LAS VEGAS, NV (BRAIN)—Part of the partnership deal between SRAM and Lehman Brothers Merchant Bank (LBMB) involves establishing a $10 million Cycling Advocacy Fund. Stan Day, SRAM’s president, sketched out details of the fund during a press conference yesterday.
While the high profile bankruptcy of Lehman Brothers Holding cast a shadow over the investment LBMB made in SRAM, Day was quick to point out that LBMB was not involved in the bankruptcy and its purchase of a 40 percent ownership stake in SRAM is set to close on schedule in less then two weeks.
The $10 million fund is made up from $6 million contribution from SRAM’s worldwide management team, while LBMB chipped in the remaining $4 million.
The fund will be dispersed to advocacy groups working in three major markets, the United States, Europe and Taiwan. Day noted that Europe gets bicycle advocacy much better then the States, so he expects the bulk of the fund to be dispersed in the United States.
SRAM is still working on how the fund will be distributed though Day noted they were going to disperse the fund as quickly, at least $2 million a year over the next five years—if not quicker. He feels that given the convergence of interest in bicycle transportation worldwide it’s better to get the money working as quickly as possible.
“We will make our plans about the fund clear in November. We don’t want to come up with anything new so we plan on channeling money to current advocacy groups who are already doing a great job,” Day said. He expects the fund will work with up to 12 groups worldwide.
Day would not comment on what happens to the fund once the $10 million is passed out. However, he did note that one of the aspects of LBMB that appealed to SRAM as a partner was its understanding the importance of advocacy to the growth of the bike market.