It's July, and you know what that means. The Big Dance, La Grande Boucle, that strange French road race that eclipses all the others each year, Le Tour. It's the only bicycle race many Americans know or care about: the Tour de France.
Along with the Tour every year comes the inevitable question: None of my customers care about professional road racing. So why do bike companies spend so much money on race teams, money that could be better spent on projects like advocacy or youth development or community programs or just promoting the activity of cycling in general?
Like a lot of things in the bicycle business, the answers are neither simple nor straightforward. The reality of pro road racing sponsorship dips into arcane topics, ranging from "that's the way we've always done it (at least in the last thirty years or so)" to the byzantine processes of bike brands' budgets.
The Economic Argument
We're talking about something on the order of a million euros in cash per year just to show up at the start line and play the professional road racing game.
Let's start by looking at the purely economic aspects of race teams. And let's get this out of the way while we're at it: no way do sales of high-end road bikes pay for the costs of road team sponsorship, and I don't know of any bike brand that pretends otherwise.
For one thing, there's the outlay of sponsorship itself: as of 10 years ago, the last time I was responsible for a bike brand's racing budget, we're talking about something on the order of a million euros ($1.1 million) in cash per year just to show up at the start line and play the professional road racing game. And that's only to be the team's bike sponsor, not one of its title sponsors. According to my sources in the peloton, that million-euro number has remained fairly constant over the past decade while overall team budgets have skyrocketed.
But the pure cash outlay is the least of it. There's also the cost of proving multiple dozens of fully equipped semi-custom top-of-the-line road bikes, climbing bikes and time trial bikes. On the equipment side (components, wheels, computers and wattage meters, bars, stems and saddles and so forth) some of these costs can be offset with sub-sponsors. Those are OE vendors to the main bike brand who want their products to be seen on the main brands' road racing team. Then there's the cost of a full-time employee to manage team relations and all the onsite realities of working with the team management and riders.
From a budgetary standpoint, the initial cash generally comes from the marketing department, and the bikes and equipment usually come from Product, often line-itemed as R&D. But however you account for it, it's still a huge expense and, at the risk of repeating myself, the revenue from high-end racing bike sales comes nowhere near covering it. Functionally, those costs are spread among all the bikes the company makes. We'll explore why in just a bit.
Marketing the team relationship
Failure to have a team in the pro peloton for the Tour is the kiss of death for a road brand, both among opinion-making riders and even more critically, among opinion-making shop employees.
While the costs of team sponsorship may be high, the costs of not having a team in the Tour may be even higher. To have credibility as a premiere road brand, a supplier's team has to be one of the 18 UCI WorldTeams, which is to say, one of the 22 teams in the Tour de France. Failure to have a team in the Tour is the kiss of death for a road brand, both among opinion-making riders and even more critically, among opinion-making shop employees.
Among the four brands in the Quadrumvirate, Trek is a title sponsor for its team Lidl-Trek; Specialized sponsors Bora-Hansgrohe, Soudal Quick-Step, and TotalEnergies with bikes; Giant has Jayco AlUla; and Pon is represented both with Cannondale — ridden by the EF Education-Easypost team — and Cervélo — ridden by Jumbo Visma.
So one reason to have a team in the Tour is that every other major brand (including Canyon) has one (or more). Smaller players with budgets that are a fraction of the Big Four's, including Bianchi, Cube, Pinarello, Scott, Factor and others, all have teams in the Tour. For many of them, team sponsorship may be the single biggest element — even, in practical terms, the only element — in the company's marketing budget. So there's a certain amount of peer pressure at work here. Sure, it's expensive to get in, but it's even more expensive to get out. The bottom line is, if you're not in the Tour, you're just not considered a player in the high-end road market.
Corporate positioning
Of course, the same thinking also applies to women's road racing, cyclocross, gravel, and the various offroad disciplines. At the end of the day, bike companies just happen to like bike racing, and competition at the highest levels is seen as part of a brand's corporate DNA. But while other categories are growing — especially women's road racing and gravel — it's still the Tour that speaks most clearly to a brand's reputation, and to the brand's perception of itself.
And that's why bike brands sponsor Tour de France racing teams.
