THAT ENTREPRENEURIAL SPIRIT

Let’s say you’re Alberto Contador. You’re 27 years old and you’ve already won the last four Grand Tours you’ve started. Your 2010 season is humming right along with GC wins at the Volta ao Algarve, Paris-Nice, and the Vuelta a Castilla y León. If everything goes according to plan, you might have another 3 or 4 years as the hands-down Best Rider In The World and another 3 or 4 after that when you’re still a threat to win every race you enter. Currently, you’ve got less than a year left with Astana. Then what?

Alberto’s best bet could be to build a new team around himself. Then he’s got all the financial upside, he can run the program the way he wants to, and he can control the risks to his liking. Actually, that’s probably a good approach for any major star in any team sport, except that in most sports it takes several years, a new stadium, and hundreds of millions of dollars to get in the game. And even then your expansion team will probably stink for at least a few years.

But among pro cycling’s many quirks are its low barriers to entry into the highest level of the sport. If you’ve got a PowerPoint presentation and connections, you can have a world-class team in the Tour de France in about a year. All you need is a title sponsor. Not that signing a multi-million dollar deal and starting a cycling team is a piece of cake, but it’s a lot easier than, say, starting an NBA franchise. Just look at the fast starts of new programs like Cervélo TestTeam, Team Sky, and – to a lesser extent – BMC Racing Team. When RadioShack separated from Astana, the addition of another team to the population was one of the least controversial aspects of the split.

So it would be pretty easy for Alberto to have his own team on the road next year and there have been rumors to that effect involving Formula 1 driver Fernando Alonso bringing Banco Santander as the sponsor. Also, it’s worth noting that Specialized’s personal contract with Contador was negotiated separately before the team deal with Astana was finalized.

But what are the benefits to Alberto of going it alone, compared to just signing the huge long-term contract that Astana reportedly offered? If you presume that Alberto’s image is the key selling point for most of the potential sponsors during the rest of this career – i.e. consumer brands, not Central Asian governments – there’s an economic efficiency to having his own team. Want to sponsor Alberto? Sponsor Team Alberto. Plus, eliminating the “middle man” role of the traditional team management gives the sponsor an assurance that the team’s main attraction won’t bolt unexpectedly a là Brad Wiggins. From an operational standpoint, there’s an appealing level of clarity in a team focused on a single rider. Everyone knows their job and is handpicked to do it.

The major financial upside of the star-centric team is the ability to negotiate personal endorsement deals concurrently with team sponsorships. The obvious case study is Lance Armstrong becoming the advertising face of The Shack while launching his own Team RadioShack. Meanwhile, other riders have to make do with whatever sponsors their team managers already have on board.

Of course, there aren’t very many riders with the star power to pull something like this together, let alone with willingness to accountable for actually running a team. Beyond Contador, the Schleck brothers reportedly have been mulling a similar venture and I could see it working for someone like Fabian Cancellara.

This summer’s Tour de France is the last in which the old crop of ProTour teams are guaranteed a spot. Starting next year, a new system will be in place. The more open it is, the more rider-owned teams I think we’ll see.

In 2008, the Court of Arbitration for Sport upheld Webster’s right to join Wigan Athletic in the English Premier League before the final season of his contract with Scotland’s Heart of Midlothian. The resulting Article 17 of FIFA’s transfer regulations requires a financial penalty in all such cases and a 4-6 month suspension may be applied. The regulations also ban the new team from signing any other new players for a year.

Labor laws rightly prevent the FIFA system from giving a lot of power to the jilted team. Instead, the system functions by providing disincentives against the rogue athlete and his new team. As a result of the hefty financial and sporting penalties, “Webster rule” cases have been pretty rare. By comparison, the UCI’s disincentives are underwhelming. According to Cyclingnews:

International Cycling Union (UCI) regulations state that a rider cannot sign with a new team while they are under a valid contract unless they have the express permission of the UCI. The regulations also state that a team signing a rider who is already under contract can face a fine of up to 30,000 Swiss Francs, with the rider himself subject to a fine of between 300 and 2000 Swiss Francs.

Granted, the rider and his new team still have to negotiate a contract buyout. But even with that expense, the UCI system – or lack thereof – does almost nothing to protect teams like Skil-Shimano and Garmin. Apparently, Pat McQuaid is “looking at” this but he doesn’t sound so enthusiastic about it.

