The End of Specialization? Is Sports Media By-Passing Cycling? A Major Bankruptcy; NCL Kicks Off; A Push to Promote E-Bikes
● Flanders: Does Pogačar Herald the End of Specialization?
● Sports Media Trends, and the Implications for Cycling
● A Major Bankruptcy
● E-Bike Bill Reintroduced in Congress
● NCL Kicks Off This Weekend
Yesterday’s Tour of Flanders was one of the biggest days in pro cycling, as what appeared to be the entire Flemish population took to the streets to cheer on the riders and participate in the party-like atmosphere. 24-year-old Slovenian Tadej Pogačar won the men’s race after unleashing a massive surge on the penultimate pass of the brutal Oude Kwaremont climb. He pegged back an incredibly strong escape group, before storming clear of an all-star group – including Mathieu van der Poel – on the final ascent of the same climb, taking a dominant solo victory. The win was stunning, as Pogačar went up against – and fairly easily dispatched – some of the (supposedly) best one-day cobble specialists in the world, notably van der Poel and Wout van Aert, despite having little experience racing in these Northern Classics. This win gives Pogačar his fourth one-day monument title (spread over three separate races) and suggests that he has a legitimate shot to become only the fourth-rider ever to win all five one-day monuments. It also ends the debate about who is the best rider in the sport at this moment, and suggests that he has the potential to become the best rider of all time. (If this sounds crazy, remember that Pogačar was closely tracking the seemingly untouchable palmares of Eddy Merckx after his first three seasons, and now seems back on track).
The twentieth edition of the women’s Flanders race was equally hard-fought by a premier field, but not as affected by the crashes which marred the men’s edition. Defending champ Lotte Kopecky (SD Worx) demonstrated strength and tactical superiority in her solo win. For the first time in what seems a generation, the Koppenberg proved to be decisive and projected Marlen Reusser (SD Worx) and Silvia Persico (UAE) ahead of the field (nearly the rest of the peloton dismounted due to the slick cobbles), but Kopecky rapidly bridged with teammate Lorena Wiebes and then emphatically broke free on the Kwaremont for the victory. SD Worx secured 2nd place with Demi Vollering’s sprint over Elisa Longo Borgini (TREK Segafredo) to round out the podium, but Kopecky’s win firmly cements her place in Vlaanderen history as a repeat winner and a rider to watch for in the upcoming women’s Paris-Roubaix.
A potential byproduct of this victory – and of Pogačar reviving the long-dormant pursuit of Merckx – could shatter the historical notion that men’s pro cycling is a sport of separate specialties, where riders dominant in one discipline can’t really compete in another. For years, the conventional wisdom has been that it was impossible for riders who don’t focus solely on cobbled classics to win such events because they don’t have enough familiarity with the courses – that GC riders couldn’t compete because they are too light to generate power over the rough cobbled road surfaces. However, Pogačar’s recent results suggest that these widely-held beliefs aren’t necessarily ironclad. And it's not just Pogačar. American riders Matteo Jorgenson and Neilson Powless both turned in impressive top-ten finishes at Flanders despite not being Classics-specialists or having deep local knowledge of the course. It’s interesting to note that fans of women’s cycling point out that skill and power are often in perfect balance in even the most “average-sized” WWT rider, with accomplished champions like Marianne Vos, Elisa Balsamo, and Annemiek van Vleuten conquering the cobbles, stage races, and classics in the same season. But just as we have witnessed the recent repudiation of the long-held belief that young riders couldn’t be competitive, it seems likely that we will see more “specialty” races where the best male all-arounders with strong engines slowly creep in and erase the niches where specialists used to thrive.
The dominant recent trend in global sports media has been billion-dollar acquisitions – one after another – of television and streaming rights by major broadcasters and big tech platforms like Apple and Amazon. These companies are leveraging sports to upsell on-demand streaming entertainment and related subscription content. But this model has destabilized terrestrial and local cable-based content distribution to the point that some leagues are completely rethinking how to build up and monetize broadcast rights in the future. U.S. cable subscriptions shrank by over 25% from 2019 to 2022 and this trend is expected to accelerate globally as broadband and 5G wireless coverage expands. In just the last few months, multiple regional sports networks (RSNs) have imploded, with regionally exclusive MLB, NHL and NBA game coverage either reverting back to their respective leagues or being acquired by other sports content aggregators. There may be a silver lining for the leagues, teams, and consumers in this shift, and pro cycling, which has a similar “regionalized” media rights model, needs to take notice of this rapidly changing landscape.
