The March 1989 issue of VeloNews - reproduced on page 18 of the January 2009 issue - estimated budgets for some of the era’s leading teams: Cafe de Colombia, PDM,  Panasonic, etc. In 2008 dollars, the average of the 9 teams on the list that contested the ‘89 Tour is $6.12 million. According to VeloNews’ 2008 Tour de France guide, last year’s average budget was $10.64 million. Presumably those are official numbers released by ASO.

Although the comparison between 1989 and 2008 dollars is pretty solid, there’s a lot of uncertainty in using that as a basis to compare a bunch of 1989 currencies to the 2008 Euro. But I can’t think of a better comparison, so let’s say that team budgets increased 74% in real terms between 1989 and 2008. There are some numbers out there for rider salaries in 1989 (New York Times) and 2008 (Wall Street Journal), but the I’d consider the reporting of those to be less accurate.

Here is some context. IEG estimated that 2007 global sponsorship spending totaled $37.9 billion, a 425% increase compared to 1989 spending, as estimated in a report conducted by Sponsorship Research International in 1998. Again, lots of uncertainty. It’s worth noting that both reports estimated sports sponsorships to be about 2/3 of total spending.

To be fair, there are major sponsorship outlets today - like the UFC and action sports - that barely existed in 1989. Market fragmentation and statistical uncertainties aside, I think it’s fair to say that cycling team budgets have not kept pace with the global sponsorship marketplace. But that might be a good thing. Despite the doping scandals, a $10 million price tag to access the global platform of the Tour de France remains saleable, even in the currrent economy. It’s a hard sell, but at least it’s possible. At $35 million, probably not.

I spent Saturday, Sunday, and Monday on the bike with Eric and Mattias. We rode from Oakland to Pescadero, spent one night at a cabin and one night at Pigeon Point, then rode back to San Mateo. More photos here on Flickr.

I just did this interview for Ed Cotton’s Influx Insights blog about trends in urban bicycling. Ed and I met at the PSFK San Francsico conference; he’s the director of strategy at BSSP, which happens to be Columbia Sportswear’s ad agency. Let me know what you think.

I’ve been thinking a lot lately about the increasing role that companies outside the bike industry have in shaping the way that people think about bicycles. I want to explore that trend and share what I find, so I’ll be posting a series of conversations with influencers from non-cycling companies that are leveraging bicycles in non-traditional ways. The first interviewee is a major force behind the phenomenon: Antonio Bertone, chief marketing officer of Puma AG. Antonio is a lifelong bicyclist and has made bikes a major part of Puma’s marketing strategy, from sponsoring messengers over a decade ago to launching a utilitarian Puma bike in 2007.

The interview covers Puma’s approach to bikes and how it’s changed over the years, Antonio’s critique of the bike industry, and his views on the bicycle’s fundamental appeal. A couple of topics that didn’t make the final cut were the growth of bikeshare programs and Antonio’s opinion that health and fitness will ultimately drive the growth of bicycling more than environmental concerns will. As a point of reference, I mention the I-Cycle video series that you can watch here.

My take: Antonio has been a great predictor of trends in urban cycling, from fixed-gears to folding bikes. Essentially, what he’s saying to the bike industry is that the bicycle is universal enough to succeed outside of traditional bike shops. In a sense, it’s like sneakers; you can find them in sporting goods stores, department stores, skate shops, and specialty sneaker boutiques, it’s just that each channel carries different styles. Maybe there’s an opportunity for the bike industry to segment in a similar way through non-IBDs. That said, specialty retailers play an important role and industry as a whole is doing a much better job than what Antonio describes. There’s always room for improvement, but I see that the efforts of retailers and brands to be more inclusive and embrace the urban category are paying off, especially at the local IBD level.

I’m curious to hear your responses. Stay tuned for the next interview with Meredith Giske of New Belgium Brewing Co., the folks who bring you Fat Tire Ale and the Tour de Fat.

The Rock Racing rumor mill has been cranking today, as Rock & Republic announced a round of company-wide layoffs affecting team staff. Not even the riders seemed to know if the team was shutting down. Eventually, Rock Racing released a brief statement late in the day saying that the program will continue. Regardless, the story should serve as  a reminder of why it’s dangerous for the sponsor to own the team.

