The Wealthiest People in Pro Cycling, Part I

Time for the annual update on the wealthiest people in pro cycling. If you thought this meant Alberto Contador, Mark Cavendish or Peter Sagan, think again because this is about the people rich enough to hire these star riders.

A lot has changed in recent times, volatile stock markets have benefited some but hit others. In the first of a two-part series here are the billionaire and millionaire World Tour team owners and sponsors.

Oleg Tinkov

What’s the fastest way to become a millionaire? Start as a billionaire. Oleg Tinkov has seen his wealth slide in recent months and has probably become a millionaire, a downward trend for someone used to almost continual advance. Tinkov is a serial entrepreneur and it all began during a bike race. The son of a coal miner, he got good at cycling and travelled to Uzbekistan for a race where he 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 and returned to Russia where he sold them for four times their price. In time came shops selling electronics to factories making dumplings to breweries and now a financial services company built on credit cards and fledgling banking services. Don’t call him an oligarch as this refers to well-connected Kremlin kronies and Tinkov styles himself as a self-made man, a challenger to the system as he describes in his biography:

“I want entrepreneurship in this country to advance so that fewer people work at Gazprom [the oil and gas monopoly] with fat faces and grey suits, and more people become young, innovative entrepreneurs”

Russia is risky and the recent Rouble crisis has hit Tinkoff Bank hard and with it, the Tinkov’s 50% stake in the bank and his warnings about quitting the sport have generated plenty of headlines. But he could fund the team privately if he wanted, he sold a large share of his holding before the crisis and remains prodigiously, conspicuously wealthy. A shrewd entrepreneur but I can’t help wonder if he got outplayed by Bjarne Riis? The Dane sold his team to Tinkov for well over a million Euros when the Russian could simply have waited a few months to build his own team, more so since the Dane has been feeling the heat of an anti-doping enquiry he cashed out on a high.

Tinkov’s swipe and Russia’s oil and gas industry puts him at odds with Igor Makarov, owner of the Katusha team.  Makarov made his billions in gas and got out just in time. In 2013 he sold his Itera business to Russian oil and gas giant Rosneft for $2.9 billion (€2.1bn) for the stake, all at time when the oil price was north of $100. He got out when the going was good. Where Makarov put the cash is confidential of course but it’s likely to have been diversified although as part of Vladimir Putin’s Kremlin komanda it’d look unpatriotic if he moved all his wealth abroad. Being a billionaire hasn’t stopped him making noises about the costs of supporting the Katusha team but as absurd as it sounds, the more the Rouble crisis bites, the more Katusha must race on. No Kremlin insider can be seen to back down, especially in the field of sports, dear to President Putin and so close to the Rio Olympics. Despite being one of the world’s wealthiest men he finds time and meaning to attend UCI Management Committee meetings where he’s arguably the sport’s most powerful figure. He still rides, the picture above shows him getting off his yacht to go for a ride.

If you think Makarov’s timing was good, meet Marc Coucke. The Belgian is Monsieur Omega Pharma, he founded the company in 1987. It grew over the years and in time he floated Omega Pharma on the stock exchange but when the financial crisis hit and stock prices plummeted he bought it back in 2012 at a low price. Since then markets and valuations have soared and Coucke’s sold his business again this time to US company Perrigo.

Reports said he’s pocketing €1.45 billion, tax free. He’s one of the few team owners to get richer and richer. But will he in stay in cycling? Coucke’s bought into LOSC, a French Ligue 1 soccer club whose wage bill is double that of Etixx-Quickstep and there’s talk of him taking over the club. Coucke’s a visible businessman in Belgium, aided by his love of bold suits and loud shirts

Zdenek Bakala

Now for the billionaire cycling team owner you’ve probably never heard of. Coucke has sponsored the OPQS team for years, Zdeněk Bakala is the one who owns it. The Czech billionaire bought the team with Dutch sidekick Bessel Kok and is a textbook capitalist who left his country with little more than a sandwich in his pocket for the USA. He went to business school and investment banking on Wall Street until the Iron Curtain fell and he opened the offices of an investment bank in Prague before going solo. According to Business New Europe, a magazine, he bought a coal mining business for €400 million, sold off assets from the mine to generate €2.5 billion and then floated the remaining business on the stock market for €4.5 billion.

