HTC Highroad faces meltdown as cycling's doping problems deter sponsors

Cycling's most successful team set to disappear as Armstrong and Contador affairs dent sport's image

by Simon_MacMichael   June 24, 2011  

Team HTC-Columbia celebrate after the London stage of the 2010 Tour of Britain (picture credit - The Tour of Britain)

Bob Stapleton, owner of HTC-Highroad, has said that the team will cease to exist at the end of this season unless a new title sponsor can be found by the end of July, just a week after the Tour de France finishes. HTC appears unlikely to renew its sponsorship for 2012, and the American entrepreneur attributes the difficulty of finding a replacement to the impact on cycling’s image of doping investigations, notably those involving Alberto Contador and Lance Armstrong.

To borrow a word from American sports parlance, HTC-Highroad in its various guises has been cycling’s ‘winningest’ team in recent years, across both its men’s and women’s squads. The team has racked up 462 wins since 2008, those victories spread throughout more than half the 36 men and women who make up its rosters, which have an emphasis on young talent.

That success, and the media exposure guaranteed by the incorporation of the sponsor’s name into that of the team itself, should guarantee a queue of potential sponsors. The fact that no such queue exists for such a high-profile team should sound alarm bells throughout the sport.

"If we haven't secured a sponsor by the end of the Tour de France, we will have to sit down and start considering how to wind down operations," Stapleton admitted to AFP. "The world's best team, a leader in the sport for the past several years, needs a title partner."

Stapleton, who built his wealth in telecoms, confesses that he has spent "many sleepless nights" as a result of the failure so far to persuade HTC to renew or find an alternative backer.

"Cycling is unique in that you have valuable naming rights,” he points out. “Sponsors can be on Manchester United's jersey for a lot of money, but the team is still going to be called Manchester United.

"It's literally hundreds of thousands of repetitions of your brand name on the internet, on television, and in global media.

"Our total return is unmatched in cycling, and I think in sports. We're going to generate a 20 plus times return for a title partner. The gold standard is more like 10.

"We have a lot to offer. But we have to shout that story out over the controversy that seems to surround the sport."

While not one Highroad cyclist has been drawn into a doping scandal since Stapleton took over the former T-Mobile in late 2007 after that outfit was hit by a series of drugs scandals, he says that the sport’s image makes it difficult to attract sponsors able to commit €10 million a year for three years.

"The consistent feedback we get is that they (sponsors) love cycling and the fundamentals, but they're concerned about the sport, and the non-stop drama around misconduct and doping," he explained.

"Be it (the investigations into) Alberto Contador, be it Lance Armstrong, be it Riccardo Ricco, whatever. And in a tough economy, with multiple sponsorship choices to make, people will see cycling as a challenging environment.

"What we need somebody to do is look past that at the great fundamentals and this kind of leadership position this team offers.

"We want to come through for the team,” continued Stapleton. “It's been such an unqualified athletic success but it's important for me that we get it on a stable, long-term economic footing."

It already looks certain that Mark Cavendish will be departing for Team Sky at the end of the year – only UCI rules barring riders or teams from commenting on transfer speculation before 1 August appears to have prevented confirmation of that – and it’s likely that other riders will already be sounding out potential employers.

Stapleton, who has said that riders and team staff will be free to look elsewhere for work should no sponsor be secured by the end of July, admitted, "Cavendish is compelling, but what title sponsors would much rather have is a stable of performing athletes who are constantly reinforcing your core values.

"Our proposal is: we're gonna always be competitive, represent your brand, and for any given country or race we're going to have a compelling athlete who can perform.

"We crave that longer term commitment. The Tour (de France) provides that narrow window of opportunity for us to get something done," he concluded.
 

24 user comments

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Non story. Bob could easily fund the team from his own pocket, he's just upping the ante as August approaches and teams can announce their rosters for 2012.

Sean

posted by seanieh66 [193 posts]
24th June 2011 - 1:35

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Could this be a pre-emptive statement after news leaked that Cav is going to Sky, so will likey want to take his lead out train with him, Goss and Renshaw, leaving HTC quite weak in "bigger" name guys, so less likey to attract a big name sponsor

I disagree that doping puts sponsors off, because has anyone in HTC ever been done with doping? Yes the image of cycling might get damaged if Contador gets banned, but its not a one man sport and just because one person does something wrong, it doesn't mean the whole peloton is at it

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posted by Gkam84 [8825 posts]
24th June 2011 - 1:37

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It's not so much drugs as the dire state of the US economy surely.

