Tinkov Takes Over

Monday, 2 December 2013

Do you have some favourite jeans? For Oleg Tinkov it might be the ones he bought in a market stall in Uzbekistan during the 1980s.

The Russian entrepreneur is set to take over the Saxo-Bank team. The squad rose up from modest beginnings to become the sport’s top squad before fading back in recent years, in part because of a lack of sponsorship money. Tinkov came on board in 2012 as a co-sponsor but seemed to change his mind last summer as he watched Alberto Contador ride to fourth place, live-tweeting his frustration with often personal messages. Now he’s going to buy the team.

No Oligarch
He might be wealthy, he might be Russian but this does not make him an oligarch. Instead Oleg Tinkov is the opposite of shady or politically-connected. He loves the limelight and tries hard to portray himself as the Mr Transparent of Russian business, supporting the little guy against overlapping Russian big business and big government. He’s the equivalent of Ralph Nader or Richard Branson although in a modern Russian setting.

Jean Genius
His first break happened during a cycling race in the late 1980s. He was in Uzbekistan for a race and spotted some blue denim jeans, then the height of fashion and above all very rare. He spent all his cash to buy four pairs of jeans on sale at 35 roubles each but the seller spotted he wanted several pairs and upped the price to 50 roubles. Tinkov bought them and returned to St Petersburg where he sold them for 200 roubles each. He carried on with printer cartridges, caviar and cars.

The studies stopped prematurely and he became a full-time entrepreneur. Russia was poor but Russian goods were often even poorer and he started importing consumer electronics from Asia. Walkmans, stereos and CD players. He opened a shop and business was good, soon he had branded retail chain in and around St Peterburg called “Technoshock”, then alongside this a chain of record stores called “Musicshock” and even a recording studio too. He sold these in 1997 for US$7 million.

Tinkov does dumplings

Tinkov switched into the food business, creating “Daria”, business that made pelemeni or Russian dumplings, an ordinary product but he resorted to shock marketing to get noticed although the billboard ads pictured above lasted a matter of hours until they were banned and removed. A few years later he sold the food business to genuine oligarch Roman Abramovich for $21 million.

Buy me a drink
With the money he started a brewery in St Petersburg called Tinkoff. Note the -ff, he borrowed the name from a street that sounded a bit like his name and created a story about the brewery serving the Imperial family, only this was a fake tale invented to lend authenticity and heritage to the new brand. In 2005 he sold the brewery for a genuine €200 million to InBev of Belgium, the world’s largest brewer was keen to get into the Russian market. But he kept hold of some of the rights to a brand and opened a chain of restaurants trading under the name of the beer. Which he again sold, this time in 2009.

Tyler Hamilton Oleg Tinkov

By this time he was getting back into cycling but this time via his ambitions and money. He created the Tinkoff Restaurants team in 2005 and this became Tinkoff Credit Systems in 2007. Riders included the Tyler Hamilton on his return from a blood doping suspension – only to get blown away by Operation Puerto within months and end up at Rock Racing – and Vasil Kiryienka who won a Giro stage with them. The team was ultimately was bought out by Katusha. Again Tinkov built something up and sold it.

Not a stage profile but the TCS stock price in November

With this he created a Russian version of Capital One, the credit card provider. TCS Bank is not really a bank – nor is Saxo Bank – as it’s not into savings and lendings and has no branches. Instead it’s an online supplier of credit cards. It’s done very well and is now Russian’s fifth largest lender. But it was listed on the London Stock Exchange the other day only for the Russian parliament to announce a review of online credit days after, sending the stock tumbling 33%.


So far a history of innovation, shock tactics and copycatting which has brought prodigious wealth. So if €6 million is cheap, why buy the modest Saxo Bank team that won just eight races this year? The squad has fallen far from its says as CSC, the number-one ranked squad. He’s linked to the team and there was talk of buying into Cannondale for 2015 so the €6 million entry ticket is the price to pay for a ready-made team rather than waiting for 2015 and setting up a team from scratch. It also suggests the team is a fun project for him, a game of fantasy cycling played out for real.

