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FDJ-Unibet Sponsor Merger

La Française des Jeux, the French lottery and gambling company, has launched a takeover of Kindred, a Swedish gambling company. No, you haven’t opened the Financial Times or Bloomberg, there’s a cycling story here. La Française des Jeux is FDJ, co-owner of the Groupama-FDJ team while Kindred is better known to many as the bookmaker Unibet, title sponsor of TDT-Unibet, the Dutch team. Only cycling’s rules don’t allow one company to own two teams so this spells trouble for one of them.

As we’ll see there can be ways around it but while their sponsors try to merge, it’s down to both team managers to resolve, separately of course.

The rules bit
Pro cycling doesn’t allow one company owning or sponsoring two teams, the idea being that if two squads were under the same roof or funded from the same pot then they’d be de facto team mates. Here’s the rule:

2.15.052 The members of a UCI WorldTeam may have no link with the members of another UCI WorldTeam, with a UCI ProTeam or with an organiser of a UCI WorldTour event likely to influence the sporting course of events or to be perceived as so doing. In exceptional cases, which do not challenge the integrity of the competition or the sporting fairness, the UCI Management Committee may grant an exception.

As you can see it applies to WorldTeams and ProTeams alike, the labels for the top two tiers in the sport. Why this rule? The risk is the owner might get the teams to collude, it could be in a race or in the transfer market. If none of this happens then as the rule says even the perception of this can be sufficient to stop one person or company having two teams.

Teams share bike sponsors like Specialized and Wilier or Shimano and so on. But these companies do not own or control the teams. Under the UCI rules the jargon used is “paying agent” as in the person or legal entity behind the team and this can’t be the same for two teams. Similarly the rules refer to the “principal partners”, think title sponsors, the kind of backers that keep the team on the road.

Long way to go
There’s another rule (2.15.063) that both sides have to notify the UCI within ten days of a change but we’re not there yet, so far FDJ has said it wants to buy Kindred and launched a takeover offer. If it goes ahead it’ll take months before FDJ legally takes ownership; in the mean time Kindred shareholders might reject the offer or another company will make a higher offer with the side effect of making this blog post redundant. Still the central scenario for pro cycling is a merger between sponsors so we’ll explore this a bit more.

The alternative case study
Two teams with the same owner? Having just said it’s not allowed. Loyal readers may remember reading that Cofidis and Arkéa are both part of Crédit Mutuel, a French banking group. But this is probably the exception that proves the rule because Crédit Mutuel is a complicated organisation, trying to draw the corporate organigram would be a headache and as Wikipeida puts it “Crédit Mutuel group has a decentralized structure, despite being designated as a single significant institution under European Banking Supervision”. It’s more like several different banks Arkéa being a brand of one of these and Cofidis belonging to another.

Embed from Getty Images

Unibet and FDJ could find a way to be independent of each other but it’s not easy. FDJ’s Présidente directrice générale is Stéphane Pallez and she regularly appears with the Groupama-FDJ team (and the FDJ-Suez women’s team too) and she could soon be the boss of Unibet too. It would have to be demonstrated that Unibet was independent of FDJ to satisfy the UCI, in simple terms that Pallez wasn’t in charge or had sway over the newly-acquired Swedish asset. This sounds unlikely, why set up a convoluted corporate structure just to ensure their cycling teams are separate?

Business decision
Which brings the bigger risk, one outside of the UCI rulebook. The enlarged company will look at its marketing budget and think “we’re sponsoring one cycling team, that’s plenty”.

Conclusion
None of this is written in an alarmist tone but the merger of two companies each sponsoring a cycling team goes from a “what if” theory to a practical example now. One company can’t be the title sponsor for two teams so a likely outcome is only one team will be left, it depends on the corporate deal and the UCI review later this year, little will change this season. But as we know you can’t really merge two cycling teams. There might be a way for both teams each to exist alongside each other but if the deal goes through you’d imagine the established, directly-owned Groupama-FDJ franchise stays and TDT-Unibet is left looking for another sponsor at the end of the year. We’ll see what the outcome is but that’s probably the one to bet on, or at least insure against.

Comments on this entry are closed.

  • Martijn Wednesday, 24 January 2024, 12:15 pm

    “TDT-Unibet, the Belgian team”

    It’s a Dutch team: https://www.tourdetietema.nl/

    • The Inner Ring Wednesday, 24 January 2024, 12:16 pm

      Doh, fixed. Saw the HQ was in Zwolle too.

