Are salaries out of control?

[Damiano Machiavelli]

Thor reportedly signed with BMC for 1.5 - 2.0 million euro. To me that seems like a very big number for the results can be expected from him. It is a huge number compared to what the salaries for all but a few special riders were half a decade ago. Stapleton said that one of the things that forced him out is that High Road could not compete with teams that were spending double what he could spend. While it would be insane for a ten million euro team to spend that much on Thor, it is reasonable for a twenty million euro to do so.

Lots of other sports have struggled with the issue of a few rich teams distorting salaries such that the small and mid-level teams are priced out of the game. Formula 1 has spend years trying to get costs under control. What should cycling do about it?

 

[Waterloo Sunrise]

Seems reasonable for year 1 and 2 - I doubt they'll get much value by the end of the contract.

I don't see the problem in the revenue generated by cycling actually going to cyclists.

It would be even better if the UCI went fully amateur and any money it creams off was passed on to teams and thence to riders.

 

[Waterloo Sunrise]

Also, #QTWTAIN

 

[just some guy]

Also, #QTWTAIN

um ya what ?

 

[Waterloo Sunrise]

um ya what ?

http://www.google.co.uk/


HTH.

 

[LugHugger]

Well, he is the current world champ. It's unlikely that Thor will wear the rainbow jersey at BMC though. So some of that value has been earned and demanded by Thor.

It does seem that by paying these salaries, the big budget teams are making a rod for their own backs. There is not the level of income available via ticket and TV rights that, for instance, the UEFA Champions League generates.

Where is the sustainability? Sure, a few big name sponsors are able to afford these budgets but what about the other 60-70% of PT licensees? If this continues for another 2-3 years, what incentive is there for the smallest teams to compete. If they fold, where do the replenishment riders come from?

The UCI, the ASO/Flanders Classics/RCS guys and the teams do need to sit down to thrash out some way of distributing the wealth on an agreed scale of meritocracy before the depth of competition becomes too shallow and results become more predictable than they are already.

 

[icefire]

Where is the sustainability? Sure, a few big name sponsors are able to afford these budgets but what about the other 60-70% of PT licensees? If this continues for another 2-3 years, what incentive is there for the smallest teams to compete. If they fold, where do the replenishment riders come from?

Sustainability? Bob Stapleton might have a word or two to say on that subject.

 

[ingsve]

Well, so far we're not seeing the big budget teams dominate. HTC was a prime example of that. They never had the budget of some of the other teams but they were able to win races left and right with multiple riders while a team like Katusha that is reported as a big budget team is hardly dominating anything.

I also think it's encouraging that for example Degenkolb moves to Skil-Shimano. This shows that smaller teams are still able to compete for the very best talent out there without being crushed by big budget teams as of yet at least.

As for Hushovds salary, I think it is well deserved. He may not have the big classics wins but few riders are as consistent as him in getting results. He has won a stage in 8 out of his last 10 Tours and one of the years he didn't win a stage (2005) he instead won the green jersey.

 

[Damiano Machiavelli]

Sustainability? Bob Stapleton might have a word or two to say on that subject.

That is precisely the point.

It is not the raw salary number that is salient. It is the percentage of the average team's rider budget that is salient. When a good but not great rider like Thor is getting, perhaps, 20% or more of the average team's rider budget then there is a problem.

 

[Mich78BEL]

if you compare it to football, basketball, formula 1 etc then there's very little money in cycling going around, gilbert, hushovd, contador deserve what they earn etc

 

[LugHugger]

Well, so far we're not seeing the big budget teams dominate. HTC was a prime example of that. They never had the budget of some of the other teams but they were able to win races left and right with multiple riders while a team like Katusha that is reported as a big budget team is hardly dominating anything.

I also think it's encouraging that for example Degenkolb moves to Skil-Shimano. This shows that smaller teams are still able to compete for the very best talent out there without being crushed by big budget teams as of yet at least.

As for Hushovds salary, I think it is well deserved. He may not have the big classics wins but few riders are as consistent as him in getting results. He has won a stage in 8 out of his last 10 Tours and one of the years he didn't win a stage (2005) he instead won the green jersey.

I think that Degenkolb's salary will be measly in comparison with Thor's. Perhaps single figure percentage? Degenkolb is still very much an emerging talent. And considering how late in the season the team folded, how many definite offers were on JD's table?

Btw, HTC's budget was significant but not at the Katusha/Sky/BMC/Leopard level.

 

[Arnout]

if you compare it to football, basketball, formula 1 etc then there's very little money in cycling going around, gilbert, hushovd, contador deserve what they earn etc

That's not the point.

