Nothing Lasts Forever

Tuesday, 24 September 2013

Three teams in one day? Yesterday brought the news that Euskaltel-Euskadi had stopped negotiations with Formula 1 driver Fernando Alonso for the sale of the team licence and there was confirmation in Cycling Weekly that Vacansoleil-DCM was stopping and via Twitter it seems Team Sojasun have no replacement sponsor for 2014.

Cycling teams come and go but there’s something wrong with the way the sport works when decisions concerning the elite of the sport get taken only months away from the new season and so late into the end of the current one.

We’ve known for some time that Vacansoleil and DCM as sponsors were leaving but work has been done to keep the team and its infrastructure, from staff to the team bus. But Cycling Weekly reports DS Aart Vierhouten saying:

“It’s over… …We applied for the second division licence some time ago, just as a fall-back option, but we will not continue.”

A similar tale with Sojasun. Team management have been hunting for a replacement sponsor but it’s three months until the end of the year and next week the UCI imposes an official deadline to inform existing riders on the squad whether they will be offered a job or not for the following year. In the absence of a sponsor the only answer can be no. But several riders have pre-empted any bad news by leaving for the likes of Cofidis and Europcar… which only makes the remaining rump of the roster less appealing for a sponsor.

Meanwhile in Spain the Alonso project to “save” the Euskaltel-Euskadi was announced at the end of August, just four months from the start of 2014. But 1 January 2014 is the day the team would become official for the fans and media but prior to this there’s a lot of work to be done from registering the squad, to presenting budgets and proposed accounts to the UCI as well as contracting sponsors and important details like signing enough riders and even signing off the kit design in time so that the clothing sponsor has time to make it before the Christmas holidays. Not to knock Alonso and his entourage but this was always going to be an uphill challenge to make the Angliru look gentle. The only comfort is that some riders are still under contract for 2014 so they might be able to get jobs with other teams “for free” next year with Euskaltel paying their wages whilst they ride in another team, not ideal but at least they get to ride.

Sure, there are cases of a team being saved at the eleventh hour, see Bouygues Télécom’s replacement by Europcar but in extremis cases are no way to run the sport. As we see in each of the three cases above riders, staff and even fans keeping hoping something will turn up.

But if you’re a wealthy backer like Fernando Alonso or a corporate sponsor looking to slot a share of your marketing budget then chances are you don’t have an “easy come, easy go” attitude to money, especially when counting in millions, the quantity needed to back a pro team. Normally marketing budgets are planned well in advance with precise costings and knowing what you’ll get in return, in this case being able to secure a pro cycling team without riders rushing for the exit.

Plenty of autographs but is there a contract to sign?

So what can be done?
Currently the UCI waits for the season to finish before beginning the licensing process, part of which involves verifying the financial committments of sponsors and the management’s budgets. But this is proving very risky. Just ask Katusha who found out in December last year they had no licence for 2013; or FDJ who weren’t sure if they’d be in the World Tour or at Pro Continental level until December last year; as Jérémy Roy wrote the team couldn’t get new kit because they didn’t know what UCI logo to put on the jersey.

Instead what if the licensing process was brought forward to July? Teams wanting a spot in pro cycling for 2014 should have got the finances and commitments in place by the summer of 2013. This avoids the late season scramble for a job, riders on squads that will not continue have months to find a job elsewhere. It also makes the sport look more professional, the idea of teams with millions of Euros on the line and fifty staff on the books not having a planning horizon beyond four months is another example of how pro cycling is really an amateur sport.

This is just one idea which keeps the current system but changes the timing. But there are more structural issues like investigating franchise and so on. Remember the Euskaltel-Euskadi team has a licence for 2014 but of course this won’t be verified by the UCI given the lack of financial commitment; but it does show that having a licence is itself meaningless, it’s having the cash that matters.

