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Fixing Pro Cycling

Photo: Kallenovsky/Wikimedia

Photo: Kallenovsky/Wikimedia

26.04.2016

More than a year after its release, it is reasonable to ask if the recommendations within the CIRC report have helped the UCI get the sport back on track? Not as much as needed, says The Outer Line in this comment piece, which proposes a detailed reform plan for pro cycling that will change both its governance and way of doing business, making it an “independent, self-governing and more economically-sustainable premier league sport”.

Over a year has elapsed since the Cycling Independent Reform Commission’s (CIRC) report was delivered to cycling’s governing body, the Union Cycliste Internationale (UCI). On the heels of Brian Cookson’s election as president of the UCI and its subsequent leadership turnover, this report sought to memorialize a long era of scandal and governance failure in professional cycling. The hope was that by better understanding and addressing past problems, the sport could chart a more hopeful and stronger future.  

While the CIRC was a step in the right direction, immense challenges are still faced by the sport. Cycling has suffered from an endless string of doping and cheating scandals which have tarnished its public reputation, turned off fans, and scared away potential sponsors. The sport’s lack of a powerful central organizing body has led to an uncoordinated and lengthy calendar, overlapping events, a constantly changing team structure, and a highly uncertain financial situation in which individual races and teams constantly clash for scarce sponsorship dollars. And despite the sport’s heavy reliance on such commercial sponsorship for its financial stability, significant global sponsors have largely been absent, due both to the sport’s poor reputation as well as its unsophisticated marketing approaches.

Furthermore, pro cycling’s disorganized and highly insular – often described as “feudal” – business model has rendered it unable to negotiate consolidated media rights packages. Television revenues, which have been so critical in the growth of many other professional sports, have been very minimal. Finally, the business of pro cycling has been largely run by ex-cyclists, most of whom have little business acumen or training. Poor business decisions have often been made, to the detriment of the entire sport, and its entrenched management culture remains generally resistant to change.

The Outer Line’s goal at Play the Game 2015 in Aarhus was to illustrate the model of professional certification as one potential catalyst for change in pro cycling. We are certainly not the first to suggest new, different or radical ideas to transform the sport at some level; however, past efforts have failed for two key reasons. First, these haven’t provided any viable solution to the fundamentally flawed economics of the sport, which have exacerbated the drivers which lead to cheating. Second, they haven’t resolved the long-standing (and once again simmering) differences between (1) pro cycling’s governing body, the UCI, and (2) the most successful brand in race promotion – the Amaury Sport Organisation (ASO), which owns the Tour de France and many other key race properties.

This is the heart of the matter. The UCI is the international federation for the sport – not the “league owner” that it has often wanted to be; it does not have the depth, financial resources or the political charter to play this role. Furthermore, because it oversees eight individually different cycling disciplines, the UCI doesn’t have the time or resources needed to decisively reform pro road racing and implement these changes across the sport. ASO, on the other hand, controls most of the meaningful revenues in cycling. It is the only organization with the political and financial muscle to enact sweeping change, but it does not seem inclined to drive a true transformation of sport. By all indications, the ASO appears to prefer the status quo – essentially monopolizing a small sport, rather than becoming a major participant in a much larger sport. As long as these two parties are focused only on their own short-term and self-serving objectives, significant change is impossible, and the sport will suffer.

Fortunately, despite all this, the sport has maintained a resilient popularity. It has been estimated that as many as three billion people around the world watch parts of the Tour de France, making it the third most-watched sport in the world after soccer and the Olympics. And this international fan base could expand significantly if the sport was properly marketed and more widely televised. With a few significant structural changes and more experienced business management, pro cycling could flourish – bringing greater growth and profitability to teams, organizers and athletes.

A business plan for reform
To overcome these challenges, The Outer Line recently proposed a Business Plan for reform – a series of bold and specific steps by which a new party might consolidate the top level of the men’s sport. Such an organization would finally be able to stabilize the financial challenges by attracting global sponsors into the sport and consolidating the marketing and distribution of its content – which could change the game for the entire sport. The Plan would incorporate the following key items:

  • Devise a professional certification model and ethics training program to fundamentally address the doping and cheating issues in pro cycling
  • Build a new global sponsorship model with exclusive rights, targeting major companies in selected markets
  • Restructure the premier competitive race calendar into a coherent, 7-month schedule of approximately 20 key events – boosting the “scarcity value” of the sport by focusing on fewer but more important events raced by a smaller number of more elite athletes
  • Create a new league structure comprised of up to 15 top-level professional teams that would gradually build more of a regional fan base
  • Refocus the competitive goals of the pro calendar, and offer significant prize money to shift the fan focus to season-long team and individual championships
  • Exploit new technologies to generate more engaging, fan-friendly television content, and to help reduce the current high costs of TV production
  • Aggregate the new league’s television and media marketing rights to create a sustainable revenue base, and help the sport grow more quickly.

(A detailed 30-page Business Plan – including proposed race calendar, time-task chart, appendix and full financial model – can be downloaded here.)

There is a huge opportunity here to tap into the true entertainment and financial potential of professional cycling, and turn it into a modern, 21st Century sporting league. At the same time, it would provide a ground-up opportunity to restructure the governance and address the key action items for reform which were outlined in the CIRC report. The new entity could build an independent, self-governing and more economically-sustainable premier league sport, with a more diverse and growing fan base. It would take what has too often been a negative and downwards spiral in pro cycling, and redirect it upwards in a positive trajectory of opportunity and profitability. Who could implement such a plan?

China’s Wanda Group is one example of a new entrant who could develop this sort of model. It took a huge step into endurance athletics by purchasing Ironman Triathlon in 2015. More recently, it acquired the holdings of Lagardere Sports – including the Hamburg Cyclassics WorldTour event and a UCI-affiliated series of amateur sport rides. It is now known that Wanda Group has also approached ASO and Giro d’Italia owner RCS Sports with purchase inquiries as well.

Where the UCI and ASO have collectively failed to right the ship, a larger and well-heeled player like Wanda Group has the potential to take the helm and steer it in a new direction. Certainly, it has a bank account and corporate structure capable of challenging ASO – by purchasing key events in the WorldTour, creating new ones, or simply acquiring ASO outright. Such a move would not replace the UCI and its Olympic charter; rather, it would free the organization to focus on the governance issues for all of the sport’s disciplines. The UCI has not shown itself able to make decisive changes because it cannot afford to alienate or “displease” the sport’s biggest economic contributor. But a powerful business leader like the Wanda Group could positively change the economic drivers and quickly implement the CIRC’s key recommendations at the top level of the sport – to change the tone, and ultimately break the political stalemate.

If some new party like this could step up and help cycling complete this type of transformative change, it would not only revitalize a proud and beautiful sport, but would also stand to make a very attractive financial return on its investment. Changes recommended by the CIRC might be put into effect from the ground up, and enforced from the top on down – neither of which may be possible in the current situation. It could fundamentally alter how the sport is run, and set a precedent for future sports governance restructuring efforts. This kind of change could be the best thing to ever happen to the sport of cycling.

More information

 
 
  • More about the CIRC report here
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