AIRmail 11-21-22: A Busy “Off-Season” – with Cyclocross and Track Racing...
Plus, Continuing Supply Chain Impacts, More Changes in the Cycling Media Landscape, FIFA Sets a Poor Example, No Developments Again This Week with Cavendish and Quintana
Key Takeaways:
A Busy “Off-Season” – with Cyclocross and Track Racing
Continuing Supply Chain Impacts
More Changes in the Cycling Media Landscape
FIFA Sets a Poor Example
No Developments Again This Week with Cavendish and Quintana
The offseason in professional cycling is anything but “off” – cyclocross is at full swing and there’s the UCI track cup as well as a smattering of Six Day events on offer. However, ‘cross is capturing all the attention and for all the right reasons, as the ramp-up to the CX World Championships begins. Some of the key observations of the ‘22-’23 season so far are: (1) early season U.S. event strength has been consistent, and the racing has been a powerful example why the sport needs more coverage to capitalize on last year’s World Championships to continue growing on home soil; (2) women’s cyclocross is experiencing a tremendous youth movement, highlighted by the recent performances of new European champion Fem Van Empel; and (3) while the men’s racing is exciting and energized by strong performances from Eli Iserbyt, Lars Van der Haar, and Michael Vanthourenhout, it seems the entire sport is waiting with bated breath for the return of the true superstars – Mathieu Van der Poel, Wout Van Aert and Tom Pidcock. These stars are slowly reintegrating into the CX start grid, having taken some recovery time after a taxing road season; the racing will likely go up a notch as they come up to full steam. Unfortunately, fans have again been faced with confusing options to be able to watch racing live online or on-demand, and many have simply resorted to watching full races and highlights for free from a variety of reliable, if not exactly intrepid YouTube sources.
With the start of the holiday sales season, it’s interesting to take a look at cycling’s myriad supply chain issues and what the coming year may bring. The bicycle “boom” which hit during the height of the pandemic in 2020 – when consumers had more time (business and social activity slowdown) and impetus (need for alternative transportation with social distancing), was largely over by the end of 2021 – when many of the restrictions began to be lifted. While some aspects of bike supply such as availability of groupsets and finished multi-component goods like wheels and pedals had been ironed out, other critical, high-complexity components like chains were still catching up. As a result – and evidenced throughout 2022 – this led to wide swings in bicycle availability. High-volume retailers selling commuter and mid-range categories generally caught up with demand. However, specialty and high-end bikes – which saw huge demand jumps in ‘20 and ’21 – stumbled as (1) pre-paid and deposit orders were canceled due to delivery delays, (2) resale markets grew and diversified to meet consumer demand, and (3) “substitutions” increased – where consumers purchased the first available equivalent from any brand instead of the original bike they had been waiting on. In addition to consumers moving orders around, large bicycle orders from Far East suppliers finally began to be delivered, and pre-pandemic transportation habits started to return. As a result, we’ve ended up with an unexpected inventory glut.
While the industry has generally been strong as we emerged from the pandemic, this “bullwhip” effect created overstock in bicycles and related specialty hard and soft goods, and hence is muting the short-term earnings capability for many companies in the business. Likewise, overly optimistic forecasting from 2021 and 2022 leave 2023 and 2024 uncertain. Enthusiasts who scour the internet for the best deals have discovered that these now seem available everywhere, all at once and far earlier than normal; connoisseurs noted that the biggest e-tailers like Backcountry essentially started dumping products in early-to-mid summer, months prior to usual sales cycles. The diversification of product sourcing that was necessitated by pandemic supply impacts has rapidly contracted, and this could pressure further retail consolidations – as shops find themselves in distress and either go under or sell out. In turn, this is likely to lead to more big-brand concept stores, which simplify the supply chain but reduce choices for all but the most savvy consumers. All in all, the boom may not have led to a bust, but the cycling industry’s biggest nemesis – forecasting – deserves renewed focus.
