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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Professional cyclists thrive on suffering: how else to explain the 184 riders who this weekend begin three weeks of pedalling an average 159km a day around France? Alas for the sport, its business model seems equally masochistic, leaving even the most successful teams at perennial risk of collapse. A budget cap would at least ease the sport’s financial hardship.
Teams are the linchpin of sports from baseball and football to motor racing, developing an identity that fans can support. That takes funds. But cycling races are held on open roads, so teams have no ticket sales, and it’s the race organisers who take broadcast revenues. That leaves sponsor dollars backing teams with ever-changing identities, limiting the merchandising potential. Top outfit Team Visma Lease-a-Bike, named after the hot software IPO candidate that backs it, formerly carried the name of Jumbo, a Dutch supermarket chain, and before that a lottery operator. Ageing cycling nerds may remember when lender Rabobank was the name at the top.
Running a top-flight cycling team these days costs an average €30mn a year. The biggest outfits spend north of €50mn and the smallest €12mn, say industry sources. Just over half the biggest teams’ spend is on rider salaries, according to a presentation for the sport’s governing body obtained by industry news site Escape Collective, which showed salary bills for the wealthiest six outfits outdoing smaller rivals’ entire budget.
Sports are a business, and they prosper when they’re exciting and unpredictable. That gives managers a product they can market. The rivalry between Team Visma’s Jonas Vingegaard and Tadej Pogačar of UAE Team Emirates — winners between them of the last five Tours — has thrilled viewers, but they come from the two biggest set-ups. There is virtually no chance of a top contender appearing from a smaller team because they cannot afford teammates of a strong enough calibre to support a champion.
Capping budgets around, say, the current average team level would potentially redistribute some of the sponsorship dollars and talent among the teams, making race outcomes less predictable. More financially stable set-ups would also go some way to compensate for the power wielded by Amaury Sport Organisation, which owns the 122-year-old Tour — the only cycling event which most sponsors truly care about. The private French group has so far shrugged off suggestions it share more of its broadcast, sponsorship and merchandise revenues with the actual race competitors.
Prize money from the Tour is scant compensation. ASO’s total €2.3mn Tour prize pot — €500,000 for the winner — pales next to the £8.4mn (€9.7mn) collectively paid to winners of first-round singles games at Wimbledon, let alone the £3mn each for tournament champions. Cycling has never been a rich sport. It wouldn’t hurt if what there was were shared a little more evenly.
jennifer.hughes@ft.com
