Pro cycling – A game we love. Not business.
There’s much talk about the changes that are necessary to make professional cycling more like a functional business. But, as Jean-François argues, bike racing is more like a game based around passion than a way for anyone to make serious money…
– Photos by Graham Watson
Why pro cycling is more than just another sporting business
– By Jean-François Quenet
Chris Froome began racing in 2016 at the Jayco-Herald Sun Tour. What a coup for the organisers! The Tour de France champion recognises Victoria as one of the very few hot beds in the world of cycling – like Flanders in Belgium, Brittany in France, Tuscany in Italy, the Basque country in Spain. Consider Victoria’s history with cycling. The Austral Wheel Race, established at Melbourne Cricket Ground, stretches back to 1887. The Melbourne to Warnambool is the second oldest Classic on the planet, created in 1895.
Victoria would become a symbolic beginning for the 2016 season for ‘Froomey’, 10 years after he took part in the 2006 Commonwealth Games under the Kenyan flag. He sat briefly in the hot seat of the individual time trial before finishing 17th out of 72 riders, the gold medal went to Nathan O’Neill. Remember him? At lot has happened in 10 years!
Melbourne is the place where Chris Froome was first noticed by two managers of the English team: Dave Brailsford and Shane Sutton. The rider remembers hearing one of them saying: “He doesn’t look like a Kenyan.”
Cycling is a sport of interesting stories. But Froome choosing the Jayco-Herald Sun Tour over the Tour Down Under and the Dubai Tour is a slap in the face of all decision makers who see cycling as a business rather than just a game.
Team Sky, Froome’s employer, is a founder and an active member of Velon, a joint-venture company created in the UK at the end of 2014 to generate a new revenue stream for the 11 pro cycling teams involved (for now). It’s all about TV, directly or indirectly – mostly indirectly, actually, as one of Velon’s initial goals of attracting more TV broadcasters to cycling has not yet been fruitful. But that’s understandable because it generally takes years for ASO, RCS, other race organisers and the UCI to convince new networks to come on board.
Froome wanted a slow start to a season in which his priority targets will be the Tour de France and the Rio Olympics right in the middle of the year. In the past three years, he won either the Tour of Oman or the Vuelta a Andalucia in February but, even though they aren’t WorldTour events, he considered them a too brutal. He wanted a more gradual beginning to his racing schedule.
Nairo Quintana, Vincenzo Nibali and Peter Sagan all opted to start racing in 2016 at Argentina’s Tour of San Luis in January. Alberto Contador returned to competition at the Volta ao Algarve in Portugal and duly won the final stage.
So, the WorldTour is once again snubbed by the stars – the so-called ‘Fantastic Four’ of the 2015 Tour de France and the showman who is currently world champion – they took their bats and balls and played elsewhere early in 2016.
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Listen to the hype about improving cycling and you’ll be told that it’s all about enhancing television but cycling’s champions seem prefer non-televised or events that receive only partial coverage – and certainly don’t get broadcast worldwide on mainstream networks.
Personal preference (and the lure of start money) still prevail over any sense of solidarity in building cycling with “a season-long narrative”, as referenced by Velon CEO Graham Bartlett late in 2015, being “the really important thing”.
The Abu Dhabi Tour (8-11 October 2015), won by Orica-GreenEdge’s Esteban Chaves, was the first race organised in partnership between Velon and a race promoter.
Velon signed a three-year deal with the Abu Dhabi Sport Council to guarantee them the participation of big teams and famous riders – the first start list was indeed a prestigious one with Sagan racing for the first time with his rainbow jersey, Nibali, Fabio Aru, Alejandro Valverde, Tom Boonen, Philippe Gilbert, Michael Matthews, Tom Dumoulin and Marcel Kittel.
“The deal is also about technology and promoting the event via the teams’ platforms,” Bartlett said.
And on 24 February 2016 came the news that Velon has signed a 10-year agreement with Infront Sports and Media.
“This new partnership,” Chris Froome tells us by way of the media release, “will enable the Velon teams to look at other exciting and innovative ways to open up cycling to new audiences.”
The release explained how this latest initiative will “make a major step forward to enable data to be shared with fans and,” Barlett says, “it is going to be fantastic.”
The hyperbole continued with mentions from riders and management of each of the 11 teams. And Bartlett is delighted by the outcome. His “narrative” is apparently becoming a reality.
“Just imagine how great it will be for fans to see the performance of the riders as they follow races on their screens or see them at the race. This is something that has been available in other sports and now we’re bringing it to cycling so fans can better engage with the riders and get a much better experience.”
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The deal with Velon and the Abu Dhabi Sport Council was symbolic of a possible change in the way operations are conducted in cycling.
Velon negotiated for seven teams – four of their members (Lotto-Soudal, LottoNL, Cannondale-Garmin and Trek) were either willing to skip the Abu Dhabi Tour due to a shortage in manpower at that time of the year or rejected because they failed to convince their star riders to take part – and equally divided the total amount of the start money.
