Former Team SmartStop director Mike Creed told Cyclingnews recently that he knew very early on in the 2015 season that there were financial problems with Premier Sports Group, the management company that owned the team.
Team SmartStop folded following the 2015 season after the title sponsor did not renew its contract for this year, and Cyclingnews recently reported that Premier failed to pay riders and staff the full commitment of their 2015 contracts.
Creed said he knew there were budget problems in March of last year, a month before the US national calendar began. Since starting with the team in 2014, Creed had always been paid directly by Happy Tooth Dental, one of the team's secondary sponsors. But when that changed, he knew something was up.
“I wasn’t getting paid by [Premier],” Creed said of his deal with the management company that owned the team. “I was an employee of Happy Tooth, so Premier Sports Group never touched my money until about March when [team General Manager Omer Kem] and [team owner Jamie Bennett] came to me and asked me to have Happy Tooth pay them and they would pay me because they were short on funds. That was in March.”
Aside from the management problems with Premier, Creed laid half the blame for Team SmartStop's demise on Kem, who had been brought on as general manager following the team's successful 2014 season. Creed told Cyclingnews that Kem, who had directed the Bissell Pro Team and the Bissell Development Team before taking the 2015 general manager job with Premier, sold owners a bunch of “magic beans" regarding future sponsorship opportunities.
Kem declined to comment on the record for this article, but he previously told Cyclingnews that he is owed back pay from Premier and was also saddled with debt after using his own company's credit card to partially fund the team's expenses.
Creed said another sign of trouble arose early last year when Bennett and Kem wanted him to field a team from the 14-rider roster for the Tour of Mexico in order to chase a sponsor south of the US border. The Mexican race took place at the same time as the Tour of the Gila in the US and just one week before the Tour of California. Creed said he refused.
“They wanted me to do a triple squad across the border to try and find another sponsor, to the point where both of them were sending me nasty emails. It got to the point where just I stopped responding and almost got fired because I wouldn’t do it. In March they were trying to go to Mexico to get sponsors.”
Kem previously told Cyclingnews that he was aware of the financial problems the management company had early on in his tenure with Premier, and he now regrets not being more upfront with the riders, but he was hoping to keep the owners engaged so they would not walk away completely.
“They never ended up paying anyone, so my attempt at keeping them engaged was a waste, and it's something I think about every day,” Kem said. “It's also why if I was going to stay in cycling I had to own the teams. That way I could make sure that everyone got paid.”
But Creed said he was the “guy on the ground” who was put in a bad position because of a lack of transparency about the team's finances.
“None of those guys came to the bike races," Creed said. "None of those guys had to have those conversations. I was the guy who was constantly asked to lie. And I never lied to the [riders]. I told them things were shit in March. I told them to get off the team in March. I told them they had to ride themselves out of the team.”
Among the fallout from the revelations that Premier Sports Group failed to pay riders and staff the full commitment of their 2015 contracts, allegations emerged that Kem used his position with Premier to build a relationship with a potential sponsor that could have saved the team but then steered the company toward title sponsorship of two new women's and men's teams he created for 2016.
Cylance, a California-based cyber security firm, joined Team SmartStop as a secondary sponsor at the Tour of Utah and the USA Pro Challenge. The team changed its kit colours from light blue to light green at those two races to highlight Cylance's support. But rather than signing with Premier to become title sponsor of the men's and women's teams Premier owned, Cylance signed up with Kem in November to form the two new teams for 2016.
In the article Cyclingnews published last week, Kem said the sponsorship meeting with Cylance took place a full six weeks after the USA Pro Challenge, and that by the time the company agreed to step up as title sponsor of the new Cylance Pro Cycling women's team and the Cylance-InCycle p/b Cannondale men's team, the former SmartStop riders were no longer available because they had moved on to new teams.
However, Creed, who is now the head coach of the USA Paralympic cycling team, recently said that Kem told him in early August that Cylance was “on board” as a title sponsor for 2016. Creed said Kem then offered him a job running the team. Moreover, Creed said, Kem asked him to tell Bennett that the Cylance sponsorship would not happen so that Bennett would distance himself from the potential new sponsor. Creed believed at the time that Kem was going to leave Premier and run the reformulated “Cylance” team under his own management company.
“They wanted to get away from Premier Sports Group and they wanted to run it under their own program, and Omer offered me a deal to run a men’s team,” Creed told Cyclingnews. “Maybe there’s a variation of that and for some reason the Cylance guy contacted them later, and maybe Cylance didn’t want to give enough money to sponsor a men’s team at that time, but I was told at Tour of Utah and at Colorado that the Cylance thing was good, and to allude to Jamie Bennett that Cylance was not interested.”
Although Kem declined to comment on the record for this article, Cylance CEO Stuart McClure backed Kem's version of events around the timing of the sponsorship deal for the new men's and women's teams.
In an email to Cyclingnews, McClure said that following the USA Pro Challenge in mid-August, Cylance disconnected from Premier and from Kem and didn't speak again about sponsorship until November. “We spoke to a few potential teams but chose Omer to partner with,” he wrote.
In the end, no new sponsor came on board with Premier, and Bennett admitted to Cyclingnews previously that he needed the down payment for a 2016 title sponsorship to cover the remaining 2015 salaries and debts. Creed said he knew Kem was leaving Premier and believed he was going to take Cylance with him, so when Bennett asked him in September to start signing riders for the following season, he used his Twitter account to announce the team would not return "as we know it," effectively ending Premier's team.
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