Sean

posted by seanieh66 [193 posts]
24th June 2011 - 1:42

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Impact of drugs turns spectators of the sport, but sponsors?

If Team Sky were found to be doping would people cancel their SKy subscription? Hardly.

Surely in this economic climate there's always some, probably unethical and immoral, organisation happy to have their brand name publicised. Take football for instance, casino's, gambling, beer companies are the big money spinners.

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posted by AndyyK [40 posts]
24th June 2011 - 3:17

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I've just seen the "interview" on BBC News, If i was the head of a company like HTC and he spouted the figures he mentioned at me, i'd be snapping his arm off to sponsor the team, but i'm not sure the figures are right

He said 6 billion viewers of the big tours?
165 million cycling enthusiasts in western europe and america??

The enthusiasts big might be correct, but then break it down to how many are road bike enthusiasts, MTB and so on, i think you'll find the numbers to be far lower and then factor in 18 UCI pro teams all with sponsorships, all the different brands and components ect. Ok its not going to be an even split of fans, but some teams will attract more fans than others, so the number of enthusiasts that might be a fan of your team and there for brand, is decreased even more.

Then take a brand like HTC, who specialize in Mobile device's, phone, PDA and Tablets, are the CYCLING enthusiasts really that concerned about having a mobile device just because its from the company their favourite rider is from? I would guess no.

That point above is simpler to quantify when you take into account the few teams that have a bike manufacturers in their name, Leopard TREK, Liquigas CANNONDALE, Garmin CERVELO, Its more likely that CYCLING enthusiasts want the bike their fav rider uses, Even better in the case of Garmin, have the bike and gps your rider uses.

I dont really know where my point was heading after writing all that, but it seems more sensible to have a manufacturer as your MAIN sponsor and in your team name that any other sponsor. I still stand by what i said above about the riders leaving, so less well known riders being left will attract less offers of sponsorship and i dont think that sponsorship is effected by a rider being caught doping and if it is effected, its not the whole sport, mainly the team and sponsors he/she rides for.

Gkam84's picture

posted by Gkam84 [8825 posts]
24th June 2011 - 4:16

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I going to get my insurance and pensions from Ag2r-La Mondiale Nerd

... ... need more speed!

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posted by JC [126 posts]
24th June 2011 - 7:39

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I get all my pre-coated steel from Lampre and my gas from Astana (probably...)

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posted by andylul [412 posts]
24th June 2011 - 9:21

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When it comes to the time to replace my pet tiger, I'm going for a Leopard instead Big Grin

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posted by Simon_MacMichael [8025 posts]
24th June 2011 - 9:35

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A 'LEO-pard', surely? Big Grin

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posted by andylul [412 posts]
24th June 2011 - 9:49

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a LAY-o-pard, i think you mean Big Grin

seriously though, i've got an HTC phone. and while the cycling sponsorship aspect isn't the only criterion – it helps that their phones are very good – it certainly made me more charitably disposed to the brand when i was picking a new handset.

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posted by Dave Atkinson [7320 posts]
24th June 2011 - 9:57

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Some points on sponsorship generally. It's not just about selling your product to cycling fans, it's part of a company's wider brand building and marketing efforts.

Money that might go towards sponsoring a pro cycling team is competing for part of a company's advertising and marketing efforts with a whole host of other initiatives - TV adspend, other sports and arts sponsorship, CSR initiatives, investment in new media etc. And those budgets are under pressure due to the economy.

As GKAM points out, the numbers cited are questionable, but a stage win in the Tour de France does get huge coverage globally, and not just among cycling fans - images will be everywhere from the sports news report on BBC Breakfast News to the daily newspapers in Australia.

Now say you are marketing director of a Fortune 500 company and you've earmarked $50 million to put into sports sponsorship. You're a cycling fan, you read the news about HTC perhaps not renewing and see that as a great opportunity to get your brand out there to a global audience.

You cite the viewing figures for the Tour de France, the world's biggest annual sporting event, remember, and your CEO says he remembers that Armstrong guy winning it but, hey, isn't he under investigation for doping and can't we go sponsor another sport like tennis instead (which of course does not have a doping problem at all. Or at least not one that makes the headlines.)

And good luck explaining to them why you should sponsor a team in a sport where no-one's clear going into the Tour de France as to who actually won last year's edition.

There's plenty of examples of companies who have pulled out of sponsoring teams because of doping - usually, because riders on that team have been caught, and look at what's happened to German cycling there, but also because they do not want to be associated with a sport that apparently continues to have a huge problem.