  • Gervais Wednesday, 24 January 2024, 2:50 pm

    Is this just for roads because the Roodhooft brothers owns multiple cx teams
    Alpecin -Deceunink, Crelan -Correndon and the 777 cyclocross reds

    • The Inner Ring Wednesday, 24 January 2024, 5:14 pm

      It’s for the top two tiers of road teams, “a UCI WorldTeam may have no link with the members of another UCI WorldTeam, with a UCI ProTeam”. So you can have a road team and a CX team, or a men’s and women’s team etc, that’s fine.

    • Cd Wednesday, 24 January 2024, 5:21 pm

      And the Ryan Kamp team.

      • Tovarishch Friday, 26 January 2024, 10:18 am

        The reason for the huge Alpecin-Deceunink Development Team roster – capturing everyone from the different cyclocross teams.

  • Lorcan Wednesday, 24 January 2024, 7:12 pm

    Interesting to watch. I imagine if FDJ gets to pick one team to sponsor they choose FDJ. But can they be made to pay compensation to TDT?

    • The Inner Ring Thursday, 25 January 2024, 8:55 am

      Good point, if there was one team it need not mean the end of the other as the contract can be settled, ie paid up to the end of the term. But it’s something in the small print of the contracts, as in the scenario isn’t detailed in the rules, it’d be an elegant way out though.

      • DaveRides Thursday, 25 January 2024, 2:23 pm

        My guess is that the current leadership of the UCI will consider how to work around this issue a little more realistically than the leadership who were in power when 2.15.052 and 2.15.063 were originally written.

        Once the teams have notified the secretariat of the UCI Management Committee, hopefully the next meeting of the UCI Management Committee would take place at the UCI offices in Aigle with everyone present in person. The final part of every member’s journey to the meeting would involve heading away from the glamorous city of Geneva to an unremarkable office building in an industrial estate with a dilapidated velodrome next door. That will serve as a very stark reminder of the realities involved and that a pragmatic solution will be required.

  • Larry T Thursday, 25 January 2024, 8:11 am

    Something for the silly season? I remember some problems with UNIBET having their own team awhile back. Seemed there were some issues with “gaming” (a tax on stupid people IMHO) and cycling? But Lotto, FdJ, etc. went merrily along so maybe it was too many WT teams? Or not enough? Gotta admit to having no clue there even was a TDT-Unibet team, so how big a loss would this be anyway?
    I’m bemused at how all these “gaming” companies find enough customers to survive, every time I look at a TV sport broadcast/stream these days it seems there’s another one! Does anyone wonder about the sponsoring/owning of teams, leagues, etc. by operations that profit from wagers on the outcomes of what these gaming companies seem to own/control?
    Makes “the house always wins” idea seem pretty obvious IMHO.

    • The Inner Ring Thursday, 25 January 2024, 9:04 am

      It’s big business, FDJ is paying US$2.7 billion for Unibet.

      Unibet did launch its own team but gambling advertising wasn’t allowed in some countries, eg France which meant they couldn’t ride in France (national lotteries, state bookmakers were allowed so it was permissible for Lotto etc). The Unibet team tried to copy the trick from F1/MotoGP of using a question mark “?” on the jersey in the way a cigarette brand – also banned from promotion – but this didn’t work and the team folded.

      • Lee Thursday, 25 January 2024, 9:49 am

        Interesting – were commentators allowed to say the name under those laws? F1 (not sure about MotoGP) would get around this as the sponsor isn’t necessarily the team name unlike cycling (ie. Marlboro McLaren would just be ‘McLaren’)

        • DaveRides Thursday, 25 January 2024, 10:51 am

          F1 is going down that path again this year, as Sauber is attempting to run as Stake F1 Team, where Stake is an online gambling operation based in Curaçao which lost US$41 million in cryptocurrency to North Korean hackers last year.

          It will be called Sauber in quite a few countries this year.

          • Larry T Saturday, 27 January 2024, 8:40 am

            “F1 is going down that path again this year,”
            F1’s so far down the greedy mofo dead-end (with throttles still wide-open) it’ll never recover IMHO. Went to Monza last year and was appalled at what the sport has become since my last time seeing it live, in-person.
            I fear MOTOGP’s heading in the same direction, so I’ll go to Mugello this year before it’s (I hope anyway!) too late.

      • Larry T Thursday, 25 January 2024, 1:17 pm

        Now I remember!!! But all good now….”SHOW ME THE MONEY!” as that movie guy said.
        “Fools and their money….” is slogan of the betting scheme operators I guess?

