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Monday, September 12, 2011
Cycling deal off to intriguing start

By Bonnie D. Ford
ESPN.com

The agreement that will join the RadioShack and Leopard-Trek cycling teams at the hip, a bit of macro-surgery that has set the sport on its ear, isn't so much a merger as a splicing together of two organizations. It's still early, but last week the seams were showing.

After weeks of speculation -- and silence from the principals -- European media reports outed the deal and forced the two teams to issue statements that were enthusiastic, if somewhat incomplete. Riders, some faced with the prospect of being left stranded in a game of musical saddles, complained they'd been left in the dark. Flavio Becca, the Luxembourg real estate magnate who will own the new entity, seemed to want distance from the notion of consorting with Americans, even though the team's primary sponsor and marketing arm are based in the former Republic of Texas.

Radioshack Cycling Team
Team Radioshack during the second stage of the Tour de France this year.

RadioShack's chief marketing officer, Lee Applbaum, in his first comments on the record about the hybrid team, conceded that things had gotten off to a "less-than-perfect start" from a communications standpoint, but maintained the new venture is "a marketer's dream."

"We discussed this at length with our partners, including Trek, who had a real-time view of working with Mr. Becca," Applbaum said. "He's a passionate sportsman who wants to win, and we prefer that to someone who's passive and just throws money at a team."

The headliner in the deal from a competitive standpoint is Leopard's three-time Tour de France runner-up Andy Schleck. Applbaum said RadioShack's corporate desire to be associated with a Grand Tour champion and the company's familiarity with the staff and management that will stay on outweighed the possible downside of ceding control to a faraway owner.

Becca, who a year ago enticed most of Bjarne Riis' Saxo Bank platoon to defect to his side, will continue to hold the team's professional license. RadioShack's Belgian manager and director, Johan Bruyneel, will run the team's business operations and design its strategy on the road. Capital Sports & Entertainment, the Austin-based company that held RadioShack's license through a subsidiary, will give up that role and become a subcontractor, handling marketing and sponsor hospitality. Trek was already supplying bikes to both teams. Nissan, a secondary sponsor for the RadioShack team, will be promoted to co-title sponsor and get its logo on the jersey.

RadioShack will continue its affiliation with its most famous former rider, keeping Lance Armstrong under a personal services and endorsement contract, according to his agent, CS&E founder and partner Bill Stapleton. (Armstrong also will continue to be under contact with longtime sponsor Trek in 2012, but not with Nissan, Stapleton said.)

The company also will maintain its support of the Livestrong Foundation, which is done tangibly through merchandise sales -- Applbaum said the company has raised $8.5 million for the foundation in the last two years -- and symbolically through the yellow stripe on the jersey. "We don't see this as a traditional sports sponsorship," said Applbaum, whose father died five years ago of lymphoma and whose mother-in-law is a breast cancer survivor.

On paper, there's some logic to the consolidation from Leopard's side. Becca, who had been bankrolling the team substantially on his own, gets the investment from RadioShack and Nissan -- the latter assuming he resolves any unfinished business with current Leopard vehicle sponsor Mercedes-Benz, which issued a brief, irritated press release expressing "surprise" at being supplanted. (A corporate spokesman for Nissan declined comment.) The Schleck brothers, who have four Tour podium appearances between them without a win in the last three years, get the choreographer of nine championships in Bruyneel.

Lee Applbaum
RadioShack Chief Marketing Officer Lee Applbaum.

Brian Nygaard, the Leopard general manager Bruyneel will replace, declined comment. Through a team spokesman, Becca also declined to be interviewed. Stapleton said he took no offense at Becca's reported comments in a Luxembourg television interview that "nothing about this team will be American except the sponsors.''

Still, the deal seems a little more confusing from this side of the Atlantic.

Why would RadioShack, a company that doesn't do business in western Europe, cede control to an organization based there? "This is not a precursor to expanding" into that part of the world, Applbaum clarified.

And what about the risk to the brand if indictments result from the ongoing federal investigation into doping on the Armstrong-led, Bruyneel-directed U.S. Postal Service teams of a decade ago?

Jim Andrews, senior vice president of Chicago-based IEG, a sponsorships research and consulting firm, said he has no inside knowledge of the factors that led to RadioShack's decision to continue sponsoring the team. Most sponsors faced with a potentially controversial situation, he said, "have sat down and said, 'We know we're taking a calculated risk.'"

"They've seen something there from those who follow the sport most passionately, that there's an association that's positive, and said, 'It's that group we want to market to and engage with,'" Andrews said.

