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VeloNews recently caught up with USA Cycling’s outgoing CEO and President Derek Bouchard-Hall to discuss his departure and time with the organization. This is a continuation of Monday’s part 1.
VeloNews: USA Cycling has faced challenges with corporate sponsorship during your time as CEO. What is the size of USAC’s current revenue from these sponsorships today compared to where it was when you came on board?
Derek Bouchard-Hall: Well, since then it is down a little bit. When I came in we had some very big and valuable partners. Volkswagen, for example, we were unsuccessful in renewing at the same level. If you go back 10-20 years, we’re really down. And the climate for sponsorship is very challenging. The industry is not making as much money as it was in the past, so the endemic sponsors are very hard to come by. I’m sure VeloNews is seeing those challenges as well.
On the non-endemic side its just a very competitive and difficult market, and I think the digital landscape has changed the way a lot of companies are marketing. There are new and low-cost ways to reach audiences in the digital realm that make something like sponsoring a [National Governing Body] challenging. We’ve stabilized it. It’s still a good source of revenue for the organization, but we want it to be much bigger than it is.
We have a number of partners we’re in discussion with that will come across the line. As we build toward 2020 we have a better opportunity. Once you pass the Olympic year, the sponsorship market is always hard. We always find ourselves going down in the year or two post Olympics, and then we rise up. One of the big challenges I faced was that fall in racing participation and a very difficult sponsorship environment. Those are two big revenue sources that, due to changes in the landscape, have moved significantly against USA Cycling.
I will say we’ve had success in other realms, so USA Cycling’s revenue has actually grown every year in the last few years because we’ve chased after other areas that are valuable to us, like the Podium Program with our membership, where we can offer extended benefits to our members. Our membership revenue is growing. The USOC is giving us more money with our elite programs, and our foundation has stepped up and provided more. In aggregate we’ve been able to grow our revenue despite these challenges, which has stabilized the financial situation of USA Cycling. I’m quite proud of that and the organization should be too.
VN: This topic of limited resources has always begged the question: Should USA Cycling choose to focus just on elite athletics, or just on growing the grassroots side of the sport?
DBH: No. That is a question that comes up and it’s a natural question. The two are linked. It is an ecosystem that we need to support, and both [elite cycling and grassroots cycling] are complementary to each other. If we stop doing one of those, who is going to pick up the other one? People also underestimate the value we have with the U.S. Olympic Committee. Anti-doping, for example, we’re able to do that because of our position with the USOC. The Safesport program, which we use to adjudicate cases and issues of misconduct, comes from that. It’s much more efficient for the organization to oversee the whole universe from grassroots development to the Olympics.
The only problem is if one is more prioritized than the other. The most common problem is when NGB’s take membership resources and put it toward elite programs. It’s a natural problem to have because the elite side is intoxicating and exciting and there is a lot of attention and exposure for the organization there. If you let that happen you can neglect the amateur side.
When I came on board, we looked really hard at the balance there, and we reallocated things. Now, we don’t take membership-generated resources and use them to fund elite athletics. We have enough money in the bank and have effectively earned interest on our investment, and that allows us to just use that to complement the USOC and foundation funding. We don’t have resources flowing from membership to the elite side.
VN: How would you counsel your successor on how to solve the membership problem?
DBH: If I had really insightful advice we’d already be implementing it. I tell this to my team constantly. Cycling remains very healthy and robust. It is a high-participation sport, and there is lots of racing going on. Yes, it’s lower than it was five years ago but it’s much bigger than it was when I retired from the sport in 2002.
There’s lots of exciting things going on in the sport. Strava, Zwift, the rise of gravel — these are all exciting things. So my advice is don’t overreact to challenges we see in road racing participation. Just be willing to adapt to the environment. Just keep searching and fighting. We also have some things coming up that will put USA Cycling in a better place to chase after big ideas. Our IT project is almost over. We’ve stabilized our membership revenue and we have some new revenue-generating projects like merchandise and membership programs. That is going to give the organization additional resource to put a larger focus to what USA Cycling can do for members.
My advice is to say, ‘This is a very exciting opportunity to implement big ideas.’ That doesn’t discount the challenges we see in road cycling and the loss we see in teams and races. That needs to be looked at critically and honestly. But to myopically focus on that one element of a much broader sport, and an organization that healthy, is a mistake. I hope that is something someone is energized about. It’s one of the reasons I so lament leaving. I’m somewhat jealous that someone else is going to get to do it.
VN: What are the key professional skills that your successor needs to have to address the challenges facing USA Cycling?
DBH: There are some basic professional skills that are required. You have to run PR and engage with your community and understand the sport of bike racing really well. You have to run a business. You have to oversee a staff of individuals who we’re not keeping here because we pay them lots of money. They are here because they love the sport and want to contribute. There’s a lot of very solid executive and leadership experience that you need to do that. Knowledge of the sport is super helpful. You don’t have to come from the background that I had, but you have to understand the sport and be willing to learn it very rapidly. You also need a spirit of optimism.
What we don’t want is for USA Cycling to do things the way it’s always been done. You want the organization to evolve and change and follow areas of success and be honest of its failures. To do that you need someone with an entrepreneurial mindset and a spirit of adventure and a willingness to take some risks and move the organization.
By virtue of where the organization was, I had to be very focused with the board and leadership team of the foundation. There were foundational elements we had to focus on. Now that [USA Cycling]’s foundation is in a functionally sound place, we can say now is the time to ask what we are going to do with this tool. How do we use [USA Cycling] to improve the sport? There has to be a spirit of trying new things to move the sport forward.