Changing the Business Model of Pro Cycling

[mrhender]

http://www.theouterline.com/changing-the-business-model-of-pro-cycling-introduction-3/

Another piece from theouterline...
Posted in the clinic but is not at all limited to that....

What are you thinking??

The leaders of pro cycling have often declared that it is time for change – first in 1988, after the Delgado allegation broke, and in 1998 with the Festina affair (and what we now know from the French Senate report). Change was again demanded in 2006 and 2007, with the Fuentes, Landis and Rasmussen fiascos, and the need for transformation within the sport perhaps culminated in the USADA Reasoned Decision and Armstrong implosion in 2012. But this time pro cycling really does have to change. With a new UCI administration and a changing attitude in the peloton, the sport has its best chance right now to truly “reboot” the whole system – to completely shed itself of the legacy of scandal and weak governance; to put into effect the changes that have been promised so many times, but never really delivered.

One of the most critical issues to address is the basic Financial Foundation of Pro Cycling: what can be done to strengthen and diversify the manner in which pro cycling generates revenue – and how it spends, reinvests, and shares those dollars. Pro cycling can no longer afford to rely solely upon often fickle and unpredictable commercial sponsorship for almost the entirety of its financial base. Despite the UCI’s report last year on the health of the sport – and various superficial private studies touting the value of sponsorship – it is still very difficult to identify, attract and retain serious and committed long-term sponsors of pro cycling. The rapid-fire entry and exit of Belkin as a name sponsor is only one example of this challenge.

And in terms of revenue generation, it is impossible for the sport to progress without addressing its “elephant in the room” – more creative and compelling TV coverage, in order to generate more lucrative broadcast licensing. In the proven mold of other successful professional sports, cycling must then develop a system for sharing that revenue between teams and organizers to maximize the overall growth of the sport. Even though the potential revenues today may be a pittance compared to other sports, it is only by creating a mechanism to share these revenues that team owners will be able to start to build true long-term value in a franchise. And finally, it is only when the potential for long-term value exists that there will start to be a correspondingly greater economic incentive to invest in the future, and to protect the integrity of the sport.

Another key aspect of the sport which needs to be thoroughly reexamined and revamped is the Competitive Structure and Schedule. Pro cycling should move towards a modified franchise model, consisting of two top leagues wherein individual teams could be advanced or relegated depending upon their annual performance, similar to the European football leagues. Despite likely outrage from certain population centers, the sport should strive to significantly shorten and revise its calendar – currently teams are stretched too thin by an absurdly long season, and obliged to field competitive squads at overlapping races (many of which are themselves struggling with economic survival). As a result, too many athletes find themselves as being treated as “cannon fodder” – constantly shipped around the world to race in relatively insignificant events, and increasing the stress and pressures on young riders to perform in an ultimately unproductive and unhealthy way. The restructuring of the teams into “leagues” could provide the spark to coherently reorganize the calendar, guaranteeing teams with participation throughout the season, and insuring that the top racers participate in all the major events. In turn, this will improve the economic and sporting opportunities for both teams and organizers. Peripherally, this will also open up new opportunities to expand the under-served women’s calendar, and will provide more opportunities to identify, incubate, and polish talented riders.

It is also critical for pro cycling to develop a much stronger system of Independent Testing and Certification, and a New Ethical Standard. The UCI cannot simultaneously be responsible for both promoting as well as regulating the sport. Athlete drug testing must be completely delegated to an independent, scientifically-rigorous third party – one which would be funded at the necessary level by the sport’s stakeholders. Cycling definitely needs to improve the analytical testing protocols, as well as the hearings and appeals process, but once guilt is established, individual riders, managers, trainers, coaches and perhaps entire teams should face a clear set of punitive sanctions – with potentially severe economic losses to team owners and sponsors. This would create a powerful incentive for the teams, and especially the riders – who live together virtually 24/7 – to police themselves. Over time, the current biological passport system should be molded into an independently-managed certification process – similar to the types of external approval and certification systems that have strengthened and transformed many other businesses.

Finally, the Oversight and Regulation of the Sport must be carefully examined and perhaps reinvented. There is a growing consensus that the current structure of the UCI may no longer be the proper governing entity for professional road cycling. Its purview is too broad, its management style too opaque and its relationships too fraught with potential conflicts of interest; as mentioned, the UCI cannot both promote and police the sport. The nature of the interaction between the UCI and the World Anti-Doping Agency (WADA) and the various national Federations must be clarified and simplified; overlapping or ambiguous lines of authority can no longer be tolerated. And in fact, it may be time to consider spinning off a new affiliated, but independent governing agency

 

[DirtyWorks]

Meh.

