I’m a huge cycling fan. When I was younger (and thinner), I raced as an amateur around Europe and even had hopes of one day joining the professional peloton. But, alas, genetic inferiority eventually caught up with me, and I wound up becoming a professional student instead.
Nonetheless, I’ve been captivated by this year’s Tour de France. And, with the Tour entering its third and final week, I can’t resist making a bold prediction about the eventual winner. And here it is: I predict this year’s winner will be…wait for it…a sovereign wealth fund.
Wait, what? Yes, you read that correctly. I predict that a SWF will be on the highest podium when the peloton reaches Paris on July 25th. How is that possible, you ask? Well, remember that professional cycling is comprised of teams that are named to reflect their corporate sponsorship. So, for example, some of the teams at this year’s Tour de France include, AG2R, Garmin-Transitions, Team RadioShack, and Team Sky.
So, I’m predicting that the winner of this year’s tour will be Alberto Contador (which, if I’m honest, isn’t all that bold a prediction, as he won last year as well). And, as it happens, Contador is riding for Team Astana, which, since late 2009, has been financed by Kazakhstan’s SWF: the National Welfare Fund Samruk-Kazyna.
That’s right. Riding in this year’s TDF is a SWF-financed professional cycling team. Samruk-Kazyna stepped in with the $22 million needed to finance the operations of Team Astana when money was tight back in 2009. And just like that, a SWF joined the professional peloton.
In case you’re curious, nowhere in the SWF’s mandate is there anything about cycling let alone sport. And, let’s be honest, sponsoring a cycling team cannot really be called an investment; it’s marketing (e.g. think about the masses of Americans that still ride around in their US Postal Service jerseys).
Originally, the plan was to change the name of the team to reflect the new sponsorship. But, the SWF really had no need for “marketing”, so the Astana brand – which is named after the Kazakh capital city – was maintained. Still, while the SWF opted not to change the team name, the SWF’s logo is featured quite prominently on the shoulders, sides and rear of all of the Astana riders at this year’s TDF (see Contador in action below).
I have to say, I’m fascinated by all of this – as you can probably tell – it brings together my passion for cycling with my interest in SWFs. But I’m still scratching my head on this one. Why on earth would any SWF want to sponsor a pro bike team? Let’s see if we can come up with an explanation:
1) The SWF’s head Kayrat Kelimbetov is president of the Cycling Federation of Kazakhstan. So, he is clearly a fan of cycling and probably takes personal enjoyment from seeing his country’s team atop the podium at La Grande Boucle. In short, the funding could be more about personal enjoyment than anything related to the SWF’s operations.
2) One of Kazakhstan’s Ministers explained the decision to fund the team as follows:
“The team has to be maintained; it’s the prestige of our state.”
Given that the team was initially created as a vehicle to showcase a remarkable Kazakh cycling talent (Alexandre Vinokourov) and to create positive PR for Kazakhstan, this isn’t all that surprising a motivation.
3) There is also an official explanation for why a SWF would sponsor a cycling team:
“Today, our multinational and multi-confessional country is an initiator and active participant of the integration processes in Central Asia and Eurasia. Along with loyalty to its own national values and long history, Kazakhstan expresses its commitment to the universal principles of democracy. That is why the success of the “Astana” cycling team is so important for us. We hope the season that is coming up will be very successful, both in sports and in politics…We trust that “Astana” will become both a sports and ethical model, which will help to bring up a new generation of racing cyclists around the world and in Kazakhstan. There are already 13 Kazakhstani racers, young, promising athletes in the composition of the new team. We believe that, in the future, many of them will become stars of the cycling world. We know that the victories of “Astana” inspire young Kazakhstani athletes, support the development of cycling in Kazakhstan and we hope that within two-three years, the regular Pro-Tour will be held in the Motherland of the “Astana” team – the Republic of Kazakhstan.”
I’m not sure I followed the first half of that explanation, but the second half is more straightforward: the SWF seems to be nurturing a future generation of Kazakh cyclists.
In short, it’s clear to me that this sponsorship is all about the prestige of Kazakhstan and its cyclists and has little if anything to do with any commercial or financial objectives of the SWF. It’s perhaps not a case study in how to be a good steward of the public purse, but I’m quite sure the entire country of Kazakhstan is glued to their TVs this July. And so maybe it’s worth it.