Merger mania

Merger / takeover

Companies usually merge to strengthen their position with the idea that 1+1 = something greater than two, perhaps because they can assume a dominant position in their market. Think of Exxon and Mobil joining to make the biggest oil company in the world or Air France and KLM joining forces to match European rivals like Lufthansa.

Now in cycling we are seeing mergers between teams only this time it’s for quite different reasons. Rather than growth or dominance, this looks more like a story of survival. More like half a team plus a few more riders hopefully makes up a whole team.

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The transfer season is open

Deal time

2.15.120 A transfer period extends from 1 August to 20 October. A UCI ProTeam or licence applicant may only recruit riders during the transfer period… …For the purposes of this article “recruit” shall be deemed to mean concluding a contract with a rider to ride for the UCI ProTeam or licence applicant’s team, including situations where the rider in question is already under contract to the same UCI ProTeam or licence applicant at the moment of that recruitment, e.g. in the case of the renewal of an existing contract.

Today is the start of the transfer season and the paragraph above is the relevant UCI rule. Read the first line and you’d think things can only happen from today onwards but look twice and you’ll soon notice the wording that says “‘recruit’ shall be deemed to mean concluding a contract” and that the obvious conclusion to a contract is signing it. In other words a rider and a team can talk any time they like, they can discuss pay, the recruitment of other riders and more. All so long as they don’t “conclude” the contract, in other words they can settle all the terms of the deal and wait for 1 August to ink it.

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What next?

Tour of Poland
That empty feeling

Cycling cannot simply be one race in July. The Tour de France must be one episode in the middle of a saga.

So says Christian Prudhomme, organiser of the Tour de France. You’d half expect him to say this given ASO runs the Tour de France but it runs many other races from the Tour of Qatar in February to the Vuelta a Espana in September, where it recently bought a controlling stake in the organisation. Not to mention the likes of Paris-Nice, Paris-Roubaix, Liège–Bastogne–Liège and the Critérium du Dauphiné.

But Prudhomme is right. If the Tour de France is the biggest and, arguably, the best race of the year then there’s plenty more to look forward to this year. This Saturday sees the Classica San Sebastian, a great one day race in the Basque country, the heartland of Spanish cycling. Sunday sees the start of the Tour of Poland, not exactly a rival to the Tour de France but one with World Tour points at stake and some hilly finishes in the Tatra mountains later in the week. There are also the post-tour criteriums, a series of lucrative exhibition races about which I’ll write more soon.

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Valuing a rider: past performance vs. future prospects

Visit a stockmarket and you’ll soon learn the value of a company tends to be based on expectations of its future performance. The on-screen prices flash and change as tiny pieces of information, as well as big news, have their effect on the valuation of a stock.

On screen stock prices... or is that a race profiles or maybe a power curve there?

A stockmarket isn’t the only place where assets are traded. In the world of pro cycling a team owner will regard riders as assets. Some teams do this openly, for others managers it’s more of a subconscious calculation.

Either way, teams need to put a value on a rider in order to decide whether to hire him. There are various factors at play. Obviously a star rider has a high price but this is based on expectations about his ability to win future races more than his stock of past wins. In addition, can the rider contribute to the team, whether in riding or via other means, from leadership to a sense of humour? Will the rider bring additional sponsors? Will the the rider keep away from scandal?

Past performance is a guide to the future
So far all these questions involve the future tense, they are about what the rider might offer once they’ve been signed. It’s like stockmarket assessing the outlook for, say, Nestlé or General Motors. It’s not so much what has happened in the past but how things will turn out in the future, what will happen to sales and profits. But there’s a new factor at play in cycling that is not about the future but the past: ranking points.

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Lloyd’s unlucky Lotto ticket

Matthew Lloyd, the Australian rider on the Omega Pharma – Lotto team got fired today.

In times past I’ve often found the various incarnations of the Lotto team to be rather chaotic, surviving from one month to the next, often with ability to lose a race by strategic bungling and above all, some chaotic recruitment (eg here and here) and man-management skills. That’s harsh but for years they’ve been a distant second to national rivals Quick Step.

In recent times though that’s changed. They’ve refocussed with Philippe Gilbert as their leader and André Greipel was a useful addition. There have been other changes and some measures they’ve toppled Quick Step.

But it seems the office politics haven’t gone away. Only this morning I brought tales of a split in the team that’s got traction across the cycling media. Rather than countering with some good news, they’ve now fired Aussie rider Matthew Lloyd.

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The transfer season begins

Omega Pharma Lotto

I first saw it mentioned on twitter then found out the source from the Gazet Van Antwerpen, The idea is that team sponsors in the Omega Pharma – Lotto team are not seeing eye to eye on their partnership.

Lotto are the longest team sponsor in existence, being involved in one way or another with Belgian pro teams since the 1980s. Omega Pharma have been behind the team for some time, using different product names for the team like Bodysol, Predictor and Silence. But now it seems there are differences over the future of the team.

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Yesterday’s Men

Whilst everyone is entitled to a second or even a third chance, sport is a cruel place. If you can’t compete, you’re out. Looking at the past So I’m left surprised when I read about the likes of Rasmussen and Rebellin. Both these two riders have been busted for doping but they also share another … Read more

UCI to regulate rider agents

The Inner Ring is read in high places but it’s coincidence that days after I write a piece shining a light on the role of rider agents that the UCI swings into action. In a press release today, the UCI announces the following: The Management Committee also approved a text ruling on the role of … Read more

Pegasus: the new Milram?

Fly-V has been a useful Australian team that’s also been operating in America to publicise its sponsor, an Australian airline, V Australia. Only now the team is stepping up and gunning for a UCI ProTour licence. I’m excited and supportive of this. Here’s the roster of riders announced by the new squad, courtesy of Cycling … Read more

Secret Agents

Mr 10% It’s a good time to be a rider agent. These figures work behind the scenes to negotiate contracts for their riders, arranging everything from the job in the first place to negotiating side deals, for example with a sunglasses or shoe supplier. Why’s it so good right now? Well, first is that it’s … Read more