Figures for appearance fees weren’t disclosed but some team managers enthusiastically indicated it was the double as what they normally receive for a four-day race in the Middle East, which can be evaluated at about AUD$22,500, so not a significant boost in their income.
“But this is a starting point for finding new rules in financing the teams,” Tinkoff-Saxo’s team manager Stefano Feltrin said.
“For 2014, Team Sky published in the UK a turnover of 31 million euros (over 46 million AUD). The budget of Katusha has doubled since I ran the team in 2009. With this rapid inflation, it’s impossible to expect one sole sponsor to back a team. The system is close to exploding.”
Velon is a strong promoter of on-board cameras, which is a bit of a gadget that won’t revolutionise the racing itself – a bit more inspiration and risk taking by the directeurs sportifs would do better – nor the global impact of cycling.
The reasoning behind the idea is to turn the cyclists into cameramen and therefore make them de facto eligible for a share of TV rights payments, which is revenue negotiated and cashed in by the race organisers.
The intention became clearer when the “Velon Addendum” to riders contracts was leaked in November. It deprives the pro cyclists of their image rights and intellectual property rights that are completely handed over to their team as well as personal data including their religion for instance.
Velon reacted by saying they aren’t involved in riders contracts but it’s really a document prepared by Velon that some riders from these 11 teams blindly signed in addition to their standard UCI contract before their union CPA (Cyclistes Professionnels Associés) protested.
In principle, Velon is completely right. Cycling teams need a different economic model to be sustainable like (some) football clubs.
But Velon hasn’t discovered anything.
It’s been the case since teams budgets have become significant in the mid-80s. Teams like PDM and Castorama folding in the early 1990s when their title sponsor didn’t renew their contract looked like disasters in the cycling world.
Listening to Graham Bartlett, a former marketing director at Liverpool FC, cycling has so much to offer that it shouldn’t be struggling economically like it seems to be now despite Hein Verbruggen’s implementation of the Pro Tour in 2005 with the promise of fabulous business opportunities.
In 2010, 25 teams were bidding for 20 spots.
In 2015, the UCI can hardly find 18 candidates.
The UCI asked Europcar to fill the gap in 2014, IAM Cycling in 2015 and Dimension Data, formerly known as MTN-Qhubeka, for the 2016 season. The South African brand is the only new sponsor in the World Tour this time around.
Interestingly, most of the multinational companies and worldwide known brands that came into top professional cycling in the past five years (HTC, Columbia, RadioShack, Nissan, Transitions, Sungard, Sharp, Argos, Belkin… and even Indian giant Tata who joined Cervélo in 2010) have quickly pulled the plug. They were approached as mini sponsors but they never became real sponsors. Most of them refuse to explain why.
It’s a pity because it would be interesting to know if it’s due to poor business management while AG2R La Mondiale published a survey according to which the 14 million euros they invested in Vincent Lavenu’s team generated 140 million in equivalent of publicity in 2015.
The return always seems to be beneficial for the sponsors. Cycling continues to be cheaper than the other main sports.
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In the past five years, cycling also lost the sponsorship of Rabobank, Vacansoleil, Euskaltel, Caisse d’Epargne, Liquigas, Milram, Bouygues Telecom and CSC, following the dismissal of teams like Gerolsteiner, Crédit Agricole and Discovery Channel that closed the business when the main backer considered to have received enough for its investment.
Some of them quit the scene because of doping scandals, others for economic reasons.
The reality of the current cycling teams business is worrying.
Let’s put Sky apart, as their turnover of 31 million seems to have no limit and it certainly won’t be less than that for 2015 and 2016 with the purchase of motorhome and expensive riders.
Biggest budgets are provided by benefactors: Andy Rihs (BMC), Oleg Tinkoff (the eponymous team, if anyone hasn’t noticed that ego plays a big part in the existence of the squad previously owned by Bjarne Riis), Gerry Ryan (GreenEdge).
Igor Makarov is another one with the Russian companies behind Katusha. It’s a state affair like Kazakhstan with Astana, which has a lot to do with politicians using the sport for their own sake and the French, Belgian and Dutch lotteries (FDJ, Lotto, LottoNL) aren’t driven by very different motives.
Bike manufacturers have rescued some teams close to folding…
So where are the true sponsors? Movistar, AG2R-La Mondiale, IAM? But in each of these cases, personal decisions have prevailed over companies strategies.
However, teams budgets keep increasing [to an average of 14.5 million euros in 2014, a figure that includes Team Sky and enables to understand their domination at the Tour de France].
Team managers keep meeting riders agents demands.
The “always more” policy remains in place, so, as Feltrin says, the system is about to explode.
The UCI has embraced Velon’s ideas for the future of cycling, including further extension of the WorldTour with the addition of races like the Abu Dhabi Tour providing that they’ll generate cash for the teams. Less openly than 10 years ago, when a tussle with race organisers led to a four-year long sterile battle, the governing body of cycling has started a new fight with ASO who again threat at some point to withdraw their races (Tour de France, Liège-Bastogne-Liège, Paris-Roubaix, Dauphiné) from the WorldTour.