He now owns the Etixx-Quick Step team but takes a back seat most of the time and probably spent much of 2014 with other things than cycling on his mind, he owns a large stake iron ore producer Ferrexpo. Iron ore prices have halved but if you think that’s a headache, Ferrexpo has most of its operations in Ukraine. It’s is just one part of his portfolio but indicative of Bakala’s falling wealth which, going by the guestimation of Forbes, has almost halved. Bakala did get excited about the reform of the sport a while back with proposals for a total overhaul of the sport, a joint venture with the UCI where the governing body would set the rules and calendar… and Bakala would take care of the rest, funding a breakaway league in conjunction with the modestly-named Gifted Group. Has this gone away or has Bakala’s idea been rebranded as Velon? He’s a figure in Czech politics because of his wealth and influence and media empire but lives in Geneva and is a keen cyclist who’ll ride the Cape Argus in South Africa when he’s visiting his winery there.

Andy Rihs BMC Racing is a more discreet figure. His father Ernst started a hearing aid business that went from the garage to a global consumer healthcare giant called Sonova and at the time of writing it is worth about US$9.6 billion. Rihs has been selling down his stake but his remaining 5% stake means a holding valued around $250 million. But he’s worth much more as he owns BMC and has financial stakes in wineries, hotels and watch making, normal since the BMC factory in Grenchen is near the Breitling HQ in an area famous for its luxury timepieces. He’s also opened the new velodrome in Grenchen, a project he part-funded and the reason why Rohan Dennis will attempt the Hour Record in Switzerland. Rihs isn’t in the media a lot nor tweeting like crazy but you will see him at the races, dressed in the team kit where the uninitiated might mistake him for a mechanic.

Michel Thétaz

New to the World Tour team owners club is Michel Thétaz. He founded Independent Asset Management in 1995. Better known as IAM, it manages billions of Swiss Francs on behalf of its clients out of Geneva in Switzerland. Estimates of his wealth are hard to come but in dollar terms think hundreds of millions. He’s a keen cyclist who might ride 5,000km a year but this only part-explains the sponsorship. Cycling’s demographic attracts lotteries, laminate flooring and car brands like Skoda so fund manager like IAM looks out of place. More so if you look at it the other way around, Swiss financial firms typically sponsor polo, yachting or show jumping. Thétaz prides himself on IAM’s independent thinking and doing things that others don’t.

Gerry Ryan on the right

Orica-Greenedge owner Gerry Ryan is still waiting for that co-sponsor to show up but there’s no worry as Ryan can afford to bankroll the team for years, reports say he’s worth AU$340 million (US$280 million). The only worry he once quipped was for his son as it was his inheritance that was being spent. Ryan started out building camper vans and caravans in 1975 and Jayco has been a big success going from eight employees to – as the auto industry pulls out of Australia – potentially Australia’s biggest vehicle manufacturer. But there are only so many caravans to sell and he’s really become rich with the Walking With Dinosaurs show to which he owns the rights, and his media and entertainment business also stages other shows. There’s more business and he’s been a generous donor to other sports too. Cycling must be his preferred sport as he was President of Cycling Australia, a role recently relinquished.

Summary
Each story is different but there are are three themes above:

  • A lot of the World Tour teams are bankrolled by a billionaire shareholder, a sugardaddy for whom spending millions on a hobby sports team is better than buying a yacht
  • Another theme is dwindling wealth, whether it’s the falling oil price, stockmarket upheavals or the nexus of these two events, the reported wealth of the team owners above has taken a bath
  • They might be billionaires and millionaires but many are out for a ride. That rider you see in team kit on a replica bike could be fan but they might just be a billionaire team owner

This is just the wealthiest World Tour team owners and major sponsors. Part II looks at others from sponsors to race owners.