Conclusion
The deadline for teams to inform riders whether they’ll have a job for 2014 is fast approaching but it’s late in the day. More than a notice period for employees, the struggle for some teams to find replacement sponsors is astonishing. It might seem regular in cycling but that squads go hunting for millions of Euros right until the last moment is no way to run a professional sport. It might even scare sponsors away because they’ll see structures that struggle with long term planning.

None of this is to knock the three teams and their management. They work within the system and searching high and low for a sponsor right up until the deadline is a duty, a mission to keep the team on the road. Nothing lasts forever but if sponsors come and go, professional cycling needs to think about new structures and methods to stop looking like an amateur sport.

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{ 46 comments }

Chikashi September 24, 2013 at 10:31 am

I agree. A pro team is a business, and that is no way to run a business. The blame needs to be shared amongst the team management, UCI and the sponsors. All a bit amateurish, as you say.

Okatzzz September 24, 2013 at 10:40 am

A big part of the problem is that such a high proportion of the value in sponsoring a cycling team comes from having the team called after your brand. That’s in contrast to most other sports, where the income of a team is more evenly distributed from a range of sources. So in cycling when the primary sponsor decides to withdraw the future of the team is at stake if a replacement can’t be found. The income from the remaining minor sponsors isn’t enough to come close to balancing the books. This situation is going to continue unless that problem gets addressed.

It seems to me the only ways to resolve that are either to have a pool to which teams must contribute and which supports under-funded teams for a limited period; to configure the sponsorship rules so that the prominence of individual sponsors is reduced; or (perhaps most sensibly) to give teams a share of TV revenue so that they’re not so dependent on their own sponsors. Any other ideas?

Chikashi September 24, 2013 at 11:10 am

Okatzzz, I am not sure about ‘most other sports’, as motorsports teams tend to operate under a comparable model where the team gets co-branded with the flagship sponsor(s). I think you are referring to cases where the team owner provides much of the financing and various sponsors fill in the gaps, which used to be the case in cycling decades ago but not today.

I think it would be difficult for sponsors to agree to contributing to an emergency fund for financially faltering teams. In any case, having a fund like that will not encourage teams to get more organised.

Getting a share of the TV revenue is interesting, but I think it’s a chicken or egg game in the sense that in order to do that, the broadcast licence fee must go up lest UCI’s revenue stream to fund salaries of useless bodies is cut. In order for UCI to justify a big enough jump in broadcast licensing fees, the sport must attract considerably more viewers that will in turn enable the media company to charge higher advertising rates. Does pro-cycling attract enough audience? I don’t know. It’s the same background issues that need to be explored as the issue of women’s pro cycling not getting as much prize money, salaries, media coverage etc. It’s easy enough to demand more money, but they first need to create more value for the paymasters all the way up the food chain. Of course, the discussion becomes that of, how are they supposed to do that unless they are given the opportunity first? It’s a bit like looking for the first job out of school and being told by everyone that they want someone with experience. However, for the advertisers, media companies and sponsors alike, there are plenty of options other than cycling in which to invest their money. I hope pro cycling will get there, but as it was argued in the post, it would help if they (all 3 groups, but the teams and UCI in particular) start acting more professionally…

Okatzzz September 24, 2013 at 11:41 am

Motorsports do often have a headline sponsor, but they also typically have revenue distribution arrangements like the F1 Concorde Agreement which distribute funds on a basis that as far as I’m aware isn’t seen in cycling.

http://www.hindustantimes.com/motor-sports/topstories/How-the-F1-pie-is-shared/SP-Article1-949214.aspx

DrHeaton September 24, 2013 at 12:01 pm

The problem that cycling has which many other sports do not is that in cycling a far too small a proportion of the teams budgets come from competitions and prize funds.

In F1 and in Football a large part of the money earned by a team comes from finishing highly in the constructors championship or in the Champions League whereas the winnings for even a race like the Tour de France are paltry compared to the budgets required to operate a team.