Check out the next issue of ROAD Magazine for my thoughts on what an effective rider transfer system would look like. On newsstands March 9.

Among boxing’s unique qualities is that no sport is more unrepentant in its pursuit of making piles of cash. But just when you thought it was all about the money, the pound-for-pound best fighter in the world passes up $40 million to defend his principles. In this case, the principle in question is his right not to be tested for doping.

Yes, cycling fans, you heard that correctly.

The fight between Manny Pacquiao, shown here punching Miguel Cotto in the face, and Floyd Mayweather Jr. probably would have been the biggest-money fight in history, with revenue approaching the total of all team budgets in the 2009 Tour de France (160mm Euro, according to ASO). But now the fight is off because Floyd wanted WADA-style testing but Manny refused to give any blood samples within 24 days of the fight.

In boxing circles, public opinion has been mostly on Manny’s side. ESPN’s Dan Rafael criticized Floyd’s camp for being unwilling to negotiate. Old-school boxing writer Jerry Izenberg recalls that Floyd’s promoter previously defended another fighter who was busted for EPO in the BALCO scandal. Fans have pointed out that the first syllable of Mayweather rhymes with “gay”.

Pacquiao has no legal or contractual obligation to submit to anything more than the Nevada State Athletic Commission’s minimal controls, and no one really expects him to. Meanwhile, the blame is handed to Mayweather for sticking to a position outside of boxing’s cultural norms. Basically, people are more concerned about whether the fight happens than whether the fighters are doping.

There’s also a civil liberties argument in Pacquiao’s favor that, in cycling, was no match for “if you haven’t done anything wrong, then you have nothing to hide.” For us, the cultural pressure from fans, sponsors, journalists, broadcasters, race promoters, team managers, and the riders themselves justifies testing that in other situations might be considered an invasion of privacy. In the context of cycling, it’s what everyone expects – which is fine. But the Pacquiao-Mayweather situation brings up an interesting hypothetical:

Would you rather see a Tour de France with only minimal drug testing than no Tour at all?

And by that I mean pro cycling in general. I’m curious to hear what you think. I’ll announce the responses in a few days.

[SURVEYS 5]

If you’re wondering, here’s my understanding of the differences between doping tests for boxers and pro cyclists.

Pro boxers are excluded from the Olympics, so WADA rules don’t apply to them. As for the various “sanctioning” bodies, they’re less concerned with catching dopers than with accepting bribes in exchange for higher rankings (a higher ranking increases a fighter’s chance of getting a lucrative title fight). Unlike cycling team owners, boxing promoters are under no pressure to test their fighters. In the US, doping is not a criminal act and the government has no legal authority to test athletes at random. Most big fights are held in Las Vegas, where they’re subject only to the Nevada State Athletic Commission’s rules, which require some urine tests but only one annual blood test.

By my count, up to four entities can take, blood, urine, and possibly DNA samples from riders at any time, anywhere in the world. Per WADA, all riders are under the jurisdiction of the anti-doping agency of the country where their license was issued. Depending on local laws, they might also be subject to testing by the anti-doping agency of a country where they’re racing, like how the AFLD tests all riders in the Tour de France. The UCI can test riders as part of the Biological Passport. Finally, several teams have internal testing programs, although some of those are being dropped.

This decision will not prevent us from progressing more quickly. It doesn’t change much. Concerning our participation in the Grand Tours, we are covered by the contract signed by the 18 ProTour teams in London in 2008 that expires in 2010… We have a loyal sponsor who supports us. We’re held to the same objectives and this decision will not change them.

In other words:

We’ll still race the races that are important to us and we’ll race in fewer races that aren’t so important.

Other than the embarrassment of getting kicked out of the ProTour club, there’s little downside for these teams. In fact, Cofidis stated last year that they weren’t planning on re-upping their ProTour license, although they eventually changed their minds. Bbox, meanwhile, has never shown much interest in racing outside of France – they’re currently ranked 21^st on Cycling Quotient but 4^th in the Coupe de France. And like Jean-René said, they’re still on board for the Grand Tours and, I imagine, for other races promoted by RCS (Giro), ASO (Tour), and Unipublic (Vuelta). It seems that the biggest risk is that they might not race the Tour Down Under.

