Slipstream’s Sponsorship Crisis

Tuesday, 29 August 2017

One minute you’re on top of the world, the next you’re in the gutter. Sport regularly serves up cruel metaphors for life. Cannondale-Drapac wore the king of the mountains jersey for a few days in the Tour de France, won a stage and put Rigoberto Urán on the podium. They announced a new blue chip sponsor in Oath, a US media company and were renewing the contracts of their star riders with a new sponsor set to be unveiled, apparently even the new kit and bus designs had been worked. Only it seems the funding for 2018 was never in place, the new sponsor had not signed a binding deal and now the team could vanish. Here’s a look at the chronology of events as well as the options ahead.

There have been rumours and warning signs this year. In fact the team has long had budget pressures. It has struggled to retain sponsors and changed its name so often over the years with the likes of Chipotle, Garmin and Cervélo coming and going and the team has been through two mergers to bring new sponsors onboard, a lively history even in the insecure sphere of pro team sponsorship. It’s kept riding with help from team supporter Doug Ellis despite some near misses for example previous sponsor Cervélo got into serious financial problems and the plug was almost pulled.

Back to 2017 and earlier this year there were articles in the US press about what a good investment the team is. At first these seemed like open appeals to the US corporate sector but on second reading they were more like reassurance for those dipping a toe in the water, a tool to take into boardroom or marketing strategy meeting in order to win over colleagues to a pro team sponsorship. In July the first good news arrived as the team announced a link up with Oath, a company you might not have heard of but it’s US telecoms firm Verizon’s media operation, the umbrella group for content-hungry online firms like Yahoo, Tumblr, AOL, HuffPost and Flickr. But the press release was a head-scratcher. It didn’t mention naming rights and it was hard to tell if the deal was significant or not. Soon after the Oath logo appeared on the shorts for the final stage to Paris suggesting it was valuable but that’s an interpretation rather than a certainty, we’ve seen sponsors get on team kit at bargain rates.

Whatever the Oath deal is worth it can’t keep the team on the road. This summer Spanish website Zikoland said Cannondale was stopping, a story which was shot down. L’Equipe also wrote the bike sponsor would be reducing its commitment which seems more likely. Indeed this can explain why the team has its current sponsors in place and Oath on top too but still faces a sponsorship shortfall: the Canadian-owned bike brand could be scaling back.

Another reason for the budget shortfall is that the team’s fortunes have picked up. Rigoberto Urán’s second place finish in the Tour de France comes at a price, his contract extension will have been on the basis of a substantial pay rise.

Flicked in the boardroom
All of which brings us to the current problems and the surprise. In an interview with team boss Jonathan Vaughters on The Cycling Podcast it appears that a new sponsor was being lined up for 2018 but that the deal had not been signed off by the company’s board and that at least one director had doubts and this lack of consensus meant the sponsorship could not happen. In other words no deal had been signed: the money for 2018 was never in place even if it was hoped or even expected to happen. This is a concern because it implies the team was renewing rider contracts for 2018 and beyond – and designing team kit according to the interview – without a watertight contract. It seems the sponsor could have been Unibet according to Dutch newspaper AD but the identity is immaterial because the story is the funding shortfall.

There’s never a good time for this to happen but at least the transfer market is still active which means some riders so credit to the team for not stonewalling riders… even the rumours emerged before the news went public. But already some teams have filled their rosters and any Cannondale-Drapac rider going elsewhere will face a reduced “take it or leave it” offer from another team. Some riders won’t find room and most of the team staff’s chances are even slimmer. There’s also an extra effect for riders who are not on the team but still in talks about their contract renewal because the prospect of extra riders hitting the jobs market will depress wages across the market.

No wonder he’s grateful

Can a new sponsor be found?
It’s happened before. The team’s predicament is news and might tempt another sponsor to step forward, especially since they can set the terms and get a bargain. Vaughters says he gives it two weeks. This is the team’s decision rather than a formal deadline imposed by the UCI or others. There is an annual licence review process in October and the UCI appoints auditors to test team accounts but this can run to December. You’ll remember the Lampre-Merida team was going to have a new Chinese sponsor but over the winter the UCI delayed announcing their World Tour licence as the sponsorship turned out to be a mirage and in the end they were saved by money from Abu Dhabi and now on their way to becoming one of the biggest budget teams in the sport. So the Slipstream adventure need not halt in 10 days.