Although I like to think of cycling as an underpaid hard men sport where the riders actually care about their job. Which will be the case regardless with the amount of training required to be competitive.

Point is that revenue generation is strange in cycling. Teams rely for 90% on their sponsors. Sponsors are very situational and can be gone in an eye blink. There is no TV revenue (only for ASO, I think that is the only organization really making a profit out of cycling), no ticket income, two of the main revenue sources in for example football.

So that means teams rely on one pillar only. When that falls, there is nothing left. If there are some very big pillars stepping up, paying a lot and pushing out the smaller pillars, the sport becomes more centralized. This is worrying, but not the biggest part. The biggest pillars are usually the kind of organizations that are new to cycling and I don't really trust many of them. Of the teams that left the sport over the past couple of years, the most of them were new sponsors.

This means riders and staffs have to look for new teams. They still keep appearing at the moment, but what if they don't? Then we have the risk of no big pillars anymore and the small pillars being knocked out.

In my opinion reliability (Lampre, Liquigas, Euskaltel, Banesto legacy) is more important than money on this very moment. The two can go together, look at Rabobank for example. But somehow I don't trust some new teams that much.

 

[Waterloo Sunrise]

That's not the point.

Although I like to think of cycling as an underpaid hard men sport where the riders actually care about their job. Which will be the case regardless with the amount of training required to be competitive.

Point is that revenue generation is strange in cycling. Teams rely for 90% on their sponsors. Sponsors are very situational and can be gone in an eye blink. There is no TV revenue (only for ASO, I think that is the only organization really making a profit out of cycling), no ticket income, two of the main revenue sources in for example football.

So that means teams rely on one pillar only. When that falls, there is nothing left. If there are some very big pillars stepping up, paying a lot and pushing out the smaller pillars, the sport becomes more centralized. This is worrying, but not the biggest part. The biggest pillars are usually the kind of organizations that are new to cycling and I don't really trust many of them. Of the teams that left the sport over the past couple of years, the most of them were new sponsors.

This means riders and staffs have to look for new teams. They still keep appearing at the moment, but what if they don't? Then we have the risk of no big pillars anymore and the small pillars being knocked out.

In my opinion reliability (Lampre, Liquigas, Euskaltel, Banesto legacy) is more important than money on this very moment. The two can go together, look at Rabobank for example. But somehow I don't trust some new teams that much.

So they all go away and the money disappears. Then Thor will sign for less with whatever sponsors are left. I fail to see the problem. Who else should get the money when a sponsor invests, if not riders? Or would you simply rather they invested less in cycling?

 

[Arnout]

So they all go away and the money disappears. Then Thor will sign for less with whatever sponsors are left. I fail to see the problem. Who else should get the money when a sponsor invests, if not riders? Or would you simply rather they invested less in cycling?

I would like to know about longer term commitment. So that means rather investing spare money in feeder teams and such.

I do understand that teams want the big riders and its good that there are new teams in cycling that want to have exposure and so on, but let's say it doesn't surprise me that the majority of the transfers and feeds surrounding contracts happen in the new teams. That's not the direction cycling needs in my opinion as it will break down existing structures. Ultimately this might lead to longer established teams pulling out of the sport, not being able to cope financially on a year to year basis.

And I think that's bad for the sport as generally speaking those teams have a bigger commitment in the lower ranks (both of level and age) of cycling as a whole.

 

[hfer07]

if you compare it to football, basketball, formula 1 etc then there's very little money in cycling going around, gilbert, hushovd, contador deserve what they earn etc

+10000 we'll begin to call salaries out of control when a rider begins to make as much as what is required to set up a Pro team - which means 12 plus million Euros.....(and yet in my view, still below of what another sport stars make in their field)

 

[ksmith]

A lot of the stability for a team is getting "it," it being there name out there. Most non-cyclist nuts apart from Schleck, Contador couldn't name another cyclist to save their lives. They have heard of some teams though.

Now to the point. I went to the Mall today, in a sports shop they had some Livestrong stuff (calm down everyone). They also had Radioshack cycling jersies. To say I was gob smacked is putting it mildly. Cycling alongside the Winnipeg Jets in Winnipeg. In a Mall ! They probally paid money to put it there, but still.

Is this the way to go, stuff you can wear like a football, hockey shirt. Would this keep sponsers longer in the sport? Perk up more intrest, also helping the riders with more stability. I know they measure sponsorship against exposure levels, but if it sells for a present for Jimmy from Auntie!" It's" out there.

