The effectiveness of a new business model for professional cycling teams in relation to sponsorship of companies in the commercial cycling industry

Abstract

Due to the historical development and the nature of cycling, the business model for professional cycling teams is almost exclusively financed by sponsorship money today. This creates a lot of uncertainty, where teams often quit when the sponsorship stops. However, there are currently teams working and experimenting with the creation of more sustainable business models, where a team, the sponsors and fans are better connected to increase the value for all involved stakeholders.

In scientific research, purchase intentions of consumers has become an important indicator for the effectiveness of sponsorship in sports. However, literature concerning the effect of sponsorship in relation to this concept is limited today. To investigate the process to increase product sales via sponsorship, this research uses simulations from discrete choice experiments to measure these purchase intentions. I developed a conceptual framework to examine the role a cycling team plays in the relationship between fans and the connected sponsors, based on a semi-professional cycling team in the Netherlands. In this model, the effect of four attributes (i.e. team design, brand visibility, price & athlete usage) and four moderating variables (i.e. team loyalty, athlete loyalty, sponsorship awareness & sponsorship attitude) on purchase intentions of cycling fans is investigated. By comparing the outcomes of the conceptual model between the closely connected fans (the club members), and a general group of cycling fans, the effect of club membership is explored as well.

Overall, the outcomes indicate that the loyalty to a team, its athletes and the related sponsors does increase purchase intentions of cycling fans, which supports the effectiveness of the new business model in professional cycling. However, not all stated hypotheses were supported by the results. Testing the effect of these variables on fans’ purchase intentions with the use of a choice experiment adds a new dimension to measuring sponsorship effectiveness that provides useful managerial insights. The results could be used by professional cycling teams to quantify and explain the added value of a community based business model to potential sponsors. Thereby, the proposed conceptual model and recommendations derived from the analysis provide valuable cues for future research and extend the knowledge of sponsorship in professional sports.