I think it comes down to the fact that in cycling, the money is too spread out. In F1 and Football the money is centralised then distributed. The whole F1 calendar is owned centrally and therefore it’s easier to divide up the money. In Football the money is distributed from UEFA/FIFA. But in Cycling the top teams are competing in races run by a myriad of different companies who are all in competition with each other and who, in the most part, are not financially successful. In F1 race venues pay huge sums of money to get their city on the calendar for a year, in Cycling historic and popular races are failing around the globe.

There are huge problems in cycling and I suspect that’s it’s very much a case that all the problems feed into each other to such an extent that no single problem is solveable on it’s own. It needs someone with serious money to come in and totally shake the pro cycling scene up.

I suspect that it won’t happen to I could see the F1 approach being successful. One company owning the rights to the ‘World Tour’ calendar, doing a better job of advertising the sport to international TV audiences and growing the ‘brand’. That company could then buy up races so that the profits from something like the Tour de France could feed back into smaller races and support them. That in turn puts cycling on a more stable footing and gives the calendar some consistency. By also dividing up a larger pot with teams it’d give them all a minimum budget (maybe $2-3m per team) which gives them a starting point to add to with sponsors rather than sponsors being the be all and end all. That also puts less of a burden on sponsors to foot the whole bill of running a team.

Simon September 24, 2013 at 3:40 pm

“I think it comes down to the fact that in cycling, the money is too spread out”

Not sure about that, it seems to me that ASO, who owns the Tour, half the Vuelta, Paris-Roubaix, LBL and a host of other races probably get a very good share of the revenues that come into cycling, with TV rights and sponsoring of their races. Do you have any number on that, Mr Inner Ring?

It seems to me that the financial model for teams is flawed, with their only revenues being essentially marketing money. Marketing is in my experience very volatile and short-sighted business, very little companies will want to commit for multiple years, years in advance, because marketing plans are made up very fast and are sometimes very reactive to what your competitor is doing. And the fact that cycling’s image is so tainted by doping doesn’t help either.

To me, sharing TV rights would be the only solution for the teams to stabilise their income, but why would ASO let that go right now. With the actual model, people identify a lot more with riders than teams, and even if they fold left and right, ASO knows that the Contadors and Froomes of the peloton will always find a team to ride. It would take a strong Ecclestone-like figure to rally a group of strong teams with big riders together to wrestle the TV revenues from ASO. During the race-radio debate, you got the feeling that Vaughters and Bruyneel could fit the bill, but the former doesn’t seem interested anymore and we all know about the latter, so it seems we’re back to square one…

Whiff September 24, 2013 at 5:16 pm

Just to clarify slightly – the big money in football comes from qualifying for the big competitions ie the premiership and the champions league and thus getting a share of the TV money; the difference in prize money for different finishing positions is actually quite small. The real issue in football over the last 30 years, and more and more recently, is that less and less money trickles down from the big teams to the small teams.

Anonymous September 24, 2013 at 7:19 pm

Agreed, but if nothing else, it provides a stable system for those big teams and that’s what cycling lacks. If you think of the world tour as the champions league then the WT teams should be getting a bigger slice of the pie in order to operate on a more sustainable footing.

DrHeaton September 24, 2013 at 7:19 pm

Sorry, that’s me.

Whiff September 25, 2013 at 11:19 am

The Champions League model might bring some stability to cycling but it has made football much less competitive with trophies now almost always being won by a smaller range of teams.

Nick Evans September 24, 2013 at 11:23 am

“the idea of teams with millions of Euros on the line and fifty staff on the books not having a planning horizon beyond four months is another example of how pro cycling is really an amateur sport”

Though in the world’s biggest sport, football, promotion and relegation isn’t usually finalised until April/May and their season starts again in August. So cycling’s not too different in that respect.

DrHeaton September 24, 2013 at 12:07 pm

Except that in Football it’s extremely unlikely that a sponsor dropping out at the end of a season would result in the team failing to exist. Football clubs have reasonable set budgets and sponsorship just tops that up. Relegation will result in some adjustment but the club, staff and players can all continue to play, the team would not immediately cease to exist.

