The Finances of Privateer Racing
Real Talk: The $$$ behind my privateer planning.
This winter, more than any before, I’ve got money on my mind.
Maybe, it’s because I’m at the grand age of twenty-three so people my age have graduated university and are into the real world. Maybe, it’s because my sister is going through the process of buying a house which seems very grown-up. Or, maybe it’s because I spend my afternoons looking at spreadsheets budgeting how much a calendar of fifty odd race days will cost.
When you’re in the U23 ranks, you can get away with ducking and diving, not making too much money. For example, during my four years racing as a U23, I made a total of £20,000 from racing. When you leave the U23s, there becomes a focus on money as well, and I don’t think that’s a bad thing.
Brits don’t talk about money like Americans. We keep our cards close to our chest and it’s almost frowned upon to talk about salary. My goal is to turn Project TAG, the operating name of my race project, into a business that pays me a salary too.
I’ve always had my side projects which have allowed me to fund my career, namely freelance writing which has taken a life of its own.
How? That’s the million dollar question. Okay, probably not a million dollars, but you get the point.
The Numbers:
My full calendar costs in the region of £20,000. Maybe a touch more, maybe a touch less. When you add flights, accommodation, race entries, coaching and so on together, that’s the ish number I come out with. Of course, that’s doing it “cheap” too. Sharing AirBnBs, relying on host-houses and crashing at friend’s places.
To look at this another way, I start each year £20,000 in the red. That’s my cost of doing business.
How do I make enough to, firstly break even, and secondly pay myself a salary?
I’ve set myself a goal to be in the position to pay myself the equivalent of a World Tour minimum salary within the first three years of privateering.
That first goal is around £35,000.
(Salary Goal + Race Expenses) + 15% = Total Budget (ish)
Currently for me, that is:
(35,000 + 20,000) + 15% = £63,000 (ish)
While these numbers aren’t exact, they’re within the region of reality. I always add the extra 15% for things such as paying my agent, those unexpected baggage costs, or that random Uber you have to take unexpectedly to the airport.
It’s worth mentioning that lowering my fixed costs is another way of essentially upping what I can pay myself.
There are some bits of equipment that I still choose to buy. Tyres is an example, it’s not a huge additional cost but gives me options to swap around brands as I want. If I had the ability to buy them at trade cost rather than RRP, I’d probably save £500 per year.
Similarly, if I could find a way of reducing how much my long haul flights cost. I know of one athlete that has a sponsorship deal where they don’t pay any cash directly, but instead cover a high percentage of the total cost of flights per year.
You can either up your budget, lower your expenses, or ideally - both!
How To Make Money?
Figuring out how to make money is step number one and results alone do not equal sponsorship dollars.
If you’re Keegan Swenson level, winning every week by a margin measured by minutes, then results do equal sponsorship dollars. For everyone else, it’s a lot more complex.
You’ve got to figure out your niche. Dylan Johnson is that techy YouTube guy, Payson McElveen is that cool podcast MTB Red Bull guy. Now, all of these guys are incredible athletes firstly, I’m simply saying they bring more to the negotiation table than their watts.
Alexey Vermeulen is one of those who blends into the Keegan category, he was second overall in the Lifetime Grand Prix after all. BUT, he also creates cool video content with Avery Stumm and also getting a reputation as that fast guy with a cool dog.
Yes, I’m jealous that Alexey is that fast guy with a cool dog. I suppose I’m that writing guy.
I’m in a fortunate position that my “day job” as a freelance writer allows me to keep a majority of my work in the industry. This obviously helps with connections. It also means I can bring something else to the table. Most of my sponsor pitches are along the lines of coming onboard means you get an athlete and an asset in your marketing team. It also means brands can split the cost across multiple budgets.
Sometimes those relationships blend into more. Take Sync Ergonomics for example, Ken helped me out with a pair of bars at the start of last year and I did some writing for him. Now, I’m involved on a relatively day-to-day basis with their written and social content.
Cash is King, and cycling is an industry that is currently strapped for cash. While you of course need bikes and equipment to race, without cash you can’t do anything.
There’s a theory called ‘1,000 True Fans’. The long and short of it being if you have one thousand fans each year, and you are able to make on average, say $100 profit from each, then you can fund everything yourself.
This theory is credited to Kevin Kelly and first came to concept in 2008. Nowadays, we’re living in a subscription economy. It seems that everything is a subscription. The newly launched Escape Collective capitalised on this very well in year one, but are they able to maintain those numbers to make it a successful business plan over time?
Say I built this Substack to a level where one thousand of you felt like you were getting enough value to give me $100 a year, then all of a sudden I don’t need as many sponsors. The 1,000 True Fans theory is great, but in the modern day you could argue it has gone too far. Everything is behind a paywall and if you subscribe to every athlete or website then all of a sudden you have a list of subscriptions worth thousands per year.