The difference with the previous conflict is that Giro d’Italia’s RCS, a company facing enormous debts and likely to be sold, is on the UCI’s side with Velon and the Abu Dhabi Tour in the middle of it.
Only four years ago, the newly created Tour of Beijing was promising new revenue to cycling – but it remained unclear whether teams, the UCI or friends of friends were going to benefit from it.
In 2012, the Tour of Hangzhou was put on the WorldTour calendar in an authoritarive way but the capital of the Zhejiang province never organised the event while the country’s capital didn’t renew the initial four-year contract. Beijing’s fantastic opportunity of cycling to profit from the Olympic heritage was short lived when the Chinese realised they were getting charged much more than other race organisers. Teams and riders were reluctant to pay the trip to the far East at the end of the season.
That fiasco was the evidence that the Disneyland concept of implementing the same wonders anywhere in the world doesn’t work.
Bike races have to write their own history with new populations to embrace the sport of cycling with all the necessary elements that, combined, have created new frontiers in Australia, Great-Britain and Norway: the success of the Tour de France on local TV (respectively SBS, ITV and TV2), local champions (Cadel Evans, Bradley Wiggins and Thor Hushovd), local teams (Orica-GreenEdge, Sky and the yet to be upgraded team founded by Hushovd) and newly created local events (Santos Tour Down Under and Cadel Evans Great Ocean Road Race, RideLondon Classic and Tour of Yorkshire, Arctic Race of Norway).
The WorldTour has very few chances to work in places where the cycling culture is non-existant, also because this sport never looks that good on TV without crowds made of true fans.
Will the UCI, RCS and Velon succeed with Abu Dhabi while the UCI and its also defunct money making machine GCP (Global Cycling Promotion) failed in Beijing?
Teams solidarity is needed to replicate with Tour de France organisers the common deal Velon negotiated with the Abu Dhabi Sports Council – and important teams like Astana, Katusha and Movistar aren’t part of Velon.
Etixx-Quick Step’s honcho Patrick Lefévère was not impressed by Velon’s first commercial operation. He hinted that he wasn’t that pleased with sharing start money with teams that didn’t offer an attractive line-up like his. For him, the cheque wasn’t bigger than if he had negotiated by himself. “I don’t attend Velon’s meetings any more,” he told RIDE at Abu Dhabi.
“We’re members but luckily in my staff a young lawyer is very enthusiastic about it so he represents us and reports to me. I’ve personally done enough to try and unite the teams with the IPCT [the International Pro Cycling Teams, the union of 17 Pro Teams from 2006 to 2008] and we weren’t listened to. The difference now is that people in charge are of a higher level of capacity to discuss the business.”
Velon is openly a business, not just an association of cycling teams. They say they’re not at war with ASO but they fail to hide their real intention to hijack part of the profit made by the Parisian Amaury Group in cycling. However, the main question remains: is there money in cycling really?
ASO’s accounts aren’t disclosed but their main income is TV rights and the main contributor is France Télévisions for a yearly amount of 23 million euros, according to reports. The whole idea behind the putsch attempt is to make the teams sustainable, even in case of the loss of the title sponsor, through a share of revenue. It’s a good idea but most race organisations are financially struggling.
On average, a WorldTour team accumulates between 700,000 and 800,000 euros yearly in start money collected from all the races they take part in. For that source of income to be able to substitute a title sponsor or a benefactor, it would have to be multiplied at least by 10.
But TV rights aren’t going up these days. They’re even at risk with applications like Periscope.
Teams can’t find new sponsors but neither does ASO that has only replaced green jersey partner PMU by existing car supplier Skoda. Velon will need a lot of new events like the Abu Dhabi Tour to build a new economical model.
On the final day of the Abu Dhabi Tour, a criterium-like race was held on the Yas Marina Formula 1 circuit, fortunately in cooler conditions than the 50°C plus recorded in the desert for stage one. Lefévère who is a supporter of business expansion in cycling noted that the greatest bike race of the day was Paris-Tours, “not only because we won it [with Matteo Trentin] but also because of the intensity of the race”.
The big names were in the UAE, also for the UCI gala set to conclude the 2015 season, the start list of the “Classic of the falling leaves” looked poor but a new record was set at 49.642km/h.
The “yellow ribbon” was symbolically introduced in 1936 by Tour de France founder Henri Desgrange to award the fastest rider in a one-day race longer than 200km. In 40 years, Trentin was only the fourth rider to beat Freddy Maertens’ record (46.110km/h at Paris-Brussels in 1975). It always happened at Paris-Tours since: Andreï Tchmil (47.168 in 1997), Erik Zabel (47.550 in 2003), Oscar Freire (47.729 in 2010), Marco Marcato (48.629 in 2012).
That’s just history of a game we love. Not business.
– By Jean-François Quenet