The UCI likes the business model they are developing. There's no way they are not managing anti-doping. The IOC would panic.

As for the claim the season is too long, it's not. Riders don't do every race over the whole season.

 

[Arnout]

It's the same old same old again.

Firstly: revenue streams are worth looking into for any industry. I don't see significant signs that sponsorship is declining in either value or longevity, in fact I'd say more money is being invested in cycling than ever before. Trying to proof that sponsors are staying in the sport for shorter periods of time by tossing the name Belkin around is just bone idleness and insulting to the reader, that's not how you back up statements.

Secondly: race calender. This is another obsessive idea that keeps rearing its ugly head. I don't see any reason why that would be a good idea. The longer the race calender, the more chance for lesser riders to be in a position where none of the team leaders are in the race at all or in top form.

The one thing I'd, in the very long run, like to see is a development in the sports on multiple continents, with own top tier teams and races on the WorldTour level, but that is very much depending on the demand side (and the development of Asian/(Latin) American interest and economies).

 

[More Strides than Rides]

As a fan, I ask myself if I want cycling to grow sport. It seems it has security, which is just fine for me. Major league sports are over-tabloided, over reported, which makes them over funded and attract over-the-top personalities. Even now I'm very uncomfortable with the growing commercialization of the NCAA.

As a runner, the same thing, pandering to the mainstream, deconstructs the top of the sport. There was huge uproar last year as the Competitor Group (Rock-n-Roll race series) eliminated prize money and travel stipends in favor of "growing the base of the sport." (They have since reinstated money for elite athletes). More and more "Color-runs" dilute what people think of when they think of elite running.

Point being, as a fan, I'm comfortable with where cycling is at in its popularity. I think that the finances of the sport are secure, but anchored by the dishonesty of doping and corruption, but thats for a different thread.

 

[Parker]

There's an old Irish joke about a family travelling in the Emerald Isle. They're lost so they stop and ask a local farmer how to get to Kilkenny, and he replies 'Well I wouldn't start from here'

And that sums up the financial situation cycling is in. It's a mess, based on tradition and history rather than practicality. And the various stakeholders will protect the slice of the pie rather than seek to make the pie bigger. Unless an Ecclestone type comes along and buys up all the intellectual property, changing it will be like turning an oil tanker in a small lake.

 

[FoxxyBrown1111]

Ecclestone

Thanks god there is none (yet), even tough JV and this russian guy try to change cycling to a profit-only-business...

Cycling is good as it is. The salaries are o.k., entrance is (mostly) free, doping controls are at least applied and sometimes work.

If a guy like this phuck Eccelstone comes around, well... just have a look how he destroyed F1, and made it unpayable for the average Joe.

Even tough Benotti and others think cycling is like WWF, they don´t know how bad other sports are. Cycling is far from it.

I take a Cookson, even McQuaid a tousand times over the Eccelstones and Tinkoffs of this world...

 

[Parker]

Thanks god there is none (yet), even tough JV and this russian guy try to change cycling to a profit-only-business...

Cycling is good as it is. The salaries are o.k., entrance is (mostly) free, doping controls are at least applied and sometimes work.

If a guy like this phuck Eccelstone comes around, well... just have a look how he destroyed F1, and made it unpayable for the average Joe.

You can knock Ecclestone all you like. And I'll agree with you for most of it. But the fact remains that he made F1 the business it is now. And if you want cycling's business plan to move from its current moribund situation (in whatever direction you please), it is going to need someone like Ecclestone. Someone who will put profit ahead of heritage.

You may not like it. I may not like it. But that's what will be needed for proper change.

 

[FoxxyBrown1111]

You can knock Ecclestone all you like. And I'll agree with you for most of it. But the fact remains that he made F1 the business it is now. And if you want cycling's business plan to move from its current moribund situation (in whatever direction you please), it is going to need someone like Ecclestone. Someone who will put profit ahead of heritage.

You may not like it. I may not like it. But that's what will be needed for proper change.

Yeah he made F1 a great business for rich people. But true racing fans turned away a long time ago. Including me.