The Inner Ring September 24, 2013 at 12:11 pm

It’s common for relegated football teams to get a payment to help them adjust to life in a lower league but they also have income from stadium gates etc as said above.

Also the promotion and relegation aspects are clear in these sports. In cycling teams can hire new riders for next year to boost their points haul and stay in the top league, the World Tour. It means one team worries about relegation hires a rider with points and they’re safe; now the next team has to do the same. All this before the murky tests on ethics that Katusha had trouble with etc.

DrHeaton September 24, 2013 at 12:12 pm

Also, if you take the Premier League as an example, a relegated team will be awarded ‘parachute payments’ from the PL when dropping down into the Championship which will help clubs adjust over time to their reduced budgets. That gives teams a chance to keep their best palyers and push again for promotion. In cycling if a team drops out of the World Tour, unless they can almost guarantee a Tour de France invite, they’re likely to fold.

Nick Evans September 24, 2013 at 7:30 pm

So in reply to both of your points, it seems the main difference for cycling is the reliance on sponsor income over other forms – no home base for ticket sales, no guaranteed income from competition/parachute payments?

Fletch September 24, 2013 at 12:32 pm

Another curcial aspect of F1 is that most teams are either part of a car manufacturer or have some brand equity of their own and bring their own fans with them to a new sponsor.

Mclaren have had multiple title sponsors over the years, Malboro, West, Vodafone etc. They are currently called Vodafone Mclaren Mercedes, as much a mouthful as any cycling team. But in 2015 Vodafone and Mercedes will be gone but they will still be Mclaren. They will have retained their brand, their fans, their history and this will enable them to find new sponsors to fund the team.

Compare this with cycling and Team Sky as an example. All of the brand equity in the cycling team is linked to “Sky”. If Sky stopped sponsoring the team then the team would remain (and likely find another sponsor), the staff, the infastructure, the riders would be the same but to the public it would be a different team. All of the (short) history, the fans, the brand equity etc will be partially lost. After the second sponsor change it may as well be a new team and as Alonso is finding it’s probably easier to set up a new team than sponsor/buy an existing one.

The reason F1 has this consistency is the rule that teams must make their own chassis. So in effect the teams are more than just temporary structures set up to go racing with other peoples kit, paid for by other peoples brands. They are all car manufacturers, even if they only make F1 racing cars.

Bike racing could do the same, make a rule that only bike manufacturers can set up teams. They can still have title sponsorship but this must be rooted in the manufactuer of bikes.

hoh September 24, 2013 at 1:21 pm

That’s going to be problematic for the likes of pinarello, which is sponsoring multiple teams just within the World Tour level.

Besides, whilst running the team may just be part of Mclaren’s R&D budget, cycling manufactures (with possible exception of Giant Trek & Specialised) are no where as wealthy.

cilmeri September 24, 2013 at 1:24 pm

“Bike racing could do the same, make a rule that only bike manufacturers can set up teams.”

Not sure if all F1 teams are car manufacturers, don’t some teams get the ferrari and red bull cast offs from previous years? Plus I think it’s different as bike frames are a lot cheaper than F1 chassis, and I think have to conform to the UCI rules that it’s possible to buy the bikes that are being raced. This could cause problems if for example Team Sky started building their own bikes but not sell them.

I’m not sure if consistency year on year is needed however, and I certainly wouldn’t want cycling to become as tribal as football. However there does need to be a bit more stability, and just bringing the process forward could do that.

maximflyer September 24, 2013 at 2:23 pm

‘as tribal as football’ – well put.

Anonymous September 24, 2013 at 2:54 pm

They all make a chassis, it’s stuff like engines and etc they get ‘last years’ from the engine manufacturers.

Nick Evans September 24, 2013 at 7:28 pm

Though the most successful team in F1 at the moment are Red Bull, and it’s difficult to see who has any brand equity there, apart from the sponsor, as the racing team is an offshoot of the drinks company.

