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Jonathan Vaughters (Garmin-Sharp)
Yet doping still scares sponsors away
Despite the multitude of doping stories that have effected the sport of cycling, Garmin-Sharp’s Jonathan Vaughters has reinforced that the sport still offers a high level of return for potential sponsors.
Vaughters, who is currently an MBA candidate at the University of Denver, was talking in light of the news that last month Cyclingnews had teamed up with sponsorship evaluation specialists Repucom to analyse the value of commercial sponsorship in professional cycling.
“While the metrics are more efficient than almost any ad buy out there, there are a few factors that hold back companies coming in at the top level. Firstly, despite the strong return, a WorldTour team is still expensive. The average budget in 2013 is over 20 million USD, and that’s just average,” Vaughters told Cyclingnews.
“Yes, compared to soccer team's payroll it's small, but you have to remember that for a cycling team the revenue source is almost a 100 per cent sponsorship. A soccer team's budget is maybe 25% derived from sponsorship. So even though cycling is very efficient, it’s still expensive. There aren’t that many multinational companies that can afford a single marketing buy that big."
However the issue of doping has been central to a number of sponsors leaving the sport in recent years. In 2012 Rabobank pulled the plug on their association with the sport after bankrolling one of the biggest teams in the sport since 1996. They even paid for the structure of the team – Blanco – to race in 2013 but without any Rabobank branding. On Saturday it was made public that technology company Belkin would assume the title sponsorship role at the team.
"The repucom report and Belkin's entry into the sport are facts that support the efficiency of cycling sponsorships. Simply put: dollar for dollar, it is the most efficient marketing buy out there."
"Doping issues may have discounted sponsorship values somewhat. But this is to the benefit of those willing to bet on cycling. And bet on the future sport cleaning up."
“The doping scandals can scare companies away,” Vaughters said. "Even though there is an incredible rate of return associated with cycling sponsorships, inside of a company there’s always an environment of internal politics going on. Because of company politics, there are not that many visionaries willing to take a risk and say they want the best rate of return for my marketing dollars,"want to go with cycling!"
Vaughters, himself an ex-doper and manager of a team that includes riders who have admitted to doping in the past, has positioned Slipstream Sports and Garmin-Sharp as a team that places ethics first. Garmin has backed the squad since 2008, with Sharp joining on as a co-sponsor last July.
Asked if the issue of doping had ever cost his team a potential sponsor, Vaughters said, “No. Not directly. However, Probably that sort of attitude or concern, wouldn’t be voiced to me as the pitch man. They may just say this opportunity isn’t right but I don’t discount that it could be down to doping issues. Still, No one has ever told me that.”
The report reveals that the average media exposure per UCI WorldTour team is $88.4 million, representing significant returns for sponsors in pro cycling. With television coverage of professional cycling increasing as the sport captures new markets, total TV media exposure delivered is estimated to be worth $2.1 billion.
You can download the full Cyclingnews and Repucom report, right here.