BTW, I don´t want and don´t care if cycling gets to be a better business. I watch it for the sport of it, not if some guys can afford more Ferraris after they sucked the hard earned money from the average fan...

Cycists earn good money, so everything is ok for them, and ok for us (free of charge).

 

[Parker]

Yeah he made F1 a great business for rich people. But true racing fans turned away a long time ago. Including me.

BTW, I don´t want and don´t care if cycling gets to be a better business. I watch it for the sport of it, not if some guys can afford more Ferraris after they sucked the hard earned money from the average fan...

Cycists earn good money, so everything is ok for them, and ok for us (free of charge).

I'm not saying it should be done or that I want it to be done. But its the only way for true revolution.
I'd rather cycling bumbled along as it is now but jettisoned some of its weaker history.

 

[FoxxyBrown1111]

I don´t get the point of the clinic anymore. If they catch high profile dopers it´s unjust. If they don´t catch them, they don´t do their job (or protect certain riders).

I mean the whole thing is basically for free if you endure commercial breaks. It´s fantastic action... All good. Humans arn´t getting better. So Benotti etc. can wait for heaven in cycling... it won´t happen. It´s the real world with good guys and bad guys.

From now on it could only get worse if the profit-max guys take over...

 

[Parker]

I don´t get the point of the clinic anymore.

The point of the Clinic is for people how are most interested in doping to talk about doping and not infect the other forums with it (that's why it was created in the first place). And it has become a place for people who want to talk about doping and little else, and to maintain that it has become a place to attach doping to whatever is current in cycling. It's also a place for cynics to display their intellectual superiority without much opposition.

 

[MarkvW]

I'm not saying it should be done or that I want it to be done. But its the only way for true revolution.
I'd rather cycling bumbled along as it is now but jettisoned some of its weaker history.

Either the federations are disempowered or a pro league breaks away. I can't see any other avenues to change.

 

[kingjr]

I don´t get the point of the clinic anymore.

It's where doping talk goes. That's the one and only point. It doesn't matter whether it's high quality doping talk or not.

 

[Parker]

Either the federations are disempowered or a pro league breaks away. I can't see any other avenues to change.

I don't think the federations have much power. ASO has the power. The breakaway league is the Ecclestone option I mentioned.

 

[FoxxyBrown1111]

If the clinic was about dope only...
But it´s not. For many posters here, cycling is hell in general. Cookson bad, MacQaid bad, Dopers? everybody, business: bad, power to less = donkey from racehorse, power to high = racehorse from donkey, action lame = more doping, action big = the same more doping...
Cycling is WWF, and so on, and so on...

Why isn´t this place ending in a mass suicide by all the depressive posts that come here?

 

[FoxxyBrown1111]

pro league breaks away.

In a way I look forward such thing... but only to see it fail.
LOL: Tinkoff Tour of Russia presented by Anheuser Busch now live on pay per view cable station XY3ZUL... What a farce that would be. Everybody would look back to 2014 and think of it as the good ol cycling days.

 

[DirtyWorks]

world tour road
Cycists earn good money, so everything is ok for them, and ok for us (free of charge).

Fixed that for you. The UCI actually does a terrible job managing disciplines other than men's road.

How many views does a Danny mcaskal (sp???) Get and there's no awareness of trials. The discipline is made for video.

 

[MarkvW]

I don't think the federations have much power. ASO has the power. The breakaway league is the Ecclestone option I mentioned.

The federations choose UCI management.

ASO was sucking wind a few years back. Right now it has the power, but I suspect successful bike racing promotion is a very delicate thing. Building much on the TdF alone is probably a risk that nobody wants to take. But a breakaway league would need to work a deal with the ASO that's a better deal than ASO already has with the UCI. That seems like it would be a problem.

 

[FoxxyBrown1111]

Fixed that for you. The UCI actually does a terrible job managing disciplines other than men's road.

How many views does a Danny mcaskal (sp???) Get and there's no awareness of trials. The discipline is made for video.

