The Roar
The Roar

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The UCI must reform professional cycling or it will wither

. (AP Photo/Keystone, Jean-Christophe Bott)
Roar Rookie
5th May, 2017
3

Professional road cycling is as close as possible to the perfect egalitarian sport. No one is excluded from supporting the sport or watching races.

You can pull your car up anywhere along the roadway, step outside your office, shop, or apartment and encourage riders as they go past. Outside a few hospitality tents around the start or finish lines, no one has to walk through a turnstile or pay admission for the privilege of seeing a live cycling race.

But this model has placed professional cycling at the financial crossroads.

A large number of race promoters face financial difficulties due to a lack of sponsorship and broadcasting income with many of them losing money or just breaking even.

The long-running economic crisis in Europe has been a significant factor behind the financial problems for race organisers and the sport more generally. It is affecting large and small race organisers alike. Last year, the French media and sports group, Amaury Sport Organisation (ASO) – the largest race organiser in the world – announced the end of the Criterium International after 85 editions.

This is a story too often repeated across Europe over recent years.

Spain has been one of the worst hit with the five-day Vuelta a Murcia being reduced to a one-day event while other races in in Valencia, Catalunya, and Basque Country have disappeared. Even the Volta Ciclista a Catalunya was at risk of being cancelled until ASO stepped in and signed a five-year partnership with the owners, which gave ASO control of image production, distribution of TV rights and sponsorships.

Financial difficulties faced by race promoters have not been limited to just Europe races. The Tour of Beijing, the Tour of Qatar and the USA Pro Cycling Challenge have all stopped running in recent years. Only on Monday, another UCI event, the Tour of Battenkill, was cancelled.

Riders during Stage 2 of the 2013 Tour of Beijing (Image: Team Sky).

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There are a number of factors behind the difficulties facing the sport. It is extremely fragmented, the racing calendar is congested and there is need for greater consolidation.

Outside the two largest racing owners which organise around 13 World Tour events, ASO and RCS Sport (and Italian media company), most races are organised by a local cycling bodies or organisations.

Individual small race promoters secure their own TV broadcasting rights and race sponsors. They just don’t have the size to lower their costs through economies of scale. They have high organising costs and generally rely on at least one major sponsor plus several minor sponsors. Therefore, the loss of just one sponsor is enough to cause turmoil and if another sponsor is not found quickly, the event can collapse.

The organisers of the Il Giro del Trentino changed its name to the Tour of the Alps and crossed country borders to try to generate more interest in its race. Eurosport dropped the coverage of the race a few years ago.

Race promoters lack a collective body that can negotiate the best broadcasting and sponsorship deals for a large number of races and distribute the funds across the different race owners. But there are deep divisions and suspicions in the sport for any of the current participants, like the UCI, ASO or RCS Sport, to undertake this collective marketing and organising role.

Maybe there needs to be the recognition that the UCI calendar is too congested. Hundreds of races are held across Europe, Asia and the Americas each year, far too many to guarantee the financial success of all.

But it is not only the race organisers that are suffering financial difficulties, so too are many racing teams.

The road to Tour de France glory is littered with the skeletons of many failed World Tour teams. Only last year three World Tour teams folded, Team Lampre (resurrected as UAE Team Emirates), Team Saxo-Tinkoff and IAM Cycling collapsed for various reasons. Before that there was Team Radioshack, Euskaltel–Euskadi‎, Liquigas, Team Milram and HTC-Highroad.

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Team Saxo-Tinkoff rider Alberto Contador has re-ingited the General Classification after Stage 13 of the 2013 Tour de France (Image: Sky).

This year there is no pure Italian team in the peloton. After Mercatone One, Mapei, Fassa Bortolo, Liquigas and Lampre, it is hard to remember the last time a complete Italian cycling team has been absent from the peloton.

If you want to compete against the big teams like Team Sky, Movistar or Team Katusha you need a budget of upwards of €25-30 million per year. That figure can be difficult to collect when large businesses facing difficult economic climate are slashing their sponsorship budgets.

The current revenue model does not provide a sustainable model for teams without state backing or a wealthy benefactor.