Tinkov is provocative to say the least on Twitter. He’s upset fans, irked riders and even publicly insulted Alberto Contador. But the two need each other. Contador is on a big contract which would be in danger if the team folded for a lack of sponsors whilst Tinkov has a rider still capable of winning a grand tour if the stars align. But we have to live with this, the UCI rules allow for a team licence to change hands, subject to a review. This includes a quick scan of ethics but rude and even offensive tweets don’t come into it.

“Already at the first team meeting, where we sat in a conference room, Oleg Tinkov said: ‘I do not care what you do, just do not get caught’. You can write this because there were many people in the room who can confirm it, if Tinkov decided to sue me for saying this,” said Hamilton.
cyclingnews.com

Nevermind Twitter, quotes like this from Tyler Hamilton are more chilling. But remember if Tinkov did say this it was an echo of what was being said in most other teams and a few squads had managers who did care what the riders did… because they sourced and administered the doping programmes themselves. Perhaps the question now is what Tinkov has to say, an interview in October suggests he’s got new things to say. But there’s an element of “he would say that, wouldn’t he” so better still, let’s see some tests of this. For example will Tinkov sign up his team to the MPCC, will he order his team staff to avoid painkillers like Tramadol et cetera?

As much as Tinkov has come on board for 2014 there’s little he can do right now. It’s too late to buy in riders; yes there are names still for hire but these are bolt-on riders rather than the more fundamental work of building a stronger team. Tinkov clearly wants a say in the team for 2014 but we’ll see if 2015 and beyond mean spending roubles to bolster the team, hire new talent and fund extras like support staff.

Oleg Tinkov Bjarne Riis

Maybe the big winner here is Bjarne Riis? He’s selling his team and reports say he will be retained on a very good fee. Only Danish investigations could cause him trouble. He can cash out before any trouble or even catastrophe engulfs him and his team.

Summary
A bike race and some jeans gave Tinkov his first break as an entrepreneur. He’s no oligarch cruising the Zil lanes of Kremlin power but a self-made man, a fact he’s always keen to remind you about. The ability to shock is part of his game so don’t expect modesty as he runs his team. The squad won’t want for advice in 2014.

But what happens beyond is interesting. Is this a personal project or a business plan with an objective for 2015 or even 2020. People laughed when Team Sky said they wanted to win the Tour de France at the launch in 2010 and it did feel like a line for the media. What does Tinkov want with this team?

peter December 2, 2013 at 12:28 pm

“Already at the first team meeting, where we sat in a conference room, Oleg Tinkov said: ‘I do not care what you do, just do not get caught’. You can write this because there were many people in the room who can confirm it, if Tinkov decided to sue me for saying this,” said Hamilton.

Nevermind Twitter, quotes like this from Tyler Hamilton are more chilling. But remember if Tinkov did say this it was an echo of what was being said in most other teams and a few squads had managers who did care what the riders did… because they sourced and administered the doping programmes themselves.

Just because others may well have said the same thing does not lessen the fact that Tinkov said it. Damaged goods. Let’s not get excited about a Bernard Tapie de nos jours. We need people with a clean mindset, Tinkov really does not seem to have one.

The Inner Ring December 2, 2013 at 12:41 pm

Agreed but Riis and many other managers from the past are still around too. Tinkov can say things in interviews, now as he owns a team he can act on them.

Sim1 December 2, 2013 at 12:45 pm

I’d agree – almost veering on ‘level-playing field’ territory there in terms of team owners and managers attitudes, which I’d hate to see.

Skippy December 2, 2013 at 2:25 pm

Can remember Tinkov riding the route of the Giro d’Italia , some years back , alone at the time he passed me , some hours ahead of the Racers . He has also ridden other years in groups .

UCI are still in ” Honeymoon Mode ” , so there is little they can do about what is currently taking place .

Whilst Teams are still going through inspection for their 2014 Season Status , i hope that ALL that is taking place , is being microspopically scrutinised ! Next year it will be a GROSS FAILURE , if UCI wait until September to start examining the Teams for the 2015 Season . When BIG Business are laying plans for the next 5 & 10 years , UCI has an OBLIGATION to be doing likewise !

