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News feature, December 30, 2006
Team TIAA-CREF's silent partner unveiled
In the past three years, the TIAA-CREF team has grown from a development team of promising junior and U23 riders, to become one of three UCI-registered Professional Continental teams in North America. But just who is helping out behind the scenes? Mark Zalewski secured an exclusive first interview with that rarest of individuals - a wealthy American businessman prepared to invest in the sport.
Led by veteran American pro Jonathan Vaughters, the TIAA-CREF team has evolved into a program that states becoming a ProTour team as its ultimate goal. Since the early days, Vaughters has alluded to a silent partner in the process, providing the financial backing to jump-start the team and keep it running.
In 2007, that partner will be even more crucial as the team marches on without a title sponsor. So who is the man behind the curtain? It is New York financial investor, Doug Ellis.
To some inside the cycling world of North America, it has been known for some time that the TIAA-CREF team was supported by an outside and anonymous source. Throughout that time, team Vaughters refused to name names, or disclose how much this "benefactor" was donating. Eventually he disclosed that this person was the "team owner" and speculation began to circulate as to who this person with the deep pockets could be... a former pro, an industry magnate, Daddy Warbucks?
None of the above, actually. In fact, when hearing the name Doug Ellis, the average North American cycling fan might shrug. A European fan might think it be the former chairman of the Aston Villa football club. A select few might recognize the name from the USA Cycling Development Foundation donor list. Regardless, Ellis is a successful business investor from New York that is simply a fan of cycling, and wanted to get involved.
"For about twenty years or so I have been a cycling fan," Ellis explained. "I lived in Spain for a while and watched live on TV that great Greg Lemond ride into Paris. It was the most exciting sporting event I ever witnessed. I then followed the sport for many years. Then felt that same thrill watching the 2003 Tour; inspired by everything Lance Armstrong faced, and all the heroics he displayed."
"I made the decision then to try to get involved in the sport, particularly to focus on a way to build an American presence in the European peloton. If we were able to create a program that gave US riders a little more context in Europe then we would be able to successfully bring riders over who otherwise might have stayed in the domestic scene. I did a little poking around to see who else was in this space, and immediately found Jonathan's name. He and I had a few conversations and quickly realized that he was the ideal partner in this mission."
More specifically, he invited himself to the team's 2005 launch party to meet Vaughters. "I had seen an announcement for the launch party for the TIAA-CREF team in 2005 on Cyclingnews, and that Phil Liggett was going to be at this restaurant in Denver.
"So I just called Jonathan up, cold-called him, and said 'I am a New York investor interested in finding out more'. He said something like, 'Well, I've sold all the seats already, but if you don't mind sitting in the kitchen eating with me, come on out!' I went and was really impressed with his professionalism and handling of that crowd. At the time, sure, it was a small, developmental program - but it still had this feel of real professionalism. After I met him and talked a few times, I just said to him that the way I see this sport growing in the US I want to, down the line, own a ProTour team - ridden predominantly by US riders. He said he felt like he wrote the same email to me."
"That was almost two years ago now and for me it has been a fantastic introduction to the sport."
An introduction indeed, as Ellis had never really participated in the sport beyond spectating to that point. "I've never raced or anything, and I live in New York City where the riding is a little challenging," he said. "Only in the last four years did I reconnect to the bike, riding in Central Park."
Ellis said that his desire to be anonymous was in part due to him still finding his way in the sport.
"I think for me I was really new to the sport. I still don't understand what all the political bodies are and their vested interests. So my first couple of years I wanted to be certain that the idea Jonathan and I hatched was one we could follow through on. So now I feel, with the way the program went last year, and now that we are a pro continental team along with our plans for 2007 and 2008, that we are on the right track. Suddenly it feels OK to be known as the person who is part of this organization - it feels appealing. I wasn't trying to be mysterious before, I just didn't think anyone would care."
Referring to one of the biggest political bodies in US cycling, Ellis fully admits that he is following a tack similar to what Thomas Weisel did to help elevate Lance Armstrong and other American cyclists to the European level. "This is similar to what Thom Weisel did last decade. In some ways that is the model that we are following. For full disclosure, I am a member of the USA Cycling Development Foundation, of which Thom is the chairman. I don't know him well, but I have a tremendous amount of respect for what he has done for the sport. I know there is a history of politics there and I don't fully understand what they all are.
