Financial Fair Play

[King Boonen]

So how exactly are teams getting a share of TV revenue from races that has no TV coverage or just a local highlight package in which the station doing that is NOT paying to do it?
Also this appearance fee is coming from the overall amount the organizers need to ORGANIZE the race in the first place which INCLUDES all the sponsors they have for that particular race. This has NOT changed how races are organized, just INCREASED the amount that the organizer needs to put on a race in the first place.

No Fing S*^& cycling isn't the NFL. It needs a DIFFERENT way to bring in revenue. It's closer to auto racing, which oh by the way, teams there also do NOT get a share of the TV contracts. Or is that a fact you are somehow missing as well?


Again cycling teams are WAY behind on merchandising. By the way I AM familiar with the teams' website and their merchandising is very HIGHLY lacking to mostly non existent.

Thanks for sharing literally NOTHING that disproves a single thing I actually said. I'm not entirely sure you actually read what I said in the first place. So keep going with your NON answer and not adding anything at all to the conversation.

Where do you think the prize money comes from?

 

[PrimusPilus12]

Where's the hurt? What is actually wrong with the model?

I believe you started this thread listing the issues, with some excellent points. I don't understand what you are now saying. Is there a problem or not?

Again, you'll need to explain that. They earn their sponsorship revenue. They earn whatever additional revenue they can come up with.

- The fact is, the revenue is inconsequential, aside from sponsorship revenue, which is very very likely net net. As for additional revenue, an online store selling bib shorts is not a revenue model.

There are dozens of TV deals. And no teams are operating at a loss.

- That proves the point. The deals are fractured and inconsequential. one or two deals indicate financial leverage and strength. These deals are not large deals like other sports. Again, the start of this thread indicates there are issues; I would attribute one of tese issues to lack of tv deals. In addition, if teams are not operating at a loss, why do they regularly fold, change sponsorships, etc. There is less money in the sport than many think.

The selling equity model is not a good way of funding the sport. It is a fantastic way of rewarding team bosses. And of inviting in more of those "unsavoury types" many seem to object to (witness the world of soccer). At the moment, teams do have an asset they can sell: Pat Lefevere cashed most of his in, the estate of Andy Rhis cashed their's in, Jonathan Vaughters cashed his in, Igor Makarov appears to be about to cash his in: a World Tour licence is not without value. You just have to sell it at the right moment. A "low" market is never the right moment, you can really only do it in a "high" market (demand > supply)
[/QUOTE]

So there is no revenue, no tv revenue in a meaningful sense that generates dollars, it is difficult to raise revenue through equity....yup, as per your first question Is there a problem or not/". I would say there is.

 

[PrimusPilus12]

Where do you think the prize money comes from?

If it comes from the TV deals, then it would highlight the problem cycling has. As you definitely know, prize money has never been meaningful.

 

[fmk_RoI]

I believe you started this thread listing the issues, with some excellent points. I don't understand what you are now saying. Is there a problem or not?

I offered some historical context. If you believe there is a problem - you suggest there is when you use the word hurt - you should be able to explain what that problem is.

The fact is, the revenue is inconsequential, aside from sponsorship revenue, which is very very likely net net. As for additional revenue, an online store selling bib shorts is not a revenue model.

Across the full range of pro teams, WT and ProConti, the last UCI figures released - about seven years ago, I think - showed that the forty-or-so teams raised about 5% of their income from non-sponsorship revenue. In 2014, Sky had that figure at closer to 15%. That is not inconsequential. If Sky can do it, others can.

That proves the point. The deals are fractured and inconsequential. one or two deals indicate financial leverage and strength. These deals are not large deals like other sports. Again, the start of this thread indicates there are issues; I would attribute one of tese issues to lack of tv deals. In addition, if teams are not operating at a loss, why do they regularly fold, change sponsorships, etc. There is less money in the sport than many think.

Yes, there is less money in the sport than many think. Yet still you think that TV deals can save the day. But look at current TV deals. Look at the package of races ASO sells to EBU and tell me how many of those races actually make their way to the UK's EBU-affiliated TV channels. If people won't even show what's already packaged, why should we believe that an even bigger package of events is going to solve anyhing?

As for the teams folding regularly: produce the list. Please, please, please: produce the list. It's a favourite line of the doomsayers, that teams are regularly folding, it ought be possible to back it up with a list at this stage.

So there is no revenue, no tv revenue in a meaningful sense that generates dollars, it is difficult to raise revenue through equity

There is patently revenue: teams aren't chartities, staffed on and off the road by volunteers. So your argument falters at the first hurdle.

Is there a problem or not/". I would say there is.

Saying there is a problem is easy. Try telling us what the problem is.