My personal view is that NO TEAM that cannot show ttheir 5 & 10 year PLAN S before or during the Giro d’Italia , should be allowed to compete at the Tour de France ! When they find that the Teams are required to PLAN & BUDGET , Team Owners will very quickly ACT , to protect their Investment !

So far i still have not seen a report on the Women’s race that was abandoned by so many of the Racers because of ” Safety Concerns “! Will this be forthcoming before the end of this season ?

Only 2 months into ” Change of Management ” , yet the Sanctions that will have eventuated from 2013 TDF have yet to surface ? Let’s hope it is SOON ! We have to accept the Politicians behaviour , of blaming the earlier administration , for failures of Policies , yet there has been NO Evidence offered to show that ALL RACERS were as CLEAN as snow ?

Sim1 December 2, 2013 at 2:30 pm

You still not got the problem fixed with your keyboard? :)

diamondjim December 3, 2013 at 3:28 am

No – I think he really does want the scrutiny to be microspopic. :-)

Darren December 3, 2013 at 11:05 pm

Lol :p

vimes December 2, 2013 at 2:54 pm

“He’s the equivalent of Ralph Nader or Richard Branson although in a modern Russian setting.”

Ralph Nader??? WTF??? You have to be kidding, or maybe you are mistaking Nader for someone else?

The Inner Ring December 2, 2013 at 3:00 pm

In the sense of consumer protection and the businessman who stands up against the establishment and big business etc. But comparisons are awkward

Othersteve December 2, 2013 at 6:24 pm

We will give you a pass on the Ralph Nader comparison.

Although we never suspected you of being from the “New World” now we know for sure you are not a US citizen!

The Inner Ring December 2, 2013 at 6:33 pm

Ha, maybe the Nader comparison is off, I wanted to think of people who make a name standing against the establishment, the “little guy” who stands up for others… although through the platform of campaigns, publicity and more. Tinkov is certainly no political campaigner. Politics? Probably not.

jollygoodvelo December 2, 2013 at 11:39 pm

Branson

Samuel G December 3, 2013 at 11:55 am

let’s face it the comparison is a bit insulting to Branson too…..others have compared Tinkov to Donald Trump which seems more fitting to me

Andrewp December 4, 2013 at 8:26 pm

Not sure Branson would mind the comparison all that month, describes the pair of them as friends and rues a missed business opportunity in this
http://www.virgin.com/richard-branson/opportunity-missed

Greg December 5, 2013 at 12:56 am

Maybe they’ll rename the team Corvair?

vimes December 2, 2013 at 3:08 pm

Well, i don’t see that at all and think it’s quite an insult to Nader, but whatever. Branson is a much better comparison.

Sim1 December 2, 2013 at 3:31 pm

Agree. Consumer protection? INRNG, you know Tinkov’s credit card business involves absolutely ruinous interest rates for the borrowers? Seriously, they wouldnt be out of place in afternoon tv ads aimed at the desperate.

vimes December 2, 2013 at 3:41 pm
The Inner Ring December 2, 2013 at 3:42 pm

Fair point but he’s still out there portraying himself as the entrepreneur tilting at the Kremlin windmills. I’m not sure he’s innovated a lot in the classic sense, he seems good at copying successful business models in the US for a Russian introduction.

With his shock marketing techniques Tinkov is Tinkov. Bernard Tapie is mentioned in the comments, that’s an interesting comparison too.

Anonymous December 2, 2013 at 3:33 pm

What could possibly go wrong!

Walt December 2, 2013 at 8:09 pm

Horner is available and eager for a ride in 2014.

spokeydokeyblog December 3, 2013 at 7:39 am

That really would be funny, very different twitter styles for those two, “I did that” V general abuse every day of a major race, an interesting side story.

BC December 2, 2013 at 8:41 pm

My prediction for what it’s worth. This will end in tears for many.

hoh December 2, 2013 at 8:57 pm

Hard to believe that Tinkov’s actually ’tilting at the Kremlin windmills”. Rather, it’s more likely that he’s quite eagerly play along the way but failing so far to get into the inner circle of the Kremlin. His outsider status makes him somehow more acceptable to the western media.

