Will more sponsors pull the plug ? - "For a smart company, this is the time to get in"

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15.12.2007 / Deutsche Telekom, Wiesenhof-Felt and Discovery Channel are three of the companies which stopped their sponsorship for a professional cycling team. Rabobank thought about leaving the sport but decided to continue after Rasmussen was forced to leave this years Tour de France. Pro cycling is in big trouble but Wim Lagae, a professor in sports marketing  told Associated Press that pro cycling remains an attractive niche.

Rabobank had a golden moment when Michael Rasmussen won this years mountain stage at the Col d'Aubisque. The Danish rider was about to win this yaers Tour de France but things came different.

Piet van Schijndel, an executive board member of Rabobank told US newsagency Associated Press that the bank thought about ending their sponsorship with the Dutch Rabobank squad after Rasmussen was forced to leave the Tour.

"I saw him [Rasmussen] win the stage on the Aubisque mountain at 5 p.m., then at 8 p.m., I got this call," said Van Schijndel.

Van Schijndel continued by saying: "I got really scared. I thought they might be colluding and, at that point, the whole issue of sponsorship was at stake."

Rabobank ordered an inquiry and installed a commision, which found that Rasmussen acted on his own without team involvement but the commission did also conclude that the UCI and the team management made big mistakes. Rasmussen was fired and Rabobank [the company] emerged with its reputation intact.

"We employ 50,000 people. Everybody knows here that if you put your hands in the till and take a euro, you are gone," Van Schijndel said.

In cycling, doping allegations can instantly damage the image of  a sponsor. After two years of doping scandals the sport lost a few multinationals as a sponsor and has difficulties to attract new sponsors. The cost of sponsoring a cycling team has leveled off in the past two years at an annual average of about 8 million euro.

Wim Lagae, a professor in sports marketing at Leuven University in Belgium, told Associated Press cycling is not alone in facing sponsorship problems and that, as risks go, it remains an attractive niche.

"There are a lot worse deals to be had," Lagae said. But "in bad times ... there is this immediate overshoot, and you end up in crisis communication."

But cycling is still a cheap alternative in comparison to other sports. A cycling sponsor gets major and immediate exposure since the brand name is also the name of the team. Exposure is huge in key European markets like France, Spain, Italy, Germany, Belgium and the Netherlands almost throughout the year, and around the globe when the Tour de France rolls around in July. It's much cheaper than European football (soccer), where sponsorship can cost more than twice as much.

"In Formula One, secondary sponsorship of a car plus advertising at several tracks could quickly run up to 100 million euros," Lagae said.

The Quick Step team, which has world champion Paolo Bettini, has had its brushes with individual doping scandals, including the alleged involvement of team manager Patrick Lefevere, but so far the company's 8 million euro budget has been worth it, Quick Step sponsor manager Philipe Caryn told Associated Press.

"As a business analysis, [cycling] is still interesting," Caryn said.

His team will start at the 2008 Tour of California and the multinational flooring laminate company will use the event for marketing campaigns in the USA..

"The hospitality programs have already been sold out," Caryn said. "The sport has great potential in the United States because the VIP programs meet a demand: be close to the champion."

Despite such an assessment, the Quick Step team is having major problems attracting a co-sponsor for about 3.5 million  euros. One pulled out at the last moment when Belgian daily newspaper published doping accusations against the team.

"We've been looking for a while and, every time, it gets down to the same [issue]," Caryn said.

According to Associated Press Discovery Channel decided to end its sponsorship but team manager Johan Bruyneel had a full replacement company lined up. But the new sponsor pulled out at the last minute because of doping scandals. Bruyneel then signed with Astana.

Astana spokesman Philippe Maertens told Associated Press:"After all that happened, the image was not that great."  Maertens added: "But they [the Kazack companies that fund the team] did not want to run off like a thief in the night. That does not achieve anything either."

The bussines world is sending mixed signals. Deutsche Telekom and Wiesenhof pulled out, Gerolsteiner will follow after the 2008 season. Other companies like Cofidis and Omega Pharma extended their sponship.

The Executive Committee of Omega Pharma has decided to extend its current commitment as cycling sponsor to the end of 2011. The initial commitment was to run until the end of 2008 but will now continue for at least three additional years.

As of the 2008 cycling season, the new principle sponsor brand of the Pro Tour cycling team will be 'Silence'. In 2007 the sponsor brand was Predictor.

The 2008 season will be crucial for the future of professional cycling, if doping scandals ´will hit the headlines again the sport will be in big trouble. 

"It will be the time of truth," said Van Schijndel, whose Rabobank is committed at least through 2012. "If it doesn't get better and we get more incidents, it will be looking very bleak. One after the other will drop out."

Caryn agreed. "If we continue like this for two more years, it will be almost hopeless to pull another multinational in," Caryn said.

Lagae, however, sees it more optimistic as the prices to sponsor a professional cycling team are very low after two yeras of doping scandals. "For a smart company, this is the time to get in," Lagae said.

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