OK. I should have said men road racing only. OTOH, I guess most and the OP post was about road racing anyway... And that´s as good as it can get, given it´s run and practiced by humans, not angels.
Circa 1.000 pros who can live off it, and the top being millionares. Team owners get their cut either, otherwise they wouldn´t run teams, and sponsors get year around advertising for hours for free (JV is right here, it´s the best ROI a business company can ask for)... Nothing needs to be changed, but a true test for blood and gene doping should be found.
I kind of find it sad JV want´s to have it run like the NFL. Does he know what he is talking of? The athlets union dictates what to test for and what not, fans are milked to a great extend and are peppered with rubbish commercials and overpriced memorabilia... But in the end of the day, they (NFL) also only afford to pay circa 1.000 players, even though with higher salaries...

 

[Arnout]

Thanks god there is none (yet), even tough JV and this russian guy try to change cycling to a profit-only-business...

Cycling is good as it is. The salaries are o.k., entrance is (mostly) free, doping controls are at least applied and sometimes work.

If a guy like this phuck Eccelstone comes around, well... just have a look how he destroyed F1, and made it unpayable for the average Joe.

Even tough Benotti and others think cycling is like WWF, they don´t know how bad other sports are. Cycling is far from it.

I take a Cookson, even McQuaid a tousand times over the Eccelstones and Tinkoffs of this world...

This pretty much. Think of all the terrible ideas voiced by these breakaway league patrons: a multitude of 4-day races with one flat stage, one mountain stage, one hilly stage and one time trial, probably on circuits, was one of their first ideas.

I rather take the diversity of the sport as it is. It might not be perfect and it's never wrong to try to make it better, but making a commercial show of cycling is not what I want.

 

[Benotti69]

.........

Even tough Benotti and others think cycling is like WWF, they don´t know how bad other sports are. Cycling is far from it.

I take a Cookson, even McQuaid a tousand times over the Eccelstones and Tinkoffs of this world...

Actually i do realise how bad other sports are. Justin Gaitlin doper has been made IAAF athlete of the year FFS!! Ryan Giigs and Paola Maldini played top level football 7 years past their sell by dates....the Williams sisters look like men!!!

The problem with cycling as far as UCI is concerned is it not very good at concealing its dark side. Cookson has come in not to clean up cycling but to pull a veil over the doping and not do it too obviously so that everyone can see a veil.

An Ecclestone figure would put far more money into his own pocket to the detriment of the sport. F1 is a rich elite only sport, where drivers have to be sponsored from a young age and treated as investments.

Cycling 1st port of call in the betterment stakes would be independent fully funded anti doping that works. After that it wouldn't be hard to figure out how to make the sport better. But too many little dictators in the sport who currently dont like being told what and how to do it.

As for JV, he would love nothing better than to make cycling a bigger deal and not necessarily a better one.

 

[FoxxyBrown1111]

This pretty much. Think of all the terrible ideas voiced by these breakaway league patrons: a multitude of 4-day races with one flat stage, one mountain stage, one hilly stage and one time trial, probably on circuits, was one of their first ideas.

I rather take the diversity of the sport as it is. It might not be perfect and it's never wrong to try to make it better, but making a commercial show of cycling is not what I want.

Absolutely. They can americanize (I actually like the NFL even w/all it´s dark sides) and russianize their sports, but I strongly hope they fail to destroy this original beautiful european traditional sport. Especially this Tinkoff. He stinks beyond help. Actions & talkings by him speak volumes. One of the biggest a-holes walking around in cycling. That´s quiet an accomplishmend given all the shady guys being in there...

 

[FoxxyBrown1111]

Actually i do realise how bad other sports are. Justin Gaitlin doper has been made IAAF athlete of the year FFS!! Ryan Giigs and Paola Maldini played top level football 7 years past their sell by dates....the Williams sisters look like men!!!

The problem with cycling as far as UCI is concerned is it not very good at concealing its dark side. Cookson has come in not to clean up cycling but to pull a veil over the doping and not do it too obviously so that everyone can see a veil.

An Ecclestone figure would put far more money into his own pocket to the detriment of the sport. F1 is a rich elite only sport, where drivers have to be sponsored from a young age and treated as investments.

Cycling 1st port of call in the betterment stakes would be independent fully funded anti doping that works. After that it wouldn't be hard to figure out how to make the sport better. But too many little dictators in the sport who currently dont like being told what and how to do it.

As for JV, he would love nothing better than to make cycling a bigger deal and not necessarily a better one.

So basically we agree. All good then. Leave cycling as it is.
Only difference is you think all riders are bad, thus dopers, while I am sure there are honest ones around. And I don´t mean only those finishing in the groupetto...