49 thoughts on “The Wealthiest People in Pro Cycling, Part I”

  1. That Makarov is definitely a mover and shaker in the UCI.
    President of the Russian Cycling Federation. (Hello, IAAF scandal? This is cycling…)
    Sponsored the European Cycling Union RIGHT AFTER being elected its president
    Still on the mighty UCI management committee.

    One of the sources of another UCI investigation we’ll never hear about.
    http://www.telegraph.co.uk/sport/othersports/cycling/10305929/UCI-ethics-committee-told-they-must-appoint-impartial-panel-to-investigate-Pat-McQuaid-dossier.html

    UCI’s ethics panel controversy with Makarov named in the dust-up.
    http://www.reuters.com/article/2014/07/15/us-cycling-uci-idUSKBN0FK1GI20140715

    The ethics panel must have been on a long holiday until then. :/ Any chance you have some knowledge on the recent revisions to the UCI Ethics code?

    • I thought he sponsored the ECU just before election? A large payment from Itera, most welcome by the ECU and its President.

      Not seen anything new on the Ethics Committee, nor are we likely to see the “Makarov Dossier” on McQuaid, although maybe the CIRC has it?

  2. A bit of a tangent but today thanks to the Swiss National Bank removing the peg to the Euro it became a lot cheaper to run a cycling team if you keep your money in Swiss Francs, which is probably true for IAM and BMC, and maybe the Russians as well. (Although Rihs and Thétaz have probably seen their portfolios take a hammering)

    Not sure how it will affect the UCI’s finances, a lot of their expenses are probably in Euros/dollars, but also probably their income from events like the Worlds will be lower when expressed in CHF.

  3. Gerry Ryan is no longer the president of CA. Malcolm Speed is now the current president (ex-CEO of Cricket Australia and ex-CEO of International Cricket Council) whilst Gerry remains a director according to CA website.

  4. Unfortunate, that Giorgio Squinzi relinquished his place amongst “Team owners”.

    It’s worth remembering that whilst not strictly a team owner, Ernesto Colnago wielded, and has had enormous influence amongst several teams, and his income might be lower, relative to your examples, but in terms of power & influence……

    How long before Asian/Chinese industrialists, join your list….

    • There doesn’t seem to be much interest in cycling as a spectator sport out in Asia and China. With the exception of the Tour de Langkawi (in Malaysia), and even with the now defunct Tour of Beijing and a couple of minor stage races in China, Korea and Japan, spectators–those lining the streets or those watching on TV–are really few, compared to the western world (including Australia). It’s probably because there are no world-class champions from Asia to drive the public interest. And also there is no history of cycle racing, even though bicycles have been used in that part of the world for over a century (Honda was actually a bicycle manufacturer at the turn of the twentieth century). As was touched upon this blog site last week in the renewal of live Tour German broadcasting, sponsorship must somehow equate with viewer interest. And while sponsorship in cycling is probably the best bang for the buck in terms of rate of return on investment, in Asia and China, that’s just not the case. So, until the day there is a Chinese contender–and not a pretender–vying for the top step of the podium at the Tour de France, all that vast mound of cash horde sitting around on the factory floor in China will be spent on something other than cycling sponsorship.

      • I think you’re missing the point of these guys involvement. I doubt any of their pro cycling efforts generate squat for their business interests. It’s about their own passion for the sport in the same way rich guys used to spend their fortunes building and racing cars at Indianapolis. Sure, some of ’em had interests in motor oils or car parts, but that was more to write off the whole fun and games expense than it was to boost the sales of piston rings. All it would take is for an Asian tycoon to be bitten by the cycling bug and who knows what might happen? They say cycling’s the new golf after all!