The last week saw a good deal of public rancor around staff cuts at the leading endurance sports media company – Outside magazine – which impacted many of the company’s 30+ brands, including its various cycling titles. Although Outside is hardly alone amongst media companies – in terms of economic headwinds resulting in softer advertising dollars and more hesitant rates of subscription sing-ups – the cutbacks also reflect an uncomfortable truth about cycling. When media brands cater to a small niche audience like professional bike racing fans, and when many consumers are still generally hesitant to pay for editorial content on the internet, it may be only a matter of time until the numbers just don’t work – for both consumers and producers.
Consumers must be willing to pay for quality content, or else they’ll eventually get just what they paid for …. nothing. And producers have to figure out how to spread their wings wider and “open up the tent” to expand to new and larger audiences. As we pointed out in a comprehensive review of cycling media three years ago, when there are too many players providing similar services to a small market, consolidation tends to occur, and some players eventually disappear. We’ve certainly seen this on the print side, where road cycling content has dwindled in the last few years, with the demise of legacy magazines like ProCycling, RIDE, CycleSport, and more recently – VeloNews, Peloton and Stelvio. Although the last few years have seen the predictable wave of consolidation, recent events suggest that there may still be some additional right-sizing coming on the digital side of the cycling media world as well.
One reason why cyclocross and track may have less media traction this year is the late-season placement of the Qatar World Cup, on which the world’s sporting and political cameras are squarely focused. The global football tournament will dominate news cycles in the coming weeks due to the both the competition, as well as the various human rights stories swirling around the event. A Danish news team was assaulted by government security last week, and planned protests by athletes and teams to highlight Qatari anti-LGBTQ and migrant worker conditions under the “kafala” sponsor system has already been met with warnings from FIFA; protests will lead to sporting sanctions. Underscoring this draconian position, FIFA President Gianni Infantino delivered a now infamous speech over the weekend, in which he attempted to normalize Qatar’s situation by equating its abuses with the ongoing human rights issues in free democratic nations. But in doing so, Infantino neglected to mention that human rights transgressions in free societies can be tackled through free speech and voting, neither of which meaningfully exist in Qatar today.
More to the point, Infantino implicitly admitted that it’s easier, and more profitable, to organize events in dictatorship-driven nations – because it costs less to assemble the events, and it’s easier to extract value. This reflects another infamous quote – from former FIFA General Secretary Jerome Valcke in 2013 – who said “...less democracy is sometimes better for organizing a World Cup. When you have a very strong head of state who can decide, that's easier for us organizers than a country where you have to negotiate at different levels.” By taking this stance, FIFA seems to be trampling on the concept of “peace through sport.” And it seems reasonable to at least ask if the same thing is being wrought through cycling: sponsorships from (and events in) countries like Qatar, as well as the upcoming UCI 2025 World Championships in a similarly embattled autocracy – Rwanda.
And finally, for yet another week, veteran stars Mark Cavendish and Nairo Quintana – and their current lack of employment – dominated the transfer news. With Cavendish’s preferred landing spot of B&B Hotels looking Les and less likely as the team continues to miss deadlines, it seems likely that if the 37-year-old sprinter wants one more shot at breaking Eddy Merckx’s Tour de France stage win record, he will have to find another team willing to take on his substantial salary, as well as his roster and schedule requirements (leadout support and a Tour de France starting spot). However, while Cavendish still appears to have interest from multiple teams (including Ineos) for 2023, Nairo Quintana’s strange case continues to roll on. After being booted off his Arkéa–Samsic team following his positive test for the painkiller tramadol, the 32-year-old six-time grand tour podium finisher hasn’t been able to find a viable team for 2023. This struggle was underlined by the fact Quintana gave a somewhat strange and scattered interview this past week while back home in Colombia, in which he suggested that he didn’t have a ride locked down for the quickly upcoming season, as well as a vague suggestion that he might return to Movistar (despite leaving the team on poor terms at the end of the 2019 season, and there being no available roster spots remaining on the Spanish outfit.) There is now a real possibility that he may go unsigned – raising questions about why exactly his Arkéa team chose to part ways with him in the first place, and why no other team has stepped forward to sign him.