The Tour de France is bigger than anything else in the sport, it’s the race everyone’s heard of. As such it’s in a monopoly position and able to dominate the sport.
At the same time others in the race are struggling. Garmin-Cervélo have taken four stages so far and held the yellow jersey but the team’s finances are always under review, the constant need to hunt for new sponsors whilst juggling a big wage will means a team manager’s job is often as much about fundraising as it is tactics.
The difference between a wealthy Tour de France and teams hunting for money is now leading squads to lobby for a share of the TV rights enjoyed by the Tour de France’s owners.
The Tour de France is run by Amaury Sport Organisation (ASO), a business that runs many other races as well as other sporting events like the Paris-Marathon, the French Open golf tournament and the Paris-Dakar rally. In turn ASO is owned by Éditions Philippe Amaury, a publishing group that prints L’Equipe, Le Parisien and other titles. EPA is family-owned, the majority shareholding owned by Marie-Odile Amaury (pictured). Her son Philippe runs ASO.
Accounts are hard to come by. In the Tour de France ASO earns income from TV rights but also from sponsorship and tops up by charging the towns along the route for the privilege of hosting the race. The race is reputed to be very profitable but there are significant costs too.
I understand the team’s desire for a slice of the cake. I’d like a slice of this too. But ASO is a business and very happy with the way things are right now, it won’t give away money for nothing. Indeed Jonathan Vaughters has said ASO believes “they could put on a race with amateur riders from France if necessary“. This is provocative from ASO and whilst one attraction of the race is that we see Alberto Contador, Cadel Evans, Philippe Gilbert, Mark Cavendish and others all together in a race, it is normally the race that creates the stories.
If teams want a share of TV rights in one race, some organisers who are struggling to cope with rising costs and an economic slump might look on with a touch of jealousy. Indeed if teams are willing to ask for money from the Tour de France, could more modest race organisers start asking for money from teams flush with cash? I can’t see that and several races are likely to vanish but it’s a way to point out that it’s not necessarily a one-way street.
Indeed revenues are already shared… between races. ASO runs a string of races during the year but supposedly loses money on them, although this seems impossible to verify. Races like Paris-Nice, the Dauphiné and the Tour de l’Avenir are essential to the sporting calendar and ASO seems to cross-subsidise them thanks to bumper receipts from the Tour de France. These events are platforms for teams to show themselves.
Teams in other sports can share money but only because they are permanent fixtures. In soccer Manchester United can host games in its stadium in front of almost 80,000 fans and it was founded in 1878. This permanence and the ability to host major games, coupled with some organisation, means teams in the English Premier League can command most of the TV rights.
By contrast in cycling it is the race organisers who “host” the sport, the teams show up because the airtime and other media coverage of the racing is very valuable.
Money never sleeps
But one lesson from the English Premier League is that any soccer clubs might have huge incomes from TV rights yet they are merely a conduit for the money: almost all of it flows to the players as wages get bid up in the auction for talent. Team managers asking for money in order to stabilise their finances would simply find more resources at their disposal to buy in star riders. In other words the money never sits still with the teams, bolstering their finances. Instead it would merely flow through the teams and inflate wages.
I can’t see ASO giving up money for the sake of helping the teams, especially if the money just flows into rider’s bank accounts. The spending wouldn’t achieve a return.
But there could be common ground for some enlightened sharing. Right now the teams pay a lot to support the bio-passport scheme but ASO derives a big benefit from cleaner sport. As such it would be good to see ASO agree to contribute to this cost, something Jonathan Vaughters seems to agree with.
For me the real problem today isn’t ASO hogging the money, instead it’s a lack of sponsors. A spot in the Tour de France is incredibly valuable yet there aren’t many queuing up to back a team, even if they’re certain to get their money back in publicity. The payback can be several times the investment.
But look around at the teams and there aren’t that many global brands backing the sport:
- Some teams are part-funded by sugardaddies (eg Leopard, BMC)
- Some by family-owned businesses run by passionate fans happy to divert their marketing budget into a team (eg Lampre, Cofidis)
- Others are ego projects for politicians and nations (Astana, Katusha)
- Many others are funded by domestic sponsors who won’t gain much from international exposure (Ag2r, Euskaltel, Radioshack)
- Arguably only HTC, Garmin, Quick Step and Sky have businesses across Europe.
Is this a professional sport or a hobby funded by men with ready access to money?
ASO certainly rakes in money from the Tour de France and this permanent and profitable franchise is a contrast to the ephemeral and often unprofitable business of running a team. No wonder teams want a share of this money.
But I can’t see ASO just doling out money for the sake of it, there would have to be something in return. I’m not sure if the money would stabilise anything, it could bring wage inflation which is great for the riders but the team owners don’t gain. Perhaps there are costs to be shared, for example the bio passport?
If teams want to stable finances then I think the ideas lie elsewhere. The real crisis is the lack of sponsorship money, big companies keen for media exposure are staying clear of pro cycling, in part thanks to the scandal-prone nature of the sport.
Perhaps a guaranteed invitation to the Tour de France, almost a franchise, because this will allow team owners to attract sponsors given the certainty of doing the big races. The UCI’s World Tour licencing scheme does this in a small extent but the terms and conditions keep changing. It’s this that turns teams into more stable propositions. But this system entrenches the existing teams and puts up barriers to new teams.
Indeed if revenue was shared today amongst the existing teams then how could a new squad break into the sport? I remember when a modest US squad slowly rose up the ranks from a development team in the US to become a pro team riding in Europe before being wooing ASO to land a wildcard for the 2008 Tour de France and today the team is known as Garmin-Cervélo and it has won four stages in the Tour de France this July. Jonathan Vaughters and Doug Ellis have achieved all this with impeccable marketing, decent ethics and a streak of fun. Remind me again, what’s not working here?