Fletch September 25, 2013 at 12:35 am

But to race in F1 Red Bull have to make an F1 car which costs a lot and therefore means they are in it for the long term. Which gives stability. And since they have been so successful the Red Bull brand now does have equity as a racing team in its own right.

If they were in it for the short term they could title sponsor another team but this would also help build the teams brand. Red Bull Williams Renault for example.

It would be a big change for bike racing but it could be a long term solution to the issue of teams dissapearing.

I don’t see an issue with racing on prototype bikes.

Looking over my shoulder September 24, 2013 at 1:51 pm

With the exception of four events across the whole calendar there is no ‘TV revenue’ to share.

In the vast majority of cases thoses events you see on the telly have the production costs paid for by the organisation of the event. At best you might find a friendly broadcaster to produce and show an event at no cost but they won’t pay the organiser for the rights.

ben September 24, 2013 at 2:08 pm

Seeing only the post title, for a horrible second I thought this was going to be an autobiographical story!

Shawn September 24, 2013 at 2:31 pm

The fact that inrng points out that the license is basically meaningless is a central problem. How can any team look for long term investors (not merely short term sponsors) to bring actual capital into the organization and help make it stable? Revenue stream from shared broadcast rights and better marketing of teams will help but so long as licenses are worth no more than the paper they’re written on, teams will not have any greater stability. I think a franchise model might be the way to go.

Larrick September 24, 2013 at 3:35 pm

The biggest issue is obviously steady income and to that end, road cycling will need to be extremely inventive if it isn’t to struggle. The most successful (from a revenue point) sports around the world have two things in common. One, they have large tv revenue and two, the teams or venues, in the case of especially golf and tennis, can bring in gate receipts. If you take a team like Manchester Utd, it’s very close to a third split in revenue from tv, match day receipts and commercial. Sponsorship makes up less than half of the commercial income only. Fans watching at the ground in paying for tickets, food etc bring in over £1.2 mil per game. It’s stating the obvious but cycling gets no ‘gate receipts’ and minimal prize money. Coupled with no overall control over tv rights across all events as in F1 or at least in the main as in the LTA or the US or European PGA, it’s hard to see where consistant income can be found other than benovelent team owners.

One would imagine that the best hope is for a league style set up with the best riders only competing in the seasons sanctioned events forcing the different organisers to cede control to one overall organisation. If there were two ‘leagues’ with the 2nd tier racing in the smaller events you could develops a promotion and relegation model. The points system would lead to a league table and end of year prize money. I think they would need to look at more circuit finishes to allow for enclosed viewing areas or utilise motor racing circuits to open opportunities for revenue. One over all controller allows for revenue from sponsorship of the league as well as consistency in branding across the teams and races. Actually, stick engines on the bikes and I may have just ‘discovered’ Moto GP!

Simon September 24, 2013 at 4:17 pm

The problem for the “league” model is that cycling is a very diverse sport with a calendar that’s crowded with historic event. You couldn’t ask the best riders to compete in all 3 GT, all the monuments and all the week long stage race that are on the calendar right now. So what do you do, do you drop the Vuelta or the Giro? Do you drop Tirreno or Paris-Nice? And what is in fact a “big” rider. Froome isn’t a big rider in Paris-Tour or Roubaix, just as Cancellara isn’t a big rider for a hilly stage race like Pais Vasco. And although I agree that circuit racing opens some possibility for extra revenues, the problem is that they usually produce very boring and not very TV-friendly racing, especially if you consider that a lot of viewers tune in for the scenery!

Larrick September 25, 2013 at 1:53 am

All of the classics, GT’s and the main week stage races could make up a ‘season’. Team sizes could be reduced with a maximum of 6 riders per race except for GT’s. The average team squad could be reduced in size allowing for more teams in the ’1st division’ and a lower wage cost per team. The big football teams in Europe compete in multiple competitions with squads of around 25 players so cycling could do so with squads down to about 18.

