editorial recently about how “cycling is the best value in sports,” mostly based on these metrics. Actually, it’s only a good value if a brand gets more than $7 million return out of its $7 million investment. I work in sports marketing for many brands, and I never hear them ask for “more impressions.” That’s just not good enough anymore.
- Bad geography — the Cannondale team is the only team with an American identity. And yet, they mostly race in Europe. There are a couple other teams (Trek, BMC) registered here, but they don’t prioritize US riders or culture. Cannondale is truly “America’s bike racing team.” Cycling is not widely covered here in the media. While there are passionate fans like me, a multi-million dollar investment demands more than a few diehards. So it’s challenging to match a US team with US brands.
- That television problem. Casual cycling fans in the US typically care about only one bicycle race, the Tour de France. That’s one of the few races that’s on TV here, and it only lasts for 21 days in July. Outside of that, brands and bike racing get almost zero mainstream media coverage in the US.
- The move to digital. Bike racing as a sport, like many businesses, has been slow to transition to the modern media era. While some races are now offered on a streaming basis (via NBC Gold Pass & Tour Tracker), mostly the sport has missed out on opportunities like Facebook Live and robust content creation. There are very few races or teams who create meaningful video stories like it’s 2017. We’re in the golden age of video, with more TV shows and video views than any time in history. Yet to take advantage of this requires real storytelling chops. The teams don’t have this skill in-house, and neither do the brands. And money isn’t allotted from a sponsorship to create this content. While the Cannondale team did close Verizon subsidiary Oath (the combo of AOL and Yahoo) as a media partner for 2018, it remains to be seen what kind of stories they’ll create.
There is opportunity for the sport of cycling to thrive again, but not without a contemporary approach to branding, media, and marketing activation.