Typically, a cycling team is a standalone company that sells sponsorship benefits to other companies. When Team High Road became Team Columbia, it was Highroad Sports, Inc. selling its naming rights to Columbia Sportswear Company, getting new jerseys, and going about its business as before. Having signed the deal, Columbia has to write the checks for the duration of the 2-1/2 year contract.

But in Rock Racing’s case, the team is part of Rock & Republic. So when the outlook for the company is shaky, the cycling department is just another place where belts can be tightened (pun intended, unfortunately). There’s no reason why that can’t include ceasing operations without prior notice, which gives team staff and riders on a sponsor-owned team even less job security that they’d normally have in the bike racing business.

On a traditional team, there are two ways for a team’s revenue to be cut off in the middle of a contract: the sponsor goes bankrupt, or the team violates the contract. Barring those outcomes, the sponsor is on the hook for the duration. Even if they withdraw their brand from the team, they still might have to fulfill their end of the deal. Such was the case with T-Mobile and and it would have been the case with Barloworld if they hadn’t reconsidered.

If the sponsor decides not to renew an expiring contract, their agreement with the team should require them to give the team enough time to search for a replacement. If one can’t be found, at least the team management owns a bunch of bikes and equipment that can be sold off.

But on a sponsor-owned team, the company can pull the plug as soon as they decide that they’d rather do something else with the money. Any staff that are employees of the company can be laid off in mid-season, when it would be almost impossible to find another team with an opening for a director, mechanic, or soigneur. Riders who are independent contractors might not be able to race even if the paychecks are still coming in.

To be fair, it could be argued that a company might invest more in a team that it owns than in one that’s simply an advertising vendor. There’s some logic to that, although cycling teams don’t have a great track record as investment properties.

(photo by Richard Masoner, www.cyclelicio.us)

… but not the usual graffiti/skate/hipster stuff. These pieces are the work of Marco Cingolani, sent my way by Antonio Colombo, art gallery owner and president of Gruppo SpA (aka Columbus and Cinelli).

The Amore e Vita/McDonald’s cycling team, based in Lucca, Italy and registered in Poland in 2008, has found a home with USA Cycling for 2009. First question: what is “Amore e Vita”? Literally translated as “love and life,” the team describes it as a “Christian and humanitarian message of undoubtable beauty.” The team’s website features a long and detailed history (English translation here), including an account of team owner Ivano Fanini’s moment of inspiration:

In 1989 at a presentation in the Vatican square by Pope John Paul II, Fanini decided to make known to all his thoughts on one of the most dramatic, burning themes to all Christians: abortion.

After “feminist” protests against their not-so-subtle “NO TO ABORTION” jerseys, Fanini rebranded in 1990 to “Amore e Vita” to avoid further controversy. It has worked; no one seems to care about their religious mission or anti-abortion origins. The team is supported by a base of individual donors and maintains strong ties to the Vatican. McDonald’s Italia arrived in 2006 as co-sponsor for reasons unknown.

Second question: how can they register with USA Cycling? Apparently they’re going to race more frequently in the US, although that technically has no bearing on where they register. UCI rules (pdf) allow teams to register in any country that will have them, and each national federation sets its own eligibility criteria and registration fee. USA Cycling charges $4,000 for Continental teams, plus the UCI fee of 6,750 CHF (currently $5,600 USD). Professional Continental and ProTour teams are pricier. Case in point: Kazakh-sponsored, Belgium-based Astana fulfilled the Luxembourg federation’s requirements in 2008 by virtue of a local address and Benoit Joachim.

USA Cycling’s rule is that any Continental team from any country can register in the US as long as there’s a plurality of Americans on the roster. For Amore e Vita/McDonald’s, that means 4 riders out of 17. Welcome to America! Somehow, I have a feeling that the Big Mac-eating pro-lifers will feel right at home. No word on whether they’ll use the Popemobile for the team car.

