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AG

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Corona virus and team sponsorship
« on: March 17, 2020, 23:35 »
with both the cancellation of races accross the woirld, as well as the massive economic impact of the virus which will be pretty longlasting, there is a better than average chance that many teams will find sponsorship $ reduced, and some teams will fail.   Soon.    :(


It is the hard economic realities that a lot of people accross the world are facing - and companies are just not going to want to spend the money on sponsoring a cycling team in such hard times. 

Which teams are pretty vulnerable?
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  • « Last Edit: March 17, 2020, 23:50 by Francois the Postman »

    Kiwirider

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    Re: Corona virus and team sponsorship
    « Reply #1 on: March 18, 2020, 03:35 »
    Which teams are pretty vulnerable?

    Depends on the duration of the economic slow down and the speed of the recovery.

    I have seen some reports that predict a full rebound within six months of the pandemic being declared beaten - or at least being declared minimised.

    If that happens within the year, then I suspect very little impact on anyone other than the teams whose contracts expire this year.

    If the recovery is slower and longer, then all bets are off and everyone is at risk.

    Of course, that said, the women's teams are all fliped regardless. This event, like any economic slowdown, will see women's sport as the first casualty of the sporting world ... (A sh*t thing to say and something that I seriously hope that I am wrong about ...!!!)
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  • AG

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    Re: Corona virus and team sponsorship
    « Reply #2 on: March 18, 2020, 03:42 »
    I just cant see a recovery happening that quickly.

    Tourism especially - but all kinds of industries are going to take a good few years to recover from the lost income.

    As people will lose jobs pretty rapidly with all the shut downs, employment will take significant time to get back up, and consumer spending will take longer than that ....

    I think we are looking at at least 3 years for most economies to recover.  Depending then on the individual company situations for each sponsor will determine if they can afford to maintain their contribution.

    Bikes and equipment could also be affected - for most people a new bike or new equipment is a discretionary spend, and if lots of people dont have much spare money ... spending could take a dive off the cliff
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  • Servais Knavendish

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    Re: Corona virus and team sponsorship
    « Reply #3 on: March 18, 2020, 15:42 »
    Yes good/ difficult thread this.

    Interesting piece on radio earlier about worldwide effect of CV19 on world sport- they picked on football and F1 - but same applies in cycling; depends how sponsors contracts are written; but many will have case; or at least legal argument to look for rebates; refunds or cancellation of deals if riders are simply unable to compete. 

    Sponsorship is often derived deep down in fan based patronage; but in spite of that most sponsor companies need to show a yield and if you get nothing for your $mills then you as sponsor will be corporately obliged to pursue reparations. 

    Bottom line is as ever a good time to be a lawyer specializing in non fulfillment of sporting rights litigation; bad time for sports, teams and competitors.

    Aside from that all marketing budgets across the board will be /are already decimated so the annual trawl for new sponsors will be even more arduous.

    Overall a scaling back of number of WT teams or even a three year moratorium on WT status to allow races to be populated;  after I fear a reasonably big shakeout of Pro Teams???

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  • Mellow Velo

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    Re: Corona virus and team sponsorship
    « Reply #4 on: March 21, 2020, 12:48 »
     I don't often agree with what usually comes out of the guy's mouth/twitter account, but this time I think he is voicing the grave concerns of many.

    https://www.cyclingweekly.com/news/racing/tour-de-france/if-there-is-no-tour-de-france-the-whole-cycling-model-could-collapse-says-patrick-lefevere-452263
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    AG

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    Re: Corona virus and team sponsorship
    « Reply #5 on: March 22, 2020, 04:02 »
    yep.

    even if the TdF goes ahead in some form (delayed or whatever) - many teams will face a completely different future
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  • Servais Knavendish

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    Re: Corona virus and team sponsorship
    « Reply #6 on: March 23, 2020, 09:16 »
    Oh dear what times...

