Remember 2012? Tom Boonen was imperial in the cobbled classics, Bradley Wiggins wore yellow and then went to the Olympic games? It all seems a long time ago but the UCI’s published its 2012 annual report today. Here’s a look at the income and expenditure of cycling’s governing body for the year.
First a few notes from the annual report before we crunch some numbers:
- The UCI has plans for a salary cap in pro cycling
- Approval was given to a system of rider transfers with compensation payments
- The biological passport results taken over several years “show clear improvements in the riders’ profiles”
- A mysterious technological project is “in the stages of development and will hopefully see the light of day in 2013. This should contribute to a necessary innovation in TV coverage”
- Staff average age is 37 and almost half-half male-female
- The World Cycling Centre took on 99 riders across all disciplines as trainees. These are riders in a development programme and typically from nations without funding to bring on talent to an elite level
- It’s a strange read as Pat McQuaid’s introduction looks forward to things that have come and gone and the report is full of initiatives that were announced so long ago you’ve probably forgotten them
Income Statement
The UCI’s income soared in 2012, largely thanks to the Olympics.
- Think Olympics and you might think gold as in medals but it’s gold coins for the UCI thanks to valuable TV revenue and marketing income which brought in CHF 21.5 million
- CHF 12.4 million of this Olympic cash was set in reserve and the UCI is using it on training and development funding, a sum of CHF 3.1 million per year for 2012-2015
- The World Championships remain a big income earner for the UCI with CHF 15.3 million of income and only CHF 2.3 million of “direct competition expenses”
- Road cycling accounts for two thirds of the World Championships income
- After a shortfall from the 2011 Worlds in Copenhagen, the 2012 Worlds in Valkenburg brought in more a lot more income
- Note the income of CHF 1.3 million from anti-doping fines, I believe most of this is from Alberto Contador’s 2010 Tour de France clenbuterol positive
- All this extra cash has swollen the UCI’s balance sheet substantially. It is investing the spare cash in financial assets until the time it needs to spend it
- On the spending side the marketing and communication budget doubled from CHF 0.9 million to CHF 1.6 million, a big increase but where it went would be interesting to know as 2012 didn’t see a big change, at least when viewed with road cycling glasses on although maybe the Olympics ate up cash. There’s mention that “the amount of work for the Communications Department increased massively” but this presumably meant late nights rather than extra staff?
- “Fees and expenses” jumped from CHF 0.7 million to CHF 3 million and remember this is 2012 and before the aborted “Independent Commission” started to bill for its time although it could include plenty of legal bills as the UCI tried to stall USADA’s investigation into Lance Armstrong/US Postal
UCI World Tour
As the accounts say, the UCI WorldTour is not an independent legal entity, but an activity of UCI that is partly managed by an ad hoc committee, the Professional Cycling Council (PCC), that is under the responsibility of UCI’s Management Committee.
Here you can see the funds paid in by teams, races and a contribution from the UCI too. The “legal and financial” cost is likely to be taken up Ernst and Young, an auditor, billing for its work to check team accounts as part of the annual licensing process.
- In 2012 €200,000 was given to the Volta a Catalunya to cover the race’s financial difficulties
Cycling Anti Doping Foundation
This is the anti-doping unit that is increasingly being moved out of the UCI, witness the move in September where Pat McQuaid stood down as a director to make way for independent experts. But there’s a long way to go before anti-doping becomes truly independent from the UCI, on a small level its offices are down the corridor from President Cookson’s office, more fundamentally it is funded by the teams, race organisers, riders and the UCI itself meaning it’s dependent on rather than independent from on the UCI. In 2012 CHF 7 million was spent on the UCI’s anti-doping programme. Here’s a breakdown of the activity and funding sources:
Global Cash Penalty
The UCI’s venture into race promotion with Global Cycling Promotions (GCP), a wholly-owned business, has been a conflict of interest at best, putting it in competition with race organisers when it’s supposed to sit above the sport. Witness the way it rushed the Tour of Hangzhou on to the World Tour calendar only for the race vanish before it even started because the agreements hadn’t been signed.
Much of the impetus behind the Tour of Beijing came from Hein Verbruggen, a figure now vanishing from sight in cycling’s rear view mirror but his legacy is proving costly here. In 2011 the UCI siphoned off €136,000 from the UCI Pro Tour Reserve Fund, the third consecutive year of subsidy. The good news is that in 2012 GCP is no longer tapping the World Tour for fund… … the bad news is that it’s getting cash direct from the UCI accounts and in 2012 GCP was awarded CHF 600,000 but still finished the year at a loss. GCP was once promoted as a means to generate income for the UCI.
It’s possible GCP turns a corner and makes a profit but it’s role as an events promotion activity just sits at odds with the fundamental task of a governing body and it’ll be interesting to see what Brian Cookson does with it, I suspect the accounts for 2013 will be of greater interest.
From McQuaid to Cookson
Next year should see the accounts come out faster if Brian Cookson meets a specific pledge to speed up publication. McQuaid has left the UCI in good financial health but that might be thanks to others, the accounts were not his strong point as he revealed in a WADA Committee meeting:
Mr McQuaid said that he did not normally get involved in financial discussions as he was not a finance person and never had been ; he could not even understand budgets.
