Financial Fair Play

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For those who maintain that race organisers have but two sources of income - sponsors and TV - have a look at Bergen's hospitality packages:

First half of the week: Premium package NOK 3,500 (€375) per day, Gold 1,775 (€190)
Second half of the week: Premium package NOK 6,550 (€700) per day, Gold 4,800 (€515)
Final day: Premium package NOK 7,490 (€800), Gold 5,500 (€590)
 
Back to the cap. USAC chairman and newly elected UCI Management Committee member Bob Stapleton - the ex High Road one, not the other - adds to his recent comments on the state of cycling's financial model:
“The haves and haves not have grown even further. You have a small group of wealth and teams who are dominating the sport and turnover in the mid- to lower-level teams that don’t have the money. I do think we need to level the playing field in terms of what it takes to be a competitive team. Even Alberto Contador said that budget caps and salary caps could make sense.”
On the subject of Froome's communist comment he appeared to offer the former economics student a lesson in the dismal science:
“I have to laugh at that a bit. That just presumes that money means innovation. It is absolutely the core of capitalism, that there are always better ways of doing things and always ways to make money go further. Maybe some economic lessons are in order for Chris Froome. I have significant respect for Chris Froome, but I don’t think that’s how communism works!"
Does he intend doing anything?
“I have a couple of actions. I’d like to see the stability improve for both women’s and men’s racing. I have been a passionate supporter of women’s cycling over the years and I hope to find ways to engage and develop women’s cycling. Take what has worked for the men and avoid what hasn’t worked. It looks strong right now, but it also has stability issues."
 
Re:

fmk_RoI said:
For those who maintain that race organisers have but two sources of income - sponsors and TV - have a look at Bergen's hospitality packages:

First half of the week: Premium package NOK 3,500 (€375) per day, Gold 1,775 (€190)
Second half of the week: Premium package NOK 6,550 (€700) per day, Gold 4,800 (€515)
Final day: Premium package NOK 7,490 (€800), Gold 5,500 (€590)
They may have had expensive hospitality packages on sale, but did they fill all six 'fanzones' they had spread around the course, throughout the nine days of the event? According to CN, it's not clear:
The oil and gas industry, from where they expected to source the bulk of their sponsorship revenue, had fallen on hard times, and they had to look elsewhere and downgrade their projections. They knocked the 21 million NOK off the budget and decided not to go ahead with certain outlays, such as removing all the speed bumps from the race route.

As well as a shortfall in sponsorship revenue, it is feared the organiser failed to sell sufficient hospitality packages for the nine-day event – a key source of income given the majority of fans watch for free.
Is also worth pointing out here that the organisers got slapped with a bill of NOK 15 million - €1.4 m - for security. While some FUD merchants have tried to talk up cycling's 'unique' exposure to the threat of terrorism, it seems the real threat might actually be financial.
 
Wang Jianlin - The Next Saviour of Cycling™ dumps VeloNews. Cycling's third most popular website will now be co-owned by one of the Outer Limits writers - the very people who portrayed Wang as cycling's next saviour - so expect more screeds to fill VN's screens telling us cycling's sky is falling in without revenue sharing, spending caps and franchises for life.
 
Franchises for life would have saved Crapac from implosion,says JV:
If there is a guaranteed entry into those races in the lifetime of the business, then at that point you have created a limited market, you have created scarcity and when you create scarcity sponsors come in and gravitate towards that scarcity."

"What we have now is if you come up with 20 million pounds you can start your own team, there is no scarcity of the commodity," added Vaughters. "It's just a matter of who can scrounge up the money, whether they come up from a very disreputable source or a reputable source, it doesn't matter."
The notion of money coming from disreputable sources: we all know who he's talking about. Anonymous donors on crowd-funding sites, right?

Franchises for life, of course, were not the real root of Crapac's problem. That was all down to bad management:
Much of that stress seemed to be of Vaughters’s own creation. He’d been relying on some creative accounting — to put it kindly — for the last few years to effectively inflate the team’s budget beyond its actual means. Every team in the WorldTour has a bank guarantee with the UCI, so that if the team folds, salaries continue to be paid for about three months. Slipstream had been leaning on this guarantee, only funding itself through October of each year. If it didn’t find a sponsor by then, it would run out of money and the UCI would pay salaries through the end of the year.