Teams are predominantly dependent on sponsorship dollars. Not many other sports have these limited revenue streams. GreenEdge Cycling loses its main sponsor at the end of this season. In almost 12 months since the announcement, GreenEdge’s search for a new sponsor still has not been announced, suggesting it is struggling to find a replacement sponsor. It recently entered into a strategic partnership with the Chinese Cycling Association, with the hope that it may be able to secure a long-term Chinese sponsor.

OricaTeam crosses the line

Other funding sources for teams, such as selling merchandise or ‘ride with the team riders’ at the end of the season are insufficient to supplement lost sponsorship income.

UCI’s manner in distributing World Tour licences does not help cycling teams.

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World Tour licences are handed to teams for upwards of three years. The lack of certainty does not promote long-term sustainability and can make it difficult to secure team sponsorship, particularly if a team is in the last year of your World Tour licence and there is the threat of being downgraded to pro-continental status.

There is also no ticket revenue for teams. At best, teams may be able to secure a spot for a small hospitality tent on a mountain top finish or at the finish line of a stage or day race. But the revenue is insignificant compared to other sports.

For example, Everton Football Club, a mid-tier football team playing in the English Premier League (EPL), received £17.9 million (almost $A30 million) in gate receipts in 2015-16 season. That figure alone that could sustain a World Tour team.

Unlike other sports there is no revenue sharing model of the TV broadcasting rights between race promoters and cycling teams. TV broadcasting revenue in international sport in significant. The broadcasting revenue streams in other sports, particularly football, for example, the Champions League and the EPL are huge.

According to UEFA, its gross commercial revenue for its competitions are estimated at around €2.35 billion. It is possible that a small football club could secure upwards of €20 million (around $A28 million) just by making the round of 16 of the Champions League.

There were media reports a few years ago that the organisers of the Giro d’italia was close to securing a revenue-sharing model with World Tour teams. However, the trail has gone cold.

INRNG argues that one of the reasons behind of the lack of revenue sharing agreements is the reluctance of cycling teams to share the costs of holding a race, which are high, especially the telecasting of the event. In addition, ASO and RCS Sport cross-subsidise their unprofitable races with the revenue from their main race (Le Tour de France and il Giro d’Italia respectively).

These are the drivers for much needed reform to ensure cycling can be more profitable and sustainable in the long-term.

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Professional road cycling has evolved at a snail’s pace since its inception and any change has been piecemeal at best. The UCI has an extension of the World Tour series to 27 races around the global to improve the attractiveness of the sport, and divides races into certain UCI classifications according to a rating scale, for example 1.HC, 2.HC and 1.1 races. The racing classifications determine which races certain cycling teams will attend.

Outside these changes, there has been little evolution in the sport (notwithstanding technical improvements). Just like 60 years ago, there is still three grand tours, five monuments, the spring classics and series of World Tour races. Only the name has changed.

Sport needs to evolve to maintain its popularity and attractiveness for fans and sponsors a like.

Twenty20 and the Big Bash League with is exploding pyrotechnics and loud music combined with fast, exciting action has refreshed the sliding popularity of cricket which previously centred around Test match format and the 50 over game.

perth-scorchers-big-bash-league-cricket-2017

UEFA expanded and renamed its most prestigious club competition in 1992, the UEFA Champions League, to ensure that there were more games between Europe’s super power clubs. A further structural change will happen in 2018-19 season.

The first question that needs to be asked is whether there are too many races on the cycling calendar and whether racing format is correct. There are 110 races on the UCI Europe Tour alone between 1 March 2017 and 31 May 2017 (this does not include World Tour races). Many of these races required either 50 or 70 per cent participation by World Tour teams. This is significant cost for World Tour teams to send riders to many of these events.

It is time for the UCI to reform its calendar to develop a strategic long-term plan. The starting point needs to be guaranteeing long-term existence of racing teams.

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It needs to ensure that fans are provided with exciting racing, but also riders are accessible to the fans. At the moment there the racing calendar is too congested and there are too many unsustainable races. Broadcasters need to be given events that will guarantee strong ratings. Too often flat stages only become interesting in the last 10 to 15 kilometres as teams start to jostle for position.

Earlier this year, a survey of Belgium race promoters by a local newspaper to examine ways to broaden revenue found that promoters thought it would inevitable that fans would be required to pay a fee to watch a cycling race by the public roadway.