    • gastrogeorge Thursday, 25 January 2024, 3:57 pm

      Larry, it’s big big money. The owner of Bet365 took home £270 million last year.

      • Larry T Friday, 26 January 2024, 8:33 am

        gastrogeorge – Yeah, I figured as much based on the advertising frenzy I see. And people wonder why I complain about cycling becoming a “world sport” or fixing it’s “broken business model”?
        The sport’s dodgy enough IMHO (not that THAT is anything new) without adding a another layer of greedy mofo’s to the mix!

  • Doug H Thursday, 25 January 2024, 8:36 am

    For those who are unfamiliar with TDT Unibet, they have a really interesting story. The team was started by Bas Tietema and his friends, who have a cycling fans YouTube channel (Tour De Tietema). This is immensely popular in the dutch-speaking world and has way more followers than the channels featuring Armstrong, Horner, Lanterne rouge etc. They did things like deliver pizzas to all the riders on the Champs Elysees at the end of the TDF! They used this popularity to set up a Conti team, which Tietema even rode for. They were invited to the Tour of Britain last season. This year they decided to step up to Pro Conti (or whatever it is called now) and acquired sponsorship from Unibet to help them do so. They have a stated goal of riding in the Tour De France (by 2026 I think). It would be a great shame if this bizarre and unique project was capsized by events out of their control.

    • KevinK Thursday, 25 January 2024, 1:39 pm

      Thanks for the info, Doug. It’s a great story. I wasn’t aware of Tour De Tietema, even though I listen to a lot of cycling podcasts/youtubes and live in Amsterdam. I’m watching one of the youtube videos now and it’s very entertaining, but since I have to have subtitles on it’s not something I can listen to while working or doing anything else, so it probably won’t go into my regular rotation. In any event, I agree that it would be a shame if this fun and worthy project were blown up by this company merger, though it seems the channel is potentially popular enough that they could find other sponsorship outside of Unibet.

      • KevinK Thursday, 25 January 2024, 1:41 pm

        This is the video I’m enjoying, and it even has some English language in it. Maybe I’ll keep listening and see if it helps with my Dutch language skills. https://www.youtube.com/watch?v=cLujvfvmPeo

    • Marcus Saturday, 27 January 2024, 10:53 pm

      Huge fan of TDT. Been following their videos for years now even though I’m an English speaker.

      They recently released a full length documentary showing their journey from YouTubers to Pro Team owners and it’s really quite excellent:

      https://youtu.be/Pbww8dUKlpA?si=b1XoWuZoYONKczIH

  • UHJ Thursday, 25 January 2024, 12:48 pm

    Any connections to the old team “Unibet.com”?
    Same company I see and back then, the team was sidelined as their activities were deemed illegal in some countries. They even went to court to conviece otherwise and lost (in France, I did not check othercountries). So they missed out on some invitations despite a decent set of riders (for the time).
    I suspect their activities are now legal?

    • DaveRides Thursday, 25 January 2024, 2:01 pm

      The team which was sponsored by Unibet in 2006-07 then became ‘Cycle Collstrop’ for 2008, and was completely disbanded at the end of 2008.

      No connection between the two teams, only the sponsor.

      • DaveRides Thursday, 25 January 2024, 2:05 pm

        It was never established whether being sponsored by Unibet was actually illegal or whether ASO was just protecting their sponsor PMU.

        • The Inner Ring Thursday, 25 January 2024, 2:23 pm

          Hmm, we can establish that by looking at the law at the time and Article 1 of Law 83-628 from 1983 says no to unauthorised bookmakers and no to them advertising. This was in place until liberalisationin 2010. I think there were cases with football clubs turning down shirt sponsorships too.

          • DaveRides Thursday, 25 January 2024, 3:29 pm

            Did the cycling team ever get prosecuted by the French government and found guilty? They did complete quite a lot of races in France during 2006 and 2007 so there was plenty of opportunity to prosecute them.

            To neutral non-French observer, it looked very much like ASO and RCS were ready for a fight with the UCI again and Unibet were a convenient choice of stalking horse given the threat that deregulation posed to the state-sanctioned gambling monopolies (is PMU still around?) which sponsored ASO at the time.

            Football clubs have an identity beyond their sponsors and fans who have the ability to make themselves heard when needed, so I’m not surprised that sponsorships got declined when the monopolies were working hard to fight off deregulation.