 

[fmk_RoI]

Where do you think the prize money comes from?

Just to offer some context to that question:

• at the start of the 80s, before the TV revenue "boom", the Tour's total prize fund stood at about €250,000
• by the start of the 90s, it had grown to about €1,500,000
• at the start of the noughties it had reached about €2,500,000
• a decade later, it was €3,500,000

 

[fmk_RoI]

So how exactly are teams getting a share of TV revenue from races that has no TV coverage or just a local highlight package in which the station doing that is NOT paying to do it?

Some take a myopic view of revenue, obsess about TV revenue and for some reason ignore all other revenue organisers raise. Reality is not some people. Reality is that revenue sharing exists today, and in the revenue sharing that exists today a portion of a race's total revenue is shared with teams through a UCI-mandated appearance fee (and - to be clear - we're talking top level races here, as noted previously this debate does not concern itself with the problems of the sport in the lower divisions). If a race had no TV revenue, it would still be paying an appearance fee, it would still be sharing revenue through the appearance fee.

It's closer to auto racing, which oh by the way, teams there also do NOT get a share of the TV contracts. Or is that a fact you are somehow missing as well?

Serious question for folk in general here: how are you supposed to debate with someone who throws such a blatant lie at you? How? Am I supposed to pretend that Formula 1's Concorde Agreement is a figment of my imagination? Am I supposed to pretend that I am somehow unaware of what happens in F1, the sport cycling is most often compared to (and which the Rapha report wants to turn cycling into)?

 

[King Boonen]

If it comes from the TV deals, then it would highlight the problem cycling has. As you definitely know, prize money has never been meaningful.

I was actually referring to motorsport specifically, but prize money handed out by anyone is going to come from a few sources, one of which will be TV revenue. Are we going to go back over the well trodden ground of how "bad" cycling TV deals are..? I'm sure this has been discussed, at length, before.

 

[King Boonen]

Just to offer some context to that question:

• at the start of the 80s, before the TV revenue "boom", the Tour's total prize fund stood at about €250,000
• by the start of the 90s, it had grown to about €1,500,000
• at the start of the noughties it had reached about €2,500,000
• a decade later, it was €3,500,000

I was more referring to the comment about teams not getting anything from the TV revenue in motorsport, but I see you've already brought that up.

Serious question for folk in general here: how are you supposed to debate with someone who throws such a blatant lie at you? How? Am I supposed to pretend that Formula 1's Concorde Agreement is a figment of my imagination? Am I supposed to pretend that I am somehow unaware of what happens in F1, the sport cycling is most often compared to (and which the Rapha report wants to turn cycling into)?

All you can do is point out the errors and misunderstandings. I think many people only think of revenue sharing in terms of someone handing over cash directly to someone else. Paying costs, prize-money etc. isn't seen as revenue sharing, even if the money to do this comes from the revenue stream being discussed.

 

[simoni]

It seems to me that we should more worry about races going to the wall than teams.

Not sure if this summary has been shared before but here it is again. A major race like the Dauphine is marginal from a financial point of view. At present I simply don't believe there is all that much revenue to share (from non direct sponsorship sources),

Whether that revenue can be raised is another matter. Can organisations such as ASO do better? Well, the tour does well so you'd think they'd know how to go about it with their other races too. But evidently they struggle.

https://inrng.com/2017/11/amaury-sport-accounts-finances/

 

[fmk_RoI]

It seems to me that we should more worry about races going to the wall than teams.

This is an important point and cuts to the heart of the whole debate around cycling's "failing" economic model: we look at it only from the point of view of the teams, we ignore the race organisers.

Daam Van Reeth, he managed to edit a whole book on the economics of professional cycling without once offering anything on the organisers' perspective (he also totally ignored women's racing). Or look at the contempt for race organisers shown by the Rapha Roadmap, which reduces races to calendar slots, shifts the UK's Surrey Classic to February, wholly ignoring the fact that that race uses the sportif model as a way of raising funds.

Why are race organisers marginalised in the debate? Because the debate is not really about money: it is about protecting the teams, it is about allowing the teams to take control of the sport by driving the race organisers out (and stop new teams coming in and driving them out). At the heart of the sport there's a century-old power struggle between race organisers, teams, and the UCI. Power traditionally has rested with the race organisers. Hein Verbruggen tried to put the UCI in the driving seat, Vaughters and co are trying to put the teams in control.

The campaign so far - certainly in the form it has existed since Vaughters first floated his 10 Point Plan - has been brilliant in the way it has demonised the race organisers and made saints of the teams, even as all their plans call for the destruction of lesser races and lesser teams.

A major race like the Dauphine is marginal from a financial point of view.