Major League Baseball, for example, is happy to have the rights revert back to the league and its teams, and it has made it clear that it will broadcast the games on its native MLB.TV platform instead. And one only has to look at Diamond’s bankruptcy filing to see why – the $8 billion restructuring plan provides a glimpse into the economic upside for league executives to reclaim, repackage, and upsell aggregated rights while retaining the capability to stream individual games locally for paying fans. Echoing this new trend, Italy’s Serie A is looking to transform its capabilities by acquiring SKY Italia and utilizing its mature infrastructure to launch a league-branded multi-platform content distribution strategy. This could be the first step for the league’s 20 teams to pull the media rights back into its league portfolio, then restructure and consolidate the content for acquisition by a global tech or broadcast player.
What do these trends imply for pro cycling? Cycling is reliant on localized, region-exclusive terrestrial and streaming channels – a direct consequence of the sport's stakeholder structure which encourages race owners to cut whatever deal is available for their event's media rights. Outside of a handful of countries which still offer terrestrial broadcast cycling content, the only outlets are cable distribution – which is rapidly contracting – or multiple streaming services which are often geographically restricted. (Yesterday’s Flanders race is a perfect example; in the U.S. it was only available to the niche streamer FloSports, which lacks both the quality, affordable cost and large subscriber base of NBC’s Peacock streaming service or Warner Brother Discovery’s GCN+ service.) Even worse, sometimes the race owner actually has to pay (time-buy) broadcasters to carry coverage. As race media rights are cut into smaller slivers and packaged haphazardly among streaming providers, fans can’t consistently or affordably access a complete season. By contrast, the MLB, NBA, and Serie A are acting so as to boost their profitability and league values while – as we have often lamented – pro cycling is held back because the sport’s rights aren't negotiated as an aggregated and more valuable package.
A recent bankruptcy petition by one of the UK’s largest bike distributors illustrates the heartburn caused by the industry’s supply chain whiplash. Over-enthusiastic forecasting – due to pandemic consumption, production, and shipping factors – first coming unglued and then realigning has destabilized cycling’s world market. Multi-brand distributor Moore Large went under and is poised to unload approximately $40 million in bicycles and related soft and hardgoods for pennies on the dollar in receivership. While this will hurt the U.K. retailer community via market flooding, it may also be an early indicator of similar stressors about to hit markets in Europe and the U.S. The spike in COVID sales triggered a spiraling demand that was only met in early 2022, and according to Moore Large’s former owners, this “massive oversupply” led to discounting, and sales never recovered as post-COVID consumer demand waned. With 2022 inventory still clogging sales floors and 2023 stock arriving, we can expect to see more fallout and adjustments. But it’s not all bad industry news; longtime and respected carbon bike constructor TIME will move some production and finishing of its products from Europe to a facility in Spartanburg, South Carolina, where it will have high output capability by the end of 2024.
The widely-anticipated kickoff of the National Criterium League (NCL) is set for Miami this coming Saturday, with 30 laps of a 1.5-kilometer route on the city’s famed Ocean Drive. The new league has captured a good deal of attention over the past several months, not least because of its $1 million purse. The new league’s $7.5 million capital raise last December, led by Will Ventures, was described as one of the largest private investments ever in U.S. professional cycling. With a number of different parties currently running crit series – including the traditional American Cup criterium series, the European Nocturne Group, and a possible series organized by Justin Williams and his Los Angeles L39ION team – 2023 is set to be an interesting year for this sector of the sport. One question is whether there are actually enough qualified professional cyclists in the U.S. to populate all these events? The NCL will boast a number of new innovations, including equal participation and pay for both men and women, and a lap-by-lap scoring system which may take fans a while to get used to. But NCL CEO Paris Wallace says, “We've captured people's imagination, I think. Change is always exciting, but also confusing. And so I think once people have seen our first race and our first events on April 8, a lot more is going to be clear.” Wallace confirmed to The Outer Line that the Miami event will feature eight combined men’s and women’s teams and will be streamed live in the U.S. on GCN+; it will be interesting to see how it unfolds. Perhaps some of these questions will be answered after the Miami event.
And bolstering the industry this week, the E-BIKE Act was reintroduced in Congress, proposing a change in federal law such that e-bike purchases are allowed individual tax credits. The bill was sponsored by several Democratic representatives, who emphasized the environmental benefits of incentivizing greater bicycle usage, particularly in our major cities. If it becomes law, this bill would offer purchasers of e-bikes a 30% tax credit for most bikes, with a ceiling of $1,500. Both the credit and the price of qualifying bikes is considerably higher than in the last attempt to pass similar legislation, back in 2020. The bill faces opposition from certain corners. In a recent news conference announcing tighter rules for e-bikes in New York City, Mayor Eric Adams said there were more than 130 e-bike-related fires last year – describing them as "explosions" that spread so rapidly that it takes “more than just water to take them out.” Industry groups, however, are confident that the bill will move forward this time. “Incentivizing electric bicycles makes them a competitive transportation option for more Americans and supports a national effort to lower carbon emissions," said PeopleForBikes CEO Jenn Dice.