A bicycle race is a simple affair with some riders, a start and a finish. But the organisation and management of professional cycling is complicated by rules, law, money and business.
The news that pro cycling teams could get a share of the TV rights money paid by broadcasters would mark a significant change to the way business is done today. Here is a look at some of the issues surrounding revenue sharing. For now we don’t have much detail so it remains to be seen whether this is just some extra cash for the teams or a structural change to the way the sport is organised.
Many races can trace their origin to a commercial imperative. In many cases a newspaper started a race to boost its sales. The Tour de France was born this way, the Giro d’Italia too. Today several of today’s press in Europe owe their existence to the circulation and profits generated by races a century ago. Racing, the media and money are the trinity of pro cycling.
The news that the Giro could share revenue with the teams could be one of those “win-win” scenarios. The Giro is a great race but it remains an Italo-Italian race and many of the best riders avoid it which can diminish the race’s status. By paying teams to come with their star riders the race can grow in stature as the win is more widely contested and interest in the race will spread further beyond Italy.
But sharing money to bring riders to the Giro is not new. When Lance Armstrong rode the Giro in 2009 there was apparently an appearance fee. Here we saw the organisers giving up some of their money to buy in a foreign star. Certainly the race was more widely covered because of this.
We don’t have details on the split for now. This matters because all sorts of things could happen:
- What % of the total TV rights money would teams get?
- If the race becomes more attractive to more broadcasters will teams get a proportional increase?
- Do all teams get an equal lump-sum payment?
- If the teams get the money, what do they do with the money?
In other words is this about the payment or is there a change in the model behind pro cycling here? Because right now the sport is in a funny position where teams would probably pay ASO to ride the Tour de France, to bid for a share of the airtime in July but many other races on the year are a cost to a squad, even winning a minor race can involve more expenditure than the value of the publicity generated.
One concern is that any increase in money just flows straight into wage inflation. Now rising wages are good but it’s never so simple. Sport is a winner takes all environment where superstars earn giant wages whilst the helpers don’t. More money for more big names in the Giro might just end up rewarding the top riders. As such we have a round of wage inflation where a few riders gain but there’s no change to the structure of the sport, instead it has just got more expensive to operate a team.
In a similar way, what is there to stop team owners taking the money they get from the Giro? Maybe there’s nothing wrong with this and a team owner that takes the money for themselves is probably going to find their squad becomes less competitive compared to one that re-invests the money.
Another thing is that the teams become tied to the one race, or at least to the highest bidder. Big races with big revenues can draw in the top teams but this means smaller races on modest budgets can’t compete. Note the Tour of California is already up against the Giro d’Italia on the calendar. Plus even smaller events can pay broadcasters to screen their races, they could get trampled on quickly here.
If today’s races are the product of newspapers, will the sport become the product of TV tomorrow? Gone are the days of 400km stages of the Tour de France but what if the action could be condensed into 150km or less? And what about other changes, for example timing the finish of a race to suit prime time audiences, for example the Tour de France could finish in time for 8.00pm. Or perhaps even seeing the timing of one race altered to suit the viewing habits of a larger audience on another continent? Arguably we’ve seen this in Formula 1 motorsport already.
Paying teams is a novel idea but note we’ve seen appearance money used in the past. Indeed the payments seem to be about attracting star riders since teams are committed to ride the Giro already. What is different is giving the money to the teams to use. We don’t know the details for now but it’s one thing to give up a proportion of the team money, another thing for it to change the sport.
There’s no doubt a deal like this could change the sport. Just as newspapers created many of today’s races, TV looks set to shape the sport tomorrow.