  5. I will have to have a second look at the old guy in the full team kit with matching bike as we pass.
    May even chat him up a bit, a new ride and yachting buddy for a few months in the spring and summer.
    Aways useful bits, Inrng

    Any interesting UCI rules/fines for team owners wearing world and national championship jerseys on the road? Were is Papa Tinkov’s helmet?

  6. Guys like these are the reason I laugh at those who insist that pro cycling adapt what they call a “business model”. The history of cycling is full of well-heeled characters with a passion for cycling and the money to indulge in owing a pro team. If you turn cycling into strictly business I think you risk losing one of the essential parts of sport – the PASSION. Do we want boring, passionless (unless its for ever more wealth) guys like Mitt Romney in the sport?

    • Exactly my thoughts while reading this. Everyone of those owners (I hate it when they are called sugardaddies!) has a long relationship with riding and/or bikes and having a cycling team is their hobby. They pay for it because they love it. Any attempt to fund cycling in any other way than the existing will fail in my opinion. There simply isn’t enough tv-money, merchandise-money etc. in it. Velon will want to create their races, their teams and their league and will introduce short racing, made for tv, to create at first any income and then maximise it (if they have their own races, they have the tv and picture rights for that) and they think that control will result in money. I think they will fail. First:Cycling fans are a strange tribe. We don’t just want entertainment, we want something real, second, cycling is way too small in the big picture, I think it only has managed to stay and sometimes grow till now in some modest way because of some people’s love for it and because it is a very cheap and short term way for some companies to establish a brand or a brand name (but it won’t sell your goods, that’s in my opinion why some sponsors are gone after a year or so-they have achieved their goals). The exception are companies related to the bicycle industry. I am sure if you will look at other long term sponsors you will always find that the reasons for the sponsorship is that somewhere along the line someone with power to make decisions loves cycling. And to be honest, I am thankful for that. I prefer the power to be distributed and not be in one hand or one group.

    • I’m sure you’ve made just as insightful comments on days that I haven’t checked in, but this is a good one. Owning a cycling team probably is on par with a quality polo program. Pro cycling is a wealthy guy’s board game.

    • What is the difference between an already-absurdly-rich person who likes cycling funding a team, and people who enjoy cycling* adapting business principles to make more money?
      (* presumably, if they put in the ridiculous hours and effort to attain pro level proficiency, since I saw this concern raised about things like Velon and cyclists forming co-ops, not outsiders swooping in to monetise the sport)

      Why is one a generous act of patronage, and the other crass, passion-less capitalism?

      I’m not arguing one is better than the other. It’s just odd that this mindset thinks letting the people who get their hands dirty into the business side will crush the intangible appeal of the sport, but has no problem with cycling being a sort of game or hobby for rich people, which presumably makes the cyclists kind of like very expensive chess pieces. (“Remember Contador? He’s back, in Pog form!” :D) IMO, that’s not a very passion-inspiring way to look at it.
      (Probably doesn’t do much to discourage the over-reliance on race radios either now I think about it…)

  7. It’s quite shocking that 6 WT teams are practically financed by sugardaddies. That’s more than a third.

    Continuing this point of view, 3 teams are funded by indirectly by governments: Lotto-Soudal, FDJ (National Lotteries) and Astana.

    4 other Teams are funded by bike manufacturers: Trek Factory, and to a lesser extent Garmin-Cannondale, Giant-Alpecin and Lampre-Merida.

    That leaves just AG2R, SKY, Movistar, all three of which are multimillion dollar companies.

    It sort of shows the lack of attractiveness (or perhaps the lack of sufficient funds) of sponsorship for smaller, national companies outside of the sport: All the WT teams have some sort of entity behind it with plenty of spending power, or a direct relationship with professional cyling. The last two teams who tried the WorldTour without such support quickly vanished again from the WT: Europcar and Vacansoleil.

    • Persistent doping scandals have not been kind for cycling’s prospects of attracting blue chip corporate sponsorship interest.

      In Australia, the country’s largest bank withdrew it’s long term commitment to the sport at the time of the Festina affair. Nearly 20 years on and no major corporation sponsors cycling here, just 2nd tier corporates involved in sponsoring specific events. This is the enduring legacy.

