The Economics of Professional Road Cycling PDF
Preview The Economics of Professional Road Cycling
Sports Economics, Management and Policy Series Editor: Dennis Coates Daam Van Reeth Editor The Economics of Professional Road Cycling Second Edition Sports Economics, Management and Policy Volume 19 Series Editor Dennis Coates, Baltimore, MD, USA The aim of this series is to provide academics, students, sports business executives, and policy makers with information and analysis on the cutting edge of sports economics, sport management, and public policy on sporting issues. Volumes in this series can focus on individual sports, issues that cut across sports, issues unique to professional sports, or topics in amateur sports. Each volume will provide rigorous analysis with the purpose of advancing understanding of the sport and the sport business, improving decision making within the sport business and regarding policy toward sports, or both. Volumes may include any or all of the following: theoretical modelling and analysis, empirical investigations, or description and interpretation of institutions, policies, regulations, and law. Daam Van Reeth Editor The Economics of Professional Road Cycling Second Edition Editor Daam Van Reeth Faculty of Economics and Business Katholieke Universiteit Leuven Campus Brussels and Campus Kortrijk, Leuven, Belgium ISSN 2191-298X ISSN 2191-2998 (electronic) Sports Economics, Management and Policy ISBN 978-3-031-11257-7 ISBN 978-3-031-11258-4 (eBook) https://doi.org/10.1007/978-3-031-11258-4 © The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG 2021, 2022 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors, and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Springer imprint is published by the registered company Springer Nature Switzerland AG The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland Foreword: One Cycling When do we wake up the sleeping giant of procycling? When will procycling start with a blank sheet of paper to reinvent the sport and make it profitable for all stake- holders? When will procycling live up to its full potential? I believe the time is now! The first edition of this book was published in 2016. It offered a good insight in how the sport economically works. And it was a source for me to think of solutions, what the challenges are, and especially what the potential really is. Between 2016 and 2022, not much changed. The numbers are different today, you will read that in this book, but the big problem remained the same: lack of business leadership, inno- vation, and collaboration prevents procycling to become an economically bigger sport. And of course, egos and the fear of losing a bit of power. First, some facts. Since the previous version of this book, we lost many UCI ProTeams. This second tier of cycling teams is much smaller now: from 23 in 2016 to just 17 in 2022.Three UCI ProTeams come from the native country of cycling (Belgium), while ten teams are registered in the Grand Tour countries (France, Italy, and Spain). In other words, a Grand Tour in the home country seems essential for the survival of a UCI ProTeam. Or, in even better words, the second tier does not deliver enough value itself to the competing teams. They are dependent on the invi- tation of big races. In the past years, we also lost some races, especially in North America. The Tour of California as WorldTour event and others. We lost races in Asia. And fingers crossed that Australia will keep their racing spirit, after the high pressure by the pandemic on professional sports Down Under. So, despite striving for a more global sport, road cycling has again become (relatively) bigger in Western Europe and less international. To put things in the right perspective: also, most of the Western European races are having a hard time to be(come) profitable. Local authorities are less and less willing to support roadblocks for a day let alone for a week. Speedbumps, round- abouts, and a massive amount of other road furniture make it difficult to keep race routes safe for the riders. Many Belgian races rely on hospitality, instead of having a source of income out of the WorldTour. The state of the organizers, the teams, and v vi Foreword: One Cycling therefore the riders is worrying. We’re in a downward spiral. Conclusion: our sport is in need for real reform. People inside and outside procycling have an opinion on how the sport should be managed. However, historical positions, quarrelling over rights, and fighting over power and of course money prevent the world of cycling to open its full potential, thereby ignoring that working together mostly delivers a better result than doing things alone. Therefore, the first step will be to sit around the table, leave all past fights and feuds behind, and look for an agreement on the basic principles for road cycling as a whole. Everyone must step into the helicopter and look to our world from that perspective. But there is hope. Business economics always follows a good idea with a great vision and mission. There will be a sustainable model for procycling by creating a better business model for all stakeholders by maximizing the potential of the sport. We will create a global, attractive, and fan-centric sport, in a safe and healthy sports arena for the athletes, taking care of environment and having an eye for inclusivity. We have to look at this as one single business, let’s call it One Cycling. A change in road cycling should put the fans at the heart: how to create a com- prehensible, attractive sport for the fans, without losing the historical attractiveness? Fans are, next to the riders, therefore eminent while safety, health, environment, and inclusivity are the pillars that support the new One Cycling world order. We have to realize that the competition comes from