This Substack here will always stay free to read with the option of the ‘buy me a coffee’ link.
What’s the ROI?
Return on Investment, or ROI for short, is always hard to quantify with sports sponsorship.
Every sponsor is looking to get something different. For some, it’ll be brand awareness, others will want deliverables such as media content, others will be doing it as a ‘hobby’, you’ve got the sport washing group and the pure sales driven group too. That’s not an exhaustive list.
I’m constantly asking myself what’s the ROI of me working with any partner. If it’s not mutually beneficial, then I don’t want in. While everyone wants a partner who gives them a load of cash and wants nothing in return, that’s not a sustainable model.
For the record, if you have a pile of cash burning a hole in your pocket, I will never ever say no.
With my bike sponsor, Ribble, there is a clear link to ROI - they sell more bikes.
For another, such as Pullwood Consulting, it’s different.
Pullwood Consulting are a non-endemic sponsor, meaning their business has nothing to do with cycling. So, what interest do they have in being involved with me? While it helps that Jon, one of the two Twigg brothers, is a cyclist, and Nick is a big sports fan himself, it’s not that simple.
By the end of our current contract, Pullwood will have been a partner of Project TAG for three years, as things stand they’re my only sponsor signed on into 2025. They want a return on their investment. While what we’re doing is fun, interesting and insightful, it is business too.
For Pullwood, can being involved with the people in the cycling space lead to more clients for them? The adage that cycling is the new golf has a weight of truth to it. It only takes me to help them sign two or three more clients and all of a sudden it’s a very sensible business decision.
Pullwood has a background in tech start-ups. They’ve been there and done it with the big boys, and now they’re helping teams to get better at things that are important to them.
Take the Spotlight Profiling that I did with them, that declared that I was a “Forcefully Optimistic”, which in Nick’s simplified words means: “If the forceful optimist had a catchphrase it would be, “Come on, let’s get after it!”. Driven by opportunity rather than threat and biased for action. Fast paced, direct, strong and ready to take control.”
Attached below are my “Counterweights” - things that fall outside of my natural preferences. Given January is the season of ideas and opportunity, I’m constantly reminding myself of “At times, quitting can be the best strategy”, and “Sometimes it may be worth you considering which adventures you want to go on, and which ones aren't for right now.”
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Being a privateer is not being a charity. You cannot expect something for nothing. What can you give back in return?
What would you be wanting if you were on the other side of the table and putting money into an athlete? If an athlete consistently finished in 20th place but provided a 3x return on investment, would you be happy?
This does, of course, depend on the level too. At the highest level of sports sponsorship, success at the top, such as winning the Yellow Jersey, is ROI in itself.
Final Thoughts
Ultimately, my goal is to hang up my wheels on my own terms, not because the sponsorship dollars dried up and I’m forced out.
It’s rare that athletes can step away on their own terms, but that’s the goal. I want to build a network of partners that receive so much benefit from being involved with the project that it makes logical sense to renew the contract. I want to get to the point where we’re signing multi-year contracts.
Long term, I can see myself going into the sport management or sport consulting side of things. The more time I spend privateering, the more I realise how much I enjoy the business side of sport.
With all that said, there are still opportunities for partnerships throughout 2024. I'm looking for two or three more partners - endemic, non-endemic, or private - to go on the privateer journey with me in 2024 and beyond. I’m always around for a call, and no budget is too small or too big.
laverick.joe@gmail.com is the place to reach me.
My Ribble teammate, Maddy Nutt, sent a podcast over to me the other week. It is with Aaron Lutze, a former athlete manager at Red Bull. It is the most insightful podcast I have ever heard on the topic of athlete sponsorship.
I’d highly recommend that anybody that is in the sport sponsorship or athlete management world gives these two a listen. I’ve also attached the “Choose the Hard Way” Pod with Alexey Vermeulen and Avery Stumm - this is also great.
Project TAG, proudly partnering (both for my athletic and influencing ability) with…
While you’re here…
I’ve added both paid subscription and a ‘Buy Me A Coffee’ link to this post. As the year progresses, I’m planning on building this blog and putting out articles which I’ve always wanted to write but for whatever reason, haven’t wanted to pitch.
Any money that I make from either my Substack, or BMaC link will go straight back into supporting my 2024 racing project. I am planning on keeping all content on here free to view though.
https://www.buymeacoffee.com/joelaverick
@joe, let us know anytime you want to borrow Kirill to raise your game against Alexey. He would probably welcome the extra speed!
great stuff Joe, I get my best ideas during a climb too. I know you since you were hanging out with Dan the fixie guy. Great process. keep doing what you doing and believing in your dreams!