Cycling is a beautiful and complete sport. It is about individual performance as much as team strategy; has drama, proximity to the public and impressive scenery; and it’s a sport that billions of people can relate to.
Yet cycling is suffering from a revenue problem. Currently, teams have to rely on sponsors to survive. Apart from an attempt at collective selling via media platform Velon, teams are generally unable to generate their own income.
As a result, many of the riders we see taking part in races find it difficult to take home a competitive salary.
This situation is due to cycling’s authorities failing to create a structure capable of reaping the monetary benefits that a sport of its size should.
In summary, there are currently too many races, all competing for the same, limited media attention.
In the main races, such as the Grand Tours, there are simply too many riders, which is creating dangerous situations.
And, unlike football or Formula 1, spectators are unable to form allegiances with their respective teams – an essential step on the journey to success.
The sport is too reliant on the achievements of the Tour de France, which dominates the calendar and is responsible for the majority of TV revenues.
However, the Tour’s organisers should not be expected to share their profits. Instead, the entire sporting model needs an overhaul to ensure greater revenue sharing, longer-term team presence, and a more stable financial situation for riders.
Cycling’s earnings can – and should – stretch beyond the confines of the Tour de France.
When building the revenue roadmap, football and Formula 1 are the ultimate business models, having transformed into global financial powerhouses.
A big driver has been the sale of TV rights, which has led to increased budgets, alongside other forces at play, such as attracting investment and delivering modernisation, all of which has allowed them to excel at a much faster rate.
Uefa’s commercial revolution in football was based on turning its main competition into a genuine Champions League. It was able to do that by combining its regulatory function with its commercial power.
Formula 1 followed a different but no less successful route. The International Automobile Federation (FIA) kept the regulatory role, while the commercial enterprise and development of the sport was separated into the commercial Formula 1 entity, linking the teams to the races and the organisation through so-called Concorde Agreements, ensuring revenue sharing.
Furthermore, both sports have introduced their own budgetary controls which, to some degree, act as a check on the dominance of the richest teams.
Due to its structure, cycling’s governing body the UCI does not currently have the ability to action these reforms.
It is apparent that a significant re-organisation of cycling is needed. And while there is no doubt that the sport of cycling will survive, that should not be the sole objective of such reforms.
Cycling must strive to match its global sporting rivals in the revenue stakes. There is ample reason to believe it can.
Cash-rich investors are ready and waiting to transition the sport into a new era, particularly in the US where its TV rights are significantly undervalued.
Work simply needs to be done to showcase the sport of cycling for the attractive investment that it is.
Jasper Wauters is a litigator who leads the sports law practice at law firm White & Case.