“Should I stay or should I go?”

The problem is a Catch-22 scenario emerges. Current star riders may prefer to jump ship rather than wait for a rescue deal/ The moment the team loses the guy who just finished second in the Tour de France is the moment a potential substitute sponsor gets cold feet. The more “assets” like Urán and Rolland are minded to leave, the harder it gets persuading a new backer to come on board. We saw before when Bouygues Telecom ended its sponsorship of Jean-René Bernaudeau’s team and Europcar was coming on board but only if their leader Thomas Voeckler stayed. He’d already signed a contract to join Cofidis but by stroke of luck had yet to fax it back and the adventure went on. Urán and his agent will surely be studying offers from other teams, it’s said Astana are interested but they are always linked to every transfer tittle-tattle.

Crowdfunding
There’s now a crowdfunding campaign, an appeal for donations. But this means raising a lot of money from a lot of people. It is difficult to manage compared to negotiating with one sponsor and only buys the team a year’s space and it’s unclear what is on offer, is this fundraising just to keep the team on the road or will subscribers get a share of the team or merchandise? We’ll see but it’s not as unusual as it might first seem: the likes of Belkin (now Lotto-Jumbo), Euskatel-Euskadi and Europcar (now Direct Energie) have tried this but the sums involved have been smaller, helping to buy a vehicle or hire a rider rather than underwrite the whole team budget. Can Slipstream team raise millions? That depends on you. It’s hard to measure the support available but the team has roughly 250,000 followers on Facebook, about 150,000 on Instagram and 200,000 on Twitter. For generosity let’s assume these are all real people and unique rather than overlapping followers and that’s 600,000 in total who need to pay about $12 each to keep the team going. Now this is too simple a calculation but it illustrates how keeping the team afloat requires big sums. The team acknowledges this, to register support and you’re asked how much you’d like to donate and the starting sum proposed is $100 with options going up to $100,000. In short this looks like a desperate move, understandable given the circumstances but otherwise unsustainable.

Hanging around in the pro conti ranks

Pro Conti?
The team could continue in cycling’s second division knowing that even without some marquee riders it still has an attractive roster and could get an invite to the Tour de France. The team got its break all those years ago when ASO invited it to take part in the Tour de France, in part swayed by the team’s stance against doping which was pioneering at the time (and being American helped given this is a crucial market). Only the invite is not certain and even if it was 95% likely some sponsors will not deploy their marketing budget on a gamble, especially since Vaughters has made sideline in public taunting of the Tour de France’s owners and could find a large Gallic cockerel returning to roost. So the route of running a competitive team in cycling’s second tier looks risky and unlikely for now, a technical possibility under the UCI rules but for now neither a choice nor a preference.

Conclusion
A World Tour with 17 teams in 2018? We’ll see. Here’s a team that’s made a habit of getting out of tight spots and operating on a tight budget. The $7 million shortfall may not be set in stone, if one or two riders leave the team then this amount needed shrinks and perhaps savings can be found elsewhere too. It seems unlikely the team would turn away a sponsor offering, say, $5 million but it also seems improbably the answer is found via crowdfunding. There’s a vicious spiral here because if a star goes then so does the appeal of a team to a new sponsor, being able to market the team with a Tour de France stage winner and podium finisher is more valuable than a promising cobbled classics roster. It’s this more than the UCI which means a clock is ticking so the situation could continue into winter but the longer it goes on the worse the team’s remaining bargaining power with sponsors, riders and staff alike get.

Gird August 29, 2017 at 3:46 pm

But, but, but what will happen to the rising star that is Hugh Carthy? …and Woods?
We all know Uran will be fine, and the rest I don’t have any affinity to. Especially with Dombrovski’s out-of-touch comments regarding the need to be able to pay a mortgage and put food on the table. Vaughters should fall on the sword for this if he didn’t even have a contract signed from the investors.

