New and Improved Points System; Pogačar to Giro Shakes Up 2024 Calendar; MAX to Stream RCS Races in U.S.; Lessons from College Football; Will Gambling Help Sustain Sports?

Key Takeaways:

●        Pogačar to the Giro

●        A New and Improved Ranking System?

●        RCS Races Will Air in the U.S. After All

●        Structural Lessons from College Football

●        Does Legalized Gambling Help Sustain Niche Sports?

Tadej Pogačar shocked the cycling world on Sunday when he announced he would race the 2024 Giro d’Italia. The move has big implications for not only the Giro – which now seems likely to feature at least two of “Big Six” superstars, Pogačar and Wout van Aert – but also for the whole season, with the Tour de France likely losing one of the only riders who can challenge defending champ Jonas Vingegaard. On first glance, it appears that Pogačar may be utilizing the unusually mild Giro course to attempt the ever-elusive Giro-Tour double. Notwithstanding Pogačar’s immense talent, and recent signs that training paradigms and nutrition have made racing multiple modern grand tours in one season more feasible (e.g., Sepp Kuss’s victory in the third grand tour he started in 2023), racing the Giro may constitute a massive gift to his primary Tour de France rivals. No rider has successfully completed the Giro-Tour double since Marco Pantani in 1998 – and in that case a retroactive doping analysis indicated he used EPO to achieve the feat. In the 25 years since, only a few top riders have tried (and failed) to complete the Giro-Tour double: Alberto Contador (Giro winner and Tour 5th in 2015), Chris Froome (Giro winner and Tour 3rd in 2018), and Tom Dumoulin (Giro 2nd and Tour 2nd in 2018). However, Pogačar has proven to be a different animal: at just 25 years of age, he has two Tour de France victories and five one-day Monument wins already, and arguably possesses more raw racing ability than any other rider to attempt the feat in the modern era. It certainly adds some excitement and new uncertainty to the upcoming season. Will he be able to join the five other riders who have accomplished the feat, and claim his place in a pantheon that also includes Coppi, Anquetil, Merckx, Benard Hinault, and Indurain?

Velon, the cycling technology development and innovation entity that is owned by a consortium of ten WorldTour teams, is working to develop a new and better system for ranking individual riders and events. Tentatively called the “Road Code Ranking,” this new Eigenvector-based methodology hopes to improve on existing points systems by continuously ranking each rider in terms of who they have competed against and beaten, rather than on a more arbitrary system of absolute points. A rider’s “prestige” will be determined by his peers; likewise, a measure of race “prestige” will be determined by the combined prestige of all the riders participating in the event. This performance method of ranking athletes and events would be far less subjective than the current points systems, which affixes rather arbitrary “importance” points to all UCI events. (As an intriguing current example, if a couple more big stars opt to race the Giro next spring, its “prestige” could begin to rival the Tour itself.) Thus, the Road Code Ranking has the potential to be a much better actual measure of athlete performance and race significance. At first, this may just seem like a minor metric or analytical improvement. However, if it became widely utilized and accepted, it could help form the foundation for one the key transformations which we have long suggested – developing a stronger and easily comprehended season-long sporting narrative that resonates with and attracts more fans. Like in Formula 1 racing – a series of individual events but where fan interest is focused on a season-long points race between top individual drivers – a similar mechanism in pro cycling could help build broader acceptance and interest in the sport. Velon officials have confirmed to The Outer Line that the first version of the system is scheduled to be launched in early 2024.

Given the Giro’s suddenly star-studded start list (in addition to Pogačar and Van Aert, other early registrants include Geraint Thomas, Eddie Dunbar and the newly re-employed Nairo Quintana), U.S. fans will be happy with the weekend announcement that they will be able to view the event on TV. Warner Brothers Discovery, after recently announcing the shutdown of its popular GCN+ streaming service, said that it now plans to move its extensive portfolio of cycling events to the popular Max streaming service. While this is great news on the surface, on closer inspection it appears that U..S cycling fans will have to pay significantly more to access the same number of races. The basic Max subscription costs $9.99 a month or $99 per year, and bike races will be streamed via the Max B/R add-on. However, the fine print on the Max website tells us that after the promotional period (ending on February 29th), a Max subscriber will have to pay an additional $9.99 per month for B/R Sports. In summary, it appears that any cycling fan who isn’t already a Max subscriber will have to pay $220 per year ($99 annual Max subscription plus the $9.99 per month B/R add-on) in 2024. This basically compares to the $50 they were paying for GCN+ in 2023. Additionally, due to the fractured streaming rights landscape in the U.S., in order to (legally) access every top WorldTour race, a U.S. fan will also have to subscribe to Peacock and Flo Sports, spending the eye-watering total sum of $420 in 2024. (For comparison, the NFL’s Sunday Ticket package, which lets viewers watch nearly every NFL football game, is $349 per year). Unless a yet-to-be-created professional cycling league can successfully bundle races together to create a viable streaming experience like F1, these high prices will almost certainly mean fewer and fewer Americans will have access to pro cycling races outside the Tour de France. 