Likewise, the bad publicity that cycling has attracted as a result of that succession of doping scandals means that there's an awful lot of companies out there that wouldn't touch it with a barge pole to begin with.

Reduce the potential sponsor pool and you're reducing the potential competition to become a sponsor, in turn driving down the money coming into the sport.

The other thing is, sponsorship isn't necessarily about selling products, at least not in terms that you can quantify it by say Sky viewing it as a success because x thousand cycling fans went out and got a subscription.

Instead, it's just one element of what is a very complicated marketing effort, which in Sky's case includes putting money into efforts such as Rainforest Rescue and the Sky Rides - it's all about building the brand and keeping it visible as well as tying in with CSR efforts.

Brands employ some very complex metrics to measure the value of their sponsorship - yes, sales might come into the equation, but it's far from the only one.

Final point. Taking your biggest customers to the last day of the Tour de France with VIP treatment on the Champs-Elysees with a weekend in a top Paris hotel thrown in can't necessarily be measured in terms of turnover - but it might help them renew the contract at the end of the year.

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posted by Simon_MacMichael [8025 posts]
24th June 2011 - 10:11

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I think we need to remember that this is a US team. From what I can gather the whole Lance Armstrong investigation is getting serious media coverage - if anything comes of that then I would expect a whole host of US sponsors to pull out of the sport (or at least those for whom growth in the US market is their core aim - Garmin probably wouldn't give a toss!).

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posted by G-bitch [302 posts]
24th June 2011 - 10:12

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Hmm rumormill has Starbucks as lead sponsor of Leopard-Trek.

If true that tells me there are definitely major lorage corporate companies out there willing to sponsor cycling teams..

HTC apparently are more interested in sponsorship of Cav and all the negative comments over Cav's contract at Highroad cannot helped things.

posted by gazzaputt [179 posts]
24th June 2011 - 10:46

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We're shopping for flooring, and for me, Quickstep is a plus - good floors and sponsor cycling. The missus likes the floors too, so job done.

Yes doping will matter to companies - not because they think that people will cancel subscriptions should Sky have a calamity, but because association tarnishes the brand. Brand marketing is crucial and to be associated with the bad publicity is not viewed as a wise investment by companies.

Not so much a six pack as a barrel!

posted by Bigfoz [62 posts]
24th June 2011 - 11:41

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I'd say it's damage limitation as news leaks that maybe Cav is moving Sky-ward. Once Cav drops in a few stage victories at Le Tour next week i'm sure things will change. Going slightly off topic - I'm not sure Cav will even go. Would he want to leave his best mucker, Bernie Eisel? What about the lead out train that has helped him win all these stages? Martin, Renshaw, Eisel are part of a very well oiled lead out team for Cav and now Andre Greipel is no longer at Highroad, Cav is certainly happier there even if there wouldn't be much love lost between Cav and Bob Stapleton if Cav were to go. I think maybe it's a bit of publicity prior to the tour.

Although doping isn't very good publicity for riders and other riders in that team, but does it really affect a sponsor? I'd say that, that level of publicity is at least column inches in the press which is ultimately why a big corporate sponsors a team in the first place. Sponsors seem very good at extracting themselves from any connections with doping whilst still remaining behind the team, so i don't think it's relevant. As Sean says, it's a non story.

Cervelo S1, Zipp 404, SRAM Rival/Force, Rotor crankset and Vittoria.

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posted by stuartpeck1 [98 posts]
24th June 2011 - 12:14

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seanieh66 wrote:
Bob could easily fund the team from his own pocket

Funding the team when he took it over made him look like a philanthropist. Doing so again next year would make him look like a bad businessman.

posted by handlebarcam [527 posts]
24th June 2011 - 12:23

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stuartpeck1 wrote:
I'm not sure Cav will even go.

At Cav's press conference on Wednesday, we were firmly told that his future was not up for discussion. Still, he did let slip that now he's spending time in Essex (where his girlfriend Peta lives), he's getting out on training rides with Alex Dowsett Thinking

At the Sky press conference yesterday, Will Fotheringham said afterwards on Twitter that he raised the Cav question and while Dave Brailsford could only say that he was contracted to HTC - UCI rules prevent him from making any other comment - there were knowing smiles all round. It sounds like a done deal.

As for whether it's a 'non-story' I think it's important to look at what Stapleton actually said, which isn't that he's just looking for a new sponsor, which wouldn't really be news, it's that if he doesn't find one, and quickly, the team will be wound up.