Meanwhile, the UCI has given the top 3 non-ProTour teams the option to race any ProTour event, which leaves us with:

• A ProTour license doesn’t determine a team’s status with the organizers of the Grand Tours.
• Teams don’t necessarily care about racing the ProTour’s full calendar, which is pretty uninspiring to begin with.
• If a team gets good results, they can pick and choose the ProTour events that they actually want to race.

So… um… what’s the point of the ProTour?

Addendum

The guy in the picture, Pierrick Fédrigo wants out, saying “I also have to think about me and my ambitions at the highest level.” Fair enough. My argument above refers to the set of incentives faced by team managers, not riders. For the latter, their future income depends on results at the kind of high-profile races that the managers of Bbox and Cofidis may now choose to skip. Fédrigo in particular is a former French national champion and Tour stage winner… and he’s in a contract year. So if Bbox opts for a lower-profile schedule, he’ll have fewer opportunities to increase the value of his next deal. I don’t mean to say that Pierrick’s motivation is purely financial but I’m sure it’s crossed his mind.

Kim Skildum-Reid of Power Sponsorship: “Exposure is a low-value mechanism that says nothing about whether the sponsor has changed their target markets’ perceptions or behaviours.”

I don’t mean to single out JV or Slipstream; they’re employing a widely used metric as calculated by a generally respected sponsorship agency, IEG. I’m certain that Slipstream reports more detailed and more varied information to their sponsors, and that companies like Garmin do plenty of work on their own to measure the effectiveness of their sponsorships. But the Media Value Myth comes up frequently in cycling, despite its inherent flaws. Here’s my take.

Traditional sponsorship measurement

If you’re running a cycling team (or anything else that relies on sponsorship), the traditional centerpiece of the post-season report that you send to your sponsor is an approximation of how much “exposure” the sponsor received. The most basic unit of measurement is the impression, which theoretically reflects each time that anyone reads, sees, or hears the sponsor’s name in the media, on a jersey logo, etc. I wrote a few months ago about why the impression isn’t a good measure of anything.

What evolved from calculating impressions was calculating media value. If you know how much it costs to advertise in the outlets where the impressions come from, you can estimate how much the coverage is worth in dollar terms. For instance, 15 seconds of direct coverage on a TV show where a 30 second spot costs $100,000 is worth $50,000. Do that for every bit of media coverage, add them all up, and you get your media value. The number may sound impressive but there’s not much substance.

What it actually measures

Let’s say you work for a big brand or an ad agency and you’re comparing what you spend to advertise in two different magazines. Would you say, “A full page in Magazine A costs $1,000 and a full page in Magazine B costs $10,000. Therefore, Magazine A offers 10 times the value per dollar.” Of course you wouldn’t, because it doesn’t take into account how many people read the magazines or whether they’re the kind of people you want to advertise to. Nor does it measure how effective your ad was at changing their perception of your company or their purchasing habits.

But the above comparison between Magazine A and Magazine B is all that you get from comparing the cost of the sponsorship to media exposure value. It’s a big gaudy number, but value in the general advertising marketplace doesn’t tell the sponsor anything about their specific objectives. Take the former Team CSC for example. The value of airtime on Versus or France2 was not particularly relevant to the sponsor, because the only places where CSC would actually pay to advertise (according to my friend there) are The Wall Street Journal and The Economist.

Some other ideas

Kim Skildum-Reid has posted a 10-minute video outlining some current thinking in how sponsors figure out if they’re spending their money wisely. Her key points are:

• Sponsors shouldn’t rely on others to do the measuring.
• Don’t measure exposure for its own sake; measure whether exposure changed consumer perceptions or behaviors.
• There is no single dollar-for-dollar number that will tell you whether the sponsorship was worth the money.

You can check out Kim’s blog here at the Power Sponsorship site.

Photo: http://www.flickr.com/photos/62681247@N00/ / CC BY-SA 2.0

Robert Gourley of Mojave Interactive recently posted this analysis of social media performance during the Tour de France for Trek, Specialized, Cannondale, and Cervélo. He also gave this insightful interview on my buddy Rick Vosper’s blog. I have a different interpretation of the numbers, which I’ll get to in a minute. In short, Mojave found that:

… both Trek and Specialized use Social Media well. Specialized edges over Trek in some key areas, like integration and user engagement. Cervélo has great organic buzz, despite having a smaller corporate Social Media strategy.