"My view is to really try to stay out of that and take the positive lessons that they taught us to go forward. I know that under Thom's control, the finances of the foundation and USA Cycling have become better. And I know they are putting a lot of money into the European residence program in Belgium. Those goals are really in line with ours in a lot of ways - to generate US athletes to populate ProTour teams. I know Discovery is a sponsor of that, but we hope that our team will also become a destination for those riders."
Doping an issue for potential sponsors
This coming season the team will be known as Slipstream Sports, powered by Chipotle, as TIAA-CREF finished its title sponsor run in 2006. In addition, the team jumps up to the UCI Professional Continental category and plans on increasing its presence in Europe, building on last year's beginning. While the team did actively cultivate potential sponsor replacements, the right fit did not present itself.
"We had opportunities for title sponsors, but instead of going with offers that undervalued the brand we elected to promote our own name and accrue whatever value that has. It is going to be expensive for us. Because we are in Europe and North America, traveling almost like a ProTour team travels with 23 riders, we spend a lot of money. The real way we are different from a ProTour team is that our salaries aren't the same category. Otherwise, much of our infrastructure is one-to-one with them," Ellis said.
When asked if the doping scandals of 2006 affected the discussions with potential title sponsors, Ellis readily acknowledged the link.
"No question," he said. "We had a number of conversations that were relatively far along, that immediately stopped after July. That was brutal for us and for other folks as well. But in a way, it pushed us to find a way to give sponsors confidence that it won't turn into a Phonak or Liberty Seguros.
"Those guys, the Liberty Mutual guys out of Boston who were really the end sponsors, they feel incredibly burned by it - and didn't understand what could happen to their name. I think it's our job now, as teams, to give potential sponsors confidence that if they make this commitment, they are not going to show up on the front page in a scandal."
But Ellis does not seem to be worried about this year; instead choosing to focus, like a true entrepreneur, down the road. "Our real struggle is finding financing for the future. As we do grow and become a ProTour caliber team, and need to retain athletes with those level of salaries, we are going to have to have a deep-pocketed corporate title sponsor.
"The decision we made this year is to go with Slipstream Sports, promote the brand of Jonathan and the whole organization, to give someone the confidence that we can be a good representative for their brand. We are, as an organization, losing money (this year) but investing in the future. That was always the business plan - he described it as a no-man's land that would be difficult. I'm appreciative that he made that clear to me in the beginning so that it would not be a surprise to me that we aren't breaking even yet," Ellis said.
"For us, we are going to need a sponsor that is either a major US corporation with European aspirations or the opposite. Otherwise our dual-headed program does not provide full value. But I think there are enough companies out there."
A difference between Ellis' goals and that of the aforementioned Weisel model is that the end goal is to make an American ProTour team - beyond the sponsor being American. "We are a program that is committed to US riders. We have a few select foreign riders, but our goal is to keep the team at least 80% US. Which is challenging when you can just go out there with your chequebook and hire a bunch of foreign stars.
"I think that message will be one that will appeal to potential sponsors. People sometimes grumble that Discovery is America's team but how many riders are US riders? And isn't the culture of the team Belgian? I don't necessarily believe that, but there are people that do, and I want to provide a program that people can say this is US culture and staff."
"For me, the highlights are more personal. It's a beautiful sport, and I am grateful that I get to be around it and see the inside of it. The athletes are really special people, and so are the people behind the scenes. I see my role as helping expose this great 'European' sport to US athletes, giving the next generation a chance to participate and succeed, the way that Lance Armstrong's generation did without that help. I think with help, the story can be even better. Our goals are modest - to run a successful program that down the road at least breaks even, or doesn't lose money. I don't think any of us expects there to be a big pay day at the end of this."
"But what I am happiest about is that (Jonathan) has the same end-point in mind and the same trajectory; to do this organically through developing a new generation of US athletes."
(Note: Cyclingnews.com has been the official online media sponsor of Team TIAA-CREF since its inception in 2004.)