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Sponsor at Tour Hits a Bump

El Segundo firm learns risks of marketing tools as its top rider is banned amid doping allegations.

July 07, 2006|Greg Johnson | Times Staff Writer

Computer Sciences Corp. had high hopes heading into the 93rd Tour de France that's underway. Its top cyclist, Ivan Basso, had just dominated the field during a key race in Italy, positioning himself as one of the favorites to pick up where seven-time winner Lance Armstrong left off in 2005.

But the El Segundo-based company's dream of capturing a yellow jersey in the Tour de France during its sixth year as a professional cycling sponsor turned nightmarish when Basso was entangled in the cycling world's latest doping scandal -- and was banned, along with a number of other top riders, from competing in France.

So far, the company is standing by its remaining riders in the race. But a Spanish subsidiary of Liberty Mutual promptly severed its sponsorship deal with another team, and cycling proponents in the U.S. acknowledge that it could grow more difficult to attract corporate sponsorship dollars.

"Cycling has gotten a lot of bad press with the doping scandal," acknowledged Jonathan Vaughters, a former professional racer who now manages a team of young riders for TIAA-CREF, the New York-based financial services company.

The controversy that erupted on the eve of the Tour de France underscored the risky nature of sports sponsorships.

"There's always a chance that a sponsorship's value will be tarnished by a team or athlete's misbehavior, financial distress or poor performance," said Don Hinchey, vice president of communications for the Bonham Group, a Denver-based company that structures sports marketing deals.

Computer Sciences Corp. immediately issued a news release stating that it was "shocked and saddened" by the alleged doping and that its riders -- who wear the company's logo prominently on their jerseys -- had agreed to a strict zero-tolerance policy.

But, once the Tour de France was underway, Computer Sciences Corp. began to leverage the kind of access that a sponsorship buys.

The company is shuttling customers and employees to France for a flurry of race-related events, including a gala affair at a posh ski resort near one of the great, scenic climbs on the Tour route through the Alps.

Though cycling remains a niche sport in the U.S., its demographic proves a good match for some companies that market certain upscale consumer goods and services.

Cycling's fan base is top-heavy with professionals in their early 30s to late 40s with average household incomes topping $100,000. A good number of them work for high-technology companies that need information technology services -- which is what drew CSC, a company with $16 billion in sales, into the game.

CSC, which also serves as the official technology supplier for the Tour, won't say how much it spends to sponsor its Team CSC. But industry observers say CSC would have to be paying more than the $10 million a year that the U.S. Postal Service paid to hitch its marketing wagon to Armstrong's bicycle.

One problem for cycling in the U.S. is that it doesn't have a traditional season of big events with a beginning, middle and end that will appeal to neophytes.

Some in the cycling world refer to their sport as "the next golf," a reference to the pastime that became synonymous with corporate executives. Others prefer a NASCAR analogy -- think of a human-powered racing circuit with corporate logos stitched on cyclists' apparel rather than painted on the hood of a car.

Cycling also represents an inexpensive option compared to this country's major sports. If the sport can cobble together a season's worth of races in the United States, a corporation might be able to acquire the title sponsorship for as little as $10 million.

"That's about the cost of one PGA tournament in one [media] market," said David Chauner, director of Pro Cycling Tour LLC, a Philadelphia-area company that arranges cycling sponsorships.

Sports marketers say it's too early to determine whether corporate interest in the sport will wane in the U.S. because of the still-unfolding drug scandal. But Vaughters, who continues to pursue marketing deals for cyclists, sees light at the end of the tunnel.

"If, in the end, [doping] finally has been purged from the sport, cycling is kind of like buying an undervalued stock right now," said Vaughters. "For those of us who've been in the sport for a long time, it signals a cleaner, brighter future for all of us."

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