The cycling community are a fickle bunch. They’ve cheered unrelentingly for GreenEDGE, Australia’s first team on the World Tour, since the project was announced early last year.
But today GreenEDGE announced a three-year multi-million dollar naming rights deal with Australian mining services giant Orica Limited and suffered a backlash from many fans.
GreenEDGE has a significant social media presence on Facebook, Twitter and their very popular website, which crashed momentarily due to the avalanche of fans who descended on the site following the sponsorship announcement, and today it’s running about 50-50 on whether Orica is a good fit for Gerry Ryan’s team.
Plenty are making the connection between GreenEDGE, a team that has nailed its credentials as being green – and if you look at their website greenness is everywhere – and a sponsor that is in the mining industry and is, amongst many things, an explosives manufacturer.
While it’s an obvious connection to draw, you would be absolutely taking the high moral ground from a sponsorship perspective if you decided not to partner with an Australian company who were carrying out a legitimate business.
The whole green element may have to take more of a back seat for GreenEDGE for a while, but if I’m in their situation I would be doing exactly the same thing. What would you rather have – no sponsor and a lovely GreenEDGE title that’s no longer around in two years time, or a sponsor that’s there to help you share your goals and vision, but might have elements of it that a percentage of the public might not agree with?
For GreenEDGE to have a sponsor who is not green is risky, but it’s a risk I’d be taking. Multi-million dollar sponsors are very hard to find.
GreenEDGE did well to keep the sponsor’s name quiet until today but it’s not a surprise that an Australian mining company would be the major sponsor. For mine, the surprise is that it’s not BHP or Rio Tinto. I believe they had a lot of interest from China and early interest from Huawei, looking to build their profile in Australia around the launch of the National Broadband Network.
The right choice for a sponsorship is someone who wants to partner with you, pay you the fee you’re looking for and then participate in your leverage activities to help grow. Even better is if they have leverage ideas of their own that grow both businesses.
Now that the future of the team is secure, I would be worried less about fan backlash and more about how they’re going to proceed.
In sponsorship, there’s paying the fee to be associated and the next step, how they’re going to leverage that, and there are massive opportunities to do that here in Australia and overseas during the Tour de France.
I don’t think anyone has scratched the surface on that event in Australia yet – you’ve got a three-week leverage window where if you have the right activities in the right place you are going to reach a lot of people for a fraction of the price of an event such as the Olympics.
So far the GreenEDGE strategy has been spot on. They needed to win the Australian title so that jersey was on their back in Europe and did so by taking it very seriously. They made their world tour debut in the Tour Down Under, they’ve gone to Europe and notched up wins, and from a new product launch perspective it’s been an absolutely stunning success. Full credit has to go to Gerry Ryan for stumping up the cash and, from the team bus to the training centre inVaresi, Italy, it’s been done brilliantly well.
They’ve gone out and sought the best riders they could afford without having a GC (general classification, or overall Tour winner) contender; the way they’ve set up their staffing there have been no half measures and that’s contributed to their early success and enabled them to lure this major sponsor.
Today’s announcement is good news first and foremost for Gerry, given he’s funded the project and taken the risk, and it’s not an inconsiderable risk. If all the outgoings came out of his pocket for three years then he’s in the red for $30m-$40m at least.
He’s still not going to get a return on his investment yet but at least there’s a multi-million hole that’s started to be filled.
Co-naming of a team for the World Tour is in the order of $5m-$10m – whether it’s in Euros, US or Australian dollars depends on who you’re talking to. Whether this is at that level only they would know.
In my experience, cycling teams cost you more money than you will make. When it comes to prizemoney there aren’t the millions floating around that are in the PGA Tour or the tennis circuit each week and it gets split between the riders and the team anyway.
It is a passion project for Gerry and if he can break even that would be a stunning result and he’d be doing cartwheels.
He deserves congratulations, but isn’t a newcomer – he has been involved in sport for a long time. He was involved in women’s basketball when no one else wanted to be and was the first one in on cycling over a decade ago. Add to that involvement with St Kilda and Melbourne Storm and he’s been a very passionate supporter of sport without having a high profile.
That has had to change and while I don’t think taking a high profile with GreenEDGE is something he’s overly comfortable with, he understands he is the leader of an organisation and he’s growing into that role.
Despite some social media dissent today, this sponsorship is good news for the team: it secures their immediate future and frees the benefactor from having to foot all the bills, it’s good news for the riders, justifying their leap of faith; it’s good news for Gerry, and maybe even more so his son.
Gerry has quipped on more than one occasion about GreenEDGE, “if this fails it’s Andrew’s inheritance.”
So perhaps the person who is breathing the biggest sigh of relief today is Andrew Ryan!
Disclosure: Culbert’s company Jump Media & Marketing manages GreenEDGE cyclist Simon Gerrans