Although Technorati paints the opposite picture over the last 30 days, I don’t dispute Mojave’s numbers. Here’s what Gourley told Vosper and I believe this is true.

We’re partnered with a bunch of different tracking tools analytics companies. But it turns out none of those tools really give you a complete picture. We’re a small group, and we have our own internal analysts, and we use them to develop a much more complete picture of what’s going on, and that’s how we put the Tour comparison together.

The problem

What the study fails to address is that Cervélo is the title sponsor of Cervélo TestTeam, whereas Trek, Specialized, and Cannondale are the bike sponsors of the Astana, Saxo Bank, and Liquigas teams. So when a blogger talks about Thor Hushovd or Carlos Sastre, Cervélo gets a mention by default. But when a blogger talks about Lance Armstrong or Alberto Contador, Astana is much more likely to be mentioned than Trek is. Same thing for Fabian Cancellara or Andy Schleck, Saxo Bank, and Specialized. Same thing for Franco Pellizotti or Vincenzo Nibali, Liquigas, and Cannondale.

To be fair, Gourley touches on this in the interview with Rick Vosper. But I think it’s a huge factor that significantly clouds Mojave’s analysis. It becomes more about the merits of Cervélo’s sponsorship strategy than it is about social media marketing. Despite the apparent social media benefits of their approach, Cervélo has stated that they can achieve their goals with the team (e.g. control of the program and rider involvement in product development) without being the title sponsor and they’re looking for a non-cycling brand to come on board

.

My point here is not to rip Mojave. They’ve produced an excellent analysis and I don’t doubt its accuracy. Instead, I mean to say that a brand’s social media performance has to be viewed in the context of its overall strategy.

Looking at the four brands in the study, I’d say that Specialized is by far the most active in social media. They’ve put significant online ad campaigns behind I Am Specialized and they’ve recently hired a full-time social media guy. Trek hasn’t been as active, although they’ve made some effort. So has Cannondale according to Gourley. Cervélo, meanwhile, hasn’t done as much socially. They haven’t used Twitter for conversation and their excellent video series at Bartape.net lacks social features.

Why aren’t these relative efforts even remotely reflected in Mojave’s popularity data? Because the numbers reflect more general brand positioning. Let’s take Specialized as a baseline and look factors in the other brands’ performance.

• Cervélo got a boost because they’re a title sponsor and therefore get more mentions (see above).
• Trek is in the same non-title sponsor boat as Specialized but sponsors the most talked-about riders, Lance Armstrong and Alberto Contador.
• Cannondale took a hit because their sponsored team, Liquigas, had a lower profile than Specialized’s Saxo Bank.

Conclusion

Social media is effective for brands. Joining the conversation in the right way with the right content can be a win for marketing, customer service, and sales. Clearly, there’s a huge opportunity, especially to reach a web-savvy consumer base like cyclists.

But there are too many variables – such as everything else that the company does – to compare one brand’s social media marketing to another’s over a short period. Metrics like those used by Mojave are extremely valuable but I think they’re much more useful when tracking single brand’s social media footprint over time. Combine that with internal conversion tracking to get the clearest picture of ROI from social media marketing.

(Photo taken by me at the Tour of California for Zipp. I wish I had time to Photoshop out the blue rope. Oh well.)

In a recent column for ROAD, I argued that teams and events should more directly serve and monetize the sport’s existing core fan base. Here’s why:

The foundation of my argument here is that I see cycling’s pursuit of the “mainstream” as single minded and quixotic. The world is changing; the mainstream is shrinking. We’re not far from a time when even network television will reach only a niche audience. Granted some niches will be bigger than others, but the challenge for every form of entertainment will be to sustainably make money off a smaller audience.

One of my suggestions was that AEG charge for the Tour of California’s Tour Tracker website that features multiple live video streams, real-time GPS tracking per rider, photos, chat, etc. And guess what? Universal Sports has done exactly that with its Race Tracker for the Giro coverage that it scooped up from RCS just before the race started.

At $3.95 for a stage and $34.95 for the whole race, the Giro Race Tracker is pricier than the $25 I suggested in my column for the Tour de France. But I gave it a shot today, watching side-by-side with Universal Sports’ free live online video. As you can see from these screenshots, video quality on the free live video (first screenshot) is better than on the Race Tracker (second screenshot). But both were adequately watchable.

