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 Post subject: nmr: no more Discovery cycling team after 2007
PostPosted: Tue Feb 13, 2007 2:07 pm 
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http://velonews.com/news/fea/11627.0.html

velonews.com Wrote:
USA Today reported Friday that the Discovery Channel is expected to drop its title sponsorship of the cycling team that bears its name at the end of the 2007 season.

The decision not to renew the team's contract at the end of a three-year contract comes only days after the firing of company CEO Billy Campbell, a strong advocate of the team sponsorship, on Monday of this week.

Campbell, who helped push the television network's initial co-sponsorship in 2004, also pushed the company to assume full title sponsorship in 2005, when the U.S. Postal Service ended its support for the team.

The team is operated by Tailwind sports, a management firm co-owned by seven-time Tour winner Lance Armstrong and attorney Bill Stapleton.

Campbell, CEO at Discovery for five years, was replaced by former NBC executive David Zaslav.

The firing was part of a major management shake-up at Discovery, which also saw David Abraham, head of the TLC channel; Maureen Smith, head of Animal Planet; Dawn McCall, head of the international operations; and Pandit Wright, head of human resources, terminated this week.

Campbell was also said to be a major supporter of the team's decision to hire Ivan Basso, despite ongoing questions surrounding his involvement in the Operacion Puerto doping scandal.

Zaslav immediately embarked on company-wide reorganization when he was named as Campbell's replacement on Monday. Zaslav announced Tuesday that he would consolidate all production facilities into one unit and hire new, senior business for each of Discovery's five networks.

Stapleton attributed the sponsorship decision to the changes at Discovery headquarters in Silver Spring, Maryland.

"This would not have happened if Billy Campbell was still there," Stapleton told USA Today's Sal Ruibal. "This is about their change in management."


This really, really sucks in my opinion, especially after securing great riders like Ivan Basso and Levi Leipheimer.


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PostPosted: Tue Feb 13, 2007 2:14 pm 
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I'm not completely surprised. They charge an INSANE amount of money for sponsorship. Hundreds of thousands. Companies get sold on worldwide exposure but in the end the exposure they get isn't worth it.

They end up only marketing to the cycling industry and that brief period of exposure during the Tour de France.


That being said, there will be another company step in to sponsor this team. No question. They're too good.


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PostPosted: Tue Feb 13, 2007 2:19 pm 
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Last number I read yesterday was $15 mil for the team. So yeah, not chump change.

I agree, Ben, but I just hope it's another American company that steps up to sponsor. I understand the fear of sponsoring a sport that is so plagued by accusations of drug-usage and esp. last year just being in the spotlight as a tainted sport... no company wants to be associated with that. I don't want cycling to fall by the wayside and get relegated back to a Euros-only sport. It's already suffered since Lance isn't riding anymore... out of sight, out of mind for most Americans unfortunately.


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PostPosted: Tue Feb 13, 2007 3:29 pm 
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Ironically, I read this after viewing "the Hard Road", which I high recommend to all you bike people.

I think Drunk Cyclist summed it up nicely with his statement of the ratio of good publicity to bad publicity right now is 7 to 1. Is that not an acceptable ratio?

The thing is, and this makes Discovery look swarmy to the masses, is that they pretty much signed on to get the exposure from Lance winning. Unfortunately, without that high profile exposure, finding another sponsor may be a little bit tough.

Though, if I was to believe Bicycling mag, and think that cycling has become a niche activity of the rich and powerful, maybe finding a sponsor won't be tough.

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PostPosted: Tue Feb 13, 2007 3:40 pm 
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Flying Rabbit Wrote:
The thing is, and this makes Discovery look swarmy to the masses, is that they pretty much signed on to get the exposure from Lance winning. Unfortunately, without that high profile exposure, finding another sponsor may be a little bit tough.




Agreed. They're are surely going to have to lower their price due to Lance not being there and the state of cycling in general.

Then again, there's always some company willing to step forward. I mean there are great teams out there sponsored by Jellybean and Pen companies.


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PostPosted: Tue Feb 13, 2007 3:43 pm 
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True. You have to realize though that while Lance probably had a nice salary, those other guys aren't breaking the bank. Most of pro cycling expenses comes from the travel expenses and keeping pro-rated doctors, mechanics, drivers, trainers etc all on call, not to mention publicity out the yingyang.

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PostPosted: Tue Feb 13, 2007 3:44 pm 
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Or, it could be that $15M could be better spend elsewhere. Sponsoring a cycling team (or just about anything) is unlikely to give you a healthy ROI.