Summary
The 2012 Olympics provided more than gold medals. The UCI has set aside half of the income to create a steady annual flow of money, it did this with the 2008 Beijing games too. No doubt the velodrome provided a good share of income but men’s pro road cycling continues to provide the big audiences, the big TV deals and the big team licence fees.
But strip out the one-off bonanza from London 2012 and the UCI’s annual budget is less than Team Sky’s spend; cycling’s governing body has money to spend but it’s budget is modest compared to other actors in the sport like ASO, RCS or the big pro teams.
GCP remains a concern, it’s losing cash every year and the cash consumed in 2012 is three times the emergency payment needed to keep the Volta Catalunya going. If GCP wasn’t owned by the UCI then it’s very unlikely it would ever get continuous funding from the UCI.
Beyond this the salary cap proposal is an interesting one but it will be very hard to implement, European laws don’t permit this and if teams subscribe to a pact, a rider is of course free to get additional sponsorship.
Footnote: Here are the exchange rates used at the end of 2012: USD / Swiss Franc CHF = 0.9153; EUR / CHF = 1.2067. The full annual report is available online at http://www.uci.ch/docs/UCI_AnnualReport_2012.pdf (PDF).
Re marcomms costs: as well as Olympics – and they could have enlisted extra help for this – there was also the UCI Stakeholders survey which I suspect would fall into this line.
Agreed but note a lot of the stakeholder work was done earlier this year.
Interesting to see that buried among the notes to the accounts is the fact that income from anti-doping fines used to be transferred across to the CADF, but now will be split 50:50 between “development projects” and UCI revenues; if the CADF is supposed to be independent of the UCI, why do half of the fines effectively created by the work of the CADF go than straight into the UCI coffers, to do with as they please? Should they not go either to the body who performed the test (be that the CADF, WADA or a local body), or at least be set aside by the UCI for supporting the anti-doping work of these various bodies?
I saw that too. One suggestion is the CADF will get all the funding it needs but any giant fees coming in go to the UCI for management. Regardless of the means or the motivation, it shows the operation has some way to go before being independent.
Did contactor actually pay his fine? Do others pay their fines? This could be checked by seeing the cashflow statement vs the income statement. Is the annual report available?
He did. I think there was some negotiation to get to the eventual sum that he paid up.
That’s right. The case went on for so long and then Contador’s fine was a separate matter from the eventual CAS ruling on the doping verdict and suspension.
So what was the ‘mysterious technological project’ ? GoPro’s on the bikes or a TV transmission system that works when there is inclement weather?
I don’t know. Maybe the UCI Channel on Youtube? Nothing special has emerged.
I’d love to see something like the NFL where you can pay a reasonable amount for a HD stream of everything.
I’m racking my brain, but wasn’t the UCI broadcasting / streaming MTB events? But I think this earlier than 2012.
Red Bull have been filming/streaming MTB World Cup and World Champs events for the last few years, both XC and DH I think, only watch the DH though so can’t be sure.
Do national federations pay anything to the UCI from licensing or membership revenues? What about revenue from training of race officials etc?
I assume that:
– A mysterious technological project is “in the stages of development and will hopefully see the light of day in 2013. This should contribute to a necessary innovation in TV coverage”
Was the on bike camera’s trialled at the World Ports Classics. Any news on whether this will be rolled out further and on what timescale? Would be great to see something similar tested in one of the bigger races like a cobbled classic or grand tour. I would love to see some mountain passes (and encroaching crowds) from a riders point of view.
There’s no more on this. I suspect we’ll get more but the footage from that race was grainy and not great for people at home with HDTVs. What’s needed is a light camera that won’t make a bike too heavy but capable of sending good images and we might not be there yet.
Perhaps special dispensation could be given to the bike that the camera is attached to to be under the 6.8kg limit. 500g camera, limit reduced to 6.3kg?
The new go-pro 3+ is only 2.6 oz (whatever that is in proper money, a quick google says 73.71g) So that plus a transmitter unit is probably not too savage a penalty. They record up to cinema quality footage which is better than some of the stuff you get on Eurosport which looks like it has been filmed on an 80’s camcorder…
Would be nice to see this implemented, imagine if you actually got to see Contador’s attack in last years Vuelta when the camera crew weren’t filming?
You can easily get footage of a sufficient quality to use in broadcasts, just look at how sports like F1 deal with this, they have multiple on board camera’s plus this year appear to have introduced thermal imaging camera’s onto the cars too.
The World Ports Classics seemed to be a low-fi cheap test of the idea more than a functional test to prove the quality.
On weight, F1 is the example again where any extra weight is a disadvantage. I don’t see why the camera’s should be any different from transponders. It counts towards the weight limit (allowing lighter frames to enter the pro-circuit) but only needs to be on the main bike. Spare bikes need to meet the same limit but don’t need camera’s on them.
It all sounds simple but this is a bureaucratic governing body (much like any other, see football and goal line technology) and change always happens slowly.