    Focusing on cycling every now and again gives something else to think about - but the conjunction on this thread is really difficult and I fear going to get worse (from a cycling perspective).

    Now following first national withdrawal, its surely only a matter of time before the Olympics are postponed; in that environment is there any chance at all that TdF goes ahead this side of say September (at the earliest / if at all this year); so picking up on Lefevre and Vaugters recent comments nearly all of teams are faced with acute funding issues (save say UAE / INEOS /and Bahrian... but even there prepare for McClaren's to be the shortest title sponsorship in cycling history).

    It seems that Astana were struggling before the crisis; and many of the others are funded by companies experiencing existential challenges.

    How will this play out - a small handful of pro teams; with invitations to remaining riders in loose National federation teams; but what of infrastructure to support that  - vehicles / teams / equipment / etc and how would that be fair to the non works teams...?

    in the interim and I know this is trivial in face of the world at present but UCI surely has a chance to organize, promote and raise broadcast funds, or at least partially honour contracts by pitting teams and riders against each other in e-sports turbo racing?  All from the safety of their own self isolation areas.
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  • Joelsim

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    Re: Corona virus and team sponsorship
    « Reply #7 on: March 23, 2020, 13:28 »
    Wrong section
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  • « Last Edit: March 23, 2020, 13:49 by Joelsim »

    LukasCPH

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    Re: Corona virus and team sponsorship
    « Reply #8 on: March 24, 2020, 09:32 »
    How will this play out - a small handful of pro teams; with invitations to remaining riders in loose National federation teams; but what of infrastructure to support that  - vehicles / teams / equipment / etc and how would that be fair to the non works teams...?
    Look at women's cycling 10-20 years ago. That's how this scenario would look.

    in the interim and I know this is trivial in face of the world at present but UCI surely has a chance to organize, promote and raise broadcast funds, or at least partially honour contracts by pitting teams and riders against each other in e-sports turbo racing?  All from the safety of their own self isolation areas.
    You're talking about the UCI here ... :shh
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    Joelsim

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    Re: Corona virus and team sponsorship
    « Reply #9 on: March 24, 2020, 09:41 »
    Look at women's cycling 10-20 years ago. That's how this scenario would look.
    You're talking about the UCI here ... :shh

    Maybe we should ask ASO, given they run cycling in reality?
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  • LukasCPH

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    Re: Corona virus and team sponsorship
    « Reply #10 on: March 24, 2020, 09:45 »
    Maybe we should ask ASO, given they run cycling in reality?
    The ASO that insisted on (almost) finishing Paris-Nice with half the teams not even there, and many riders questioning the wisdom of it? That is now hell-bent on holding the 2020 Tour de France, (literally) come what may, if needs be without a publicity caravan, start villages, and roadside spectators, just as long as "the show goes on"?

    Nah.
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  • Joelsim

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    Re: Corona virus and team sponsorship
    « Reply #11 on: March 24, 2020, 10:08 »
    The ASO that insisted on (almost) finishing Paris-Nice with half the teams not even there, and many riders questioning the wisdom of it? That is now hell-bent on holding the 2020 Tour de France, (literally) come what may, if needs be without a publicity caravan, start villages, and roadside spectators, just as long as "the show goes on"?

    Nah.

    The latest I see is to offer a shortened version of the race.

    My thought on this would be to remove all the sprint stages, it’d make the race better!

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  • Mellow Velo

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    Re: Corona virus and team sponsorship
    « Reply #12 on: March 24, 2020, 10:50 »
     Don't worry, Ineos have the matter in hand.

    https://twitter.com/INEOS/status/1242383220622143489
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  • Mellow Velo

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    Re: Corona virus and team sponsorship
    « Reply #13 on: March 29, 2020, 07:58 »
     And so it begins:

    https://www.cyclingweekly.com/news/racing/lotto-soudal-riders-take-pay-cut-as-support-staff-made-temporarily-unemployed-452839

    Lotto-Soudal have been forced to make 25 support staff unemployed.........
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  • Leadbelly

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    Re: Corona virus and team sponsorship
    « Reply #14 on: March 29, 2020, 20:07 »
    Astana and Burgos are in a similar boat.

    https://www.wielerflits.nl/nieuws/astana-snijdt-flink-in-salarissen-door-coronacrisis/

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    Astana will pay riders and staff less salary in the next three months. According to AS , this is a reduction of at least thirty percent, because of the crisis that arose because of the spread of the coronavirus.