outside our sport and that the world is changing. Fans are engaged in other ways; sport has a different place in the world and is being digested differently than before. We have to reform our sport with the world of 2030 in mind. Procycling has other potentials as well. It could lead by example the health and environmental quest many countries and cities are on today. Cycling is healthy and environmentally friendly. Procycling shows it is possible to travel more than 100 kilometers by bike, without using any fossil fuel, while keeping the body healthy. The message has big potential: “solve traffic issues and health problems, go biking.” And by being the frontrunner of safety, procycling could also show cycling is a safe way to travel. The sport is also inclusive. Cycling is easy to access for everybody: young, old, men, women, rich, and poor. What a big signal for the world! But how can we tap into this potential? Easy: by leadership and working together. Organizers, riders, teams, and the governing body UCI will need to step out of their trenches and finally start working together. As in every business, a clear plan and a coherent vision makes it easy to adapt to a new world. A strict format and race cal- endar make it clear to everyone what road cycling is up to and, importantly, what it is not up to. A strict format will also create value through the series. It is very clear that riders are good at racing, organizers are good in the business of organizing, teams are good in the business of running teams, and the UCI is good in the politics of governing and making rules and regulations. And we all need each other, like the riders need each other to win races. We have to keep an eye on the problems of each stakeholder. When we agree upon that, the next move should be to create a standalone, accountable, and liable company that runs our sport from a Foreword: One Cycling vii business perspective. This new entity can be governed by the UCI, but with a board of directors representing race organizers, teams, and other stakeholders. One Cycling means we need to create this company and pool all rights from both teams/ riders and UCI/organizers. One Cycling will be responsible to create and commercialize the cycling series: top level and second level, and maybe third level. Create clarity for the fans for 1-day races: top-level races always on Sunday and second-level on Saturday or Wednesday, for example. Another example: top-level stage races always have the same length and format, and never overlap. Put all these races under the umbrella of a series with a clear winner (rider and team), where apples are compared with apples (only top-series points count for top-series ranking). A shorter, more comprehensive calendar at the top level, where star riders are competing against each other in most of the races, will make it more attractive to fans. Clearer as well, as a fan will know whether it is a battle of the stars or a lower- ranked event. One Cycling will take the opportunity to centralize digital content, rankings, and data, which all together deliver higher media value. The central orga- nization will organize innovation, safety, and globalization of the sport and the other pillars mentioned above. The value for all stakeholders will skyrocket. It will take courage and strong leadership to do what is best for the sport. We might have to kill some darlings, but we will create even more instead. This book gives you a good insight in the economics of professional road cycling. A realistic view, not too positive, not too negative either. It shows road cycling’s huge potential, along with the threats, especially what road cycling is lacking to harvest. I think answers to the questions in the first paragraph are easy: ride the future now. Richard Plugge General Manager, Team Jumbo – Visma ‘s-Hertogenbosch, The Netherlands Contents 1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Daam Van Reeth Part I Organizational Structure and Finances of Professional Road Cycling 2 The History of Professional Road Cycling and Its Current Organizational Structure . . . . . . . . . . . . . . . . . . . . . . 11 Jean-François Mignot 3 The Finances of Professional Cycling Teams . . . . . . . . . . . . . . . . . . . . 35 Daam Van Reeth 4 Sponsorship in Professional Road Cycling . . . . . . . . . . . . . . . . . . . . . . 69 Wim Lagae 5 The Economic Impact of Major Road Cycling Events . . . . . . . . . . . . 91 Paul Hover Part II Demand for Professional Road Cycling 6 TV Broadcasting of Road Cycling Races . . . . . . . . . . . . . . . . . . . . . . . 123 Daam Van Reeth 7 The Tour de France: A Success Story in Spite of Competitive Imbalance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163 Wladimir Andreff and Jean-François Mignot 8 Willingness to Pay for Professional Road Cycling Events. . . . . . . . . . 181 Willem I. J. de Boer and Ruud H. Koning ix x Contents Part III Personnel and Performance Issues in Professional Road Cycling 9 Human Capital and Labor Exchange in Road Cycling . . . . . . . . . . . . 197 Daniel J. Larson and Jean-François Brocard 10 Strategic Behavior in Road Cycling Competitions . . . . . . . . . . . . . . . 227 Jean-François Mignot 11 Modeling Performances and Competitive Balance in Road Cycling Competitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 253 Benjamin Cabaud, Nicolas Scelles, Aurélien François, and Stephen Morrow 12 Doping in Cycling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 283 Hans Vandeweghe Part IV Developing Trends in Professional Road Cycling 13 Professional Women’s Road Cycling . . . . . . . . . . . . . . . . . . . . . . . . . . . 311 Suzanne Ryder 14 Globalization in Professional Road Cycling . . . . . . . . . . . . . . . . . . . . . 337 Daam Van Reeth
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