The big business of cycling
Not that long ago, cycling was a Cinderella sport in South africa, and sponsorship and media coverage were hard to come by.
In Europe, cycling has always been big business, driven by the region’s passion for the sport and its massive following. The business of cycling here has been helped in no small part by the legendary Tour de France, the other two Grand Tours, the Giro d’Italia, and Vuelta a Espana, as well as the popular spring classics, the most famous of which is Paris-Roubaix, aptly named the “Hell of the North” because of its tortuous pavé (cobble) sectors.
Following the trend of their roadracing European counterparts, it was road cycling, particularly through large events like the Cape Town Cycle Tour and the Momentum 947 Cycle Challenge, that the local population mostly participated in. That is until mountain biking fever took hold. Now, with more than 50
three- to four-day mountain bike stage races i n South Africa, heightened mountain biking activity is evident. Not surprisingly, this growth in the popularity of cycling has made cycling brands, marketers and sponsors sit up and take notice.
Cycling is no longer a poor man’s sport. The reality is that today many cyclists are comfortably well off, so it’s no wonder that brands are now eyeing the cycling industry with its growing media exposure to increase awareness for their brands. But the brand is not the only beneficiary of growth.
Building t he brand also means building the sport - something MTN knows quite a bit about. Its investment in cycling , which began in 2007, contributed to the growth of the sport at both recreational and competitive levels. The visibility and not unsubstantial successes of MTN-Qhubeka, the continent’s first Pro Continental African team, helped drive interest and investment into cycling. Perhaps more importantly, these investments, sponsorships, events and related exposure contribute to growth in the cycling industry and the economy as well as create jobs and drive tourism to the country.
SA’s signature events like Absa Cape Epic, which is accredited by the UCI (Union Cycliste Internationale), and the world’s largest timed event, the Cape Town Cycle Tour with its 35 000-odd participants, generated over R600m for the Western Cape economy last year. And they continue to promote cycling both locally and globally. As will Team MTN-Qhubeka, who will be f lying the nation’s f lag at the Tour de France later this year.
The bicycle may not be king here as it is in many European countries, but the cycling industry is growing locally. Even the City of Joburg is pushing for a more cycling-friendly city by promoting cycling and building cycling lanes. But more to the point, the increasing number of events, participants, cycling-related sales as well as a growing and engaged audience evidences this growth. And it is unlikely that big name cycling brands like
Specialized would be ploughing money into local dedicated set-ups if this were not the case.
A SUSTAINABLE BUSINESS: THE ABSA CAPE EPIC
SA’s unique events like the Cape Town Cycle Tour and the 947 have set the bar as sustainable business models and premier cycling events. One race in particular has also managed to do this without relying on massive participant numbers, and it has elevated the status of mountain biking in the country. The Western Cape’s Absa Cape Epic is the world’s only hors categorie (HC) mountain bike team race – on a par only with the Tour de France, Giro d’Italia, Vuelta a España, the three road cycling Grand Tours, and the Cyprus Sunshine Cup.
It is not called the Epic for nothing. It is an epic eight-day test of endurance and skill. What awaits riders each year is a challenging 800km terrain that includes 15 000m of climbing traversing imposing mountains and rocky climbs, taxing gravel roads and gripping, technical descents. It is not for the nervous or unfit. Yet everyone who is anyone wants to be a part of it. Last year, the 100 Early Bird entries were sold out within seconds and potential participants, both men and women, had to scramble to get an entry through the Epic’s innovative lottery system.
At R59 600 per two-person team, the entry fee is not cheap. But this amount also covers accommodation, food and support over eight days. The riders’ entry fees only cover 55% of the cost of the event, says Absa Cape Epic founder Kevin Vermaak. The remaining 45% is covered by sponsorship income.
Why, you may ask, would so many t wo-team hopefuls, many of them amateurs, be willing to pay a sizeable amount to put themselves through the ordinary person’s equivalent of torture over eight days? The answer is simple. It is one of the most, if not the most, prestigious mountain bike race in the world. Its HC status means it is one that the professional mountain biker is not going to miss, especially when crucial UCI points can also be earned. A prize purse of R1.7m is an added incentive. Not surprisingly, the Absa Cape Epic attracts top professionals and amateurs from around the globe. But many don’t make the cut as only a total of 1 200 riders – in 600 two-person teams – can take part each year.
Founded by l ocal entrepreneur Kevin Vermaak in 2004, entries for local participants in t he i naugural r ace sold out i n t hree days. The international block had sold out as well. By 2005, it had surpassed 2 500 global TV hours to become the most televised mountain bike race of all time and, in 2006, it landed title sponsor Absa, reports t he Gordon Institute of Business Science (GIBS). TV coverage i n 2014 amounted to 3 500 hours, a va l ue of R260m, Vermaak told Finweek.
This year Vermaak anticipates R300m to be generated by the Absa Cape Epic for the local economy. The average rider, he says, will spend an average total of 14 days in the Western Cape, usually i ncluding four days before the race in Cape Town.
“In 2014, it was t he fi r st t r ip t o South Africa f or 38% of t he international riders and 89% said they would return again for a holiday with their family. The impact extends to towns in which the race passes through and therefore is not localised to the City of Cape Town,” says Vermaak.