I should add that the Race Tracker offers “standard” and “premium” video, but I didn’t notice much difference in quality. There’s also a bunch of low-quality pirated streams out there. And RAI offers unrestricted coverage with multiple camera angles that I hear is good, although I can’t imagine it will be available much longer in countries where folks like Universal Sports have paid good money for online broadcast rights.

(Note: I watched the RAI coverage the day after this post. It has some Tracker-like features but they don’t outweigh the fact that I don’t speak Italian. Video quality was about the same as Universal Sports, which wasn’t loading. RAI’s archive of interviews and highlight clips would be a great feature for the Tracker.)

Race Tracker vs. Tour Tracker

Compared to the ATOC Tour Tracker, the Universal Sports Race Tracker isn’t a fully baked product. You can’t see the GC or information about any stages other than the one you’re currently watching. Nor does the Race Tracker allow you to follow individual riders by GPS or see their bios. It also lacks photo coverage.

Common features are live video (obviously), text play-by-play (Universal gets Cyclingnews’ live coverage with AEG’s is written in-house), interactive course profile, and public chat. Both are really slick Flash sites produced by Adobe.

The fundamental difference between the two is that the ATOC tracker is produced by AEG, who owns the event, while Universal Sports is limited by their role as a broadcast rightsholder. AEG can duct tape GPS units on everyone’s bike, while it seems like Universal Sports just has one in the Garmin-Slipstream car (Garmin sponsors the Race Tracker).

Of course, video quality and streaming consistency are the only things that really matter. Everything else you can get from Cyclingnews. I didn’t use the ATOC Tour Tracker at all (I was pretty busy that week) but my Twitter query gives me the impression that it was good, although frequently unavailable due to the crappy weather. Based on this morning’s stage, I’d give the Universal Sports Race Tracker pretty good marks as well.

But is it worth the money?

You’ve got four basic options:

• Various pirated streams (free)
• RAI with multiple camera angles (free but I don’t speak Italian)
• Universal Sports standard (free)
• Universal Sports Race Tracker ($3.95/day or $34.95 for the whole race)

For now, I’ll go with Universal Sports free coverage. But if that weren’t available, the Race Tracker would be my choice.

On May third, [Sports.kz] quoted Kazakhstan’s cycling federation vice president Nikolai Proskurin as saying that even if the team takes part in the Giro as planned, it is likely to be the final Grand Tour in the history of the Astana project. The only way to save the current incarnation of the squad appears to be for one or more Kazakh backers to move in and commit to supporting it. Alternatively Johan Bruyneel, who owns the ProTour licence, will have to find funds to enable the team to continue.

“A week ago, even the reserve account of the Astana team, which the UCI law states must contain an untouched sum of two million dollars, was emptied,” Proskurin stated. “These funds are a guarantee of participation for any professional team in the ProTour racing series. In order to prevent the seizure of the license of the Astana team, we have to replace this amount within a month [of it being emptied]. That means that we still have about three weeks.”

It sounds dire, and relative to Proskurin’s role it probably is. But Johan Bruyneel, Lance Armstrong, and everyone else involved with the program might even come out ahead in the event that the team’s Kazakh connection falls apart.

The current status

Just so we’re clear, here’s my understanding of how the team is structured. Bruyneel owns (or at least controls) Olympus sarl, a Luxembourg company that owns the team’s infrastructure and ProTour license, and holds contracts with the riders, the non-Kazakh sponsors, and the Kazakhstan cycling federation for a title sponsorship under the name Astana, which is the capitol of Kazakhstan. (See correction below.) The federation, meanwhile, pays Olympus sarl with money it receives from a consortium of Kazakh companies. Those companies are unwilling or unable to pay the federation, which has in turn put Olympus sarl in financial straits.

Luckily, if the Kazakhs pull out entirely, Olympus sarl will have all the pieces in place for a new title sponsor to “save” Lance Armstrong’s team just in time for the Tour de France. Even in this economy, that’s a very saleable sponsorship.

It might even be better in the long run than if Astana had stayed on. Why? Sponsorship activation and metrics.