That immediately puts other teams on alert that riders are up for grabs, and you can bet as well that their agents are already on the phone trying to secure them a team for next season.

I don't think he'd have stated it so plainly unless there was a very real prospect that the team is going to disappear given the uncertainty it will doubtless create.

I guess we'll find out for sure in five weeks' time.

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posted by Simon_MacMichael [8025 posts]
24th June 2011 - 12:46

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While scandals may not affect how fans think about a product or service, it is actually the companies who sponsor who are sensitive. A lot want to present a positive image, look how sponsors of footie thugs like Roonie get the shakes everytime he's seen with a woman over 50. And I would say positive image is MASSIVE in the states, surely the home of spin and BS. Big corps just don't want to be seen associatted with a negative media image in whatever form that may come from.

As said above though I think for Bob and HTC one problem is very probably the loss of Cav. The whole team have done an amazing job but at the end of the day Cav is the focus of attention, especially for the layman follower.

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posted by bikeandy61 [389 posts]
24th June 2011 - 13:32

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I'd also argue that the popularity of road cycling as a participation sport and a spectator sport has never been bigger despite the doping over the last few decades.

posted by cchead77 [8 posts]
24th June 2011 - 14:00

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If doping causes teams sponsors to run off, deystroying eams and give the sport a bad name that makes the fight agaisnt doping even more cause

hi

posted by cool guy 999 [54 posts]
24th June 2011 - 19:29

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With all due respect, Cavendish talking about training on the Essex lanes, with Dowsett, is no more a slip, or a revelation, than news about his his training in Italy with BMC's Sciandri and Phinney would be.. or even his travelling from Quarrata to this year's edition of the Tour de Suisse in one of BMC's liveried Skodas – all parties involved were very publicly tweeting about it as it happened. I really doubt there is any more significance to it than that they get on.

As for Highroad: Stapleton's plan B is almost certainly to merge the team with another team.. and to do that comfortably he needs to shed riders. I suspect he is just making sure that all interested parties are aware that all contracts are potentially negotiable.

posted by harthacanute [7 posts]
25th June 2011 - 5:16

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harthacanute wrote:
With all due respect, Cavendish talking about training on the Essex lanes, with Dowsett, is no more a slip, or a revelation, than news about his his training in Italy with BMC's Sciandri and Phinney would be..

That's a fair point. But then he's rooming this weekend with Sky riders at the Nationals (and tweeting about that too).

If there really is nothing behind the Cav to Sky rumours, I imagine his (and HTC's) PR people must be tearing their hair out.

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posted by Simon_MacMichael [8025 posts]
25th June 2011 - 11:24

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Oh, don't get me wrong, I have no doubts at all that Cav is going to Sky - rules don't prevent anyone denying the fact that no move has been agreed and there are no attempts to even pretend to deny - I just don't happen to think that every contact between Cav and a Sky rider, many of whom he spends weeks on end as neighbours to and training with in Quarrata, is evidence of that move.

Even without the move to Sky, the riders he will rely on at the World's and Olympics are mostly Sky riders and he would be looking to foster those bonds. I mean, just look at how many of Swifty's publicly stated ambitions for the next 12 months revolve around "supporting Cav".

posted by harthacanute [7 posts]
25th June 2011 - 14:42

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harthacanute wrote:
Oh, don't get me wrong, I have no doubts at all that Cav is going to Sky - rules don't prevent anyone denying the fact that a move has been agreed and there are no attempts to even pretend to deny - I just don't happen to think that every contact between Cav and a Sky rider, many of whom he spends weeks on end as neighbours to and training with in Quarrata, is evidence of that move.

Even without the move to Sky, the riders he will rely on at the World's and Olympics are mostly Sky riders and he would be looking to foster those bonds. I mean, just look at how many of Swifty's publicly stated ambitions for the next 12 months revolve around "supporting Cav".

A lot of sense in that, look at Cav's quote the other day about riding and having no one to talk to, to me it figures that he would be friendly with the English riders, he is after all a fairly young lad who spends a lot of time in foreign countries and being away from home. I'd say HTC or any other team would have no qualms with him being pals with and lift/room sharing with other English riders from different teams. I'd imagine they would be happier with that arrangement than having a lonely, homesick rider tweeting about missing his Page 3 bangers, sorry, I mean Girlfriend.

But yes, he's going to Sky.

posted by farrell [1401 posts]
25th June 2011 - 14:49

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