We’re constantly told that cycling’s economic model is unsustainable, and that without serious investment and restructuring the sport will simply wither away. Rising costs to run teams; a lack of shared television revenues; a stumbling set of reforms, and a power struggle between the main power brokers are just some of the issues that have created an uncertain future for professional cycling.
According to Graham Bartlett, CEO of Velon, the solutions for cycling’s problems can be driven by the company which he leads. Velon is a collaboration and business venture by 11 of the current 18 WorldTour teams. They are pushing for greater economic stability, growth into new sectors and greater collaboration between the teams, the governing body and the largest race organiser in the world, ASO, who run and own the Tour de France.
Control is very much the operative word, but can Bartlett and his bloc of 11 push through the reforms they seek? Can they establish long-term ties with ASO and can cycling truly grow?
Of course we’ve been here before. From Manolo Saiz to Hein Verbruggen and Etixx-QuickStep team owner Zdenek Bakala, there have been a multitude of plans to reform professional cycling. At one point, all you needed to kick-start a revolution was a suitcase full of cash, a platform or press conference.
However, unlike previous ventures, Velon’s reform has an underlying level of legitimacy. It’s not just one man’s plans nor is it a roll of the dice from an outgoing UCI president. Velon, now heading into their second year of business, have set out goals and made steps – some bigger than others – to achieve their aims. Perhaps their grandest achievement is that they’re now recognised as a significant player.
When they first hit the headlines in 2014, L’Equipe afforded them a paragraph of space in their publication. In the two years since Velon has become a stakeholder at cycling’s top table. Certain parties may see Velon as a headache, even a rival, but they have been forced to listen. Now Velon has even more influence after announcing a ten-year deal with the global sports marketing company Infront, who recently bought the Ironman triathlon business and invested in cycling by buying the endurance-sports division of Paris-based Lagardère Sports – which owns the Hamburg Cyclassics race and a series of sportive events. Infront’s parent company Dalian Wanda Group of China was even rumoured to be making an attempt to buy ASO and so own the Tour de France.
Bartlett: "Infront is a great partner for Velon"
In a lobby of a West End hotel in London, Graham Bartlett is sitting in front of his laptop, pleased with the fact that Velon have just created a ten-year partnership with sports marketing company Infront. The sports marketing company already has experience in cycling, working with the Tour de Suisse and the UCI, and Bartlett is keen to stress that the new investment with Velon is just another building block in cycling’s reform and improvement.
“They’re a great partner for Velon. What it means is that all the things Velon have been talking about and want to do, we can do, because the missing piece of the puzzle has always been the right level of investment and expertise from the right partner. We now have them on board,” he tells Cyclingnews.
Velon’s most visible initiative since their inception has been through technology. It was the easiest area in which to make quick progress. The on-board video footage first showcased at the 2014 Tour de Suisse and generated intense interest. Bartlett is hoping that Infront’s experience in similar areas in other sports will help transform and improve Velon’s current proposition. From there, the plan is to approach race organisers, lure them in with the data they can showcase, and build new partnerships.
“For a long time we’ve talked about how we can animate a race and bring it to life from the inside. When we did cameras on bikes everyone thought that it was great but they then asked for the sound and the data,” Bartlett explains.
“With this partnership we’re able to build a platform for that to happen. We’ll be able to bring the data from the race to the fans. In the past people have done smaller experiments but no one has been able to put together a bigger overarching project for every race. This allows you to do that.”
“The first port of call is the UCI and then the race organisers. Now were in a position where we can make this happen and we can ask the organisers: ‘How do we want to bring this to you, and how do you want us to shape it?’ We’ve dipped our toe in the water last year when we did our deal with ASO but now we can go wider than that and offer a really good position to all the race organisers.”
Moving forward with technology
Velon aims to have deals in place by May of this year and there is a possibility that June’s Tour de Suisse could be the first event to showcase the new technology.
The fact that a ten-year deal could be secured with Infront when the maximum length of a UCI WorldTour licence is just three years may surprise some. However, Bartlett points out that the deal was made with longevity in mind, that teams such as Tinkoff know that their time in the sport maybe limited but that under the Velon company they can work towards longstanding goals.
“The first thing is that you need a long run at this. The technology takes time to get up to speed and it’s not something you can do over a three-year period. That’s one of the strengths to having the (Velon) company because the company has no life span, or UCI licence span and the shareholders buy into that. That’s one of the reasons why they set Velon up because they needed something that could change.”
