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FOREIGN EXCHANGE

FX & cycling: A perfect match

 

While some of my colleagues swanned off on jollies to the Euro 2008 UEFA championships this week (see final story for a cautionary tale on that habit), I was gutted to have to turn down an invitation by Saxo Bank to go to Copenhagen because of my heavy workload. So I missed the announcement that brought together two of my passions, FX and cycling. Saxo disclosed that it was to take over in 2009 as the main sponsor of one of the world’s leading cycling teams, CSC, run by former Tour de France winner Bjarne Riis. It has become co-sponsor with immediate effect. The move has puzzled my non-cycling muckers.

“Why on earth does Saxo want to sponsor a cycling team? They’re all on drugs,” was a typical response from one dealer chum. “Come on, shag,” I replied. “There are plenty of FX dealers who’ve resorted to the odd pharmaceutical aid! You can’t slag them all off.”

More importantly, his attitude highlights the fact that many in the UK are completely unaware of how big cycling is globally. The Tour de France is the biggest annual sporting event in the world, and plenty of other races generate huge media coverage. Saxo hasn’t disclosed the financials of the deal, but I’d guess it’s likely to be around $12 million a year. I reckon that even if it avoids any drug scandals, Saxo will reap plenty of benefit from the amount of column inches it garners.

Back in 1996, I wrote the following as part of an academic study of the Tour de France: “Most of the companies that sponsor professional cycling teams seemingly have little connections with the sports and leisure industry... (Spanish bank) Banesto... attracted thousands of new customers during the 1995 Tour, who deposited nearly £500 million. The income these new deposits could generate alone would recoup the cost of sponsoring the team, which is said to be £5 million. Awareness of the company has been calculated to rise by 700% during the period of the Tour.”

Team CSC/Saxo Bank and its international roster of cyclists have a very good chance of seeing someone in the coveted yellow jersey of the Tour de France, which starts next month. It is likely to win some stages, as well as challenge for the overall race; it will, as a result, feature prominently in newspapers in many of its targeted markets.

 

The official press release contains the usual spiel about bringing together two leaders in their field, etc, etc. A follow-up with Lars Seier Christensen, Saxo’s joint chief executive, more neatly sums up the rationale behind the sponsorship: “I can’t give you the contract details, sorry, but no doubt it is the best value available for the number of eyeballs in any sport. We didn’t think there was any point negotiating a low sponsorship contribution, though. Bjarne Riis (the team’s manager) needs the best riders to continue to be the best team in the world, which is the ambition. If we wanted to be second best, I am sure we could have found a cheaper team.”

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