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PostPosted: Tue Feb 13, 2007 3:50 pm 
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Elvis Fu Wrote:
Or, it could be that $15M could be better spend elsewhere. Sponsoring a cycling team (or just about anything) is unlikely to give you a healthy ROI.


Disagree with you on a level. That 15m that was spent got them huge amounts of exposure with all the shows that tied into the tour. Lance did some much cross-promotion on American Chopper, etc. Not to mention all the merchandising that every bike fool this side of Paris bought. That 15m for the exposure was well worth it. Discovery was all over the tongues of people for a good 4 months. Nonstop. Lance on every bike website, cover, etc. All the time sporting that Discovery jersey.

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PostPosted: Tue Feb 13, 2007 3:52 pm 
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Name recognition and exposure do not equal sales. Ask General Motors.

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PostPosted: Tue Feb 13, 2007 3:54 pm 
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Flying Rabbit Wrote:
Ironically, I read this after viewing "the Hard Road", which I high recommend to all you bike people.

I think Drunk Cyclist summed it up nicely with his statement of the ratio of good publicity to bad publicity right now is 7 to 1. Is that not an acceptable ratio?


Hardly. Nearly 15% of your exposure is negative, and for this your wasting $15mil of your shareholders' dollars?

Damn good thing you're not a CEO.


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PostPosted: Tue Feb 13, 2007 3:57 pm 
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The thing that pisses me off, and of course, I know I'm odd in this sense... Ivan Basso is a force to be reckoned with. He came in 2nd and 3rd behind Lance on two occasions. He's a PHENOMENAL rider and probably the best one out there right now. As far as cycling is concerned, he's got EVERYTHING Lance had-- the endurance skills, the climbing skills, the time trial skills, and has always had a great team of domestiques to carry him through. But of course Americans don't see good ol' boy Lance out there, so why should they give a shit about some Italian dude? Sorry... bitter rant.


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PostPosted: Tue Feb 13, 2007 3:58 pm 
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Absolutely, but then again, how else do you pimp a non-physical product? By putting your name out there and tying it to a physical thing, such as cycling, you are therefore increasing your exposure. Thusly, with Discovery being tied to Lance, it was money because they had the cross-promotional abilities.

I no doubt agree with you that the 15m spent may not have been made up, but it may have exposed some of their other programming to a new audience. Unfortunately, that data is unavailable to the public.

Anyone know if there are tax writeoffs that they could've ingested as well?

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PostPosted: Tue Feb 13, 2007 4:01 pm 
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With a couple minutes of research, it appears that Discovery is just redirecting the ship into digital broadcasts and syndication, i.e. the entertainment business rather than the cycling business. That money has to come from somewhere. There is also talk of layoffs in the near future in addition to a pretty significant management shake-up.

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PostPosted: Tue Feb 13, 2007 4:03 pm 
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Billzebub Wrote:
Flying Rabbit Wrote:
Ironically, I read this after viewing "the Hard Road", which I high recommend to all you bike people.

I think Drunk Cyclist summed it up nicely with his statement of the ratio of good publicity to bad publicity right now is 7 to 1. Is that not an acceptable ratio?


Hardly. Nearly 15% of your exposure is negative, and for this your wasting $15mil of your shareholders' dollars?

Damn good thing you're not a CEO.


The point is, that this one guy brought down American cycling. He may or may not have doped. Probably, but the jury is literally still out. Also, the point being that there were so many good years of racing and of outstanding performance. I don't blame Discovery for dropping the program because, quite frankly, most Americans could care less about cycling as a sport.

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PostPosted: Tue Feb 13, 2007 4:03 pm 
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Flying Rabbit Wrote:
Absolutely, but then again, how else do you pimp a non-physical product? By putting your name out there and tying it to a physical thing, such as cycling, you are therefore increasing your exposure.


This is a pretty ridiculous assumption. There are thousands of companies that sell services (non-physical products) based on the value of the service they provide. Hell, McDonalds ain't banking billions because they are good cooks. They are selling the experience and the service that you know you will get when you go into one of their restaurants.

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PostPosted: Tue Feb 13, 2007 4:04 pm 
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Most Americans value their taints.


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PostPosted: Tue Feb 13, 2007 4:05 pm 
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Let's not forget that Floyd Landis is not the first and far from the last doping problem for cycling. It's damn near track and field.

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PostPosted: Tue Feb 13, 2007 4:11 pm 
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Fu and Billz, I get it, really I do. As an avid cyclist myself and big fan of pro cycling, I'd like to see it get more exposure in the U.S. as a sport worthy of lauding. The U.S. is cranking out some amazing competitors in cycling (Tyler Hamilton is back in the game again, Tom Danielson, Dave Zabriskie, George Hincapie and Bobby Julich- although both are getting older, Levi Leipheimer). I guess it's just a WISH on my part that another American firm will step up and sponsor a team that is worthy of winning, because I hate to see it all be only European-sponsored teams.