MRJ August 29, 2017 at 4:12 pm

Curious to hear how you thought Dombrowski’s comments were out-of-touch? Surely bike riders have as much right to have other commitments in life (family, financial future, etc) as we fans do. I found Dombrowski’s comments (in the interview he did with The Cycling Podcast, in their review of stage 9 linked to above) to be quite thoughtful and brutally honest.

And regarding the matter of signing riders to extensions, without having the signed contract with a sponsor in hand: I’d bet this is quite common in the sport; any entrepreneur knows the feeling of operating this way. To me this is only a problem if JV mis-represented the situation to someone like Uran, telling him the ink was dry when it wasn’t. And we don’t have enough information to make that judgment.

Gird August 29, 2017 at 4:47 pm

We’re talking about the very same interview. If he was speaking on behalf of the support staff then fair enough, however as an employee likely on a six-figure salary I find his comments somewhat out-of-touch.

Emil August 29, 2017 at 11:06 pm

I doubt Dombrowski is on a six figure salary. The lower level riders (of which Dombrowski is one) are not paid particularly handsomely.
My guess is that only Uran makes six figures on that team, possibly Talansky as well.

StevhanTI August 30, 2017 at 10:36 am

Van Marcke probably has a low six figure salary as well. If it isn’t for his wins then at least for his publicity value in springtime.

Michael B August 30, 2017 at 10:44 pm

I heard that same interview and I’m almost certain Dombrowski explicitly referenced all the support staff. He came across very well.

Cd August 29, 2017 at 3:48 pm

I’m a fan of both the team and JV but have to say the idea of crowdfunding seems really unseemly. This isn’t a charity nor is it even some local team that represents ones home or village. If the team maybe switched to a jr development squad it would make some sense, but I feel it’s the best move for the team to stop the crowdfunding in its tracks. Donations for a for profit endeavor makes little sense.

Mendip5000 August 29, 2017 at 4:49 pm

A for profit venture…that’s made continued losses? Doug Ellis has made personal “donations” in the past, so no reason that others can’t do the same in my view.

The Inner Ring August 29, 2017 at 8:03 pm

Let’s see what the team comes up with, I doubt the plan is to raise all $7m this way but it could plug the gap between a sponsor, existing or new, willing to tip $1-2 million into the team combined with some savings elsewhere.

Robert August 30, 2017 at 6:02 am

I seem to remember JV hinting at a 1M deal in the interview on the way of being closed. So yes, 6M left to go *sigh*

Global Nomad August 30, 2017 at 10:39 am

Cd, you seem to be stuck a little in the past with your view of crowdfunding – this is being used by everyone and even for product development by start ups. You could argue that Obama also used crowdfunding for his election. The problem is really one of continuity and the unreliability of crowdfunding with the effort required – ask for much less but need many more contributions or concentrate on a few big ones that require more in return.

I quite like the idea of seeing 500,000 tiny names on a jersey…..would also make a statement about the state (sorry) of team funding.

Cd August 30, 2017 at 6:44 pm

No, I know how it works. But it’s not like they’re funding a new project. Looks like kickstarter rejected them, probably for that reason. Despite all that, I’ll probably contribute. They’re only asking for $2m. I have to weigh my $100 or so vs. the value of the enjoyment I get rooting for Slipstream for another year and that value is probably worth more than the $. This will also come after a larger donation to the Red Cross for Houston as it should for anyone in the US.

Peter August 29, 2017 at 4:20 pm

It would be a shame, I have always had a soft spot for this team. Not just their reputation, but also a lot of the riders they employ(ed) or their style. Dan Martin for instance.

“In short this looks like a desperate move, understandable given the circumstances but otherwise unsustainable.”

I agree with this, though I think that if done in the right way, at the right time and with the right reward/subscription behind it, this idea could probably work and could generate a team a relatively small but very stable part of their budget, all the while adding to their appeal for (potential) sponsors as they can flash with a dedicated fan base (who, for example, all get a tshirt/cap/sticker/bottle with the sponsors name on it). And merchandise is just one way to go, think about it creatively and there’s all sorts of possibilities.

