For years French teams faced a headwind in the shape of high payroll taxes but this system is now rewarding them. Coupled with stable sponsors and home advantage when it comes to hosting the Tour de France, the three French squads in the World Tour are in a stronger position these days relative to their rivals.
It might have been the first bit of transfer gossip this year: Oliver Naesen was linked with a move to CCC. Put aside concerns that what the team really needed was a star for the Tour de France or a reliable sprinter rather than the third prong of a classics trident alongside Greg Van Avermaet and Matteo Trentin; and that Michał Kwiatkowski could join the following year making it an even more crowded move… all this is on ice with the CCC team looking likely to vanish at the end of the year. Title sponsor CCC, or Cena Czyni Cuda which translates as “the price makes wonders”, saw its stock price look less than wondrous well before the Covid-19 crisis so the company was under pressure to cut costs and having three cycling teams (CCC, CCC-Liv in the Women’s World Tour, plus CCC Development) looks luxurious, even if the company founder and chairman is a keen cyclist. Enforced shop closures in Poland and beyond have compounded the company’s problems although the company’s stock price has more than doubled in recent weeks which might buy the teams some space. Anyway, Naesen re-signed with Ag2r La Mondiale on a safe three year deal.
Today we get the news that Thibaut Pinot, David Gaudu, Stefan Küng and Arnaud Démare have extended their contracts for three more seasons with Groupama-FDJ. It’s hard to imagine they and their agents were keen to move elsewhere but still, all have stayed and on three year deals when two is the standard rate. We’re in non-standard times, having a contract for 2021 is security, even more so if it’s with a team that’s certain to exist next year too.
There’s no news chez Cofidis today but they haven’t cut rider wages during recent weeks. You feel for management who signed Elia Viviani on a big deal, including hiring his brother, and granted him permission to have a go at the Tokyo Olympics… only to have him sat at home for much of the year and making fresh plans for Tokyo next year instead of focussing on that elusive Tour de France stage win. Some Cofidis riders were placed into “partial unemployment”, a French government scheme that temporarily covers wages but those doing online races and other “work” were considered to be doing their job in full and so kept on the books in full. The same story at Ag2r La Mondiale and Groupama-FDJ were no wages have been cut or gone unpaid.
There’s a premium with the three French world tour teams at the moment: stability and security. Cofidis is a credit company owned by a large mutual insurance company; Ag2r La Mondiale is a large mutual insurance company; Groupama is a large mutual insurance company… and FDJ is the French national lottery, recently privatised but for now no change in sponsoring and marketing and committed to supporting sport until the Paris 2024 Olympics. So four big companies behind three teams and all with long term sponsorship plans behind.
Some of this good is down to good fortune, sponsors come and go and today’s ones are reasonably risk-free in a pandemic. Remember the Europcar team? The car hire company quit the spot and has been fighting in recent weeks to avoid bankruptcy following the travel bans. But part is structural, nationality counts here as the sponsors know better than most what they’ll get in terms of exposure given familiarity with the Tour de France, their home market. Also for years French teams have faced an additional headwind with high payroll taxes in France meaning to hire a rider on, say, a million Euro contract, cost a French team more than another team, to pay a rider the same sum net of taxes cost more. Italian teams faced similar problems and shopped around, it’s why Lampre was quietly run out of an address in Switzerland and at times the Bardiani and the Willier/Vini Fantini/Southeast team were technically registered as Irish and British teams. But French teams stayed registered in France even if it meant paying more. Now this is starting to pay off like an insurance policy, an expensive one but it puts the French squads in a strong position when a rider is weighing up their options this summer, do they sign with a squad that might not exist next year or go with one that will
The pro rider market reaches an equilibrium of sorts each year, although in recent years the direction has been up and up every year. Just the possibility of F1 driver Fernando Alonso starting a cycling team was enough to make wages jump a few years ago but now we’re in the reverse scenario where CCC look to be going. If so this will bring the World Tour back down from 19 teams to 18 and where we were this time last year but with several star names coming back on the market. Manageable. However if one or two more teams go then they’ll be a tipping point where wages could fall substantially. The loss of a couple of World Tour teams could be handled by 16 World Tour teams in a revised UCI system where the likes of Arkéa, Circus, Wanty, Bardiani or Total Direct Energie get to ride more races but promoting these small will fill spots on the start line but won’t bring in new money: there’s no more price tension to pull up rider wages.
A three year deal? Nice in boom times, even better during a pandemic and recession. So far the French teams are faring relatively well thanks to generous sponsors and a home advantage of the Tour de France. Those high payroll taxes have been a headache but helped finance a system that makes the teams look like employers of choice at the moment. Relative is the key word, combine Ag2r La Mondiale and Groupama-FDJ’s budgets and you’re still millions of Euros short of Ineos. Still once upon a time budget squads like Bahrain-Merida and Astana might have poached talent from the French teams, these days they’re slashing wages, that is if they can meet the wage bill in the first place. It’s a question of nuance, Ag2r La Mondiale, Groupama-FDJ and Cofidis are mid-ranking teams by most measures and this won’t be changing too soon, it’s just they’re looking more resilient to the crisis for now. It’ll be interesting to see the effects on the market in the coming months, do riders sign with stable teams even if it means a wage cut from today, how can agents weigh up the credit worthiness of a team? There’s a lot riding on the coming months.