He’s business model seems to be picking fresh business sectors not yet profitable enough to interest real “Oligarch”es, using probably his Oligarch-ish connections/policy leeways to make the business model more profitable. Once the business is ready & profitable, he then sells it back to the proper “Oligarch”es.

I can’t imagine his importing business to be so much more successful than the thousands of others doing it without some help from the Russian Customs Authority. Likewise Tinkoff Credit Systems won’t be possible if he hasn’t got anybody inside the Russian Financial Authority. The only difference is that Tinkov is trying to keep the big cash mill Tinkoff system (by listing it in London etc.) and somebody high up is trying to force his hand by doing the online credit review. He’d probably sell it off to a real Oligarch again at the end of the day.

Ninja December 2, 2013 at 9:01 pm

Well played Bjarne! I reckon he’s seen the writing on the wall, sold out while the goings good and will now wait and see what comes out in the Danish investigations. He’ll be able to move out of the sport for a while if he has to without losing the team

PT December 3, 2013 at 1:42 am

Perhaps Bertie can get Sammy and Juan Antonio on board too? He does like having his Spanish mates around when times get tough.

mike December 3, 2013 at 5:35 am

maybe a walk in freezer will be installed on the team bus, full of “special Spanish steaks”?
pro sports team owners gotta have the ego right? in this age of any press is good press, Oleg fits right in. I am looking forward to the antics we are sure to see this season. its working up to telenovela proportions.

Darren December 3, 2013 at 11:04 pm

‘working up to telenovela proportions’!
Just what I was thinking!
The scenario’s are endless!

spokeydokeyblog December 3, 2013 at 7:36 am

Great stuff there, cheers for all the background on Tinkov, had assumed he was part of the Oligarch group, it’s going to be an interesting season in many ways.

Anonymous December 3, 2013 at 8:03 am

There goes Berts’ 2014….in holding pattern for Alonso despite anything said between here and meltdown – probably sometime in about May/June re arguments over Giro-Tour :-)

beev December 3, 2013 at 11:27 am

one thing that strikes me about this deal is that riis, much like a cat always seems to land on his feet. you can only but wonder though as to how many of his 9 lives he now has left….

Sim1 December 3, 2013 at 11:49 am

I think the ADD are coming for him…..

Still be a loaded, albeit banned, ex-team owner mind you…

Sim1 December 3, 2013 at 1:46 pm

Just dug out an old CN interview with him from 2008. Some of the guff re doping seems more than hypocritical considering some of the banned riders TCS signed plus what Hamilton claims.

However other stuff he comes out with makes more than sense eg ‘I am a believer in the Anglo-Saxon model, where I am sure that Australian teams, American teams and United Kingdom teams are going to emerge, or even German. Their model is based on the business model, instead of the manage model. The French, Italian and Spanish teams, it is more like ‘friends, friends’.

Which is absolutely spot on.

http://autobus.cyclingnews.com/riders/2008/interviews/?id=oleg_tinkov_dec08

Larry T. December 3, 2013 at 11:32 pm

I truly feel sorry for anyone with a contract forcing them to work for this megalomaniac. This fellow seems to do or say anything to make a quick profit – the very attitude that has resulted in the dire straights pro cycling finds itself mired in. The comparisons with that wacky US real estate tycoon with the dead squirrel on his head are dead-on, remember when “The Donald” had a bike race with his name on it? No matter what this team does on their bicycles, it should be entertaining to watch as it unfolds, or more likely unravels?

Tovarishch December 4, 2013 at 10:44 am

Just a small correction – InBev were already number 2 in the Russian market prior to 2005 having established a joint venture with Indian venture capital group Sun, which owned 5 breweries, back in 2001.

The Inner Ring December 3, 2013 at 12:19 pm

I agree although Tinkov has better hair

Also we’ve seen Tinkov via Twitter and self-promotional books and media events, now we will see how he works as a team owner and businessman.

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