Just an observation, when was the last time you were walking the dog or whatever, and you saw someone with something cycling related on- without a bike between their knees. Not very often I bet.

 

[movingtarget]

if you compare it to football, basketball, formula 1 etc then there's very little money in cycling going around, gilbert, hushovd, contador deserve what they earn etc

I agree. Hushovd is a World Champion, multiple stage winner etc.......Gilbert and Contador would be considered superstars with the same success in other sports but whether the current world economics can support teams with more than one or two great riders is another thing. I wonder how much the average rider in a Spanish team is getting paid compared to Saxo and BMC etc.....considering Spain's financial woes. HTC with all of their success could not find a sponsor and that must worry most teams when they are getting towards the end of their sponsorship deals.

 

[rickshaw]

alternatives

So, we now have "cycling Capitalism", where market forces, supply and demand set budgets and riders' wages and anything goes.

What are the alternatives?

"Cycling Socialism" where all the teams have the same budget, the riders get the same pay, victories are shared equally and the bikes are all gray with Shimano Sora components?

A "Hybrid-ism", where the most rapacious, murdock inspired management tactics are controlled; where wild disparities of budget and wages are reduced with salary caps and revenue sharing?

Maybe what works in other sports will work in cycling too?

 

[Altitude]

That is precisely the point.

It is not the raw salary number that is salient. It is the percentage of the average team's rider budget that is salient. When a good but not great rider like Thor is getting, perhaps, 20% or more of the average team's rider budget then there is a problem.

Thor isn't a great rider? I'd hate to hear what you think of all the lowly riders who don't win the WC and multiple stages of Le Tour

 

[El Pistolero]

It's not about how much you win, but about what and how.

Thor:
2005: Green jersey at the Tour, stage win at the Vuelta.
2006: Prologue, yellow jersey and another stage win at the Tour, Points jersey at the Vuelta and a stage win, won Gent-Wevelgem.
2007: Stage win at the Giro and Tour(bit of a bad year for him)
2008: Stage win at the Tour.
2009: Green jersey and stage win at the Tour, won the Omloop het Nieuwsblad
2010: World champion and won the cobblestone stage at the Tour, Stage win at the Vuelta.
2011: Won 2 stages at the Tour in an impressive fashion in his rainbow jersey and wore the yellow jersey for a week.

He's consistent and a very safe buy for any team out there. He always performs in a season.

 

[uphillstruggle]

Maybe what works in other sports will work in cycling too?

What, you mean like the debt ridden structure that is currently destroying football?

@ Pistolero: I totally agree, Hushovd gets a few quality wins every year. And if Wiggins gets paid 1.5 then Thor deserves about the same.

 

[Damiano Machiavelli]

So, we now have "cycling Capitalism", where market forces, supply and demand set budgets and riders' wages and anything goes.

Put the adolescent Ayn Rand fantasy literature down and look at the real world. There is no capitalism in cycling. A bunch of the teams are funded for purposes of nationalism. Others are funded by decision makers who are cycling enthusiasts and are willing to spend money without regard to return on investment. Those teams are not subject to market forces. The teams that are subject to market forces are left to convince companies to sponsor them when salaries have been jacked up by those teams that are not subject to market forces. It is like a private business trying to compete with a government subsidized one.

Maybe what works in other sports will work in cycling too?

Other sports have rules to spread the amount of talent around the league so that there is a reasonable level of competition.

 

[Damiano Machiavelli]

Thor isn't a great rider? I'd hate to hear what you think of all the lowly riders who don't win the WC and multiple stages of Le Tour

Thor is no Cancellara or Contador or Valverde or Basso or Cavendish or ...

And if Wiggins gets paid 1.5 then Thor deserves about the same.

Who thinks Wiggins is getting paid equal to his worth? Up until this June he had no significant wins. Wiggins is a great example of what I am talking about. When it costs 1.5M to hire a a rider like Wiggins then the teams with average budgets will struggle to survive.

 

[Damiano Machiavelli]

If BMC does sign Gilbert, they’ll have close to 10 million Euro in annual payroll tied up in just five riders. That’s roughly Garmin’s total annual budget: That’s payroll for 27 riders and staff, plus all operational costs – the service course, travel, team bus, etc. Europcar runs on just $6.5 million Euro per year (budget figures are from L’Equipe‘s data, published during the Tour).

http://bicycling.com/blogs/boulderreport/2011/08/09/the-highroad-warning/

 

[greenedge]

Most cyclists deserve what they earn. However there could be a more even playing field