As for circuit racing, I agree with both the viewers that watch for scenery as well as the racing and that circuits can be boring but I’m suggesting that maybe only the last 90 mins are on a circuit. Long enough to make it worthwhile for people to turn up to. I’m not sure tracks like Spa or Monza would make for boring racing either and like the GP’s, big screens could relay the racing from around the tracks & beforehand to those in the grandstands. Actually can’t see why if there was for example a stage race that had one stage finish at Spa, you couldn’t have a support race for the spectators over say 80k before the stage race reaches the circuit. Spectators travel for miles in the summer to catch a peloton whizz by in a matter of seconds, why wouldn’t they pay to go and have a seat, food and drink available, screens to watch the action and a view that allows them to see the riders for a longer time for multiple laps?

Tom September 24, 2013 at 4:46 pm

Are the riders for teams actual “employees” or “independent contractors” ?

Labor laws vary greatly among countries, but in USA the difference is significant, and there are pros/cons to both categories.

But I’d be surprised if the US’s IRS (federal taxing agency) allowed racers to be classified as “independent contractors” , but maybe they are. The IRS has ruled when an “owner” substantially controls how, when, and where a “worker” performs his duties, then the worker is really an employee, even if he has a (unenforceable) contract calling him a “contractor” . This is generally true in USA, but may not be in every circumstance.

Curious? September 24, 2013 at 5:46 pm

What if ASO owned all the races, owned all the TV rights, contracted all the sponsors, payed for the anti-dopping, and distributed all the team budgets?

They already own or are running all of the marquis events and the associated TV rights. While both the Giro and the Vuelta were more interesting this year, ASO could subcontract operation to RCS and UniPublic, etc.

What if a central organization was responsible for business development? Team management could focus on technology and talent development, performance, roster strategy, and tactics.

What if there were 18-20 permanent Pro Tour teams? Riders could be brought up in development programs, contracted for a time, and then enter a draft system that distributes talent to the most needy teams. Teams at the bottom of the standings would have first cut at needed talent.

Skippy September 24, 2013 at 5:51 pm

How many of the ” Fortune 500 Companies ” don’t set Budgets for less than 5 years ?

Pro World Teams dragging their ass over the line each 30th Sept , then awaiting ” Amateur Hour orchestrated by phat the rat ” , defies belief ! Allowing their Teams to be treated in this cavalier fashion earns ALL Team Owners a Great Fat rasberry !

Sitting in Firenze twiddling their thumbs , awaiting the royal shafting coming their way , smacks of STUPIDITY !

JV is supposedly doing an MBA , don’t they teach ” Budgets & Corporate Responsibility ” ? They did when i was doing an MBA , as well as OTHER Pertinent Business Skills !

Whilst we have amateurs controlling the UCI , there is NO FUTURE ! Teams will come & go , relying on ” HOPE “, rather than planning !

WISE UP , WAKE UP , get a piece of paper , sit down and plan the NEXT 5 years , determine WHAT is needed to see a result in 2018 ! Then having DARED to draft a destination , roll up the sleeves and put together a ” ROAD MAP ” !

SO SIMPLE , even a bystander , can see that the TEAM OWNERS , hadn’t thought about doing the hard yards of cooperating with each other !

So JV , are you MBA Material , OR , another flash in the pan ?

Sorry , did i hear someone say ” Too Hard “? Conflicts with UCI Constitution ?

GET REAL !

Sam September 24, 2013 at 6:05 pm

Erm…right….

Touriste-Routier September 24, 2013 at 9:08 pm

Drawing up a budget and selling sponsorships are two different concepts … Forecasts and realities are rarely the same. How many accountants/CFOs/Controllers are top sales people?

And why are you picking on JV; Slipstream hasn’t lost their sponsor.

RocksRootsRoad September 26, 2013 at 9:53 pm

Skippy, Are you James Ellroy in disguise?

trounder September 24, 2013 at 6:31 pm

Right now, as you say INRNG, “having a licence is itself meaningless, it’s having the cash that matters.”

