Show Me The Money

Sunday, 12 December 2010

Without boring you, the process to registering a team with the UCI first involves sending them a copy of proposed contracts with riders and then, months later, setting up bank guarantees and a financial evaluation of the team.

Pegasus the winged horse was a creature of myth and fantasy

In the light of the worries about the Pegasus team, where rumours suggest sports financier George Gillett was set to back the team but dropped the entire project when news of Contador’s positive story broke, I’d suggest a rule change: teams shouldn’t sign riders until the funding of the team is certified.

Any company seeking to sponsor a team should receive a formal letter from the UCI, addressed to its global head office, seeking confirmation of the intention to fund a team. In addition a copy of this letter should be sent to the same company’s auditors. Once a satisfactory response is received in duplicate then the concern should shift towards ensuring riders are hired on appropriate terms. But there’s no point signing riders if the sponsor isn’t committed to the sport.

In the case of a team set up by a millionaire like Luxembourg and the deep-pocketed Flavio Becca then the letter is simply addressed to the likes of Mr Becca or perhaps the sugar-daddy type sets up a company to fund the team and injects cash into the business, an amount which is then confirmed by its auditors.

Whilst it is right that the template contract is approved by the UCI, precedent suggests that the source of the money needs to be verified before a rider is signed.

  • As a footnote, remember that there’s still time for Chris White and company to save the day with the Pegasus cycling project. Let’s hope that this can be resolved before the deadline.
Mattio December 12, 2010 at 7:10 pm

It seems to me that there might be a tricky game of playing chicken – a sponsor might not want to commit unless a high-quality roster is assembled. Your proposal is sensible, of course, but it forces a sponsor to shoulder the risk rather than having riders shoulder the risk. Which makes me wonder, what could our sport do to lessen the risk altogether?

TheInnerRing December 12, 2010 at 7:19 pm

Riders could always give an indication or a letter of intent. But how many of us would change jobs to an employer who had no track record and who didn't show where the money was coming from? Right now the riders assume 100% of the risk, no?

The sport has seen too many riders getting burned by over-ambitious team managers.

Matt Walsh December 13, 2010 at 2:14 am

Yeah this is like DUH Rule #1. You feel bad for the riders and we've all jumped into projects because a friend swore the money would follow any day but jeez, guys, you can't sign a contract without a sponsor. Pros like McEwen and Hunter should know that.

John Adams December 13, 2010 at 11:09 am

Gillett won't have dropped the project due to Contador. If involved at all he'll have dropped it due to his dire financial problems which has seen him forced to sell the Montreal Canadiens, huge problems for his Nascar team and Liverpool FC torn from his grubby hands by the High Court in London. Even now he's being sued for $117m by Mill Financial after defaulting on a loan used to securitize a refinancing of the debt incurred by buying Liverpool FC.

TheInnerRing December 13, 2010 at 11:49 am

Very good point John, I think the timing with the London courts / Royal Bank of Scotland financing explains a lot.

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