Sponsors pulling out of pro cycling?

[livingminimal]

Originally Posted by echappist

Some may say this encourages complacency, but the truth is that I don't know of any other sport where event organizers pay participants such a paltry sum, while pocketing the lion's share of licensing fees for themselves

I know very little about football, but isnt this exactly the NFL model?

Or maybe it's the exact opposite. Im not sure. I know their revenue model is weird.

[adub]

Cycling as a spectator sport sucks.

Unless you are a dedicated cycling fan who knows the difference between a grand tour, 1 day classic, crit it's a confusing sport to spectate and makes no sense.

And really watching a grand tour is a tourist bureau advert for 98% of the time and a bike race for 2%

[redir]

I never really could understand why companies don't see cycling as an advertising gold mine. I'm thinking back even to the Tour of Georgia in the US where cycling is a 'fringe' sport. None the less literally Millions of spectators went to go see the event and Georgia enjoyed an economic impact of $26 million to the state economy.,. That's way more then the Super Bowl or the World Series. I understand that TV is involved in those sports of course, but still.

[saab2000]

Originally Posted by redir

I never really could understand why companies don't see cycling as an advertising gold mine. I'm thinking back even to the Tour of Georgia in the US where cycling is a 'fringe' sport. None the less literally Millions of spectators went to go see the event and Georgia enjoyed an economic impact of $26 million to the state economy.,. That's way more then the Super Bowl or the World Series. I understand that TV is involved in those sports of course, but still.

I hate to break it to you, but there’s no way the Tour of Georgia is bigger than the Super Bowl. It is easily the biggest TV show each year. There are players with endorsement deals probably worth more than $26M. I’d bet the NFL Combine draws bigger ratings than the TdF did when LA was finishing first all those years. I’d bet one Georgia Bulldogs game is more important for the state economy than the Tour of Georgia was in all its years, and I would dare say football there is an institution, where the cyclists are a few eccentric Americans and a smattering of Europeans whose names many people can’t pronounce.

Atlanta wants a Super Bowl in their fancy new stadium.

[CunegoFan]

Originally Posted by echappist

ASO and RSC really ought to start coughing up TV right fees. Of course, they should pay themselves first by making sure that police and ambulance are paid, but after that, the participating teams ought to be paid a non-nominal sum for participating.

Some may say this encourages complacency, but the truth is that I don't know of any other sport where event organizers pay participants such a paltry sum, while pocketing the lion's share of licensing fees for themselves

The ASO earns 45 million euro annually. That is from all events it produces, not just cycling-- Paris-Dakar, Paris marathon, golf, etc. The TdF accounts for about half of that, and the other cycling events barely break even. Give the teams half of 23 million, and each team gets pocket change relative to its overall budget. The only way forward there is to radically improve broadcast rights so the ASO's earnings increase by ten times. Do you see that happening?

The path for the U.S. is participatory events with a pro division. Traditional racing is hard and requires a very high minimum level of fitness. How popular would 5Ks be if all those running over a seventeen minutes pace were pulled from the race? That is what bike racing is like. Something like triathlon's WTC is needed but with more focus on finishing than racing. This would mean a series of very large bucket list destination events with brand recognized by normies. The WTC's events are subsidized by the communities where they are hosted.

[echappist]

Originally Posted by livingminimal

I know very little about football, but isnt this exactly the NFL model?

Or maybe it's the exact opposite. Im not sure. I know their revenue model is weird.

I think the head office kicks down money to the teams. ~$200 M seems to be the amount received per team

I'm not so well versed in the finances of NFL (other than the generous corporate welfare most of the teams receive), but any commercial sport team has the following revenue streams:

-event gate receipts
-tv broadcast rights
-other commercial fees (usually sponsorships)

depending on the sport and the league, these are negotiated either at the league level or the team level. For instance, for the Premier League, broadcast right is negotiated by the league, gate receipts and commercial fees are by the club.

For cycling teams, it's the last one that provides the lion share of the money, but I would think that in terms of cycling as a whole, TV rights predominate. In

Originally Posted by redir

I never really could understand why companies don't see cycling as an advertising gold mine. I'm thinking back even to the Tour of Georgia in the US where cycling is a 'fringe' sport. None the less literally Millions of spectators went to go see the event and Georgia enjoyed an economic impact of $26 million to the state economy.,. That's way more then the Super Bowl or the World Series. I understand that TV is involved in those sports of course, but still.

unfortunately, those numbers get inflated

im surprised that cycling, outside of the Benelux, has survived this long on its current business model

[echappist]

Originally Posted by CunegoFan

The ASO earns 45 million euro annually. That is from all events it produces, not just cycling-- Paris-Dakar, Paris marathon, golf, etc. The TdF accounts for about half of that, and the other cycling events barely break even. Give the teams half of 23 million, and each team gets pocket change relative to its overall budget. The only way forward there is to radically improve broadcast rights so the ASO's earnings increase by ten times. Do you see that happening?

i didn't know that. by earn, do you mean profit after taxes?

Assume that is profit after taxes, then ASO pockets say 1/3, and distribute the other 2/3 (say 16 M) to the teams. Fees divided evenly per team, per event. Even 500k makes a big difference to the operation of a team (especially the pro-conti teams).

And the other is to charge gate receipts. Charge small fees for town-centers where the race passes, a tiered charge for the last km of a race, and charges for the last few kms of a climb. They need to do better protecting riders on mountains regardless, might as well get two birds with one stone. If the spectators on Alpe d'Huez reduces by 50%, so be it. Safer for the riders, and revenue for the teams

[redir]

Originally Posted by saab2000

I hate to break it to you, but there’s no way the Tour of Georgia is bigger than the Super Bowl. It is easily the biggest TV show each year. There are players with endorsement deals probably worth more than $26M. I’d bet the NFL Combine draws bigger ratings than the TdF did when LA was finishing first all those years. I’d bet one Georgia Bulldogs game is more important for the state economy than the Tour of Georgia was in all its years, and I would dare say football there is an institution, where the cyclists are a few eccentric Americans and a smattering of Europeans whose names many people can’t pronounce.