Sensible… but this would see the UCI admitting a 6.3kg bike is safe to race on and therefore it would undermine the existing rule.
Can’t see them doing that, if all the bikes were the existing weight with a camera or ballast of the same weight added it would still be a level playing field
Thanks for the insight inring, being a bit of a McQuaid when it comes to accounting it’s good to have an explanation. Lets hope Cookson delivers on the transparency front.
On the on-board cameras: Think of the implications of making every rider carry this extra kit for it to work in cycling…
• If you mount a camera on the bike it will suffer from road-buzz
• The logical place to put a cam is on helmets and that would incur a big penalty on the rider aerodynamically as well as weight wise.
• Each rider would have to carry all this gear on their bodies, you can’t have cables to the bike for safety reasons alone.
• Further safety implications of adding hard heavy objects to the helmet and body of the rider and increasing the bulk – especially as helmets seem to increase the incidence of serious spinal injuries.
• Competitors would have to lift this penalty weight every time they get out of the saddle – effectively hobbling the lighter even more than they are already (ever wondered why the bottles are carried on the bike not the rider?).
• Think of the extra weight; probably two or pan-able cams would be needed (I imagine the rear view will be more interesting a lot of the time) powerful batteries, reliable transmitters that can stream in real-time, cables to the batteries and aero housings and clamps to streamline the lumps on the helmets – possibly close to a couple of Kg or more for the riders to lug around.
• On top of all that you’d have to deal all the problems of 200+ live HD video streams hitting the airwaves and the amount of interference to the signals caused by mountains, trees, weather, power lines, etc. etc…
No way to put any lens-leaning system for bad weather, rendering the cameras useless when it rains and you can’t ask the riders to clean the lenses.
• The systems would probably have to be custom built, your average Go-Pro won’t hack it because they are too big and only produce archive footage.
• Extra cost and logistical complexity of all the infrastructure, setup, support & maintenance.
Maybe this is not so easy, I’m not an expert but a high quality feed doesn’t look very do-able in the short term with the tech that is currently available.
To counter some of your points:
• If you mount a camera on the bike it will suffer from road-buzz
>> Not always, the use of a Global Shutter (one that take an image of the whole frame at once, not top to bottom like most Helemet Cams) would greatly reduce the shake, add on Optical Stabilization in the lens unit plus some vibration dampening you could have a safe. The use of Gyros would help stabilize things greatly, but the set up is bulky and the batteries would only last two(ish) hours.
• The logical place to put a cam is on helmets and that would incur a big penalty on the rider aerodynamically as well as weight wise.
>> I’ve found that under the stem to be a great place as it’s a stable mounting point and can keep things tidy, you can run cables from there to under the seat where you can house batteries, transponder, etc.
• Each rider would have to carry all this gear on their bodies, you can’t have cables to the bike for safety reasons alone.
>> Sorry, but stuff being on the person won’t happen, it’s actually more dangerous and the added weight would become distracting.
• Further safety implications of adding hard heavy objects to the helmet and body of the rider and increasing the bulk – especially as helmets seem to increase the incidence of serious spinal injuries.
>> Agreed, which is why I still believe the bike the place for a camera
• Think of the extra weight; probably two or pan-able cams would be needed (I imagine the rear view will be more interesting a lot of the time) powerful batteries, reliable transmitters that can stream in real-time, cables to the batteries and aero housings and clamps to streamline the lumps on the helmets – possibly close to a couple of Kg or more for the riders to lug around.
>> Not KG’s, think 300g in total weight, maybe 500g tops (which is still quite a bit).
• On top of all that you’d have to deal all the problems of 200+ live HD video streams hitting the airwaves and the amount of interference to the signals caused by mountains, trees, weather, power lines, etc. etc…
>> I don’t think you would get 200+, maybe 5 to 10 guys per race, something along those lines. In fact it could be seen as an advantage. There would be a financial bonus for each rider with a camera for the effort of the camera and people could “vote” for their favorite riders to have the camera on their bike. Imagine Jens Voight with a camera; or Vockler or Cavendish. That perspective would go a long way to bringing the excitement you feel on a bike to the general audience.
No way to put any lens-leaning system for bad weather, rendering the cameras useless when it rains and you can’t ask the riders to clean the lenses.
>> Not always the case, but a very valid argument. I would use a coating like Neverwet (nano coatings are so awesome) to keep things as clean as possible.
• The systems would probably have to be custom built, your average Go-Pro won’t hack it because they are too big and only produce archive footage.
>> You can actually wirelessly transmit from a GoPro and a system could be worked out (they wirelessly transmit video from small-Octocopters all the time) so it’s very technically possible. Nothing from scratch custom built, but more modified to a standard of weather proofing and reliability demanded from high level TV production.
• Extra cost and logistical complexity of all the infrastructure, setup, support & maintenance.
>> Yup, making something awesome takes effort and money, but the investment would sure help bring some new images and perspective to cycling to help make it more appealing to the general masses.
In a nut shell, on bike cameras are a very real reality that can be done with little extra work or cost and at a high level of production value.
I had read that the discount given to the Volta a Catalunya in 2012 was €60.000.