What next for Team Sky?
Experts tell Vern Pitt the squad is entering one of the toughest markets in years
Team Sky may have to compromise its British identity if it is to succeed in attracting a new headline sponsor within six months in one of the toughest markets in recent years, according to experts.
Last week broadcaster Sky announced it would stop backing the team, which cost it £25m in 2017, from the end of next year. The news was only communicated to team principal Dave Brailsford a couple of weeks before the announcement and Cycling Weekly understands it came as a shock.
Since its inception in 2010 Team Sky has had a strong British identity, from its birth as an adjunct to the British Cycling programme, to its star riders largely being British. That identity was further boosted on Sunday when Tour de France champion Geraint Thomas was crowned the BBC Sports Personality of the Year.
While the sponsorship professionals CW spoke to felt this was a strong selling point for some sponsors, if the team has to cast a wider net and look abroad for backers it may have to commit to changing its roster over time.
“It feels like it’s part of their DNA,” said James Toller, director at sponsorship consultant Mallory Group, who used to work for Jaguar Land Rover and set up Jaguar’s deal with Team Sky that ran from 2010 to 2016. “Any brand is going to want to have a degree of ownership over them so their DNA will need to shift.”
Foreign sponsors are also less likely to be concerned with the controversies that have dogged the team in recent years, as these have not had the same level of profile abroad as they have in the UK, and team management is understood to be keen on a “total reset”.
Experts also felt the controversies were not insurmountable to convincing board members of FTSE 100 companies worried about reputation risk, to invest. “Sponsors
don’t knowingly walk into controversy,” said Andy Westlake, chair of the European Sponsorship Association.
“But is the current one a controversy with a capital C or a little C? I’d say it was little C and a sponsor will see the positive substantially outweighing the negative.”
The range of experts Cycling Weekly spoke to felt that the digital technology a nd financial services were probably the best fit for Team Sky’s image as a performance-driven organisation.
Brexit battle
However, they identified the current economic environment as one of the toughest in the last decade. Sponsorship consultant Giles Morgan, who
“Brailsford is saying his phone has been ringing already”
negotiated the HSBC sponsorship of British Cycling when he worked for the bank, said: “In 2009 [when Sky did their deal] in the UK we were in the middle of the financial crisis. We were in a tough time — businesses hate uncertainty.
“What is interesting now is there is Brexit and enormous uncertainty for businesses at the moment. You’ve seen this with Six Nations rugby; the value of the sponsorship for next year is considerably down. It’s not that the value of the sponsorship is in question, it’s just the companies that are cautious investing.”
Westlake agreed that the sponsorship market was “tough”, especially for an organisation seeking a level of cash that would get you shirt sponsorship of a mid-table Premier League football team, as Team Sky is.
He added: “That said, big deals, and deals bigger than that, are being done. They have every chance of finding a new Sky to step in and take the team forward. I know Brailsford was in the media saying his phone has been ringing already and I’m sure that’s the case because cycling has come of age as a commercial vehicle.”
Westlake said the time pressures of the deal, which will need to be finalised before the Tour de France if the team is dodge the risk of riders wanting to leave, was also a major challenge. “Usually it takes longer than six months. Of course, big deals of that scale will have been done in that time, but in an ideal world you would want to be doing it 18 months to two years ahead of time,” he said.
Experts felt that Sky’s best chance of success was to find a backer who would come close to matching Sky's commitment, as lining up multiple smaller sponsors would be even more difficult in the time-frame.
Ultimately they said Team Sky was in the best position of any team to try and find a major backer. “Dave Brailsford has all the bullets to fire, he just has to hit streets,” said Westlake.