There are a number of superstars in the world of sports. The word can hardly be augmented, and yet it is not enough to describe the status LeBron James enjoys in the USA. The 37-year-old, who plays for the Los Angeles Lakers, is one of the greatest basketball players of all time, having reached the finals nine times and won four titles in the past decade. In addition, he is an impeccable, scandal-free person who worked his way up from the poorest of backgrounds, a role model for millions of children and young people. If you lumped together the best qualities of Fritz Walter, Uwe Seeler and Gerd Müller, the result would be something like LeBron James. He’s not a superstar, he’s a super-super-superstar.
So it was quite a surprise when the news circulated a few days ago that this LeBron James and two business partners were joining a bicycle company from Koblenz for 30 million euros. Los Angeles and Koblenz am Rhein, basketball and bicycles – how does that go together? The deal seems in need of explanation. However, if you look at the background, you will find that it is of a compelling logic. LeBron James’ entry into Canyon Bicycles looks like a win-win, even for someone who’s won everything.
“Canyon is currently building the best racing bikes in the world,” says industry expert Ralf Kindermann, whose company Value Creation brings investors together with innovative companies from the bicycle, sports and outdoor sectors. At the Tour de France that just ended, three teams rode Canyon bikes: Movistar, Alpecin-Deceuninck and Arkea-Samsic.
“Canyon’s greatest asset is perfectionism.”
The founding story of Canyon reads like a fairy tale: A father has three sons. He kindled their enthusiasm for cycling early on and drove them to races. The father dies early. In the late 1980s, the sons set up a company that imports high-quality triathlon bikes from the USA. Their groundbreaking idea: They market the bikes directly via mail order, save on the dealer margin and can offer the product at a lower price. In the 1990s they got big with the mountain bike boom, and over the past 15 years they got bigger and bigger with the general bicycle and e-bike boom.
“Canyon’s greatest advantage is its perfectionism, attention to detail and technological leadership,” says industry insider Kindermann. 30 years ago, American cult brands such as Specialized, Trek and Cannondale would have smiled mildly at the Koblenz-based bicycle manufacturer, but they have now left them behind – in terms of technology, quality and price. Canyon still does not have a dealer network, the bikes are sold directly over the Internet, and there is also a sophisticated service and workshop system.
At the heart of the company is founder Roman Arnold, 59, a quiet man who stirred up the industry with his perfectionism. Today, Canyon has more than 1000 employees, including almost 400 engineers and designers. At the end of 2020, the Belgian investment company GBL, which also has a large investment in Adidas, took over the majority in Canyon. Arnold still holds around 40 percent. The bicycle manufacturer achieved sales of 475 million euros in 2021, and revenue has recently increased by an average of 21 percent a year.
“Celebrity marketing is by far the most successful form of marketing in the US.”
LeBron James and his business partners take over four percent of the shares for 30 million euros. Canyon is thus valued at 750 million euros. But how did the American super-super-superstar come up with the idea of joining Koblenz, what makes Canyon so attractive to him?
“Celebrity marketing is by far the most successful form of marketing in the USA,” says Kindermann. Celebrities give their names to promote companies, thereby increasing their awareness and sales. This has been around for a long time, the recent trend is that sports superstars not only sign advertising contracts, but set up their own investment companies in order to participate directly in the companies. In Germany, Philipp Lahm and Sebastian Vettel also do it, in the USA Michael “Air” Jordan started doing it, his own line is now an important sales driver for Nike. LeBron James has also been using his own fame for a long time to invest in companies and advance them. “The highlight is that the athletes increase the value of the company and at the same time benefit from it through their shares,” says Kindermann.
Basketball and cycling seem to come from different worlds, but LeBron James is considered a cycling freak, just like many top athletes get their basic fitness level on racing bikes or mountain bikes. There’s a photo of him casually biking around Miami’s South Beach in 2013. With his fame, LeBron James is supposed to bring Canyon’s American business forward. So far, the company has had sales there of almost a quarter, 100 million euros. In a few years, income is expected to double there. “There will be a boom in sales of e-bikes in the USA in the near future,” predicts Kindermann.
The people from Koblenz jumped on the e-bike trend relatively late
“LeBron is one of the most well-known athletes in the world and he’s really interested in cycling,” said Canyon CEO Nicolas de Ros Wallace. The basketball star’s network in the American sports industry is the “perfect match” for the bicycle manufacturer. LeBron himself did not comment on the deal. In terms of its history, Canyon comes more from the sporty line. The Koblenz-based company therefore jumped on the e-bike trend relatively late, but is now all the more committed and, as usual, a technological leader.
In the Corona period, the bicycle boom intensified extremely. The biggest problem for the industry has been the disruption to supply chains. Customers often had to wait many months in 2020 and 2021 before they got the bike they wanted. Expert Kindermann has observed that the problems have been easing for some time and delivery times are getting shorter again. Canyon promises a maximum delivery time of two months for its models – from a beginner’s racing bike for a good 1000 euros to a professional bike for more than 10,000 euros.
The future prospects for the bicycle industry are bright. Ten years ago, e-bikes still had the image of a means of transport for pensioners. That has changed completely. In the meantime, many ambitious athletes also ride electronic mountain bikes and racing bikes because they can use them to increase their range and experience nature without sacrificing fitness. Since e-bikes are much more expensive, the profit margins of manufacturers, dealers and aftermarket companies increase. They put the money into innovations, which in turn make the product more attractive – an upward spiral that Canyon is best at exploiting worldwide. Super-super-superstar LeBron James is now embracing this trend – and it can be expected that he will amplify it considerably at the same time.