Volkswagen's emissions crisis could leave USA Cycling scrambling for a new title sponsor
Volkswagen is USA Cycling's biggest partner, and this is a contract-renewal year.
Last month, an investigation by the US Environmental Protection Agency revealed Volkswagen had been cheating on emissions tests for diesel vehicles. In Europe alone, Volkswagen is recalling 8.5 million vehicles, and the company is now cutting investments by 1 billion euros as it tries to cope with the scandal.
The automaker will decide next month whether it is going to continue its partnership, Daniel Gillespie, the sponsorship manager at USA Cycling, told Business Insider on Thursday. A spokeswoman for Volkswagen confirmed that.
"We're not in a good spot, obviously," Gillespie said. "If they don't renew, we're going to be scrambling to offset that sponsorships among other categories. But we're going to stick by Volkswagen and help them get through this period.
"There's a lot of damage right now, but the partnership with USA Cycling can only help repair that," he added. "It is questionable what they did, but for us, as a company Volkswagen still resonates with our brand, and it's one of the top car brands that our members use."
Volkswagen has been the title sponsor of USA Cycling for the past four years. Its name appears in several showcase events, including the Volkswagen USA Cycling Professional Road, Time Trial, and Para-cycling National Championships and the Volkswagen USA Cycling Professional Criterium and Team Time Trial National Championships.
A membership-based organization, USA Cycling has more than 62,000 members who hold 76,000 licenses. Each year it sanctions over 3,000 events across all disciplines of the sport - BMX, mountain biking, cyclocross, road, and track. It has a budget of $14 million, and Volkswagen's dollars make up a "sizeable chunk" of that, CEO Derek Bouchard-Hall told VeloNews. He said USA Cycling was actually looking for Volkswagen to increase its sponsorship next year.
This week, Volkswagen is holding its annual dealer meeting where orders are placed for 2016. The success of the meeting is seen as an indicator of the brand's health.
"If they get orders and sales look strong, that helps our cause," Gillespie said. "If orders are way down, that's going to have an impact on budget.
"With where the economy is and where companies are spending money, it's always a tough proposition to find companies to sponsor and provide cash support," he said. "It's a challenge, especially when you're competing with other trade teams and other sports.
"We're always looking for partners. Even though Volkswagen is having a disaster inside its organization, reputation-wise, I think normally you try to partner with a strong brand like Volkswagen in order to partner with other strong brands. So you get a strong partner in the automotive industry, then you get a strong partner like Sierra Nevada, then other partners, even if it's at a smaller level."
As Volkswagen deals with its crisis, it is reportedly taking a hard look at its sponsorship deals.
The Sports Business Daily reported that, among Volkswagen's various sports sponsorships, cycling could be on the chopping block.
Christoph Breuer, a professor of sports economics and management at the German Sport University in Cologne, told SPD the scandal could affect Volkswagen's involvement in sports and that cycling in particular "could be scrutinized by changes to VW's sponsorship strategy."
Bauer added: "Volkswagen should now focus on sponsorships that show a more positive image of the company."
Gillespie acknowledged cycling's troubles but thinks the sport is on the right track.
"Cycling's had a damaged image from its past, and I think we're making some changes here that hopefully will rebuild cycling's reputation. And in Volkswagen we've had a really strong partner that's supported us in hard times."
In an interview with Business Insider last week, Bouchard-Hall said doping had become synonymous with cycling but that cycling was now the leader in testing athletes for PEDs thanks to improved testing, better education, and harsher penalties.
"Our sport, I believe, is leading all other sports in the world," he said. "I would love anyone to show me a sport that is anywhere near as far in the fight against doping as we are. Most sports either don't know they have a problem or they're ignoring it."
Volkswagen's current sponsorship of USA Cycling ends December 31.