Augie March August 29, 2017 at 6:21 pm

Chris Froome said he felt bad, perhaps he’ll slip them some of his huge annual salary (which is probably more than most pro conti teams yearly total budget) via the crowdfunding campaign….

Stuie August 29, 2017 at 11:37 pm

Why would Chris Froome pay anything?😳

Big Ringer August 30, 2017 at 10:16 am

What a ridiculous comment. Its a commercial endeavor not some worthy game of charities where everybody ‘must’ win something and all inequalities are balanced out.

Augie March August 31, 2017 at 3:53 am

Two people now missing the sarcasm here….

Javier Hernandez August 29, 2017 at 7:56 pm

I can’t help thinking a membership option is better than crowdfunding.

Membership would encourage recurring payments rather than crowdfunding one-offs.

What do you get for your membership? That’s tougher. Discounts on other sponsor’s product? Give one member a seat on the board or the management committee as a fan’s representative? Team car rides, travel in the bus (competition winner style), exclusive digital content? First chance to buy old equipment?

Membership too won’t raise $7m but it might help make a difference and it would certainly herald a different kind of team.

Chris August 29, 2017 at 7:58 pm

Anyone called Alonzo?

The Inner Ring August 29, 2017 at 10:38 pm

A different story perhaps but interesting how he was once so keen to set up a team only for this project to vanish within months. Maybe he was never that interested?

Foley August 29, 2017 at 11:15 pm

North Korea Aerospace?

Trump/Breitbart Race Team?

Augie March August 30, 2017 at 7:28 am

The extant UN, US and EU sanctions would probably prevent North Korea from investing in pro cycling.

Vitus August 30, 2017 at 3:12 pm

There are already enough Russian based teams, we don’t need the alt-right/kremlin to sponsor another.

pax August 29, 2017 at 8:27 pm

I hope they can pull it out.

That said, it does make the point again that the UCI/ASO model is just not sustainable.

The teams can perhaps be grouped as follows
a) Sponsorship by Billionaire
b) Sponsorship by Energy Money
c) Sponsorship in France
d) Teams constantly looking for a way to survive. (example Quickstep, Cannondale this year)

Furthermore, we have the issue that races are expensive to put on, and the legacy race format is not always appealing to the world wide fan. However, the format works well for ASO, and those already in the system. ASO and RCS claim the don’t make money, but they don’t need to as the pressure to share with teams would increase. However, especially the ASO’s asset value is increasing – perhaps up to $1B now (considering how much the Triathlon was sold for several years ago). Thus billionaires are helping ASO increase their asset value – a nice transfer of wealth on the backs of many in the sport.

The UCI is too weak versus ASO, and it is possible it may roll into French hands. Many of those voting are incented to keep the status quo.

The whole cycling scene needs a drastic change – with a focus on making it work financially, which means making the media work right, changing the race formats, adding a luxury salary tax,(with adjusting for varying tax brackets in Europe) and much more. These things have been done in other successful sports – we can’t live in the history if we want a future.

jc August 29, 2017 at 9:17 pm

Agree with much of this. The current setup is unsustainable, though saying so often upsets some traditionalists. I suspect the addition of UAE / Bahrain money has only made things worse by pushing up salaries, perhaps the Peter Sagan thing with Bora has too. Not sure what the solution is, many of the smaller races dont make money, even if ASO, RCS & Flanders do. Even then there is not enough to share around the teams. Maybe the TV rights could be sold for more though that is complicated.

Unfortunately I suspect the Canondale situation will be repeated. Quick Step have had problems and if Andy Rhis is as ill as rumours suggest perhaps BMC will too.

The Inner Ring August 29, 2017 at 10:31 pm

Even RCS and ASO lose money on their smaller races or just break even. Take the Critérium du Dauphiné, consistently one of the best races in the world in terms of action, contenders and its place on the calendar. It has a budget of €2.3 million and makes a profit of… €11.9k according to the latest set of accounts filed and previous years show a similar revenue and profits measured in only thousands of Euros.

