Tuesday, February 16, 2010

The Business of Cycling - Wall Street Journal


When the three fastest riders stand atop the final Tour de France podium in Paris Sunday, they won't be the biggest stars the sport has produced. They won't be the richest, either.

Based on the current crop of contenders, the combined salaries of the three top-finishing riders could add up to as little as $3.5 million. That's less than half the combined salaries of the top three riders in 2005 -- Lance Armstrong, Ivan Basso and Jan Ullrich -- and less than the average salary for a single NBA player.

Given these relatively low numbers, one team has been able to field a competitive effort in this year's Tour for $11 million, roughly half of what some of the top teams are spending.

Cycling's top salary, according to coaches, sponsors, cyclists and team executives, belongs to Spaniard Alejandro Valverde, who makes nearly $4 million a year. Prerace favorite Cadel Evans pulls in somewhere around $2.3 million. But those riders are exceptions. Luxembourg's Frank Schleck, who led the race for three days, makes roughly $1 million, about $500,000 less than teammate and current leader Carlos Sastre. The bargain of all bargains may be American Christian Vande Velde, currently in sixth place, who will earn less than $500,000. France's brightest hope, Sylvain Chavanel of the Cofidis team, makes about $1 million.

Given all the bad news in cycling, one bright spot for the sport is that it is becoming a relative bargain for sponsors, especially in this year's Tour de France, where many of the top riders have been suspended for doping or haven't been invited back. The top cyclists compete for a tenth the salary of a top Formula 1 driver and less than most mediocre European footballers. With the Tour broadcasting live on TV in 95 countries, cycling is still a pretty cheap way for an obscure hearing-aid manufacturer or flooring company to get noticed. "You couldn't touch soccer in Europe for less than $25 million," says Columbia team owner Bob Stapleton. But "you can have the dominant team in cycling for less than that." The relatively low salaries of cyclists are a function of the sport's unusual economics. The average budget for a top-notch cycling team ranges from $15 million to $23 million, about 60% to 80% of which goes to riders' salaries; the rest goes to travel costs, equipment and personnel. Teams don't get anything from the TV deals the events make, as they do in some pro sports. Though millions of people turn out for races like the Tour, there are no ticket sales. The winner's prize for the Tour, just $700,000, is usually distributed among the nine members of a team........read more

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