 

[DirtyWorks]

This pretty much. Think of all the terrible ideas voiced by these breakaway league patrons: a multitude of 4-day races with one flat stage, one mountain stage, one hilly stage and one time trial, probably on circuits, was one of their first ideas.

I rather take the diversity of the sport as it is. It might not be perfect and it's never wrong to try to make it better, but making a commercial show of cycling is not what I want.

And you know, the UCI occasionally tries to create made for tv racing in mountain biking and they end up killing them even when they have an audience. I don't think it would work either.

The current business model then is to personally benefit from being a high-ranking UCI person while trying to sell races to governments like they have been doing recently. FIFA certainly works in a similar manner.

#############

FWIw, the history of the UCI goes roughly as starting as a passive rules-making body for all the national federations, with the UCI welcoming promoters.

About the time of Hein Verbruggen as President, the UCI tries to kill off the promoters by increasing costs and making up bad official reviews of high-ranking events to lower their rank over time. The follow-on effect was to destroy continental-level cycling economy, consolidating revenue at the UCI.

This is where Global Cycling Productions was supposed to come in and take over complete control of the calendar except for ASO, RCS (not for long) and the Belgian coop that runs the Spring Classics.

Meanwhile, it's understood UCI execs are making huge money under the table as 'consultants' so a promoter gets their event a very high rank. (See Keirin bribe scandal, Tour of California more important than the Giro)

So, with GCP going away, there's some changes not yet known coming, with a much smaller calendar on the horizon likely accelerating 'consultant fees' while the UCI tries to consolidate broadcast rights. They seem to have them (???) in Colorado and California.

The thing they must still be working on is consolidating broadcast rights. It's a topic Hein discussed at length in one recent interview. Also don't forget someone in the UCI still runs a licensing organization for the phrase "tour of" with no direct connection to the UCI. You'll notice the Colorado WT event doesn't use Tour of Colorado.


I'm not sure what the exact model should be, but it seems to me a hybrid where the UCI is a rules-making organization protecting the integrity of their events that sells media rights to promoters events seems like a good model to me as geographic broadcast boundaries are going away. The teams down to the riders need to earn some media royalties too.

The rest of cycling's disciplines seem to experience benign neglect.

 

[Watt Matters]

And you know, the UCI occasionally tries to create made for tv racing in mountain biking and they end up killing them even when they have an audience. I don't think it would work either.

The current business model then is to personally benefit from being a high-ranking UCI person while trying to sell races to governments like they have been doing recently. FIFA certainly works in a similar manner.

#############

FWIw, the history of the UCI goes roughly as starting as a passive rules-making body for all the national federations, with the UCI welcoming promoters.

About the time of Hein Verbruggen as President, the UCI tries to kill off the promoters by increasing costs and making up bad official reviews of high-ranking events to lower their rank over time. The follow-on effect was to destroy continental-level cycling economy, consolidating revenue at the UCI.

This is where Global Cycling Productions was supposed to come in and take over complete control of the calendar except for ASO, RCS (not for long) and the Belgian coop that runs the Spring Classics.

Meanwhile, it's understood UCI execs are making huge money under the table as 'consultants' so a promoter gets their event a very high rank. (See Keirin bribe scandal, Tour of California more important than the Giro)

So, with GCP going away, there's some changes not yet known coming, with a much smaller calendar on the horizon likely accelerating 'consultant fees' while the UCI tries to consolidate broadcast rights. They seem to have them (???) in Colorado and California.

The thing they must still be working on is consolidating broadcast rights. It's a topic Hein discussed at length in one recent interview. Also don't forget someone in the UCI still runs a licensing organization for the phrase "tour of" with no direct connection to the UCI. You'll notice the Colorado WT event doesn't use Tour of Colorado.


I'm not sure what the exact model should be, but it seems to me a hybrid where the UCI is a rules-making organization protecting the integrity of their events that sells media rights to promoters events seems like a good model to me as geographic broadcast boundaries are going away. The teams down to the riders need to earn some media royalties too.

The rest of cycling's disciplines seem to experience benign neglect.

Much of this reminds me of the failed commercial model experiment of Cycling Australia over the last few years, which has ended up putting CA $millions into the red and a few people must have done very nicely out of it thank you very much.

Now they've been bailed out by govt and state federations.

http://www.cycling.org.au/News/All-...d-ASC-welcomes-new-board-and-recapitalisation