Bike-race organizers have hit their own “wall”
It's a killer, "the wall" in Manayunk.
It's a killer, "the wall" in Manayunk.
For cyclists in Sunday's Commerce Bank Philadelphia International Championship, the short, steep stretch up Lyceum Avenue in Manayunk can be as daunting emotionally as it is physically.
"It's a challenging slap in the face," said former Olympic cyclist David Chauner, cofounder of the race.
Chauner understands the wall - maybe a little too well.
Three years ago, he and his longtime business partner, Gerald "Jerry" Casale, hit a wall of their own - 20 years after starting the Philadelphia event that has become the nation's premier bicycle race.
Their wall nearly killed their business.
Late in 2005, the race's major and longstanding sponsor, Wachovia Corp., dropped out at the last minute, leaving them scrambling to save the race.
Revenue at their company, Pro Cycling Tour L.L.C., which produces bicycle races around the country from offices outside Norristown, plunged from $8 million to $3 million in one year, as three other long-term cycling sponsorships, in an unfortunate coincidence, also came to an end.
And Casale, now 67, was battling a particularly rough form of prostate cancer.
The partners laid off half their staff and stopped taking their own salaries to pay the one or two employees who remained.
"We had a meltdown," Chauner said. "We almost went out of business."
It was a painful time, the two men recalled recently over coffee at a Manayunk restaurant just blocks from "the wall."
Casale was struggling to work. "I was sleeping on my desk," he said. "I kept thinking I was putting a burden on everybody."
Chauner looked across the table, and the look said enough to fill a shelf of business books - about love, respect, friendship and what it really means to be partners.
"It was a tough time," said Chauner, 59.
"Dave made a difference in American cycling. I pumped up his tires many times, and I will do it for the rest of my life," Casale said.
"My position in the company is the opposite of what he does. I can't fill his shoes," Casale said.
"Jerry's a born leader," Chauner said. "He really has great insight into things. He really understands people and their characters."
The two men met 46 years ago when Chauner was 12 or 13, a young boy on a bike. Casale was 20 or 21, out of the military and married with a young son of his own.
Chauner's bike broke down on Bells Mill Road near Hill Cycle Shop, owned by Casale's father. Chauner and a few fellow 12-year-olds were out on an unsupervised bike ride from the Main Line, something that would be almost unthinkable today.
Casale opened his father's shop early and fixed Chauner's bike. From then on, Chauner looked up to Casale. Later Chauner worked at the shop. The men stayed friends even as Chauner made his way to the Olympics, where he raced with the U.S. team in 1968 and 1972. Casale branched into race management.
In 1984, Casale was in Barcelona, Spain, as a U.S. cycling team mechanic when he had dinner with Chauner, there as a reporter covering the race.
Over dinner, they decided to start an international race in Philadelphia. CoreStates Bank signed on as the first sponsor for the 1985 race, with Chauner handling marketing and Casale working on operations.
They continued to collaborate on the Philadelphia race and other events until they hit their wall in 2005.
Three years after the crisis, Casale is healed from his cancer and the business also has healed. "But we realized that we had to change our business model," Chauner said.
They are still working on it. The business continues to rely on corporate sponsorships more than either man would like.
This year's race, the 24th Philadelphia International Championship, will cost $1.5 million to $2 million to produce, with 85 percent of the revenue from corporate sponsors, the partners said. Neither racers nor spectators pay to participate.
But, Chauner said, it has become increasingly difficult to sell corporate sponsorships.
"We compete with NASCAR and golf," he said. "When times are good, companies put money into sponsorships. But when times are bad or there's an acquisition, that's the first thing to go."
Or marketing priorities change.
That is what happened when Pro Cycling Tour nearly skidded into oblivion in 2005.
Wachovia had purchased First Union, which had purchased CoreStates. After several years of sponsoring the race, Wachovia ended 20 years of sponsorship. "We got a form letter," Casale said, still hurt.
"Sometimes small companies go through this. When you lose a big piece of business, it can really affect you," Chauner said.
These days, looking to even out their cash flow, the partners want to develop indoor bicycle racetracks, including one in the Philadelphia area.
"Gate receipts, concession sales, regular traffic," Chauner said, ticking off the advantages as if they were jewels.
However, their biggest business remains the production of cycling events.
"The marketing value of an opportunity sport is huge," Chauner said. "Cycling is where NASCAR was 30 years ago, or women's tennis."
He thinks a company could build its brand in tandem with the sport of cycling, the way Virginia Slims cigarettes did with women's tennis.
"Cycling has never been more popular," Chauner said. "It has health and fitness. It's green with the cost of gasoline. There are more bike paths. There is a very positive future for this sport."
Spoken like a entrepreneur working from his passion.
But here's the thing about following your passion - you've got to price it right. Finishing up their coffee in Manayunk, the two men agreed that understanding the value of that passion represents the most difficult challenge for entrepreneurs who want to make a living from their dreams.
When they began, inspiration would strike and then, wide-eyed and enthusiastic, they would do what they could to pull it off.
"We love to do this so much that we get less than it's worth" for organizing races, Chauner said. "Now, we try to go into the financing before the concept.
"But," he said ruefully, "our passion still gets the better of us."