"As for the association with Armstrong, I'd love to be a fly on the wall internally. They may be saying, 'We're already in. Our options are to pull out, cut our losses and not risk any tarnishing of our brand,' or, 'We're in, and rather than lose our entire investment in the sport, we still think there are positive benefits.' There are still people who believe and defend Armstrong and love his story. You know you're going to get criticized either way."

Applbaum said he and RadioShack are comfortable with their commitment. He expressed regret that some riders and staff will lose their jobs, but said he is confident Bruyneel will make the transition smooth.

"He has an incredible track record in Grand Tours. … He's a phenomenal manager of people," Applbaum said. "Integrity is a core pillar of our brand, and at this juncture, we continue to monitor the situation. If the investigation changes course, we'll address it at that time."

The core of the RadioShack-Nissan-Trek team will come from the existing Leopard stable led by Andy and Frank Schleck -- who finished second and third in the Tour de France this year. It will also include and classics and time trial strongman Fabian Cancellara of Switzerland and populist hero Jens Voigt of Germany. A roster won't be finalized until later this week at the earliest, but indications are that RadioShack will contribute Americans Ben King, Matthew Busche and 2011 Tour of California winner Chris Horner; Slovenian national champion Jani Brajkovic; and veteran Grand Tour campaigners Andreas Kloden of Germany and Haimar Zubeldia of Spain. American Levi Leipheimer, winner of three important stage races this year, has not announced his intentions.

Any riders who already had signed contracts with Leopard have to stay put. Those who had agreed on terms with RadioShack technically would be free agents because the license-holder is going away, but their chances of finding a slot on an elite team would be bleak this late in the season.

Whatever external factors do or don't come into play, the new Leopard-RadioShack tandem will enter a changed competitive landscape next year featuring several stacked "super-teams" like the U.S./Swiss-owned BMC and Great Britain's Sky.

"It doesn't happen overnight," Garmin-Cervelo majority owner Doug Ellis said of the challenge of melding two organizations, a passage his team underwent last year. "There's an overlap of skill sets -- how do you fit all those guys together? It took us some time to sort out. We didn't perform well in the early classics partly because of that."

Cervelo co-founder Gerard Vroomen said the constantly shifting alliances in cycling have immunized him from being surprised at anything, and he pointed out that the Schlecks were reportedly first courted by Bruyneel a couple of years ago when RadioShack was being formed. Vroomen speculated that Becca became impatient both with the search for a title sponsor and the team's results. "I can't climb into his head, but 12 months ago he was probably sure he was going to win the Tour de France and the spring classics, and he didn't do either,'' Vroomen said. "Someone must have made the suggestion that Bruyneel creates Tour de France winners.''

Andy Schleck
Andy Schleck is the headliner in the deal from a competitive standpoint.

Stapleton said the first informal discussions about fusing the two organizations took place in Paris during the last weekend of the Tour and that Armstrong, who was present, was an early advocate. Both Applbaum and Dean Gore, Trek's director of global marketing, confirmed that they were approached by CS&E at that time.

"On our side, what was interesting was a more international roster and younger talented riders, still keeping our focus for our American sponsors on [the stage races in] Colorado and California, which are of paramount importance to them," Stapleton said. "I think what they were interested in was not just our sponsorship dollars but our sports experience, our experience running a team, making sponsors happy with hospitality and marketing programs."

Stapleton and Gore said they intend to continue operating the under-23 team sponsored by Trek, which produced national road and time trial champions King and Taylor Phinney (now riding for BMC) last year.

If the Paris conversations had never happened, Applbaum and Stapleton both contend the RadioShack team would have continued to operate as is; in fact, the team had already applied to renew its license. The obvious fissures in the global economy and the tighter sponsorship market that has resulted didn't propel the deal, Stapleton said.

"We were fully funded at our end," he said. "This is a deal that made sense on both sides. It wasn't done under duress. There was no financial driver or bankruptcy or anything that did it, and there wasn't any sort of outside investigation that influenced it."

Gore declined to comment on the potential impact of the investigation. He said Trek was prepared to continue sponsoring two separate teams, and the company has seen growth in European road bike sales since its association with Leopard. But Trek also sees the value in being behind one beefed-up team, he said.

"Everybody remembers the winner," he said. "No one remembers who finished second. We didn't have the final say in this, but we think it's a really good outcome for all parties involved."

Bonnie D. Ford covers Olympic sports for ESPN.com. She can be reached at bonniedford@aol.com.