The Lotto and Intermarché teams are supposed to be merging. Tomorrow is the deadline to submit registration papers to the UCI. It’s reported that Lotto plans to race on, with Intermarché coming over as co-sponsor and bringing some riders and management along too.
With this the Intermarché licence would wither and it’s here that some problems arise because the team has big debts. Can it drop these by swapping the licence over to another team?
Loyal readers will remember last year’s Halloween piece about the Intermarché-Wanty team’s significant, repeated losses. The team has been racking up big losses. The 2022 accounts pledged to fix this only come 2023 this hadn’t been resolved. The good news was the near €2 million loss was halved but still that meant losing a further million Euros in 2023 and that’s unsustainable.
Accounts from 2023 – the last set available, 2024 should appear soon – showed €500,000 injected by unnamed shareholders and a two million Euro loan from one of the team’s sponsors – presumably one of either Wanty or Intermarché but lender is not named – was needed keep them on the road.
The screengrab above shows part of the balance sheet with 2022 in the left column and 2023 on the right. Pro cycling teams typically have small balance sheets because they have few assets and liabilities but this is notable for the large debts.
All this is from 2023. But it doesn’t seem to be old news because these debts are an issue that still exists according to reports in the Belgian media, see Het Laatse Nieuws.
In simple terms can Lotto come along and pick up the assets of the Intermarché team such the riders it wants and Intermarché as a new co-sponsor, while ditching the things it doesn’t want like debts? Similarly from the Intermarché team’s side if the lender is Wanty (or bike supplier Cube etc), will it want the current team to vanish and leave unpaid debts; or if the lender is Intermarché, will it roll over sponsorship to the new team but say goodbye to getting repaid or insist Lotto takes on the debt?
To further complicate things the screengrab above showed the team had extra unpaid debts in wages, taxes and social security payments, also running to over a million Euros. Now some of this could just be par for the course, sums due to be paid in the future that were logged in the accounts at the due date and have since been paid.
This is where the politics come in because Lotto is the Belgian state lottery. The company is under close tutelage of politicians to the point where they keep a close eye on the cycling team’s operations. So it could be tricky to let the Intermarché licence drop and waive any unpaid social security contributions, or other unpaid debts. Or similarly to agree to fund the team only to find a chunk of the budget is going out the door on loan repayments for what was another team. It’s potentially political.
Conclusion
Both teams have incentives to conclude the merger so they can race in 2026 and beyond. Each needs the other’s co-sponsor as alone they’ll struggle. Lotto doesn’t have the funding to support a return to the World Tour with only one title sponsor, while Intermarché has debts to repay and each have had a weak season. So the overhang of debts of two million Euros or more is a real issue to square.
With reports of the outstanding debt, revisiting the accounts lets us see it was a loan from a sponsor. Whoever lent the Intermarché team this still has around two million reasons to intervene and seek some kind of repayment or roll-over but this is the last thing Lotto needs, it would be the biggest claim on the new budget, more than Arnaud De Lie’s seven figure salary.
With one day left before the UCI’s soft deadline of 15 October there’s no news on a resolution. It can be solved but there potentially wider issues than this merger for the future when another a team with debts wants to ride on.
Good summary. Somebody, somewhere needs to cover or swallow that debt so do we know if there is any tittle-tattle regarding IWA clutching at the straw of dangling the lure of selling their licence – for, say, 2.5 million euros – to whichever of Cofidis or Uno-X does not make the WT cut but may be desperate enough to cough up?
That seems like a narrow window of opportunity and I don’t even know if the UCI would allow it or not.
Someone at Cofidis would love to solve the problem but €2 million is expensive, as is taking every contract to transfer them to the new team, and do this seamlessly yet suddenly during the UCI registration period too. But it could possibly be a card to play for the lender to at least reclaim some of the money, and Q36.5 might be interested too although they’re in less of a rush.
3.30pm CEST update: was writing the post above half thinking as soon as the “publish” button gets hit the teams would announce the merger… but instead this afternoon HLN has a new article saying nothing’s been signed, there’s a rider too many on the roster and it would take a “mirakel” to do the deal. Not sounding great.
However the surplus rider issue can be solved relatively easily, at least compared to €2m of debt (it’s happened before with riders given to another team and part/all of their salary paid by the old team as part of the deal). It suggests sides are still holding out for a deal rather than an irretrievable situation.
According to PCS Intermarché have 20 riders contracted for 2026 and Lotto 18. That’s a minimum of eight riders to dispose of in a way acceptable to the UCI, Belgian law, the riders and their agents. Some might be attractive to other teams but those riders are probably the ones to merged team needs to prosper.
PCS is probably out of date but it shows the problems with trying to merge two teams when you can only have one roster capped at 30 riders. Farming them out to other teams on good terms can cost more money.
Looks like Gerben Thijssen could be off to Alpecin, filling a gap in a team that’s limited for sprint options and flat days 😉
Perhaps one of the problems with riders is that the most in demand riders can find a new team leaving the less in demand riders.
I am wondering if in the past 2 teams merging has been a case of one world tour team and one lower ranked team meaning a lower excess or riders.
Garmin and Cervelo come to mind here perhaps?
Cervelo was a Pro Continental team.
You might be thinking of the second merger for Slipstream (Garmin-Whoever at the time) which was a WorldTeam/WorldTeam merger with Cannondale Pro Cycling (former Liquigas team).
Slipstream then had a third merger with Drapac Professional Cycling less than two years after the previous one.
