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Questions about Pro-level product endorsement(15 posts)

Questions about Pro-level product endorsementcyclinseth
Apr 14, 2003 9:33 AM
It's my understanding that the racers on professional-level teams do not individually pay for their bicycles and other related cycling equipement (frames, components, wheels). Does the team management pay for them or do the bicycle companies give them their bicycles for free?

If the teams get all of their equipement for free are we as consumers subsidizing this relationship by paying higher prices than would be? In other words, are the bicycle companys' losses passed on to us, the consumer?
re: Questions about Pro-level product endorsementNo_sprint
Apr 14, 2003 9:43 AM
It's all free. Bikes, clothes, equipment, expenses, salary. Nothing to worry about. Coca Cola, Nike, Pepsi dwarf the bicycle manufacturers in free stuff passed out and endorsement/promo spending.
I think I meant to use "sponsorship" not "endorsement"cyclinseth
Apr 14, 2003 9:43 AM
Yup. Buy a Trek, mail it to yourself, pay Lance $$$$$!! nmSpunout
Apr 14, 2003 9:45 AM
re: Questions about Pro-level product endorsementsacheson
Apr 14, 2003 9:59 AM
Both happen. In some cases, you'll see the bike manufacturer acting as a title or secondary sponsor. In these situations, the riders get some bikes at the expense of the bike company. In other cases, the bicycle manufacturer is not a "sponsor" of the team, but it will provide frames, etc. to the team at a good price. In this situation, other sponsorship money coming into the team will pay for the bikes.

In both situations, the riders don't own the bike. They are allowed to use the equipment until their contract is up, or until the new bikes come in (if they sign on for another year). After the rider has used it, the team or manufacturer will liquidate it to their discretion, and in some cases (like Lance winning the Tour on a bike), the rider is offered their beat up, hacked-to-the-ground steed as a thank you.

Of course, there are also the situations where a cyclist chooses to purchase their own equipment (and sometimes this includes the frame - more common historically, before so many manufacturers opted for unique designs). This is most commonly seen with the ADA and Lightweight wheels you see in events with a lot of climbing.

I'm sure some of the costs are offset to the consumer, but it's going to be a trivial amount - not even enough to worry about. AND it's going to be a heck of a lot less than the warranty work caused by the "I don't know what happened. I was just riding along" dork.

May I ask why you care?
re: Questions about Pro-level product endorsementcyclinseth
Apr 14, 2003 10:09 AM
May I ask why you care?

just one of those things that popped into my head.
Yup! advertising cost passes down to consumersc722061
Apr 14, 2003 10:24 AM
That's an interesting perspective...TJeanloz
Apr 14, 2003 10:58 AM
Isolating advertising expense as a "cost" that is simply passed on to consumers is an interesting way to look at business. If it weren't for advertising, people wouldn't buy much stuff. Particularly in cycling, where a good product practically has to be endorsed by a pro team for it to get any respect. The marketing expense is an essential part of the business equation -- a bit like R&D, whose costs are also passed onto the consumer. Without advertising, there's no sales; with no sales, there's no business.
Apr 14, 2003 11:04 AM
I remember after Simoni won the Giro in 2001, this board here lit up with Fondriest fever.
Ad cost not simply passed down to consumerContinental
Apr 14, 2003 11:00 AM
The reason for bike companies supporting Lance and other riders is to increase demand for the entire line of bikes at higher price points than would be possible otherwise. For example, because of Lance's prestige Trek can probably get at least $150 more for an entry level Trek 1000 than a "no name" bike of equal quality would bring. I might get flamed here, but the fact is that people who purchase Trek and other well known brands pay a good chunk of change for the name, and the value of the name is defined more by marketing support of racing than by quality.
Uhh, simply, who pays for the Ad cost in the end? nmSpunout
Apr 14, 2003 11:04 AM
Same person who pays the raw material and labor costs...TJeanloz
Apr 14, 2003 11:23 AM
Advertising is just another input in the production and sales process. It's just part of what things cost.

This discussion is so stupid I can't believe we're having it...
You think Trek prices drop if Lance refuses compensation? nmContinental
Apr 14, 2003 11:40 AM
But then the economies of scale comes into playPaulCL
Apr 14, 2003 12:01 PM
Trek gives Lance a bike, Trek passes cost onto consumer, Lance wins TDF, again, again, again, and ???, Trek is the most popular bike in the USA, Everyone wants one (not me),Trek sells 400% more bikes today than in 1995, Trek orders 400% more raw materials, Trek's cost come down per bike, Trek can either drop bike prices to consumers or keep them steady over years becuase the profits are as to outsell their competitors. I don't pay too much attention to Trek prices, so did it work??
re: The Lance budgetteoteoteo
Apr 14, 2003 10:26 AM
This topic is a funny parallel to a conversation I had regarding appropriation/allotment of equipment and the like for Lance. Specifically Lance wanted to get some bikes for Jerry Seinfeld and I was discussing it with a good customer who happens to also work for Lance's agent.

In LA's case they have his team stuff but also have money dedicated/earmarked by the marketing department as the Lance account. Now in this scenario I don't think the bikes for Seinfeld would come from this account.

Now say LA wants some bikes for racing Cross (like he did this winter). He has his assistant (a former co-worker of mine), who is also a mechanic contact Trek/Shimano/etc to get the items on the way. This of course just relates to personal bikes, some training bikes for Austin. His race bikes all still go to the team. Anyway, he's not an average team guy and thus has a more broad program to get all of his needs covered.

thought you all may be interested.....