The Squeamishness Of Sponsors

Sponsors of cycling teams are a fickle bunch. I saw this first-hand when I was president of the Ann Arbor Velo Club back in the mid-90s. If a sponsor was unhappy with something the club — or someone in the club — had done, I’d hear about it. Boy, would I hear about it. And with unhappy sponsors, the subtext of these types of conversations is always, “I’m going to pull the rug out from under you if you don’t do what I want.”

Dealing with such people is an exercise in diplomacy. (And for those of you who’ve never heard the definition of a diplomat before, it’s this: A diplomat is someone who, when he gets done telling you to go to Hell, you will be looking forward to the trip.)

But with all sponsorships, they eventually come to an end. For the storied Discovery Channel Team, their current title sponsor is electing not to renew their contract at the end of the year. According to a New York Times story, the decision came as part of a corporate restructuring which led to the resignation of Bill Campbell, the man who inked the sponsorship contract with the cycling team’s owners back in 2005.

From Steroid Nation comes this summary of the benefits of sponsoring a professional cycling team:

Why Sponsor?

Why does someone sponsor a cycling team? The simply answer is to boost name recognition. That is why most of the Pro-Tour teams in Europe are sponsored by national lotteries, financial firms or telecommunications companies.

How effective is sponsoring a cycling team? Phonak explains.

Before it entered the world of professional cycling, Phonak’s degree of familiarity in Germany was 0.6% (1999). Today, 52% of people in Switzerland and roughly 20% of the German population are familiar with Phonak. Sales during that period rose from 314 million Swiss francs to 867 million francs (2005/06 fiscal year). Those welcome figures were achieved thanks to the marketing presence, among other things. At various races in Europe over the years (Tour de France, Giro d’Italia, Tour de Suisse, Tour of Germany, etc.) Phonak came into direct contact with thousands of people, for instance at the so-called Hoermobil, where spectators at those events could learn more about “Phonak – Better hearing” right there on the spot. In addition, during the 2006 ProTour alone, Phonak Cycling’s media team put out 270 articles about the team in 176 days; not including the newsletter, which began appearing this year, each Monday. During the summer months of 2006, more than 100,000 people from different IP addresses visited the web pages. Those are numbers that speak for themselves.

So, what Armstrong and Stapleton need is an American Company that needs to boost its name recognition in Europe. A company with an interest in cycling is a plus.

The team now known as Discovery has been through sponsorship changes several times before. Starting out as an amateur team in the late 1980s, the team moved into the professional ranks as Subaru-Montgomery, with co-sponsors Subaru and Montgomery Securities.

When Montgomery Securities needed to scale back their financial commitment at the end of the 1995 season, the US Postal Service stepped in as title sponsor from 1996 until the end of 2004. After the Postal Service decided to discontinue as the title sponsor, Discovery Communications stepped in. Given the time between now and when Discovery’s sponsorship ends, there’s every reason to believe the team will have a new title sponsor in place before the beginning of the 2008 season.

Steroid Nation makes a good case for Amgen, the manufacturer of EPO, to become the next sponsor of the current Discovery team. I have my doubts about whether that would happen, but truth is often stranger than fiction. It would certainly be a gutsy move by the biotech company, who would certainly benefit by the exposure they would receive in the European market. What might do even more for Amgen, PR and marketing-wise, would be to help develop more sophisticated tests to detect the use of EPO by athletes bent on cheating, as Spinopsys Phil suggests in a comment there. I’m not sure how practical his particular suggestion is, but the general idea is good.

There is a disturbing side to the Times article, and it has to do with the squeamishness of sponsors in general. Those who spend money to support teams, whether amateur or professional, want publicity — positive publicity. Whoever said “there’s no such thing as bad publicity” never met the types of people who sponsor professional cycling teams.

The sponsors hate bad publicity, for the most part, with a passion. As the New York Times article says:

Bill Stapleton, a part owner of the cycling team along with Armstrong, Bruyneel and others, said Friday in a telephone interview that the owners hoped to attract another United States company as the team’s lead sponsor. But, he said, the announcement last summer that Floyd Landis, the winner of the Tour de France, had failed a drug test during the race “took the wind out of a lot of people’s sails” around the sport.

Several of the team’s lower-level sponsors “expressed their displeasure and doubts about continuing” in the sport, he said.

“Nobody asked to be let out of their contract,” Stapleton said. “What we said to all of our sponsors was that Floyd wasn’t on our team, and we have never had a positive test. We understand it’s a suspect environment right now, but we answered all their questions.”

He said any new sponsor would have the right, as did Discovery, to withdraw its support if any of the team’s riders failed a drug test.

It’s a sad reality of professional cycling that for all the good sponsorship of a team can do for a corporation, the decision-makers in those corporations are often willing to let scandals, or even unsubstantiated rumors, keep them from making a commitment — or use those things as an excuse to end a commitment.

Regardless of what you think about Floyd Landis and whether or not he doped at the 2006 Tour de France, he should not be the scapegoat that sponsors (or potential sponsors) use to justify their decisions not to fund cycling. Landis has had enough heaped on him as it is. He’s not the one responsible for the sponors’ decisions. The sponsors are.