Atlanta wants a Super Bowl in their fancy new stadium.

Like I said, I understand that... "but still."

[fignon's barber]

https://cyclingtips.com/2018/09/us-r...at-comes-next/


Apparently, the CEO of USAC says he has no control over the growth or decline of cycling in the US. And the only way to save pro cycling in the US is for the pro teams to show up at gran fondos and Dirty Kanza and crush the amateurs.
……..Yep, it's doomed.

[CunegoFan]

Originally Posted by echappist

i didn't know that. by earn, do you mean profit after taxes?

Assume that is profit after taxes, then ASO pockets say 1/3, and distribute the other 2/3 (say 16 M) to the teams. Fees divided evenly per team, per event. Even 500k makes a big difference to the operation of a team (especially the pro-conti teams).

And the other is to charge gate receipts. Charge small fees for town-centers where the race passes, a tiered charge for the last km of a race, and charges for the last few kms of a climb. They need to do better protecting riders on mountains regardless, might as well get two birds with one stone. If the spectators on Alpe d'Huez reduces by 50%, so be it. Safer for the riders, and revenue for the teams

That is profit after taxes. It has actually increased by about 50% over the last couple of years. Before earnings were more like 30 million euro. The Tour is the only even that makes decent money. The Giro makes a small fraction of that. Really there is not any money to fund the teams unless the pie gets significantly larger.

Yeah, half a mil would be great for a Pro Conti team lucky enough to be invited to the Tour, but to even the low budget tier of the Pro Tour it is not much. Sky might spend more on Nutella than it could get from the Tour.

[CunegoFan]

Originally Posted by fignon's barber

https://cyclingtips.com/2018/09/us-r...at-comes-next/

Apparently, the CEO of USAC says he has no control over the growth or decline of cycling in the US. And the only way to save pro cycling in the US is for the pro teams to show up at gran fondos and Dirty Kanza and crush the amateurs.
……..Yep, it's doomed.

That was a really good article. Bouchard-Hall is a doofus. Rich guy who pretended to be a pro cyclist. USAC has about as much relevance to road cycling as IMBA has to mountain biking. Maybe that's a bit harsh; USAC has yet to stab its members in the back like IMBA did.

The Vaughters-Rapha plan seems to be having pro riders do participation events so the riders can build their brand on Instagram and what not. Why would I want to watch a Youtube channel by Joe Dombrowski instead of Seth's Bike Hacks or BKXC?

[bikinchris]

Originally Posted by saab2000

I hate to break it to you, but there’s no way the Tour of Georgia is bigger than the Super Bowl. It is easily the biggest TV show each year. There are players with endorsement deals probably worth more than $26M. I’d bet the NFL Combine draws bigger ratings than the TdF did when LA was finishing first all those years. I’d bet one Georgia Bulldogs game is more important for the state economy than the Tour of Georgia was in all its years, and I would dare say football there is an institution, where the cyclists are a few eccentric Americans and a smattering of Europeans whose names many people can’t pronounce.

Atlanta wants a Super Bowl in their fancy new stadium.

He isn't talking about TV revenue. We spectator the TdG several times and we drove from Louisiana and bought gas, food and hotel rooms. There were a good many spectators just like us from many states. The people freezing their butt at Hog Pen gap were there because they couldn't get up to the last climb. I met very few locals all of those years. At the ToC, there are more locals, but more spectators too.

[FlashUNC]

Originally Posted by oldpotatoe

Thinks that’s a little severe, ‘dying’...Shrinking for sure along with road cycling in general. Why, bike sales have been flat for a while, gas is still cheap, cycling, with distracted drivers, sure isn’t getting safer..I think that impacts pro road cycling sponsorships...

You've got a World Tour team talking about entering guys in gravel races and ultra endurance rides next year.

If the sponsorship flight and top teams scrambling to find any way to generate eyeballs isn't the writing on the wall, I don't know what is.

[echappist]

Originally Posted by CunegoFan

That is profit after taxes. It has actually increased by about 50% over the last couple of years. Before earnings were more like 30 million euro. The Tour is the only even that makes decent money. The Giro makes a small fraction of that. Really there is not any money to fund the teams unless the pie gets significantly larger.

Yeah, half a mil would be great for a Pro Conti team lucky enough to be invited to the Tour, but to even the low budget tier of the Pro Tour it is not much. Sky might spend more on Nutella than it could get from the Tour.

I think about how much I pay for Eurosport every year (40 quids/year right now), and it's a paltry sum compared to what I pay to watch Champions League ($10/month, not to mention the fees for all the other soccer I watch on NBCSN and FOXsports). If all of the rights holders tell Eurosports that the fees will need to be tripled, I doubt I'll see a 50% increase in subscription fee, and, frankly I'd be happy to pay 80 quids for all major cycling events spanning from Het Nieuwsblad to Il Lombardia. How much of a difference might that make for the teams participating? I don't know.

[Fivethumbs]

As someone who owns videos of just about every professional race and magazine from 1985 to 2000, it is my opinion that professional racing is not as exiting as it once was. There are more specialist type of racers, a lot of super-team dominance, race radios, and pros picking and choosing among events. It seems things have made the racing become too predicable, at least for me. When I watch the 1989 Tour de France - I don't see an ADR train or Systeme U train pulling Lemond or Fignon up all the big climbs. As always YMMV.