    However since they haven't been receiving any wages recently anyway, they may not notice the difference. 70% of nothing is still nothing.

    https://www.wielerflits.nl/nieuws/burgos-bh-vraagt-tijdelijke-uitkering-aan-voor-renners/

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    Burgos-BH has applied for a temporary allowance for all twenty riders and part of the staff because of the corona crisis. They are temporarily dismissed and, if the application is approved, receive a WW benefit until the rates are resumed.
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  • Leadbelly

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    Re: Corona virus and team sponsorship
    « Reply #15 on: April 02, 2020, 05:37 »
    https://twitter.com/Cyclingnewsfeed/status/1245560345818738691

    Ouch!

    Some other relevant news from a day or two ago was that the teams came to a gentleman's agreement not to poach/tap up riders (who have contracts for 2021) from each other as a result of these various pay cuts.
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    Re: Corona virus and team sponsorship
    « Reply #17 on: April 02, 2020, 12:31 »
    what's the difference for the teams though, at the moment? I mean, it's not like prize money has any significant influence on the budget - taking travel costs and so on into account, not racing is probably cheaper for them than racing. Are sponsors just not paying?
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    Servais Knavendish

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    Re: Corona virus and team sponsorship
    « Reply #18 on: April 02, 2020, 14:05 »
    Yes I imagine that is a big factor.  With Teams unable to fulfill contractual race obligations, sponsors would have legal redress to reduce funding... plus many sponsors might be cutting all non essential outlays and just not paying, citing Force Majeure etc

    The one that gets me is football - EPL teams laying off staff but continuing to pay multi million £ contracts to players - news of wage cuts in EPL are not keeping pace with elsewhere - eg Barca 70% cut.
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  • Leadbelly

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    Re: Corona virus and team sponsorship
    « Reply #19 on: April 02, 2020, 18:44 »
    Next up CCC.

    https://naszosie.pl/2020/04/02/ccc-team-jednak-przejdzie-do-historii/

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    According to the head of CCC, Dariusz Miłek, it makes no sense to invest in sport that is not beneficial for today. He talks about the termination or even closure of the CCC Team project.

    "Decisions regarding the level of our involvement in sports sponsorship will be made in the coming weeks. They will be potentially painful, but necessary in this situation. Cyclists are not currently riding and will not be riding for a long time, so they will not achieve the marketing goals set for this sport project. We are now fighting for our business, so we will not have sentiments about the movements that bring us a reduction in sports costs. It would be immoral to reduce employee costs by excluding cyclists. We will provide details of our decisions in the coming weeks"

    It would be a shame if they couldn't even keep the CT devo team going.
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  • Mellow Velo

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    Re: Corona virus and team sponsorship
    « Reply #20 on: April 03, 2020, 12:19 »
    More here and yes it seems exactly the reason we all fear. No return due to no racing.

    https://www.cyclingweekly.com/news/racing/ccc-looking-to-reduce-or-withdraw-sponsorship-of-team-one-year-early-453366


    “We have a contract that obliges us [to sponsor the team] for this year and for the next, but the company must and wants to withdraw from it at a low cost because the cyclists simply aren’t providing promotional services. We don’t have 265 racing days at Eurosport, the Giro d’Italia’s been cancelled, the Tour de France is also looking uncertain. So it makes no sense to invest in this sponsorship since we have no benefit from it,”
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