I would call for caution when it comes to looking at the reported results of individual races within the ASO empire. There are shared sponsors, meaning the intricacies of transfer pricing - how much of a sponsorship or TV package you apportion to this race and how much to that - render somewhat meaningless individual accounts. All the Dauphiné's accounts really tell us is that it costs ASO c€2m or so to organise this week-long event. That doesn't help us much when guessing the cost of, say, the Tour de Suisse, given that ASO has an economy of scale that other race organisers don't have. The overall figures for ASO, across all its sports, are more important (revenue of c€225m, profits of c€45m) in so far as they at least show the limits of the revenue sharing argument.

 

[Koronin]

Where do you think the prize money comes from?

From a lot of different sponsors mostly. Most races don't exactly get much money from TV revenue like the Tour does. So it comes from sponsors. Where else would it come from?

 

[Koronin]

Just to offer some context to that question:

• at the start of the 80s, before the TV revenue "boom", the Tour's total prize fund stood at about €250,000
• by the start of the 90s, it had grown to about €1,500,000
• at the start of the noughties it had reached about €2,500,000
• a decade later, it was €3,500,000

Find a race that is NOT the Tour to use as that race is NOT typical of the rest of the calendar. How about the Vuelta a Murcia. They have exactly ZERO revenue from TV.

 

[Koronin]

Some take a myopic view of revenue, obsess about TV revenue and for some reason ignore all other revenue organisers raise. Reality is not some people. Reality is that revenue sharing exists today, and in the revenue sharing that exists today a portion of a race's total revenue is shared with teams through a UCI-mandated appearance fee (and - to be clear - we're talking top level races here, as noted previously this debate does not concern itself with the problems of the sport in the lower divisions). If a race had no TV revenue, it would still be paying an appearance fee, it would still be sharing revenue through the appearance fee.

Serious question for folk in general here: how are you supposed to debate with someone who throws such a blatant lie at you? How? Am I supposed to pretend that Formula 1's Concorde Agreement is a figment of my imagination? Am I supposed to pretend that I am somehow unaware of what happens in F1, the sport cycling is most often compared to (and which the Rapha report wants to turn cycling into)?

In both NASCAR and Indy Car teams get exactly ZERO dollars from the TV contracts. The organizing body and the tracks get ALL the TV revenue. So please tell me where exactly the lie is?

 

[roundabout]

Speaking of TV revenue, some (many?) races pay to be on TV (see third paragraph)

https://www.kleinezeitung.at/sport/...dfahrt_Keine-Uebertragung_Rundfahrt-radelt-in (in German, but google translates well enough)

 

[roundabout]

In both NASCAR and Indy Car teams get exactly ZERO dollars from the TV contracts. The organizing body and the tracks get ALL the TV revenue. So please tell me where exactly the lie is?

uh, no

teams get 25% of TV money in NASCAR as far as I know

googling 'nascar tv revenue split' confirms my recollection

 

[Koronin]

uh, no

teams get 25% of TV money in NASCAR as far as I know

googling 'nascar tv revenue split' confirms my recollection

NASCAR teams still loose money. That must be something new with the new TV contracts. Until fairly recently tracks negotiated their own contracts. Then when NASCAR did the half season contracts NASCAR it's self took a cut and at that time teams did not get any of the TV money.

 

[simoni]

Find a race that is NOT the Tour to use as that race is NOT typical of the rest of the calendar. How about the Vuelta a Murcia. They have exactly ZERO revenue from TV.

Why does the fact its TV revenue matters.

Fact is, race organisers get revenue from a variety of sources, they then have to run their event and then there's hopefully some left over. They probably take a bit of profit if they can, a bit of prize money, a bit of mandated appearance money and....that seems to be it. TDF is probably the exception and its been fairly easily demonstrated that even that is a small pie in the context of typical annual team budgets.

Seems that in most cases, the revenue simply isn't currently there to share in great quantities. Cycling isn't as big a sport as we'd perhaps like it to be, save for limited corners of western and northern europe.

Maybe there is a solution to this. I don't have one, you seem pretty passionate about this, what's your ideas?

 

[Koronin]

Why does the fact its TV revenue matters.

Fact is, race organisers get revenue from a variety of sources, they then have to run their event and then there's hopefully some left over. They probably take a bit of profit if they can, a bit of prize money, a bit of mandated appearance money and....that seems to be it. TDF is probably the exception and its been fairly easily demonstrated that even that is a small pie in the context of typical annual team budgets.

Seems that in most cases, the revenue simply isn't currently there to share in great quantities. Cycling isn't as big a sport as we'd perhaps like it to be, save for limited corners of western and northern europe.

Maybe there is a solution to this. I don't have one, you seem pretty passionate about this, what's your ideas?