        • DNG Friday, 26 January 2024, 10:42 am

          Didn’t they wear jerseys without the sponsors name when riding in France?

          • DaveRides Friday, 26 January 2024, 1:18 pm

            And they were prepared to do the same for the Tour de France.

            Just proves it wasn’t about any real legal issue, just ASO finding it convenient to both protect one of their sponsors (I notice that post-deregulation PMU is no longer the sprint jersey sponsor) and use Unibet as a stick to beat the UCI with.

          • The Inner Ring Friday, 26 January 2024, 3:12 pm

            They tried this for a couple of races but it wasn’t a solution, it was still the Unibet team promoting Unibet and everyone called them Unibet.

            I don’t see the conspiracy Dave sees, advertising a bookmaker was illegal at the time in France (and other countries) and had been for some time so trying contravene this was asking for trouble. It’s like today where tobacco advertising is forbidden in France, it would be dumb to start “Team Marlboro” and expect to ride the Tour.

          • George Friday, 26 January 2024, 10:19 pm

            “Just proves it wasn’t about any real legal issue”
            Actaully doesn’t ‘prove’ anything at all, merely your opinion, based on what? Anti-ASO prejudice? Or just anti-French, as you seem to be seeing plots everywhere.

          • Larry T Monday, 29 January 2024, 10:28 am

            “..it would be dumb to start “Team Marlboro” and expect to ride the Tour.”
            Of course it would! They’d just call it “Mission Winnow” or “Lucky Explorer” (leaving out Strike) using the old motorsports scheme.
            On the gambling front I counted 6 different betting-related ads rotating on the electronic ad boards in the football match I watched yesterday + one permanent one on the end of the field. In-between there were ads for a car, a shoe, used-car dealer, cured pork bits, gas and electricity suppliers and a discount supermarket.
            I guess that tells us where the real money (profits) are, right?
            Does pro cycling really need this?

  • GMS Thursday, 25 January 2024, 1:35 pm

    Only cycling’s rules don’t allow one company to own two teams so this spells trouble for one of them.

    ————
    If the corporate merger goes through, the single company won’t own both teams, though. It will own a a part of the Groupama-FDJ team, but will only be a sponsor of the TDT-Unibet team. The paying agents will still remain separate and distinct, won’t they?

    • The Inner Ring Thursday, 25 January 2024, 1:53 pm

      Presumably separate paying agents yes, but shared “principal partners”. Otherwise you could set up, say, Ineos Grenadiers and then have an Ineos Plastics team, an Ineos Chemicals team etc.

      • Anonymous Thursday, 25 January 2024, 3:31 pm

        Think of all the possibilities if Citroen were still in the game and Stellantis management decided to get all of their other brands involved as well!

    • Michael B Thursday, 25 January 2024, 3:55 pm

      Multi-club ownership starting to become an issue in football too. It has the potential to cause a lot of problems in that sport.

  • Ron Obvious Thursday, 25 January 2024, 2:45 pm

    Meanwhile, in Sweden, my morning paper reports that Kindred is being sanctioned for record amount 100 million SEK (well, actually 4 years ago, but justice moves slowly) by the Gambling Inspection for being dicks to gambling addicts. They’re worth 28 billions though, according to the same article, so this case probably doesn’t make them particularly more eager to sell.

    • rob md Saturday, 27 January 2024, 6:25 am

      Kindred have also been fined in 2022 for not doing due diligence with people betting millions and having not a lot of income and “not taken sufficient measures to assess the risk of its services being used for money laundering and terrorist financing,” Gambling and gangsters, who’d have believed it!

  • CA Thursday, 25 January 2024, 3:44 pm

    I’ll read the post in more detail at lunch – but, it would be very short sighted for the UCI to take any drastic action on this.

    Shutting down two pack fodder teams – who both are essential to developing riders and adding to the depth of the men’s peloton – would be a very bad precedent to set.

    • The Inner Ring Friday, 26 January 2024, 3:13 pm

      I don’t think they’ll shut down two teams. But unless things are managed carefully one team is at risk here; as Lorcan suggested above though a nicer outcome would be Unibet stops but has to pay out in full which should give the team time.

      • RV Saturday, 27 January 2024, 10:07 pm

        Given the precarious nature of the sponsorship model in cycling, you would really hope that some kind of protection clause would be written into the contract. Unfortunately, though, even with such a clause, the team needs money to be able to pay lawyers in order to enforce it. The little guy almost always loses in these situations.