Andy Rihs is ill, I’m sad to say it is not a rumour but public record. He has MDS (aka “blood cancer”) https://www.aargauerzeitung.ch/panorama/people/hoergeraete-unternehmer-und-sportmaezen-andy-rihs-hat-blutkrebs-131102287 (German).

jc August 29, 2017 at 11:28 pm

Perhaps that’s the point, the sport is living beyond its means. Even if ASO etc put more back into the sport (I think they should) it would not solve the problem. For most other sports broadcast rights are the main income source (though there is some doubt as to how much longer the levels of income growth can continue) but the structure of cycling probably limits the amount that can be earned. Where else does the cash come from? Generous sponsors are always likely to be in short supply.

RonDe August 30, 2017 at 12:54 am

For all the pious hand-clasping and talk of “the sport” its not “the sport”, is it? Its the teams who cannot attract a sponsor. If there were 18 Bahrains or UAEs or Skys or the various lotteries that seem to have long term sponsoring ambitions everything would be hunky dory and then we could complain that all the sponsors of the sport were dodgy regimes, immoral gambling companies and horrible media barons. But sponsors like this who turn up don’t want to hand cash over to guys like Vaughters. They want to be masters of their own destiny and run their own show. So they actually have a different model to the one Vaughters runs. Vaughters wants companies to hand over cash presumably in return for exposure. He wants people who will be hands off and not hands on. So the question his sponsors will be asking is “Do we want to give our money to this guy?” Personally, I can’t blame them for saying no.

StevhanTI August 30, 2017 at 10:42 am

Broadcasting, and ticketing, merchandising, naming rights, the mercato…

I don’t know how all these weigh up against each other but I doubt if broadcasting really is the biggest share in the revenue

chava August 30, 2017 at 1:00 pm

Honestly, Dauphine has always been a weird pseudo-race. The favorites never ride all-out because of risk of going to deep in prep for the tour, but still it is used to assess the tour favorites first and foremost, so it end up lacking in identity. I truly do not think this race belongs in the World Tour no matter the quality of previous winners or its history.

TourDeUtah August 30, 2017 at 2:38 pm

You been watching the same Daffy as the rest of us ?

Noel August 29, 2017 at 9:39 pm

It does seem odd that the wages of Froome and Sagan would probably match the budget of this whole organisation with how many – 40 to 50? people perhaps losing their livelihood. Salary caps would seem to be the way round that, although why shouldn’t a cyclist earn a decent packet considering what other sporting superstars get these days… . Similarly why should the cyclists pay be limited if ASO are making a mint out of the system….
ASO have such a dominant position that I’m not sure, away from some sort of dramatic collapse of a number of teams, what the agent for change is…

The Inner Ring August 29, 2017 at 10:28 pm

That’s the same in all sports, at least in those where there’s a free market, eg the likes of Neymar and Ronaldo earn more than many of their team mates combined and multiples of the entire wage bill for other football teams.

Also ASO are in a strong position but they’re not making a fortune out of the sport. I must return to their accounts soon, it’s not so interesting because they don’t disclose much but it’d be helpful to explore the numbers in the coming days.

Razorback August 30, 2017 at 4:09 am

Salary caps also doesn’t work in multi country sports as difference in tax systems and accounting would it make it impossible to make it work or even guarantee that there is no “back payments”.
Salary caps just works in the US for franchising sports (NBA, NFL,..).

Ecky Thump August 29, 2017 at 10:33 pm

If ever there was an inappropriate name to a sponsor that failed to live up to its promise – Oath.
Aye, that’ll be right.

BenW August 30, 2017 at 10:32 am

Vaughters said it wasn’t Oath so it’s unfair to drag their name through the mud.

Anonymous August 29, 2017 at 11:28 pm

I have a problem with JV – and I suspect potential sponsors do too.

He’s made such a song and dance about the unsustainable financial model (and of course he’s right!)

But there’s something awry when the guy’s gone and got himself an MBA – and told everyone about it – and written articles for major publications about what’s wrong and his vision for the sport … And yet companies still don’t buy into him…

It seems that in JV’s world it’s always someone else’s fault. Maybe that’s too mean?

I just see companies like Cofidis or AG2R sending their money to their teams for years. And yet even though JV has that special link to the United States of America he still can’t get one company to give him some cash …

No?

