Media Fortune Fame & Folly

Rouleur races into the future

Rouleur, the upscale cycling magazine for road racers, has been acquired by former banker and lifelong cycling enthusiast – and manufacturer – Matteo Cassina. The deal, which focuses attention on the potential role of niche magazines at the heart of integrated ‘special interest’ businesses, is believed to value the company at close to Rouleur’s £1.8m revenue.

The London-based magazine, which was launched in 2006 by sportswear brand Rapha, was sold seven years later to Gruppo Media, an MBO backed by media, retail and financial veterans.

The distinctive, high quality publication is published eight times annually, has a subscription price of some £80 and operates London’s annual Rouleur Classic exhibition which charges 3,000 visitors £150 to attend.

The magazine describes itself as “the world’s finest road cycling journal, for the most discerning rider. We were all tired of the formulaic nature of other cycling magazines, full of group tests that no-one believes in – Rouleur was created to be something we would all read, cherish and collect.”

Fellow publishers have loved the luxury of Rouleur’s photography, design and silky 130 gsm paper as much as the team who produced it. It’s the Vogue of cycling magazines, whose editor-in-chief says: “The experience with a new magazine borders on the religious: the smell and crispness of the paper, the feel on the skin, the quality of the production and binding.”

Its won a slew of professional awards in the UK. But rivals might not have been so envious had they known the price of “success”: hundreds of thousands of pounds of annual losses, borrowings of up to £500k, and the long search for a new owner. Until now.

Some 80% of Rouleur’s £1.8m revenue in 2019 came equally from the magazine and exhibition, and almost 20% from e-commerce including clothing, books and tools. The company has a full-time staff of 8-10. Some 30% of its 20k print order goes to paying subscribers around the world. But the brand is bigger than that.

Matteo Cassina has been a shareholder in Rouleur for the past four years and is believed to have paid off the company’s borrowings including from former fellow shareholders. His total investment in the company could, therefore, be anything up to twice the estimated £1m he has paid for its equity.

He had once been interested in investing in Simon Wear’s Global Cycling Network in the years before it was acquired by Discovery Inc, reportedly for more than £50m. Cassina would have been deterred by the juicy valuation.

He has been mad about cycling since his teenage years, although he dreamed also of competing as a rower in the Barcelona Olympics in 1992. He didn’t make it and, instead, spent 20 years in investment banking, culminating in his appointment as international President of the Saxo Bank, of Denmark, where he sponsored teams and operated an executive networking programme focussed on cycling.

Now, he is consumed by all things cycling, and building an international marketing-media group across what one rival publisher has described as “the world’s biggest global sporting goods market”. But, for all the talk about cycling being the “new golf” for the urban middle-classes in Western countries, the paid circulations of UK cycling magazines have continued to fall: specpubs can be just one part of a successful integrated group serving enthusiasts.

Cassina owns the legendary Passoni which sells 500 racing bikes at an average price of £15k, hand-built from titanium or stainless steel in the shadow of the Alps, not far from his Lake Como hometown. He is also an investor in sportswear, cycle races, and e-sports companies.

He may just move soon to buy back the international versions of the Roleur Classic exhibition which are currently operated under licence in Los Angeles and Melbourne.

Inevitably, some of his competition for digital users and e-commerce is the Global Cycling Network which has 2m subscribers to its YouTube channel. GCN has much broader appeal than road racing. But Roleur can learn a lot from its digital and YouTube strategy, given the mere few thousand who subscribe to Rouleur’s own YouTube videos and its modest web site.

Cassina might also study the trials and triumphs of DriveTribe, the motoring social network founded by Jeremy Clarkson and his colleagues from BBC Top Gear and, now, Amazon’s The Grand Tour. After the 2017 launch of its great sites and with investment from 21st Century Fox, the company painfully lost almost £14m in its first two years.

Its response was to cut its staff by 30%. Now, with new £2.5m investment from Elisabeth Murdoch (with more to come), DriveTribe may have generated £2m revenue in 2019 and will reach £3-4m this year – which might produce breakeven. It now has 1.1m YouTube subscribers, a website audience of 9.4m monthly uniques, and is generating revenue primarily from branded content for car companies, notably Audi. Looking good at last.

Cassina might even take some lessons from TWiT Netcast Network, whose brilliant blend of podcasts, online TV and Google Hangout discussions has millions of techies captivated across the world in a business whose estimated $15m of revenue may be delivering a 50% profit margin. TWiT (“This Week in Technology”) was founded in Petaluma, California, 15 years ago by tech journalist Leo Laporte. It produces some of the most popular podcasts in the world (as well as a substantial volume of live-streamed video) and has more than 6m regular listeners and viewers. It is a great example of how a specialist media group can build a global audience for what is effectively an interactive TV channel – at low-cost.

The new Rouleur owner could also get inspiration also from Kuok Meng Ru’s Singapore-based BandLab music sharing phenomenon. It is the glue for online sales of musical instruments and it also publishes music magazines. The three-year-old, cloud-based BandLab platform has 5m registered users from 130 countries who make more than 2m songs every month.

Traditional magazine mini-conglomerates must change dramatically to find ways to grow profits without the traditional scale economies of print publications. But specialist media has much more growth potential than the mass circulation magazines which are being squeezed by Google, Facebook et al. All companies need either to be among the largest or niche specialists; the middle ground gets squashed.

The Rouleur deal is a reminder that specpubs, long loved by enthusiasts in print and digital, can be ‘brand hubs’ for new-wave, integrated community groups across retail, media, and events. Way to go.

Rouleur