Imagine if the license wasn’t meaningless. Imaging if license renewal was every 4 years instead of every 12 months. Now imagine if ASO and RCS had to “share” the broadcast royalties for their races by paying license holders to show up. Now imagine if license holders (aka: teams) had the option of “selling” shares in the license, instead of begging for handouts from corporate marketing execs every year. Imagine if the “equity” derived from the license was sufficient to meet baseline funding to operate for 4 years instead of just 12 months. Imagine how this might free up a ton of cash so that teams could actually thrive off of the smaller marketing handouts that niche advertisers could offer. Now you have the beginnings of a “business” model for a modest professional sport. JV gets it.

The alternative I see is PRO cycling remains an amateur sport with a storied past and an aging fan base (myself included).

Touriste-Routier September 24, 2013 at 9:33 pm

Many races do pay the teams: 1) Prize Money, 2) Travel stipends, 3) Appearance Fees

Only the largest races get meaningful revenue from TV rights; most events have to pay for the broadcast production, or provide sponsors for the broadcast.

You have to remember that teams have no skin in the organization of races. They don’t pay entry fees for UCI events, and they don’t carry the direct financial risk of organizing the events; their only risk is not getting paid by the organizer.

The organizers don’t necessarily need all the top teams to be at their races; the average roadside and TV fan doesn’t know the difference. Watching the local 2nd or 3rd tier team is often of greater interest than a 1st tier team from a far away place.

Licenses are granted for multiple years; they get reviewed annually based upon sporting and other criteria (covered extensively on this site). This is done for the purpose of maintaining the integrity of the sport (yes, I recognize the irony here).

As others have said, there are multiple problems that feed into each other. Having a season long competition, that no one really cares about drives up the cost of running the teams. It costs significantly more to have 24 riders (so you can have up to 3 squads competing at one time versus 12 riders. There are a lot more 1 – 3M Euro potential sponsors than there are >5M Euro sponsors… If Euskatel didn’t have to go to races around the globe that they have no direct interest in being in, would they still exist? The Pro Tour is killing the sport on many different levels.

The Inner Ring September 24, 2013 at 9:58 pm

All good points, as you say the races pay teams some fees to take part.

We have the “World Tour” but the likes of FDJ can’t sell a lottery ticket to a Belgian, yet alone in China or Canada. The same of Belisol shutters, Movistar telecoms, Omega Pharma products and a range of other brands, they’re all dependent on their national coverage.

Antwerpen September 24, 2013 at 10:26 pm

Lotto lasts forever.

haps September 24, 2013 at 10:47 pm

very interesting post aswell as comments -
economic stability and sporting stability are essential for all shareholders from my point of viev

teams and instituion need to find more diverse way of generating income in order to be less depending on sole sponsorship money alone – it does not appear sustainable –

instituions need to provide clear and transparent guidelines for sporting stability – which is what appears clearly objective .- how is etical and financial criterias being judged objectively? if it is not static matter?
maybe rider points should stay with the teams that payed their wages – that could ensure some sporting stability – maybe with a declining value during the years

I find it interesting that Eurocar can have an interest in staying in second div. as they seem secure of an invitation to TDF which counts as some (50+%) of the annual marketing exposure.

anyone knows how big part of the income sponsorship provides for a cycling team budget aprox in %???

as for the tribal comment – totally agree – altough I find it equally hard so be a “fan” of an investment bank or a Spanish communication company….

Ross September 25, 2013 at 12:35 am

Although I would find it abhorrent, a possible revenue-raising opportunity would be for the organisers of the big races (i.e. grand tours) to sell naming rights for some of the iconic mountaintop finishes. You could have the Coca Cola Alpe D’Huez , the Red Bull Col de Tourmalet, or the Heineken Galibier stages etc., etc. This money could then be used as prize money for the winning teams on these stages. Many other sports and sports venues use naming rights to gain further revenue, but cycling seems to have not embraced this. I know it’s crass commercialisation but it works.