Brian August 30, 2017 at 12:46 am

I’m not necessarily disagreeing with you, Anon, but you are comparing apples and oranges when it comes to cycling sponsorship markets in France and the USA; there’s a disproportionate benefit for Cofidis & AG2R (and I greatly respect their long standing sponsorship, just like FDJ, the Lottos, and Quick Step – even the sugar daddies).

MJ Ray August 30, 2017 at 1:04 pm

My problem is with JV and his apparent support for turning the WorldTour licences into a US-style franchise system. He’s probably right in that teams need multi-year licences and the grand tour revenue needs spreading around a bit more than ASO and RCS currently do, but I don’t think the answer is a system which would basically pull up the ladder and stop any more new teams like Slipstream or Sky entering the competition in the future. Whether you love or hate those teams, they have changed the sport.

I’ve also still a slightly bad feeling about the way Slipstream seems to have dumped co-founder Millar but I probably don’t know the full story there.

But mainly for the franchise system love, as far as the crowdfunding goes, I’m out.

RonDe August 30, 2017 at 12:43 am

Yuck. Vaughters again and again. A man I openly admit I find it very easy to dislike. Earlier this year we were talking about his team as not having won a world tour race for 2 years. Then a few wins fell in place. Were they luck or judgment? Doesn’t really matter. He says again and again he can offer metrics and data to companies that their sponsorship will be returned in spades and yet this guy always seems to operate on zero budget and loses sponsors regularly. How many different team names are we up to now? I can’t help thinking the problem is actually Jonathan Vaughters although he himself will never see it. He leaves a bad taste and thats before we mention drugs. Does a leopard change his spots? I judge this man by a claim he once made which was that he would fold his team if ever a rider on it tested positive. Tommy D tested positive so why is this team still around? A man whose word you do not trust. Imagine if Brailsford had made a similar claim!

Basically I wish Vaughters himself would just disappear. Its the riders and staff who matter. Here’s hoping they find better surroundings.

Cd August 30, 2017 at 1:06 am

What’s so terrible about Danielson, was ever hiring him in the first place. More so than not shutting down the team when that bag got popped again. I mean what did JV expect from that guy. Danielson has also pretty much ruined Gaimon’s reputation as well.

Cannonfail August 30, 2017 at 1:16 am

Let’s also remember he said all his guys were clean… but he forgot to mention Ryder Hesjedal had doped in the past until after he had won the Giro. Open and honest that Vaughters guy.

Cd August 30, 2017 at 3:36 pm

That’s unfair. He always said his team was full of ex-dopers. That would RH. The point was they didn’t after joining team. Except for Danielson, who really did big damage to the whole team/JV.

Alex222 August 30, 2017 at 1:16 pm

If it is all about the rider and staff why would you want JV to fold the team after one failed drugs test? All those riders and staff would have been without a job.

Gird August 30, 2017 at 5:10 pm

Very well put. And let me add Christian Vande Velde to the list of dopers.

Joe K. August 30, 2017 at 5:18 am

It’s always the same never-ending issues in this sport–sponsorship shortfalls, team funding inequalities, distasteful personalities as team owners and managers. The art or skill of finding the right sponsor is perhaps too subjective, and too much a matter of luck. A lot of it has to do with the like-ability factor and socializing skills of the team’s head man running the show. Just look at Lefevre, Unzue, or even Savio (although he’s in trouble for the pay-to-ride scam), with consistent track records of lining up the right sponsors year after year. What needs to change? In order to remove this subjectivity and chance from the equation, you need to cut away, and remove, this “dis-connecting” and “detachable” link between true ownership and financial obligation to the team. After all, it is a recipe for disaster to acknowledge someone is the “owner” when that someone does not have the financial capacity to pay for and operate–in other words, really and truly be responsible for–that team. It’s like having children, and then going around to others asking for money to feed them, clothe them and send them to school. It’s a social welfare system, and that is the current state of affairs in the current pro peloton. The only exceptions to this social welfare state can be found in team’s where ownership and funding are from within, such as Team Sky or Astana. That is why whenever there is a sudden sponsorship crisis, the top riders in that situation always cite Astana as a possible go-to. Love ’em or hate ’em, they always have solid financing. And as for Team Sky, they’re already packed to the rafters with top-notch talent, so there’s no more room at the table. From where they’re sitting, it’s no wonder that the rest of the peloton look like a bunch of third world communist nations trying to scrape by on short-term meager hand-outs from some cheap skate, unheard-of, second-or-third rate corporate sponsors. As Froome says–What are we, a bunch of communists?