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PostPosted: Tue Feb 13, 2007 4:13 pm 
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Right, but how is McDs getting exposure? By advertising. The point is, Discovery obviously wouldn't have put money into the expenditure if it didn't look like they weren't getting something out of it. That something was publicity for their programming.

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PostPosted: Tue Feb 13, 2007 4:15 pm 
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Elvis Fu Wrote:
Let's not forget that Floyd Landis is not the first and far from the last doping problem for cycling. It's damn near track and field.


But for 95% of Americans he is the first and last doping in cycling. Whatever fringe fans Lance might've brought into the sport, might have been lost because of Landis.

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PostPosted: Tue Feb 13, 2007 4:46 pm 
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Flying Rabbit Wrote:
Right, but how is McDs getting exposure? By advertising.


*bangs head on desk* Not exactly. The most powerful form of advertising is word of mouth from family and friends. There ain't enough ad dollars in the world to buy that sort of WOM power.*

Flying Rabbit Wrote:
The point is, Discovery obviously wouldn't have put money into the expenditure if it didn't look like they weren't getting something out of it. That something was publicity for their programming.


But the publicity doesn't mean jack shit if it doesn't bring in revenue, which was the exact point I was making in my first post:

Elvis Fu Wrote:
Or, it could be that $15M could be better spend elsewhere. Sponsoring a cycling team (or just about anything) is unlikely to give you a healthy ROI.


By reading up on what's going on at Discovery, it's very clear that they are interested in growing their flagship venture—Discovery Channel, not Discovery Cycling. I would be very surprised if that change in strategy wasn't influenced by the bottom line.

*A total aside here: you ever seen those Jiffy muffins in the store, with the old fashioned blue boxes:
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They haven't changed their packaging in 75 years, and they do little to no advertising. Guess what…they carry over 50% of the muffin mix market. More than Betty Crocker and all the other big brands combined. They got that way because your grandmomma and her grandmomma used it and loved it, and it was passed down through generations. It becomes more than the mix, it's the experience. Same with Coca-Cola. It's not the advertising that makes it #1, it's the emotional attachment with the product that makes it #1.

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PostPosted: Tue Feb 13, 2007 4:48 pm 
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Flying Rabbit Wrote:
Elvis Fu Wrote:
Let's not forget that Floyd Landis is not the first and far from the last doping problem for cycling. It's damn near track and field.


But for 95% of Americans he is the first and last doping in cycling. Whatever fringe fans Lance might've brought into the sport, might have been lost because of Landis.


He wasn't the first...Lance was the first.

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PostPosted: Tue Feb 13, 2007 5:29 pm 
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Just to draw the wrath of Dana for no good reason, other than being so damn good at doing so...

cycling lol

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PostPosted: Tue Feb 13, 2007 5:43 pm 
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Radcliffe Wrote:
Most Americans value their taints.


My taint is priceless.

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I tried to find somebody of that sort that I could like that nobody else did - because everybody would adopt his group, and his group would be _it_; someone weird like Captain Beefheart. It's no different now - people trying to outdo ! each other in extremes. There are people who like X, and there are people who say X are wimps; they like Black Flag.


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PostPosted: Tue Feb 13, 2007 8:17 pm 
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Elvis Fu Wrote:

*bangs head on desk* Not exactly. The most powerful form of advertising is word of mouth from family and friends. There ain't enough ad dollars in the world to buy that sort of WOM power.*

Same with Coca-Cola. It's not the advertising that makes it #1, it's the emotional attachment with the product that makes it #1.


Look, I agree that there is some WOM power, and yes, loyalty to a brand is certainly a factor, but Coke spends some 300-400million in ads a year. I disagree that WOM/loyalty is more of a factor than advertising. Look at Sprite--classic case. Brand was quickly going downhill in popularity. Sprite has been around for how long? They start advertising using a more "urban" influence, and their brand goes up in the market. Sure, that's only one case but it isn't an exception. The reason Coke advertises is to keep themselves in the public eye. There are always companies looking to cash in on yr success. They might not topple you, but in the end, isn't it all about making the most money?

Also, keep in mind that original argument was that, at the time, 15m was a good investment. I don't think I'd disagree with you and say that the 15m now wouldn't be a good investment. But, the amount no doubt is probably slashed now that Lance is gone. True, cycling isn't a cashcrop yet here in America, but neither was NASCAR 10+ years ago.

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