The interesting thing about all three of those team “mergers” was that the team buying their way into the top level didn’t actually take any ownership and the consortium fronted by Jonathan Vaughters continued to control the team, unlike the BMC/CCC and CCC/Wanty mergers which led to the current incarnation of Continuum Sports. All that happened were that a handful of riders joined and they got a new sponsor who had previously owned the team that was closed.
Apropos rider numbers/etc: Did Girmay ever move to a new team?
No, or at least not yet. If he and De Lie are on the same team it’ll take some care to manage given their overlap but it could work giving more range across the calendar, eg one to the Giro, another to the Tour etc.
Surely one of the first things any new team will want to do is get rid of Girmay. He’s reportedly on a very expensive contract until 2028, and he has not been very good this season. De Lie looks a better prospect.
Girmay’s contract is estimated to be between €2 and €3 million per year. This seemed to have been based more on the hype surrounding him than results (one points jersey in the TdF and Gent-Wevelgem).
Girmay is one of those riders who, I think, is more attractive than his results would suggest. Cycling teams exist to generate media coverage for their sponsors, and Girmay generates a lot of media coverage whatever his results (and I agree with you that his results are “a bit disappointing” this year). I suspect that there are teams who feel the salary is money well spent.
Surely you haven´t forgotten that there were three stage wins (and two 2nd places) behind that points jersey?
Anyway, I wouldn´t give a hoot about those estimations. It would´ve been quite a step from the reported (and quite credible sounding) €1 million plus.
And although €1.5-2.0 million is a lot of money, the new team won´t necessarily be in the situation of having to choose either-or. The question therefore is: is it really all that unlikely that Girmay will never deliver anything like he did in 2024 – and if it is, which rider or riders could the team sign for those millions and expect to get a better return for their money?
This is another “pro cycling’s business model is weird” story. I can’t think of another sport where tiny minnows are swimming with leviathans on such a regular basis. It happens in competitions like the FA Cup, but it’s not like Crawley Town or Accrington Stanley are regularly playing Liverpool and Man U. Two million Euros is absolutely nothing to many of the entities that make up the World Tour, yet I’ve seen multiple articles discussing this as a big issue with respect to the proposed merger. It makes me wonder if some form of profit sharing or salary cap will be possible at some point in the future. Otherwise, how can the minnows even begin to compete? UAE’s record season (without a top sprinter!) signals a major shift in the way cycling works. There are a few heavy hitters who will be able to compete with them in the long run, but is it just going to become a club where only giant spenders can be members? Seems like a sticky question for the future of the sport.
How about the Premier League in football? I have not researched the budgets properly so lazily grabbing the first list from a search online tells me Man City have 4.7 times the budget of Burnley. In cycling this disparity is smaller in the World Tour where even assuming UAE have €60 million and Intermarché’s reported €14 million gives us 4.3x.
That’s surprising to me, but I also think it’s not a true comparison. Burnley will make huge sums from media rights for the Prem, while cycling teams get absolutely nothing. So UAE’s budget is essentially limitless while Intermarche’s is, well, limited.
You Reds. Unexpected Crawley Town reference on Inrng. I mean, talk about weird business models…
ANYWAY
In the past I’ve commented sort of in defence of cycling’s weird business model, and whilst big (rich) teams from ‘new’ cycling nations have come and gone in the past the troubles of Arkea, Intermarche, Lotto, Cofidis and Total are really showing the hit teams from these traditional cycling nations are taking at the moment. Not to mention the teams from Italy and Spain.
Or are the Tudors, Q36.5 and Uno X going to be enough to offset this imbalance in the longer term?
I don’t know what he is worth but likely of he was on a stronger team he would get more consistent results. I would reflect he needs to get better on hills if he chases one day races over flatter stage race sprints. Sacrificing some sprint power for better hill and staying power would give rewards in bigger one races.
His current team can’t be relied on to keep him in the best position, mark riders or set up a split.
Matthews is in a similar rider in a similar position. Unless your mvdp or the POG when your team does not have the budget your star rider is reduced to following, trying to hold their own position and hoping things fall their way.
Any big move will please the fans who complain normally you’re just a follower but a big team with 2 or 3 riders at the critical point will simply use their numbers and your left with nothing. It’s a hard way to win on a weaker team.
He started his pro career as a fast finisher on hillier courses and I’m not sure he’s lost that skillset. The stars aligned for him in last year’s Tour and neither he nor his team may be quite that good on a consistent basis. It would be interesting to see him on a different, stronger team but at the same time he has often talked about how well IWA suit him. That may have changed somewhat with the turmoil of the last year, financial and relegation and merger pressures.
Seems like everybody at IWT has taken a serious step back. Girmay’s clearly got innate talent, you have to wonder what his results would be like if he traded places with, say, Philipsen or Milan. And how they would look on IWT. Support, training, and opportunities matter — we’ve seen that with, eg, Jorgensen and Laporte. And the guy’s still young.
If IWT go down I doubt he’ll have trouble getting picked up. On his salary it would probably have to be a bigger team. Good for him … but the rich would then just get richer.
With Arkea-B&B officially announced that they will not be continuing next year, if the merger goes ahead that’s 2 full teams of riders to find contracts for next year, very quickly. Some already have, but many have not. Where will those riders end up? Mainly pro or conti teams? A few in the WT teams? A few retiring?
Even if you spread the riders across WT teams, pro and conti. Conti teams vary, they have minimum wage and social security in France for example but in other countries it’s a bike and some travel expenses and little else. Even gravel looks relatively full. There’s a surplus of riders on the market, including some good riders.
Take Thibaud Guernalec, no household name but capable of top-10s in World Tour time trials and a workhorse for any sprint train or GC squad and he told Le Télégramme newspaper the other day he’s not got a ride. So if he hasn’t then plenty more won’t.