U.S. college football’s economic transformation has taken about four years to basically redesign the model for amateur sport; there are some concepts here which pro cycling’s stakeholders could also synthesize into a new action plan – preventing other sports from stealing our piece of the pie. Two key aspects that we’ve previously examined – Name/Image/Likeness (NIL) capitalization realized by the athletes, and conference realignments which uncoupled regionally restrictive competitive and economic agreements – have led the college football revolution. These developments set aside traditional structures to embrace new financial opportunities: NILs and looser NCAA transfer rules have opened the door for athletes to freely transfer from one school to another to maximize their financial rewards. This simultaneously forced marquee schools to break their tradition-bound regional rivalries and join conferences with the most lucrative broadcasting deals to financially fuel the new ecosystem. The new four-conference college football landscape now resembles professional NFL football, with highly anticipated team matchups now possible regardless of time zone, and an expanded playoff format. In lockstep, athletes can now make or break the fortunes of those top schools with self-directed decisions that supersede school loyalties with long-term personal financial security and the best chance for future NFL playing opportunities – professional athletes by most definitions, but competing in an “amateur” sporting category.

An insightful opinion article provides further focus on how college football’s changes affect the wider sporting landscape. Amateur sports federations, like the U.S. Olympic Committee and USA Cycling, typically place more focus on winning medals with select athletes at the top level with less attention paid to supporting grassroots and youth sports which have a greater socio-economic impact. The NCAA, which oversees all of amateur collegiate sports, may no longer be able to shield its member schools from legal and financial scrutiny of its recent multi-billion dollar broadcast deals. Conference realignments have showered schools with financial windfalls, but have simultaneously injured or broken the funding model for other conference-related and more truly amateur sports – like swimming, track and field, and gymnastics. Universities are vehemently opposed to classifying football players as employees, even though they are inexorably tied to every facet of “fundraising, alumni engagement, infrastructure projects, maintenance of good relations with state legislatures, and, most of all, the marketing bit – selling the idea of what it means to go to college to American families.” And this is exactly what the National Labor Relations Board (NLRB) recommended in 2022: that collegiate athletes aren’t amateur competitors or students, but rather professional employees of their universities. More to the point, the professionalization and evolution of sport may be inevitable, demanding new development paradigms and oversight – whether the NCAA, IOC, or UCI likes it or not.

Pro cycling has thus far only achieved one aspect of college football’s revolution – freedom of movement for the athletes with remuneration at least somewhat commensurate with the athletes’ capabilities. With apologies to the CPA, this is largely due to the whims of rider agents goading than any collective actions of the athletes. The WorldTour calendars, which are analogous to college football’s conference schedules, are still a mess of overlapping events often prioritized more for local and regional audiences that the races can steal from each other rather than the audiences that the sport can collectively excite and draw into the sport’s overall narrative (although women’s cycling has improved, in this regard). College football’s conference realignments and new national championship structure have completely rewritten a legacy sporting narrative in just three seasons, and despite initial complaints, has been wildly successful with fans. But as in college football, pro cycling needs a surge in athlete power to demand and capitalize on their value to really force progress; the true value of current and future star athletes (current case study: Cian Uijtdebroeks) inexorably destabilizes tradition-bound and limited funding inherent in the sponsorship model. Pro cycling has already passed a critical tipping point, namely, what riders can demand in compensation is starting to exceed the appetite of our sponsors. Therefore, as we have been preaching for years, a reinvention of the top level of the sport needs to happen - more concise race calendar, stronger team structure, alignment of team owners and, most critically, expansion of the sport’s broadcast reach.

Amidst the decline in live television ratings, including mainstream sports like the NBA and MLB, American football is proving to be remarkably resistant to this trend. One potential theory for the robust nature of the audience for both professional and college football is the growing prevalence of online gambling. Gambling on sports grew quickly across the country after the Supreme Court struck down the Professional and Amateur Sports Protection Act (PASPA) in 2018, allowing each state to create and enforce its own sports betting laws. This change may have enabled many casual viewers to stay emotionally invested in even more obscure games. One sign of just how quickly sports gambling has gone from “taboo” to “acceptable” is that ESPN – the standard-bearer for sports broadcasting and journalism in the United States – recently launched ESPN BET. After licensing its brand to Penn Entertainment for $1.5 billion over the next ten years (and receiving bonus warrants based on the performance of ESPN BET), ESPN is now actively pushing betting parlance like over-under and points spreads on their live broadcasts. This would have been completely unimaginable just a few years ago.

However, while the legalized gambling phenomenon may have been good for football stakeholders (along with ESPN’s bottom line), will it pay off for smaller niche sports like cycling – or even the actual sportsbooks themselves? Setting aside any moral debates about the growing prevalence and acceptance of an addictive vice like sports betting, it isn’t clear that slight viewership growth in niche sports like cycling will be due to the growth of online sports gambling, or that the shift from in-person to online gaming will profit the operators. Massive marketing and operational costs to pivot from straightforward in-person casino-based sports gaming to the expensive and complex world of app-based mobile betting has, at least so far, been distinctly unprofitable.  This is primarily due to intense competition – between emerging digital companies like FanDuel and DraftKings, and legacy casino operations like MGM – for a limited number of customers. The general business plan for these players seems to be to spend large amounts of money to aggressively acquire a large customer share before eventually pivoting to a more profitable business model. Implementation of this model will be somewhat constrained as long as the nation’s two largest (and wealthiest) states – Texas and California – remain off-limits due to the lack of legalized online gaming.

(Happy holidays to all of our readers and thank you for your on-going interest and support. We’ll take a holiday break next week, posting one issue between Christmas and New Year’s, and then resuming our regular Monday publication date once the new year gets underway.)