National Championships; Developments in Sports TV Rights; Sponsorship Woes; Froome Misses Tour; Flanders and Tour de Suisse Combine

Key Takeaways:

·       National Championship Results

·       More Evidence: Cycling Must Consolidate its TV Rights

·       Emerging Financial Models for Athlete Development

·       Cycling’s Most Successful Team Facing Sponsorship Uncertainties

·       Flanders Classics Joins Forces with Tour de Suisse

This past week saw another lull in the pro cycling calendar, as the sport prepares for next weekend’s kick-off of the Tour de France in the Spanish Basque Country. However, many of the top riders in the peloton were contesting their respective national championships over the weekend. A major highlight included Wout van Aert winning the Belgian time trial championships to claim the career triple crown of Cyclocross, Road, and Time Trial titles and Remco Evenepoel winning the Belgian road title while wearing the Rainbow World Championship jersey (see full country-by-country results here). In the U.S. edition, which took place in Knoxville, Tennessee, Trek’s Quinn Simmons won the Men’s road race (and was promptly named to the team’s Tour de France squad), while Canyon/SRAM’s Chloe Dygert showed that she was back from her terrible injuries from a couple of years ago by taking the women’s title. Meanwhile, in the other events, UAE’s Brandon McNulty and Dygert won their respective categories in the time trial, while Luke Lamperti (Trinity Racing) and Coryn Labecki (Jumbo-Visma) won the criterium titles. It is notable that Lamperti and Labecki, both of whom race primarily in Europe, won the criterium against full domestic squads, despite neither having any team support at the event. This phenomenon highlights the growing gulf in quality in recent years between racing domestically in the United States versus racing abroad in Europe.

While the winners of the national titles are all extremely talented riders, the event is somewhat diminished by the fact that many of the top US riders – specifically those selected for the Tour de France, like Matteo Jorgenson, Sepp Kuss, and Neilson Powless – weren’t in attendance. It simply isn’t logistically feasible for them to travel back and forth from Europe for a short weekend right before the marquee event of the sport. This stands in stark contrast to major stars, like Van Aert, Pogačar, and Van der Poel, all of whom were able to contest their national championships. This conflict highlights a major issue with the current calendar slot for the U.S. event, and why it was likely a misstep to move it from its earlier Memorial Day (2011-2016), or early fall (2006-2010) slots.  With more of the top U.S. riders competing and living in Europe, it will only become harder and harder to make the current mid-season slot work. With its contract with Knoxville ending after this year’s events, this could be a good time for USAC to consider a re-set. CEO Brendan Quirk confirmed to The Outer Line that USAC was evaluating the pros and cons of seeking an alternative date – not only to make it easier for European-based pros to compete, but also to avoid conflicting dates with the popular Tour of America’s Dairyland race – and in the process of identifying its next host city. 

Aggregation of broadcast licensing rights by sports leagues seeking to maximize content exclusivity, fan reach, and monetization opportunities appears to be accelerating, and pro cycling may be left behind as the market shifts. Major League Baseball recently won one lawsuit against embattled/bankrupt regional sports network provider Diamond Sports Group to force it to pay the full value of licensing fees owed to MLB for a portfolio of teams – revenues which Diamond doesn't have, in the wake of steep declines in cable subscribers. The San Diego Padres' broadcast rights have been repatriated to MLB, which is already streaming the team’s remaining games consumer-direct to the delight of Padres fans; other teams aren't far behind. In fact, the rumored shutdown of AT&T’s regional sports portfolio will likely become the deluge behind the Diamond dam break. Sports leagues want to go consumer-direct where it makes sense, and create exclusivity deals elsewhere to increase licensing revenues and broadcast reliability. Similarly, the infusion of international personalities and sports stars in key leagues – like Victor Wembanyama will do for the NBA’s San Antonio Spurs and Lionel Messi will do for the entire MLS – is creating a market to both stream direct to overseas fans and renegotiate international broadcast rights.

Cycling, which still lacks a reliable and consistent production and distribution model, seems to be more and more on the outside looking in from a product and technology perspective. As we’ve said many times before, cycling needs to move towards a centralized licensing model for its premier events to be packaged as a commodity, and find a global partner capable of carrying and delivering a secure and reliable broadcast. With multiple streaming service subscription fees too exorbitant for many fans, and much of cycling's content ending up on YouTube for free anyhow, this may be the right moment for the sport's event and sponsorship stakeholders to convene and find solutions before another golden opportunity passes by.

