The Race For Survival (updated)

Having looked at the team sponsors and what they do the other day, time to reprise a post from February looking at the sponsorship prospects for teams last year, the topic keeps coming up with several teams facing financial challenges.

As ever the point here is not to shout “fire” in a crowded place and spread doom. It’s just a look at the issues ahead and how some teams have challenges to solve.

At the end of last year Picnic-PostNL only got a one year licence from the UCI. Teams might get a three year licence but they’re subject to annual review in October so this was an unhelpful public sword of Damocles hanging over the squad. The team has a side-hustle in selling off riders which reached a new level with the sale of Oscar Onley to Ineos, generating millions in revenue. But this probably only backfilled previous losses. Fabio Jakobsen is on the last year of big contract and once this is up the team can reap big savings. But the teams results have been dire which makes asking backers to renew harder.

Bahrain-Victorious is code for Bahrain-Your Name Here and the team has been open about wanting a co-sponsor but so far nobody. One factor is any potential go co-sponsor is going to have their brand in lights alongside a repressive state and this juxtaposition limits the appeal. An extra headwind is the geopolitical tension in the region, the US war on Iran is seeing Bahrain under attack from Tehran and this has already caused delayed wages for the riders.

EF Education First-Easypost has gone public to find a co-sponsor. It’s not clear if Easypost is stopping but the the point is EF is willing to become the junior partner in naming rights if the team can find a new backer. A lot hinges on this because if they can land one then the team can get the financial firepower it needs, right now it can sustain a grand tour GC challenge with the likes of Richard Carapaz and in Ben Healy it has as solid chance of a Tour de France stage win too, short of hiring Jonathan Milan or Tadej Pogačar. The unspoken part is if no sponsor is found then will EF continue to shoulder all the costs or is it cutting back?

As said here a few times last year you could see a few dark clouds for Visma-Lease a Bike. The jersey is getting crowded with logos as the team seeks as much revenue as possible, costs have been cut with riders unloaded. Now Visma wants to stand down as the lead sponsor and so far there’s no news of a replacement sponsor. Talks are always going well says the team but there’s a soft deadline in August for this and the harder deadline of October is going to rush up. It ought to be an easy sell but that makes it a bellwether case. The team is part-owned by a billionaire but is Robert van der Wallen willing to be a sugardaddy on the hook to preserve the team’s top-tier status?

Groupama-FDJ have a joint sponsorship agreement that runs until the end of 2027. That sounds like a long time away but now is the time to review this and here comes the problem. The costs of backing the team go up and up thanks to galloping rider wage inflation but the results have gone in the other direction, especially after Thibaut Pinot left. This makes for a difficult conversation with sponsors for this team and others. Harder still, they haven’t won a Tour stage since 2018. The development team is a calling card as it can unearth talent but it’s also a cost to run it.

Lotto-Intermarché is newly formed from the merger and so for now there’s no worry. But is it a sustainable project? Time will tell but Lotto brings a political angle as the Belgian state lottery funding means the team’s funding is a national affair and comes with scrutiny from politicians. Like other teams can the costs of backing the project can keep rising but will politicians support this? Earlier this year it was thinking aloud to suggest Intermarché as a French sponsor will want more French riders and this is now becoming a reality with their interventions in the rider market but this leaves Lotto shopping for an even balance of Flemish and Walloon Belgians and so a structural fault line. Again nothing disastrous but an issue to manage.

At the start of the year one question was if Soudal-Quickstep would keep Soudal as a sponsor given company founder Vic Swerts has been keen to support Remco Evenepoel and now he’s gone would Swerts stay? For now yes and the change instead is Quick-Step is stopping its sponsorship and will replaced by Safety Jogger. Hardly a big name but very much inline with the team’s blue collar work kit image.

NSN? In a sport driven by naming rights, being called Never Say Never is bold. There is a concept of having a cycling team that is not a textile billboard. Instead the strength comes from establishing a visual identity so strong that you don’t have to read “Soudal” on the shorts or “Tudor” on a jersey because you’ve already thought it. However this squad appears to be more like “Never Say Israel” and a rebrand to keep protestors away. It is backed by some wealthy companies and individuals but what they’re getting back isn’t clear. So can they find a sponsor.

Jayco-Al Ula had a wobble on the final approach to World Tour registration for last year but in the end Jerry Ryan came good and backed the team. But it came close to stopping, this was not an admin bungle. Ryan is another backer confronted with rising costs but diminishing returns and set to exit the sport in the coming years. One sign of the retreat is the team is stopping its collaboration with the Hagens Bermen Axeon development team, and this is significant if the path for picking up talent, especially Australian, is closed.

Uno-X have the same issue as Jayco when it comes to recruiting home talent and only compounded since they only hire Norwegian and Danish riders although according to Daniel Benson’s newsletter, this could extend to Norwegian speakers with Magnus Sheffield. Anyway, how long can a relatively small business sustain a World Tour team?

Have Netcompany-Ineos solved their sponsorship issues? At the start of the year the thinking was Ineos could exit and be replaced by TotalEnergies once the French oil major’s title sponsorship of the French ProTeam ends. Only Ineos is still here but in came Danish IT company Netcompany. The question is what TotalEnergies does next, it’s probably needed if the team is to retain its position in the top tier budgets and a long term committent could help the team rebuild.

XDS-Astana seem to be thriving as a team. But can this sustain the sponsorship? XDS is the Chinese bike company with eyes on mimicking the growth story of Giant, selling everything from kids bikes to World Tour team issue bikes and keen to do this in its own name rather than as an OEM manufacturer. But funding a World Tour team is an expensive way to do this, it can easily cost ten times more. Canyon and Specialized find it more efficient to supply two teams each; there’s only Trek left and now it’s junior partner; Decathlon is a sponsor but to promote wider retail sales. Plus there’s Kazakh political risk, the team can promote the nation and its sovereign wealth fund but is down to three Kazakhs now.

New to the watchlist is Movistar after Bloomberg reported in June that the Spanish telecoms operator is “seeking to either sell its sponsorship contract, which includes naming rights for the Movistar Team and runs through 2029, or to bring on other sponsors to shares costs”. The interesting thing is the news here almost isn’t news, they’ve long been looking for a co-sponsor so seeing this idea floated suggests something is up. One concern for the team has been whether bike brand Canyon would continue given they have plenty of exposure from backing Alpecin but they’ve signed Paula Blasi for the women’s team and she’s such a promising – and already delivering – talent that this ought to entice the company to be a core backer.

Conclusion
There’s more money than ever coming into the sport. It’s boom time and you would not believe how many riders are on million Euro contracts or more; the data isn’t available, but the anecdotes of talented but relatively unremarkable riders on seven figure contracts suggest wages keep soaring. Set against this, this blog post can feel like pointing out the lone cloud in the sky on a summer’s day.

But it’s not poking around for the sake of finding negatives, indeed one team has been put on notice by the UCI and others have gone public about needing to find extra funding. The inexorable rise in costs means many team managers are having to ask sponsors for more only knowing they’re delivering less in terms of results in a sport dominated by some big names. So these are stories to watch and just like that cloud on the horizon, sometimes it billows up into something stormier.