It matters because a LOT of races do NOT have TV revenue. Also in many other sports TV revenue is a big part of the budgets for teams.

For the vast majority of races I agree that TV revenue isn't there. As I said the Tour de France is the major exception to this.

As I've said merchandising on a much bigger scale than is currently done would be part of the solution, but only Quickstep has really tried to get into this area with many items that aren't just jerseys or just have the sponsor name on them. They have lots of other items and lots of items with the "wolfpack" name/logo and a few autographed items. Something other teams haven't done. This is something that US based sports (NASCAR, MLB, NFL, NBA, NHL) have been doing for 40 plus years. Cycling really needs to diversify more when it comes to merchandising. Obviously it's not the only solution, but it should be part of the solution. Some of NASCAR's top drivers make more money in merchandise sales than they do with their combined salaries and winnings..

 

[King Boonen]

From a lot of different sponsors mostly. Most races don't exactly get much money from TV revenue like the Tour does. So it comes from sponsors. Where else would it come from?

To be honest this is starting to seem like wilful ignorance. Here, 30 seconds on Google, if that:

How NASCAR Prize Money Works

It used to be easy to find out how much money a NASCAR driver made after winning a race. But now it's not so simple.

auto.howstuffworks.com

 

[Koronin]

To be honest this is starting to seem like wilful ignorance. Here, 30 seconds on Google, if that:

How NASCAR Prize Money Works

It used to be easy to find out how much money a NASCAR driver made after winning a race. But now it's not so simple.

auto.howstuffworks.com

No Fing kidding purse money comes from a variety of sources. Did anyone say differently?

 

[King Boonen]

NASCAR teams still loose money. That must be something new with the new TV contracts. Until fairly recently tracks negotiated their own contracts. Then when NASCAR did the half season contracts NASCAR it's self took a cut and at that time teams did not get any of the TV money.

No Fing kidding purse money comes from a variety of sources. Did anyone say differently?

 

[Koronin]

I shall repeat the question. Please show where anyone claimed that purse revenue is from exclusively 1 source. What you quoted does NOT come close to claiming that. Try again.

By the way for teams to get TV revenue it must go DIRECTLY to them NOT through another avenuse such as purse money as that is NOT close to equal. To be a CLAIM that teams get TV renevneu it must be EQUAL among all teams or it's not really getting money from the TV contract, they are then getting money either from the track OR the governing body.

 

[King Boonen]

I shall repeat the question. Please show where anyone claimed that purse revenue is from exclusively 1 source. What you quoted does NOT come close to claiming that. Try again.

By the way for teams to get TV revenue it must go DIRECTLY to them NOT through another avenuse such as purse money as that is NOT close to equal. To be a CLAIM that teams get TV renevneu it must be EQUAL among all teams or it's not really getting money from the TV contract, they are then getting money either from the track OR the governing body.

At least we are slowly getting somewhere... Very slowly... I really should have predicted that goalpost shift, it was very obvious.

I get paid by grants. We apply for money, hopefully get funded and it pays my salary. That money gets paid into my bank account from the university, not the funding body. Does that mean the funding bodies don't pay me..? If you work in retail the customer pays your wages. They don't directly hand you the cash and you put it in your pocket, but no customers, no job.


As for equality, why does it have to be equal? If one NFL team gets 95% of the TV revenue paid to teams and the rest split the final 5%, is no-one getting TV revenue?

You have consistently claimed that teams in motorsport don't get any of the TV revenue. It's been proven wrong several times now. You can argue that prize money isn't equal if you want, it's a different discussion and raises different questions, but claiming teams do not get any of the TV revenue is a flat out lie.

We can even take it further back and discuss the fans paying the teams, because ultimately that's the initial source and this relates to revenue split and fairness.

 

[fmk_RoI]

To be a CLAIM that teams get TV renevneu it must be EQUAL among all teams or it's not really getting money from the TV contract, they are then getting money either from the track OR the governing body.

So, like the UCI-mandated appearance fees?

 

[simoni]

I shall repeat the question. Please show where anyone claimed that purse revenue is from exclusively 1 source. What you quoted does NOT come close to claiming that. Try again.

By the way for teams to get TV revenue it must go DIRECTLY to them NOT through another avenuse such as purse money as that is NOT close to equal. To be a CLAIM that teams get TV renevneu it must be EQUAL among all teams or it's not really getting money from the TV contract, they are then getting money either from the track OR the governing body.

What is your argument/complaint? I'm thoroughly confused.

It looks like you're getting wound up about teams not getting paid a direct, equal share of something that (as you acknowledge) doesn't even exist a lot of the time.

And.....?

Shouldn't we discuss why it doesn't exist, if it could exist, before we worry about what to do with it? In fact, hasn't that debate been started already?!