The definition of “professional athlete” is being rewritten through two different but almost parallel economic tracks: Name/Image/Likeness (NIL) deals, and investor patronage. While NILs have broken the legal ceiling for "amateur" athletes at the high school and collegiate level, investor patronage has rapidly taken root. The primary driver for investor patronage has been Big League Advantage, which attempts to identify unpolished gems in baseball – via the sport's vast array of on-field athlete performance and game impact metrics. The company then offers an up-front lump cash payment in exchange for a percentage cut of the athlete's future contract earnings. The advantage for some athletes – particularly baseball players who come from Latin American development systems which lack the exposure of American players – is the provision of an immediate lifeline which can provide the foundation for a successful MLB career, and significant future payouts for both the athlete and the investor. The company is rapidly moving into other sports like the NFL and NBA.  Critics claim the downside of the investor patronage model is that it can potentially exploit uneducated individuals or those who lack good legal guidance.

Between NILs and programs like Big League Advantage, there are more highly capitalized and lucrative support models for athlete development than ever before – and cycling might benefit if various private and national federation programs could integrate this kind of thinking into their operations. For example, Italian cycling guru Gianni Savio has plied a hybrid “transfer-market” investment version of this for years, but rather than enriching the athletes, he has used it to fund his own pro squad. Savio basically identifies and signs young (usually South American) riders to long contracts (5+ years) at a low salary, develops them into winners, and then waits for WorldTour teams to pay hundreds of thousands of Euros to buy the rider out of his contract – an arrangement which has often been highly beneficial to both parties. Prime examples include Egan Bernal, Fausto Masnada, and Iván Sosa. While he doesn't get a cut of future pay, it affords his team a slice of a rider's future upside in exchange for a low upfront investment.

After revealing a few weeks ago that its main sponsor would step back from the title role, Team Jumbo Visma has now apparently lost a second sponsor – potentially creating a significant shortfall in its 2023-24 budget. The German delivery company Gorillas, whose logo appears on the team’s sleeves, is apparently also scaling back – a victim of declining home grocery delivery demand as the world emerges from the COVID pandemic. The company is reportedly in discussions with a variety of major international companies to take over the team’s main sponsorship. There have also been reports that the team is in discussions with Saudi Arabia’s huge NEOM project, a city the size of Belgium that will stretch along the Red Sea coast, aimed at reducing the country’s dependence on oil exports. If this were to materialize, it would represent yet another major – and undoubtedly controversial – Middle Eastern step into the sport. From a broader perspective, Jumbo-Visma’s situation is reminiscent of the challenges faced by Bob Stapleton’s highly successful High Road teams a decade ago – which lost sponsorship even as they were one of the most successful teams in the sport. The situation serves to underline the constant challenge facing pro cycling – near total financial reliance on external sponsors which can disappear – for a wide variety of internal and external reasons – at any time, even if you are one of the most successful teams in the sport.

As WorldTour teams slowly roll out their lineup for the upcoming Tour de France, the headline news so far has been the exclusion of four-time Tour champion Chris Froome from his Israel-Premier Tech team’s roster. This news might come as a shock to casual fans, especially since the 38-year-old Froome has insisted for years that he will be able to return to Tour-winning form. However, for those who have been closely watching since his return following his terrible accident at the 2019 Dauphiné (including a five-year, €5 million per year deal with I-PT) this has come as little surprise. Outside of being unable to seriously challenge for a single win, he seems to have regressed in 2023. This non-selection also highlights the impressive depth – especially with young, previously unknown riders – that IPT has been able to build, beyond the headline veteran signings they made when they first entered the WorldTour in 2020. This should serve as yet another reminder that a large budget doesn’t necessarily translate into a top team, and that the best way to build a solid squad is to find young, up-and-coming riders before others do – and avoid chasing expensive big names whose best years are behind them.

During the course of last month’s Tour de Suisse, it was announced that Flanders Classics would invest and partner with Cycling Unlimited, the organizer of the event, to help build and grow both entities in the future.  The deal represented a small, but nonetheless interesting consolidation move within the sport. Flanders already operates about 60 different events, including the Tour of Flanders, Omloop Het Nieuwsblad, Gent-Wevelgem, Dwars door Vlaanderen, Scheldeprijs, and De Brabantse Pijl. Flanders Classics CEO Tomas Van Den Spiegel said that two groups will exchange strategic and operational insights, and “we all know that there have been discussions going on forever about the reform of cycling. We are important stakeholders in that discussion as well and now we can speak as one voice." Hans-Peter Zurbruegg, chairman of Cycling Unlimited, was even more grandiose, saying "This is more than just a partnership, it's a testament to the power of collaboration in driving transformative change."