Hafren LMP1 August 30, 2017 at 7:06 pm

As a motorsport fan, the Savio ‘pay to ride’ scandal is quite interesting; below the top drivers/ riders, there are a huge number of ‘pay drivers’ who bring a budget to enable them to drive/ ride for a race/ season. Nobody really likes it, but that’s how a lot of teams go motor racing.

DaveS August 30, 2017 at 6:54 am

While this team is the subject of this article, the article is actually about the difficult, maybe even impossible, business model that is Pro cycling. A model in which the consumer gets the product for free and the money comes from what is basically a gamble and generosity. These things will always be unstable, based on the way the business world is going at the time. How to fix it? I got nothing . . .

Experimentalist August 30, 2017 at 10:17 am

Correction: most cycling in Europe is on Eurosport which is not a free channel.

MJ Ray August 30, 2017 at 12:55 pm

Actually, Eurosport is a free channel here, but only with audio in German. It was something like €20 for the year though, so not exactly football channel prices (which are more like €40/month in many countries). Also, free channels like ITV4 and RAI Sport have some races live and highlights of more.

MJ Ray August 30, 2017 at 12:55 pm

(€20 for the year for Eurosport in other languages – sorry for the confusion.)

TourDeUtah August 30, 2017 at 3:00 pm

The biggest stake holders of this sport are the race organizers. They are the ones that make the most money, have the biggest budgets, and the most talented people in the biz.

So, if ASO wants to run a bike race and only three teams have the cash to enter, ASO will have to start paying teams and or riders to attend. I know some organizers pay for hotels and other expenses for the teams, but the organizers, who have the most to gain from a successful bike race, should be the ones to pony up the investment money. They should start with increasing the prize monies.

May will argue that many races will go away. Good. There are far too many now.

UCI needs to be forced out of the race organization business. The WT is a joke and there are far too many WT and faux WT events on the calendar. Their funding should come solely from bike races, registration fees, licensing of riders, and franchise fees from the team owners/operators.

The WT or Premier League or whatever they call it should be limited to 12 teams. Allow for teams to move up/down.

Team owners are free to sell sponsorship or advertising space on their jerseys for whatever price they can get. If you are capable of putting together a good team and they win a lot they should be able to generate more revenue.

That’s my 2 cents worth.

Brian August 30, 2017 at 3:43 pm

@DaveS, It is a crazy business model. Essentially, the teams don’t make any revenue doing the primary thing the teams are designed to do: race their bikes at the highest level. Prize money will never support a team. As you say, it’s free to consume, so ticket sales will never support a team. We’ve all read over and over revenue sharing of broadcasting and know where that goes. So, basically you end up with a model where you’re always begging for money in trade of jersey space to operate your team, from year to year, without security. I’m not sure where JoeK above is coming from when he cites Team Sky. Surely if the media organization stopped sponsorship, Brailsford’s team could struggle financially. Or is he confusing with British Cycling?

Allegedly Anthony August 30, 2017 at 10:17 am

I can’t help thinking that one of the roots of cycling’s financial unsustainability is the pre-eminence of the Tour. Many potential sponsors will only see value in winning in France, and only three or four teams in most years can really consider themselves serious contenders for the GC win. So, how do you support 18 teams with commercial sponsorship? What is the commercial value in, say 8th at Tdf, a win in Burges, a couple of stages of the Dauphine and San Sebastian and Het Volk, for example?
Fans like us will continue to enjoy the classics, Giro, Tour, Paris-Nice, etc and to value stage wins but the wider media (in English-speaking countries, at least) don’t seem too care. If all the best riders were to target different races together then media would probably follow, but in the real world this is too risky if the press aren’t already there.
Maybe we can slowly dismantle the imbalance, chipping away a bit at a time, but I really can’t imagine a real fix that could be implemented and succeed in less than 15 years or so.
Anyou brilliant ideas, anyone?