Othersteve September 25, 2013 at 2:58 am

Pro road racing will always be a back water sports event! I love it that way

300 + million Americans and cycling will always be just a boutique sport!

I can’t claim to speak for my cycling brothers on the continent ( Europe) but you have to follow the money
There is not enough money in pro cycling, has never been and I can’t see anything changing.

MickR September 25, 2013 at 3:21 am

After reading Slaying the Badger last week, I think I understand the team dynamic… in the 1980s. But, it is probably not that different today. Wealthy owner sees great opportunity to take has-been star (Hinault… “has been” in 1984!), get an un-sung but brilliant manager and build a team around them to get some exposure to the La Vie Claire brand and Look pedals.

Sky is a UK TV brand, right? With two superstar UK riders. Seems legit. It is a shame it cost so much to run a top team, but a previous poster got it right methinks; the best riders will find teams, yes, but it should be clear that there needs to be a legit business case for an owner to put her brand on a shirt to allow the team to exist for the privilege of racing.

TourDeUtah September 25, 2013 at 5:23 am

Would personally love to see the Pro Tour concept and the UCI go jump in a lake. The people that run UCI and PT are only in it to carve out feifdoms for themselves. Period.

I have heard some talk of a premier league based upon the 12 best PT teams. Most of the 4th tier riders on 3rd tier PT teams wouldn’t make Pro Conti teams, let alone a top PT team. Many of the .1 and PT races need to be done away with. It has to be difficult for a well monied PT team to have riders, staff, and management at 3 – 4 different races at one time. Let alone the smaller PT teams like Euskatel or Vacansoleil.

Besides with fewer PT teams, more Conti and regional teams will be able to ride in more events than they do now. Let’s face it, Sojasun is not interested in riding the Tour of another 3rd world country, yet, they are interested in riding in French events where their branding has more input.

Fewer events and fewer PT teams that are well manged/financed is the best way to go in my opinion

crimson_planet September 25, 2013 at 7:36 am

This is all payback/fallout for the doping of the 1990′s and since. Pro riders didn’t realize that omerta had shot themselves in the foot/wallet. Tolerance of dopers has poisoned the sport and chased away sponsor money.

noel September 25, 2013 at 5:04 pm

hold on here – wasn’t there a report out this summer that said Sky got some 500m bucks worth of ‘exposure’ for the cost of about a 1/10th of that?.
the issue here is that thanks to the appalling leadership of the uci over the last 25yrs, the big global brands won’t touch cycling with a bargepole. Until that boil is lanced (bad choice of words I admit) cycling will lurch from crisis to crisis….

Larry T. September 26, 2013 at 4:55 pm

Utah’s got it right. First, buying into the top-tier got a team what? Guaranteed entry into the biggest races, but also the OBLIGATION to show up at all of them. If the team was any good or had national interest they could get in via the wild-card scenario, so paying out these big fees just forced them to create a huge team so they could compete in more than one race at the same time. All this really did was put euros in the coffers at UCI and raise the cost of team sponsorship to an unsustainable level. PLEASE do not use F1 as an example of any way to run a sport! Insane costs, corruption, etc. make this scheme the last thing pro cycling needs. UCI needs to come up with some real benefits to the top-tier, starting with reducing the number of them so they have some value.
But let’s face facts – the multi-national, big money scenario was merely the fruit of the LeMond/Armstrong effect on the sport. Now that is over and cycling is returning to normalcy, it just seems worse because for a brief time the sport was awash in sponsorship monies. Mr. Mars and the Mad Hatter of UCI rode that wave as far as they could, looking the other way at all the problems like doping. Right now that “return to normalcy” combined with world-wide economic slowdown and doping scandals have given us the current situation. Perhaps with some new management and a lot of work UCI might return the sport to some credibility and attract some sponsors who look at it as a purely business/promotional expense rather than the usual bike industry/passionate patron model of sponsorship. But I doubt pro cycling will ever return to the daze when it was showered with cash by the likes of Coke, Nike, etc. Those days are gone, folks!

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