The marketing stuff

There are two parts to the value of a sponsorship: the benefits that the sponsored property creates for the sponsor, and the benefits that the sponsor creates by promoting their involvement with the property. In the case of a cycling team, the former includes the exposure from media coverage, race broadcasts, etc. that contributes to the sponsor’s brand positioning and awareness. The latter is about how the company incorporates the team into advertising, corporate events, and other marketing efforts. In theory, a company sponsors something and promotes that sponsorship because the promotion is better off with the sponsored property than without it. In other words, a company like Trek feels that an ad featuring an Astana rider is more effective than one featuring someone else. This is usually called activation, and the Kazakhstan cycling federation does none of it.

Even if a sponsor like Astana isn’t concerned with activation, not being activated is still bad for the team. It has a brand just like any other company, and sponsorship activation can make that brand more valuable. Think about how Nike’s campaigns made Michael Jordan more valuable to Gatorade and his other sponsors.

Astana presumably isn’t closely tracking marketing metrics, which could also hamper the team’s ability to set a price for its sponsorships. Bruyneel can’t walk into meetings armed with data about how Astana’s sales and stock price increased during the sponsorship. Fortunately, he brings a probably Tour de France win and a certain Lance Armstrong to the table. But the lack of a case study for the outgoing title sponsor may still take a little money off the table.

Meanwhile, Lance is planning to become a team owner himself for 2010, which could mean a split with Bruyneel. This might be Johan’s only shot with Lance on board to find a new title sponsor. So, the sooner Olympus sarl replaces Astana, the sooner the team will see the benefits of sponsorship activation and tracking in the short and long terms.

photos by EWFTT,  Missing Saddle, and Paul Coster – thanks!

Correction: Subsequent news reports indicate that the Kazakh federation owns the team’s ProTour license, although transferring it to Bruyneel is possible. Also, it seems that rider and staff salaries are paid directly by the Kazakhstan cycling federation.

Wanted to take a minute to say thanks to Josh for his support in helping get this trip organized. We all learned a ton from this experience, and was cool for us to see a road version, and for you to see a raw version. Thanks!!!!!!

Mike correctly implies that there’s a disconnect between the pro cyclist’s experience on the bike and what everyone else gets.  At least in perception, the pro’s life is one of precise organization, flawless equipment, and self-sacrificial training, spiced with varying degrees of glitz and glamour. In the industry, our instinct is to bring that experience to the masses with $10,000 bikes, first-class bike tours, VIP passes, behind-the-scenes documentaries, and an explosion of Twittering as noted yesterday on Mashable. Because of those offerings, cycling fans have as good a sense as any of what it’s really like to be a professional bike racer.

And, at least in this country, professionals can actually relate pretty well to the enthusiast cyclist. For starters, they share a socioeconomic background, and only a select few riders are more than a tax bracket away from their well-heeled US fan base. The pros face the same dangers on the same roads as anyone else who rides a bike. They understand that we understand what it’s like to push oneself on the bike and be exhausted afterwards, even if we’re moving 15km/h slower.

So there’s a common ground between these two…

…that doesn’t exist between these two.

But is this good for cycling? Mythmaking is a significant driver of global professional sport, but that’s a difficult process when the athletes and fans can relate so well to each other. While the human scale of cycling is one of its most endearing qualities, it might also be a reason why television coverage, sponsorship dollars, salaries, prize money haven’t tracked upwards in cycling as they have in other sports in recent decades.

On the other hand, the lack of distance between the fans and athletes is a major factor in the sport’s internal motivation against doping. Because we consider pro cyclists to be fundamentally similar to us, we’ll always believe that it’s possible to hold them to our ethical standards. But among, say, baseball fans, there seems to be a sense that the players are too far removed from the everyday person to understand the fans’ desire for fair play. That is, if the fans care at all.

So, where are we heading?

More than any other pro sport, cycling has taken to Twitter like a fish to water. I believe it’s because the approachability of the tweet fits with the already approachable nature of the sport. As Twitter and other social tools permeate our everyday lives, myths will become human and a pre-humanized sport like cycling will adapt more quickly and naturally than its larger counterparts. In other words, we’ll benefit from the convergence of what Mike refers to as the road version and the raw version.

Flickr photos: pro cyclist by me, orange cyclist by lapstrake, Kobe by Rich115, high school baller by Jamie L. Williams