VeloClub is CyclingTips’ membership program which brings us closer to our members, and connects likeminded cycling enthusiasts.
by Shane Stokes
March 25, 2016
Photography by Gruber Images
NEWS & RACING BROUGHT TO YOU BY CHAPTER2 BIKES
There’s been much talk of late about the need to come up with a new revenue stream in cycling. The traditional sponsorship model has proven to be an unstable one, lasting at most several years. Once the companies involved step back their commitment or exit the sport, it necessitates a scramble to find a replacement.
Think about the difficulties experienced by HTC Highroad, which was the world’s best team when it ran out of time in 2011. Despite having an array of wins and a vast depth of talent, finding enough backing to continue proved impossible.
In the quest to create a new revenue flow, increasing television revenue is one new focus. That avenue is something being considered by the Velon group, a company founded by 11 WorldTour teams.
However a completely different direction was announced on Wednesday. One of those involved is Geert Broekhuizen, who previously worked in a press and marketing role for the Cervélo Test Team, Omega Pharma-QuickStep and Giant-Alpecin.
He has joined forces with the consulting firm RebelGroup in order to develop this new model.
“The existing business model of a professional cycling team, financed by sponsors only, is extremely fragile” he told CyclingTips. “This means that popular cycling teams have been forced to stop because they cannot find new main sponsors. This is nothing new, and the fact that teams come and go is not itself the problem because it is still working.
“But this has a consequence on the broader structural flaw in cycling: the lack of connection with fans, leisure cyclists and businesses where many untapped opportunities lie.
“The sport needs a new model if it wants to grow, and this is where we see a big opportunity.”
The Dutchman elaborated on the limitations of the current system, something he was aware of during his work with teams. “Due to the current structure, teams must focus on fulfilling the short term sponsor contracts, mainly focussed on visibility, and as a consequence on race results.
“Because of this, teams often do not have the opportunity and resources to build an organization that is sustainable over the long term.”
It means there is an emphasis on maintaining what you have today rather than being able to plan further ahead.
However if his new project works as planned, he believes a far healthier model will be in place.
If so, that can only be good for the team concerned and also the sport.
Earlier this year, Broekhuizen walked away from the Giant-Alpecin team. The news came as a surprise to many: he had been an integral part of the setup, but explains now that he wanted to take things in a different direction in cycling.
From then until now he has been looking for partners in that project. That first phase is now complete.
“I looked into my network and around me for companies from outside the sport who could contribute to build this new structure,” he explains. “One of them is Rebel, and I am now working with them to construct this plan.”
Rebel is the consulting firm RebelGroup, an international firm comprising many experts.
Director Edwin Gulickx explained that the company advises customers and partners and also invests in order to realise opportunities.
“Recently we came into contact with the world of cycling via Geert Broekhuizen. He introduced a promising concept to us that challenges the status quo of the sport,” he said via Wednesday’s statement announcing the new project.
“We have seen that professional cycling is very undeveloped from a business perspective, which inhibits the growth of the sport. This is something that really intrigues us because, as we say in Rebel terms, there is a reservoir of untapped value.”
He added that the challenge is a perfect fit for what the company does on a daily basis, “contributing to increase sustainability in different sectors is virtual our core business” and that he considered it a logical step to pursue the project.
So that’s the who; now for the what.
Broekhuizen said that the project is about “a sustainable club structure in which we have members and partners.” He mentions soccer, where there is a first team playing at the Champions League level, and then a vast club structure beneath that.
Under his plan, those who are not part of the first team – in other words, who are not the 25 or 30 professional riders who would ultimately be involved – are actually a key component. The amateur riders and fans are crucial.
“The difference with a lot of other projects that are announced in cycling is that those are always working around the professional cycling team idea. In this project, though, we work around building a new structure to involve many people and to contribute the sport of cycling realize its full potential,” he says.
“Of course, this includes being involved in professional cycling in the end, but that is more the tool to reach our goal. It will also contribute to create a sustainable structure in professional cycling.”
To better understand things, visualise the structure as a pyramid with the pro rides at the peak. Amateurs and fans are a very big part of the rest, and provide a very crucial base.
Looking at an example from other sports, Manchester United is the world’s most valuable football brand. It is estimated to be worth $1.2 billion. Its worldwide fan base includes more than 200 official recognised branches of the Manchester United Supporters Club, and it has an upwards of 75 million fans worldwide.
That example shows how other sports can engage fans and involve them in building up a structure.
“At the moment there is a big difference between the recreational sports and the professional sports,” he says, speaking of how things are in cycling. “Worldwide there are millions of people riding their bikes every week. However they do not directly have a connection with the professional side of things.
“That is because we do not have the resources to attract them and to incorporate them into our organisation. Cycling is simply not building a relationship with them.”
As regards specifics, Broekhuizen stresses that it is early days and that much work lies ahead. However he said that the new project is going to do things differently to the traditional approach.
“If you look at other sports, they are working with a big commercial team to get people involved into the clubs. That will be a crucial part of the project.”
Broekhuizen is reluctant to go into specifics at this point in time. He explains why. “If you think of us sitting two hours around the table, brainstorming about ideas and how we can involve people, then we can come up with 100 ideas. That is not the difficult part, because there are so many opportunities.”
“We are at that point right now, building the right proposition for people to join us. Because of that, I don’t want to go into too much detail and therefore make things too concrete, because we should not fall too much in a tunnel vision at this stage.”
That said, he does give a couple of examples. “We can learn from other sports. Lots of people are always telling us that we don’t have a stadium, we don’t have an event such as organising a home match in your stadium. But I think we need to look to see if we can create such a home base and events.
“If you think about it, you could also have licences for amateurs through the club. You would be a member of the same club as the pro…so, one day, you can have a club championship and race against the pros. But you can also think about ideas such as race access and training guidance.
“Again, I don’t want to make it too concrete, because this is exactly the process that we are working on now. But we do believe there are so many ways to involve new fans and recreational cyclists, and not only the current fans we see.”
Broekhuizen underlines that the most important thing to takeaway at this point in time is that a set of experts are sitting around a table and collaborating together to come up with the best ideas. Once this is done, attracting members and partners is the likely result.
Further details will be announced when the collaboration has come up with clearly defined steps. May or June is mentioned as a possible date for more information; in the meantime, work will continue behind the scenes to take things in this new direction.
He feels it is crucial to do things in the right order. “At this point in time, it is not the immediate goal to create a professional cycling team. Before that, we are aiming to create a strong club structure first. That is why I looked outside the sport and tried to bring the best professionals I know around the table to create such a project.
“To be honest, it would be a mistake for this project to start to speak to sponsors and to investors now as they are asking for the traditional model. We need to think out of the box now.’
“Instead, we are currently in the process of finalising a new blueprint for how a professional cycling organisation can be run. That’s the situation right now, and that’s what we will focus on first.”