Allegedly Anthony August 30, 2017 at 10:18 am

Sorry, that was supposed to be Burgos, not “Burges”. Autocorrect…

Allegedly Anthony August 30, 2017 at 10:20 am

Also, “Any”, not “Anyou” at the end!

chava August 30, 2017 at 12:21 pm

UCI needs to promote the one-day races more. Only Paris-Roubaix has a wide audience and are also known outside the cycling core world. Combine all one-day races with a Gran Fondo the day before and collect a premium from those 40-something with disposable income to finance the promotion of the races further. Get full GoPro/whatever high-tech coverage. Heckj, even experiment with drone footage if safe enough. Upgrade watchable races like Schaal Sels, Giro dell Emilia and Tro-Bro Leon that encourage attacking and guarantees drama instead of sprint classics or pseudo-races like the horrible Fleche Wallone. Maybe even the new Austrian Alpine race. Ensure a proper one-day race calender post-Tour. And re-introduce the World Cup jersey to keep track.

Dominic August 30, 2017 at 10:36 am

It will be interesting to see if the ongoing doping scandals in athletics see some transfer of sponsorship monies to other sports with global reach. An obvious fit would be for Rapha/Walmart to take the team for a year or two. It seems more a fit then the corporate Sky machine did, Slipstream style themselves as bike racing enthusiasts and romantics. I can empathise with the predicament, for most big corporate cycling = Tour De France and one team have a monopoly on that which would require huge sums to break. In comparison the best JV can offer is a plucky stage win and exposure and that still isn’t cheap. $7m is a lot of targeted add placements at a few cents. The obvious solution lies in raising more revenue from the races and sharing this to keep the sport competitive and interesting but this has been the debate for as long as i can remember it being an issue.

Nick August 31, 2017 at 1:18 am

Sadly, I don’t think anybody leaving athletics because of the doping scandals is going to see cycling as a place to rebuild a clean image.

Global Nomad August 30, 2017 at 10:41 am

I quite like the idea of seeing 500,000 tiny names on a jersey…..would also make a statement about the state (sorry) of team funding.

Hafren LMP1 August 30, 2017 at 6:56 pm

Have to agree with many on here; the current financial model simply doesn’t work, and not only that, far too much of the sport is stuck in a time warp. Compared to a lot of major sports, frankly, its completely amateur.
But is there the will or the way to change it? Probably not; so other teams will also fold.

And Team Sky have a rumoured budget of £25-30M; hardly earth shattering in global sporting terms, is it?
So why can’t the sport attract the big money corporations for their teams? Returns on investment is probably very small.

In an ideal world the UCI would govern & set rules; then just ONE company would promote a ‘World Tour’, (similar to the motorsport model;F1, MotoGP, WRC, etc) selling TV rights, distribute TV money to the teams, etc But as it is, with ASO/RCF, etc already established – it’s too late for that.

The Inner Ring August 30, 2017 at 10:49 pm

Is the model that bad? There are plenty of long standing teams in the World Tour with enduring sponsorships.

The return on investment in cycling can be very big. This is part of the problem, cycling is “cheap” because of the risk (perceived or real) of a doping scandal blowing up and inflicting damage on the brand. More at http://inrng.com/2014/06/pro-cycling-sponsorship/

Pax August 31, 2017 at 7:40 am

Why did Sharapova get a standing ovation, for winning her first match after a drug suspension?

WTF – it doesn’t matter in some sports.

In cycling, though, the media can let it go.

I am not trying to justify the use of PEDs, but we know that abuse is much more wide spread in many other sports – football, tennis, etc and especially in american football and baseball. Why hyper focus on the cycling side, instead protect all the young kids in the other sports instead? Hmm… maybe the league management made a concerted effort to manage their image different. …. Oops, there is competing management.

chava August 30, 2017 at 3:46 pm

Yes and I am even Danish so naturally I should rate this year’s edition highly. Idk, this race just seems like a testing ground for me, but this is because I rate Tdf too high.

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