While the Global Cycling Network ran a small survey after this news which found that fans would be happy to pay to see races, there are a number of significant hurdles facing promoters.

Firstly, compliance and fencing costs to keep non-paying fans out of the race would be astronomical. It is not possible to fence off the whole race outside the last 300 metres of the finish line or tops of key mountains. It will also be a challenge to convince people to pay something that was free before, especially if there they get nothing in return.

Fortunately for cycling fans, some real reforms are being led by Velon. A number of World Tour teams established Velon in 2014 with the remit to create greater stability within the sport by providing more commercial and marketing opportunities. Currently 10 of the 18 World Tour teams are members of Velon.

The organisation’s website states “we have ambitious plans to improve how fans interact with races – before, during and afterwards and we’re connecting with you wherever you are. Online, on the move, on social media.”

Velon is using is Youtube to bring fans closer to the action with GoPro cameras connected to a number of riders. In addition, Velon has developed an app where fans can see the heart rate, power meter outputs and other data. Velon signed an agreement with RCS Sport to use the latest rider performance-tracking technology at their events. It was tried out during the Milan-San Remo earlier this year to varying success.

Velon, in conjunction with its marketing partner – Infront Sports & Media (Infront) has also launched a new and radical cycling event this year called the Hammer Series. A revolutionary new professional road cycling series to crown the world’s best team. This event will shake up world cycling and run shivers down the spine of the UCI.

The first Hammer Series race will be held in the Netherlands at the Limburg Sportzone complex, between 2 and 4 June. All 10 Velon teams plus Movistar and Bahrain-Merida will participate in the inaugural event. In addition, four pro-continental squad will also participate, Roompot, Caja Rural-Seguros RGA, Israel Cycling Academy and Nippo-Vini Fantini

The Hammer Series is a test event for Velon and Infront. During the announcement of the teams that will be involved in the inaugural event, Velon CEO, Graham Bartlett, hoped that the series would grow to eight to ten events per year.

This is what cycling needs. It is something that will excite fans. Something to keep them at the event not just over one day, but over the whole three. Its format allows the imposition of entrance fees. In return, fans will be able to see constant racing action over the three days where each day of racing features multiple laps ensuring wherever fans are on the course they will get the ultimate view of the action.

Unlike most races on the UCI calendar, fans will get to see their favourite teams and riders several times each day. There will be no lining up on the mountain side for hours to see their favourite riders for a fleeting moment. To ensure greater fan participation, the organisers are also holding a sportif ride of varying distances and youth races for ages 8-14. To increase great excitement for fans, Velon could include walk through of team tents, driver signings and rock concerts to make it an all day event for fans

The Hammer Series offers the greatest evolution of cycling since the first cycling race in 1868 and the inception of the first Le Tour de France in 1903. Its success will give fans greater accessibility to teams and their heros. It will provide a platform for revenue sharing model where teams receive sponsorship and broadcasting income and shared gate receipts, which will greatly assist in their long-term survival.

Velon clearly has intentions to develop a Formula 1-like season where there are eight to ten events across the world where each teams and riders compete for best rider and best team titles. It has the potential to effectively compete against the UCI’s racing calendar.

The time has come for the UCI to reform its cycling calendar and format to make it viable for teams and the race promoters. ASO has already clashed a number of times with the UCI over reforms to the World Tour format and calendar. Broadcasters need a model that ensures rating success. Participants must be profitable or the sport will wither.

Lack of reform opens cycling up for a breakaway series to develop. We have seen that happen in other sports like cricket and we now seeing glimpses of that happening in cycling with Velon wanting to hold up to 10 events per year. The potential of 30 days of cycling at Velon events will have an impact on a rider’s availability for UCI races.

Velon is lurking in the shadows to provide an alternative cycling model to the UCI. There is nothing preventing the ASO and RCS Sport from reaching a commercial agreement with Velon to run their races in conjunction with an expanded Hammer Series. ASO has threatened to remove Le Tour from the World Tour before.

The next 12 to 24 months will be an interesting time in professional road cycling. One thing for sure, there will be change, but it is the form that this change takes which no one knows.

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