Having sold my beloved Ford Focus ZX5 in February, Kadisco’s 4-wheeled transportation needs fall to Zipcar. I rarely need to use a motorized vehicle, so pay-by-the-hour carsharing works out great (although it is a bit stressful to always be in a hurry to return the car on time). Anyways, the car that I reserved Monday night had a flat tire when I got there. I called Zipcar and they switched the reservation to another car a couple blocks a way. Walking to the new car, I tweeted, “Just picked up a Zipcar with a flat tire. What a day.” The next morning, a Zipcar rep who monitors Twitter called me, emailed me, and credited my account $25 on top of the extra half hour they had already added to reservation.

That’s a textbook example of customer service in the era of social media. I would take it a step further, though. If they had said, “Here’s a $25 credit. If you could twitter that we hooked you up, that would be awesome,” I would have gladly done so.

I Want Sandy and Pownce, two of my favorite web services, will be shutting down in the next couple weeks after being acquired by larger sites. I use I Want Sandy all the time to send myself little reminders: send @s a direct message on Twitter like “buy milk 5pm tomorrow” and she reminds me by SMS and email tomorrow at 5pm to buy milk. Incidentally, it was was Twitter that bought value of n, the company that created Sandy. People seem to think that the point of the acquisition was mostly about Twitter wanting to hire values of n CEO Rael Dornfest.

I don’t use Pownce as much as Sandy, but it was really useful to send large files to friends. Pownce got bought by Six Apart, the company that created LiveJournal and TypePad among other blogging products.

It’s not surprising that smaller sites are looking for buyers before the economy gets any worse, but it’s a bummer for their users. As Dave Slusher points out, we do in fact pay for these “free” services:

Time is more limited and precious to me [than money], so making me waste my time is worse than wasting my money when they are anywhere near, like within an order of magnitude. The switching cost of putting in a new service and getting used to it is non-trivial and I and every other user of Sandy or any other Web 2.0 service have every right to be pissed when you successfully convince us to insinuate your service into our lives and then pull the plug.

I guess I’ll just find some other gender role-reinforcing anthropomorphic website to tell me when to do my laundry.

UPDATE 12/4: Some really, really nice people are building an open source Sandy! They’re looking for suggestions on their blog, Twitter, and Google Code.

I came across this presentation on SlideShare while looking for some inspiration to finish up a proposal I’m working on. A lot of companies that I’m a customer of could learn a thing or two from this.

by Fabio Cipriani

Here is an unscientific, apples-to-oranges comparison of Google Trends search volume over the last 12 months for “fixed gear” in blue vs. “road cycling” in red:

There are lots of interesting things here, but two that jump out at me are how much of a bump “road cycling” gets during the Olympics around point C relative to volume during the Tour de France in July, and how quickly it falls off afterwards.

Like a can of peaches [cringe], the Tour de Georgia is on the shelf. It’s been the best in North America from a pure racing standpoint, although they have had financial trouble in the past. The dismal economy obviously isn’t helping their cause, but I don’t think that’s really the problem. It’s that bike races always cost a lot to put on, but the value for sponsors depends on where the event is held. Unfortunately, the Tour de Georgia is probably too big and expensive to stage in small towns like Dahlonega, Georgia (Pop. 3,638).

Without a significant TV or web audience, the best thing a bike race like the Tour de Georgia can monetize is feet on the ground. A lot of people would say media coverage too, but I think the value there is more about marketing the event itself than delivering direct benefits to the sponsors. In any case, small towns in Georgia can’t send a lot of foot traffic through the expo and have little value for corporate hospitality. Atlanta is a good location for the final stage, but apparently not lucrative enough to offset spending $150,000 a night on hotels in places like Tybee Island.

Sure, the Tour of California costs a lot more to organize and sponsor. But look at the large and bike-loving Nielsen DMA’s it will run through in 2009: #2 (LA), #6 (Bay Area, twice), #20 (Sacramento), #28 (San Diego). This year’s TdG, meanwhile had one day in #8 (Atlanta) but the next biggest market was #96 (Savannah).

I think the lesson is that you need to tailor your bike race to the to revenue potential of your local market. Or, if you have your heart set on running a UCI 2.HC stage race, you need to find a really big market.

(image: Ben Jacques-Maynes on Brasstown Bald, 2006 Tour de Georgia)