“It allowed me to get guys like Rigo [Urán] and Sep [Vanmarcke] and Taylor Phinney,” Vaughters says. It also meant that the team was $3 million in the hole at the end of every season. Vaughters says this debt was not part of the $7 million he needed to keep the team alive, but it was debt that EF, or any new sponsor, would have to eventually pay down.
 
With JV's Lost Boys pocketing just fourteen grand (plus the fifty k appearance fee) for three weeks of limping around France - that's less than Lawson Craddock pulled in with his Bad Luck Bears story for that velodrome - we're probably due a fresh blast from the financial wizard on why cycling needs to play fair, financially. He's parked revenue sharing. He's accepted a salary cap won't work. What gem do you think he'll come up with now, crowd-funding?
 
http://inrng.com/2018/09/team-sky-budget-2017/


Team Sky’s budget for 2017 was £34,496,000, up 11% on the previous year as the screengrab from their filed accounts shows. It was equivalent to US$46.2 million or €38.6 million.
[...]
Team Sky’s budget for 2017 was £34.5 million, their highest amount and by extension the biggest ever seen in the World Tour.
Compare that to teams like Sunweb, LottoNL, EFD, AG2R, Movistar working with anywhere from €10 to €20 million. Kind of surreal.
 
May 26, 2010
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Re:

LaFlorecita said:
http://inrng.com/2018/09/team-sky-budget-2017/


Team Sky’s budget for 2017 was £34,496,000, up 11% on the previous year as the screengrab from their filed accounts shows. It was equivalent to US$46.2 million or €38.6 million.
[...]
Team Sky’s budget for 2017 was £34.5 million, their highest amount and by extension the biggest ever seen in the World Tour.
Compare that to teams like Sunweb, LottoNL, EFD, AG2R, Movistar working with anywhere from €10 to €20 million. Kind of surreal.
That is a lot of doping and motors being bought!
 
Wang Janlin's Wanda Sports group - operators of a number of bike races, including the Tour de Suisse, the Chinese stage race, and that German one day one - floated on the NASDAQ last week.

Things did not go well.

They originally wanted to sell 33m shares at $12-15 ($400-500m).

They reduced that target to 28m shares at $9-11 ($250-300m).

They actually sold 23.8m shares at $8 ($190m).

Those shares then fell and are now trading at $3.83 ($91m).

That's quite a poor performance from an entity some saw as being the saviour of cycling...

(As this sometimes helps: that $91m is less than twice Sky's 2018 revenue in dollars, $50.8m.)
 
Those shares then fell and are now trading at $3.83 ($91m).
That's quite a poor performance from an entity some saw as being the saviour of cycling...
(As this sometimes helps: that $91m is less than twice Sky's 2018 revenue in dollars, $50.8m.)
Hmm... besides Ironman, I wonder what is the back-story to this. Seems like a big bet on growth of triathlon in China, and analysts were not convinced. The Ironman is a huge asset, but did they buy it at a good price, all things considered, and why would the IPO be worth speculating on
 
The Ironman is a huge asset, but did they buy it at a good price
Wang Jianlin didn't buy anything at a good price, the man was on a spending spree, paying silly money for anything that caught his eye. He originally paid $1.2b for Infront and $650m for WTC, the triathlon part of the empire, and he's added a lot to that with the acquisition of things like Lagardère, the Rock 'N' Roll series etc.
I wonder what is the back-story to this
There are several elements here. First, that Wang's using the money to pay off debts, rather than expand. Second, that while Wang seems to be somewhat back in favour within China, the period of his alleged house arrest and subsequent forced sell-off of international property assets still worries people. Third, there's Trump and his trade war. Which brings us to fourth, and the devaluation of the yuan shortly after Wanda's IPO, which is probably the key driver forcing the share price down to $3+.

Even the Outer Limits bros - who championed Wang from the get-go and also took Tim Kay's Team China in Your Dreams plan seriously - have noticed these things, so imagine what intelligent Wall Street investors must be thinking.

Wang is still a player domestically, he's still got the Chinese stage race and he's still funding development and he's still partnering with the UCI. All of that finds favour politically. But is he the Daddy Moneybags he once was thought to be, capable of buying ASO and RCS and whatever he expressed even a passing interest in?
 

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