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 😉