Commentary

What Will Happen To Cycling's Team Sky?

For a short period -- since Comcast scored a big win to buy European broadcaster Sky PLC a few months ago -- the cable/communications company that owns NBC Sports and NBCSN almost became a major team sponsor of a world-level professional road-cycling team.

This week, the U.K.-based Sky management decided to end its associationwith the cycling team known as Team Sky, perhaps No. 1 in the sport by many estimates -- especially around the Grand Tours, including the biggest event, the Tour de France.

After winning an auction in late September, Comcast got better news: Sky’s controlling owner, 21st Century Fox, which has had a 39% stake in the company, agreed to sell its stake to Comcast.

Team Sky has won the Tour de France event the last six of seven years -- starting with Bradley Wiggins in 2012; then Chris Froome, who won four in the next five years; and this year with Geraint Thomas. The team has delivered 322 all-time wins, including eight total Grand Tours, 52 other stage races and 25 one-day races.

Due to its controlling interest in Sky, Fox was a key mover when it came to marketing for the team -- not only for promoting Sky but also 21st Century Fox, which was prominently seen via all the team’s marketing, including team jerseys.

Much of the way cycling is structured on the professional level requires each team to get heavy sponsorship for the operation. This is unlike other sports, especially in the U.S. Major sports here, such as the NFL, Major League Baseball, NBA and NHL, have revenue-sharing models when it comes to TV advertising.

They also sell tickets to fans at home-base stadiums/arenas.

Professional road-cycling teams have neither. And that’s an issue -- especially with TV. Jonathan Vaughters, CEO, Slipstream Sports, a subsidiary of EF Education First, the current name of a U.S.-based World Tour team, has long complained about this.

But getting big cycling event organizers -- the Amaury Sports Organization (Tour de France) and RCS Media Group (Giro d’Italia) -- to consider a revenue-sharing agreement is a virtual nonstarter.

Cycling’s current financial model causes steady business disruption, with teams having to look for a new title or secondary sponsors every couple of years. Typically, at the high end, the cost to run a World Tour team is anywhere from $20 million to $40 million a year.

Plus, pro road-cycling teams can regularly stop operations and abandon the sport, which can leave many mainstream/domestic riders seeking other teams for work. But for its part, Team Sky has had a steady partner -- since 2009.

No surprise here, but much of that sponsored marketing appears on TV -- as in-race signage, jerseys and via constant mentions by on-air analysts. There are many TV networks around the world airing cycling, including U.S.-based NBCSN.

In 2014, Vaughters tried to get Netflix as a title sponsor of his team, but was eventually turned down. Netflix felt anyone watching the Tour de France would not, at that moment, be watching its service.

But Vaughters disagreed: "My argument [to Netflix]," in speaking to Inc. magazine some years ago, was "you're basically hijacking another channel's programming. That channel [say NBCSN] paid for the media rights to the Tour de France. You didn't.”

In this harder-to-come-by world of lower linear TV impressions for on-air TV marketing, perhaps there could be a case for CBS, ABC, ESPN and other networks to buy up a cycling sponsorship.

Think about how many times NBC's on-air analysts would have to say Team CBS or Team ESPN -- especially if they were a strong, competitive group of riders.

Perhaps TV network marketing needs to go on a daring breakaway.

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