      By far and away the largest sponsors here are governments, both Federal via Sports Commission grants and the AIS, and a couple of State governments via event/tourism agencies. Elite cycling in Australia survives on the government teat, and it’s on notice.

    • I forgot LottoNL-Jumbo, which is sponsored by a lottery but not a state-owned one. Secondary sponsor is a national supermarket chain.

      This makes it the exception to what I wrote above, although it is evident that they had a significant budget cut from the time the team was Rabobank, to now.

    • The Sky team owes no small debt to James Murdoch who is probably a billionaire (his family certainly are) so you could almost include him in this group and remove Sky from the “exceptions”. Or, leave them in there and acknowledge that its a News Corporation company which means its the Murdochs at the helm.

      • Good point, I was considering it too, but for me a significant difference is that the sugardaddies INRNG listed all have shown some sort of personal passion for the sport in their involvement. As far as I know the Murdochs have no such involvement so I considered it similar to AG2R and Movistar as a multinational corporate sponsorship.

      • James Murdoch will appear in Part II, I didn’t put him above as he’s not as directly involved in ownership or sponsorship, decisions to sponsor Sky have to make commercial sense as well rather than just pleasing him. He is a keen cyclist and will visit the team, ride in the car, attend camps and so on.

        • I was contemplating asking the question about including the UK tax payers!
          You perhaps answered that question with a part two, too include James Murdoch.
          So perhaps tell us are the UK’s multi million dollar development program to be included in Part Two, should included Kazakistan as well?

  8. Makarov has invested in Pangeo Capital – an offshoot of VTBank formed about a year ago that doesn’t seem to be doing very much and NNK, an oil and gas trading company so I think he may have taken quite a hit recently.

  9. If I were to become mega rich overnight my dream would be to get involved with some under threat pro race, probably in France or Spain. Then I would be around my passion, my love, my interest and what better way to enjoy my wealth. I don’t see anything different from these guys doing it now. By the way, the grassroots road race scene needs some backing also and as that is where my poor talent finds its home so I would also dream of doing something to help amongst the Cats.

  11. Rail as we may against the ‘sugar daddy dilema,’ cycling is far from the only sport where this takes place. Sports are filled with very rich men throwing money at their childhood dreams and passions to promote their status.

    Just look at Chelsea’s profit/loss for a starter (and interestingly the wages % of turnover…
    http://www.thechels.co.uk/club/finances/

    • Similarly I was think of characters like Mark Cuban with the NBA Dallas Mavericks here in the states as well as someone like David Letterman with his Indy car passions. Where would these teams be without these grown boys fulfilling childhood passions. Maybe that’s a distant maturation of women’s cycling and sports with the proliferation of female executives and independent wealth. It will be the Sheryl Sandbergs of Facebook and Marissa Myers – CEO of Yahoo or Carly Fiorina investing in teams and women’s sports.

      • True, it’d be really cool to see that change, hopefully sooner rather than later.

        I do think some of these ‘sugar daddies’ are very shrewd businessmen though as although they often rack up losses in operating profit/loss, the value of franchises are skyrocketing on the back of increasing media revenue streams. Just look at the ‘forced’ sale of the Clippers last year.

        This is the biggest reason Velon is pushing so hard and that the ultimate battle will be between the ASO (sure to be in part II of this series) and the team owners.

        • All headed in the right direction, as a subset two of the above also have winery interests?

          A way to show off assets, quick way to lose money:

          cars, bikes teams, wineries, yachts and x spouses.

  12. I suggest we should welcome sponsorship money, from wherever (well almost) it comes.

    Many lower level amateur club teams are sponsored by local business’s, who’s ‘patron’ has a passion for the sport. Many race sponsorship deals, both amateur and professional, have a similar relationship. If some of the 1% want to reduce their net wealth by supporting professional cycling, we should welcome their input with enthusiasm.

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