Exclusive: Fernando Alonso’s new business partner reveals cycling plans

3 October 2014 | Posted in Notes & Insights | By David Cushnan | Contact the author

Exclusive: Fernando Alonso’s new business partner reveals cycling plans

Fernando Alonso’s plans to launch his own professional road cycling team remain on track, but his decision to set up a joint venture with sports investment manager NOVO, announced earlier this week, represents a change of approach for the double Formula One world champion and a man regarded as perhaps the finest driver of his generation.

Amid growing rumours that Alonso, who is now 33, will split from Ferrari, the team he has driven for since 2010, at the end of the current season in a final bid to win the third world title he craves at either Honda-powered McLaren or Red Bull Racing, the Spaniard has taken the next step in establishing himself in the world of professional cycling.

Alonso, a keen cyclist as his Twitter account regularly reveals, has made no secret of his desire to set up his own team. Last September he was linked to the now-defunct Euskaltel-Euskadi WorldTour team and rumours have circulated ever since about his involvement in either acquiring or launching a team, speculation only fuelled by Alonso’s public appearance at May’s Giro d’Italia.

In ‘joining forces’ with NOVO, a sports investment firm set up last year by Nathan Pillai, Alonso remains in discussions to launch a team in 2015. The joint venture will focus on buying into companies associated with cycling, an attempt at creating a more sustainable model for professional cycling team ownership.

Speaking exclusively to SportsPro, Pillai, who before setting up NOVO spent 15 years selling commercial rights, said of Alonso: “We were introduced earlier this year by mutual acquaintances and we just shared the same thinking, the same vision. We had a kind of common approach as to how we would enter the world of cycling.”

"We had a kind of common approach as to how we would enter the world of cycling"

“Originally their plans were just looking as a team, but that’s not really a sustainable operation and for me there’s a much bigger opportunity. Over the course of the summer we started to put this all together.”

NOVO, which is based in the Gulf region, will be a shareholder in the new venture, although Alonso and his long-time manager Luis Garcia Abad, who has been named as a director of the new project, are expected to play significant roles.

NOVO was born out of managing partner Pillai’s belief “doing things differently when it came to the application of capital within sport”. The company works with high net worth individuals, institutions or sovereign entities, such as sovereign wealth funds. Alonso is its most high-profile partner yet.

“We’re not after, or we don’t work with, people with open chequebooks who want to go on a jolly,” Pillai said. “That’s not who we are. We act discreetly, we’re under the radar, typically we wouldn’t be operating in this sphere publicly but with relation to this particular project it needed to be brought to light.

“I’ve always operated on the basis of keeping very much in the background because that’s what we do, we’re not after any profile or celebrity by any stretch of the imagination,” he added. “It just so happens that in this particular case necessary for us to come out and explain what we are doing any why.

The Alonso strategy revolves around the conclusion, reached after extensive observation and analysis of the sport, that, as it stands, running a professional cycling team is not a sustainable business model.

“If you want to have a WorldTour team you’re either a very wealthy individual who is prepared to lose or fill in the gaps that sponsorship can’t, or you’re a sponsor, or you’re a bike manufacturer - and a bike manufacturer these days can’t even keep pace, if you look at what happened to Cannondale,”

Pillai told SportsPro. “A pro cycling team is not a business. If we are going to do this, we want to be around for the long-term – we don’t want to come in or out based on a sponsor need, so we wanted to create our own franchise, one that would sustain beyond a three or five-year sponsorship deal. In order to do that we needed to have a sustainable business model and that’s what we’re doing now.

“It’s not about attracting investors into a team,” he confirmed. “This is about identifying an investment opportunity within a growing market, targeting a very specific part of it and looking at opportunities which we know of some of which we don’t know of yet, and identifying where we can inject capital and other resources to help grow those companies. And then having a platform, which is a team that will act as the means to help accelerate the awareness and profile of those different businesses.

“We have a very clear idea that when we do come into the sport we obviously want to win and we want to do so with the best possible product and the best possible kit and we want to not just be a platform for companies to use us as a vehicle, we want to be actively involved in those companies helping to shape that product and also helping to benefit from when they start to do well. It’s a very clear, uncomplicated strategy in that respect.”

The investments will be in three areas related to cycling: high performance products; technology, linked to both bike and rider, including wearable technologies; and content, which Pillai described as a “multitude of things, be it events, be it media”. He added: “We can see where the potential of the sport can go and we’re keen to see where we can plug ourselves into”.

"Fernando has been at the cutting edge of Formula One for a long time and he knows a thing or two."

Alonso, world champion with Renault in 2005 and 2006 before a switch to McLaren, a return to Renault a then a move to Ferrari in 2010, has talked openly of the potential he sees in applying Formula One thinking and processes to cycling. “That’s at the heart of where we think we can do something different,” Pillai said. “Fernando has been at the cutting edge of Formula One for a long time and he knows a thing or two. And he spends a considerable amount of time on his bike – he sees things very differently.”

Describing his new business partners as “incredibly down to earth”, Pillai added that while the focus will initially be cycling only, there are “aspirations” to work on other projects in the future. “Right now this is something that we’re heavily focused on but we do operate across other areas,” he confirmed.

“We have a great deal of belief in the sport of cycling and we wanted to find the right way to do it. In everything we do we try and look at it from a different angle and certainly try and see where we can create value.

The endgame, however, remains an Alonso-owned team. “We do have a plan and roadmap in place,” Pillai said, adding: “All I can say on that is that we remain committed to getting that up and running. There has been a lot of speculation but it’s unfortunately the nature of the beast – I can tell you now a lot of what is written is inaccurate. We’ve been trying to find a way to do this and if we’re going to do this it has to be done in the right way. 

"Nobody’s chucking any money at this unnecessarily because a professional cycling team is not a business that allows you to do that and see any real returns,” he added. “We wanted to create a platform for sophisticated investors to come into cycling. If we can demonstrate that there is a way to do it successfully and try and work with all parties to make a more sustainable business model, I think you’ll see a much better product for fans, for media partners, for sponsors alike. That’s the plan.”

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