Cycling’s Sponsor-Branded Teams p/b Financial Instability

May 11 2015

I like a lot of what Vaughters says here, but the problem is that cycling can’t have a franchise system until it has actual franchises. I mean, Vaughters’ own squad—officially Slipstream Sports LLC—hasn’t ever been called by that name. Manchester United, in contrast, has remained Manchester United, whether Sharp, AIG, or Chevy is emblazoned across the chest.

This enduring team brand is a major reason why the franchise system is successful. That “I gotta see about a girl” scene in Good Will Hunting is effective because Will and Sean—a generation apart—each understand the experience of Red Sox fandom. It just wouldn’t work with US Postal Service p/b Berry Floor.

Even in Belgium, the one part of the world where teams might conceivably have inter-generational fan bases, the country’s biggest “franchise” has changed names three times since its inception—six, if you count co-sponsors. And even then, it was a spin-off of a pre-existing Italian organization (Mapei).

It’s a multi-dimensional contrast; in the US, the events and venues themselves are the here-today, gone-tomorrow advertising vector. Yes, there’s the World Series and the Super Bowl, but there are far more TaxSlayer Bowls[your name here] Gardens and branding rights for pretty much every ancillary anything in the broadcast. Makes Amstel Gold seem almost anti-capitalist, and in many ways, reflects the current power imbalance between cycling’s teams and race organizers.

Most commentary on the business of cycling versus the business of ball sports centers around the existence of a stadium. And don’t get me wrong, it can be an incredible revenue stream. But I don’t believe it’s the stadium itself that makes the difference—I think it’s the fans’ relationship to the brand of the local squad.

After all, stadiums are profitable for teams (and often a raw deal for cities) because fans are willing to build them with public funds, shell out $85 for a seat, and dull those expenditures with nine-dollar Bud Lights. The idea that a massive physical structure should be expected to turn a profit for a franchise on as few as eight events a year is absurd—it’s the fans’ willingness to pay that makes it happen.

Cycling doesn’t need stadiums—it just needs those franchise brands to make fanbases coalesce. From the Cowboys’ star to the Yankees “NY”, licensed apparel is a massive revenue driver. While I’ll be the first to advocate rolling up to the group ride in a Mapei kit, I’d get the same feeling walking into Fenway in a $193 replica Bill Lee jersey—and in the latter case, the Red Sox would still get revenue.

Of course, a lot of this branding is tied up in regional affiliations—there’s something undeniable about the appeal of The Home Team. And cycling used to understand this, as the Tour de France was contested by national and regional squads well into the 1960s.

You could argue that teams today are too international to recreate this system, but it’s not like the guys playing for the Bears are actually from Chicago. The “homeness” of a team is largely a function of branding, to the point that gear from certain teams frequently becomes de facto gang insignia.

By setting up a permanent, open-to-the-public, service course-esq structure in a specific population center, teams could both begin to create that sense of local ownership, and (in place of a stadium) diversify their revenue through direct sales of team-branded goods, coffee, beer, service from pro mechanics, and early access to the newest gear from team sponsors.

There's no such team as the Spungos

…of course, there could be in cycling, so long as Spungo™ Brand ponied up enough money (via).

All this isn’t to say the franchise system is a magic bullet—leagues frequently fail, and the early days of every successful pro sport were fraught with competing leagues, mergers, moving teams, and folding organizations. But once established, there’s no denying the marketability of the team brands they create, from Crystal Palace—whose namesake was destroyed some 80 years ago—to the Cleveland Browns—who were revived even after the original franchise changed names and moved to Baltimore.

But of course, all this earning potential is completely hamstrung by the existing brand name sponsorship model. It might be an easier sell in the short-term, but it makes a lasting franchise structure effectively impossible, to the point that sponsor-branded teams might be the most serious threat to the long-term financial viability of the sport—more so even than doping.

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