SBJ/Jan. 17-23, 2011/People and Pop Culture

Cycling team chief sees lesson in NYC Marathon

As manager of Garmin-Cervelo, the United States’ premier cycling team, and a former professional rider himself, Jonathan Vaughters has seen the sport of pro cycling endure a decade of doping controversies and political infighting. The turbulence has created a challenging environment for marketing around the sport, but Vaughters believes in cycling’s future, especially in the U.S., where the Amgen Tour of California and the new Quiznos Pro Challenge in Colorado have given the country two major international events. He recently spoke with staff writer Fred Dreier.

Cycling has seen its reputation tarnished by doping, but what are the other issues affecting the business end of the sport?
Vaughters: To me, the biggest hurdle in cycling is bringing clarity and transparency to exactly which teams have the right to do which events. There are only 20 spots in the Tour de France, and [the race organizer] decides who gets in. Right now, anyone can start pitching Fortune 500 companies saying they will have a team in the Tour de France in 2012, and there is really nothing to say they can’t. That is how sponsors get alienated, because they think they are buying a ticket to the big races, and there is no guarantee they will be invited. If they get burned, they leave the sport and take their marketing dollars with them. There needs to be a determined number of members in the top tier of cycling that can say, “Yes, we have earned a space, we can guarantee you the [Tour de France].” Sponsors can realize who is legitimate, they know what they are buying and that their marketing objectives will be met.

Jonathan Vaughters
Vaughters
Would a salary cap benefit the sport?
Vaughters: I think so. For total budgets, I’ve heard the largest teams are around 17 to 18 million euro [$22 million to $23 million] and bottom of the barrel is about [$10.5 million]. If you put a salary cap in that says no less than [$13 million] and no more than [$16 million], then there is no confusion for a sponsor about the price of entry into the sport. Teams can spend that on wind tunnel testing or salaries or whatever they choose, and it forces teams to be more competitive to attract the riders.

How can professional cycling grow in the United States?
Vaughters:
The Tour of California and Quiznos Pro Challenge are good examples of American races that have brand identity and major sponsorship. Growth is not going to come from the European model of fans standing on the side of the road, it’s going to come from recreational cyclists. I think cycling can learn a lot from an event like the New York City Marathon, where you have an elite event and then thousands of participants. That is attractive to a sponsor. A cycling event in America should try to have a major recreational tie-in, like a Gran Fondo [Big Ride] event, where afterward the participants watch the pro race.

From a business perspective, how can cycling fight doping?
Vaughters:
The amount of money flowing into anti-doping has to be much larger than it is right now. It costs [Garmin-Cervelo] half a million bucks to run our own anti-doping program, on top of the $165,000 for the UCI Biological Passport [anti-doping program], so you’re looking at between $800,000 to $1 million a year per team. There are 20 major teams, so if there was $20 million invested, you’d start making headway really fast. But when teams are in an environment where they are in year-to-year survival and fighting each other for signature athletes and a spot in the big events, then collaborative efforts like that just don’t occur. If you put the onus on the team to fight to get into the event, you will have fewer resources to fight doping with.

With so many problems, how do you attract companies to sponsor cycling?
Vaughters:
The good part is that if you put together a team that does well on the world calendar, the marketing metrics you can provide are second to none. When we talk to [title sponsor] Garmin, we almost have to tone down our numbers because they seem unrealistic. When you talk about logo exposure, it’s like a 20-to-1 return on investment. The sport should be able to sell itself so easily, but it’s those stupid little hurdles — the doping issues and clarity — that hurt. If we could get those out of the way it would be phenomenal. There isn’t another advertising avenue in sports that can come close to matching cycling.

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