When Velon first appeared it seemed as though they were rather uneasy about their ultimate ambition of generating revenue. Their website still leads with the message of making cycling better, but intertwined with that is the need for teams to generate revenue. Costs for running a WorldTour team have increased significantly in the last ten years as Team Sky, Katusha and Tinkoff inflated the markets with higher salaries and significant investment in improving technology and performance. The revenue incomes for teams from most commercial sponsors have largely remained the same.
“Velon is unashamedly a business venture. We have to create things that not only cover Velon’s costs but also the project's costs and there needs to be a return on investment to our shareholders. We’re a business and so are Infront. So yes, there’s a business plan and yes there’s a forecast and targets on how we can monetise this. That’s true of any sport though,” Bartlett says.
“What I can say is that there’s a lot of investment and that this is a long-term one. It’s a business model where we’re looking to offer what people want.”
Of course what people, what fans want, is deeper levels of analysis during race coverage. Thirty years ago fans in Britain would stand outside newsagents waiting for the last week’s report from Milan-San Remo to be delivered via a magazine. Now cycling fans want to know who won in real time, their speed, power, team tactics and thoughts as they do it. It’s an encompassing avalanche of stats, stills and streams (online and television). The question is about control, ownership, who delivers it and who makes money from it.
"People think that we want to scrap the monuments and have people riding up mountains backwards on pink bikes. That’s absolutely not the case. The beauty of the sport is its complexity and history and we want to keep that. What other sports have done really well is that they’ve taken the best of that history and expanded it. If the teams and organisers in cycling come together we can do that."
ASO: the elephant in the room
Bartlett’s toughest challenge isn’t that Velon has 11 of 18 WorldTours instead of a complete consensus. It’s time, it’s cycling’s ingrained culture, with its elements and individuals that are reluctant to change and race organisers who simply refuse to be a part of it, or who think they can do a better job themselves and see no reason to share their precious revenue.
Such a scenario could play out with ASO. When Cyclingnews asks about ASO and positions them as the elephant in the room, Bartlett fires back passionately.
“Why are they the elephant in the room? We’ll work with ASO and we’ve worked with them in the past,” he says.
Bartlett points out that Velon have done more deals with ASO than any other race organiser. This may be true, but the relationships has been difficult at times too. Velon cameras were taken off bikes at one point last year, and although the two parties came to agreement with GoPro in 2015, no deals have yet been signed for 2016.
At the same time, ASO have ventured into its own data analysis with a Dimension Data project during last year’s Tour de France. Dimension Data are now a WorldTour team sponsor but not a part of Velon. With the backdrop of uncertainty over the WorldTour reforms, one can quickly understand the difficult position Bartlett and Velon are in. Each advance they make towards securing new sources of revenue creates new challenges. Tread too carefully and a lack of progress will starve you. Move too fast and the door to ASO may shut forever.
“They’re not the elephant in the room to me. They’re potential business partners,” Bartlett says, before pointing out other important deals that have been struck with RCS and other organisers.
“We’ll make this offer to every race organiser, RCS, Flanders Classics, WorldTour, non WorldTour. We worked with eight races last year with cameras and some relationships are wider and deeper and with some it’s short, sweet and simple.”
“Velon has done more deals with ASO than any other race organiser. We did the GoPro deal with them, and then in 2014 we did the cameras on bikes at the Tour. We licenced our position and Movistar’s position to the ASO on tracking last year. We’ve done more deals, in terms of number with ASO, than any other race organiser.
“ASO have been good pioneers with tracking. They very bravely launched a Beta last year. They put a lot of money into that and fair play to them. They brought in Dimension Data and we worked with them last year and we would love to work with them again this year. We’re already in talks. We’ve been talking to them about data and tracking and cameras, and have been having those conversations for around two years. There’s an on going dialogue with ASO.
“The deal with GoPro was great, and was good for the sport. In terms of the reform it was multifaceted and the teams were one stakeholder. Where the UCI have landed with that is a balanced framework. ASO don’t see it that way but ASO have not held Velon back in terms of our business position.”
To subscribe to the Cyclingnews video channel, click here
Not only television revenue
Television revenue, which is seen by many as the crux to the competition for control, is just one part in Velon’s overall ambitions, as Bartlett explains.
“TV revenue is highly variable within the sport. You’ve got some races that benefit from a good revenue position and others don’t and have to use other pots. It’s not about sharing revenue. What we’re interested in is across the board revenue sharing. Forget TV, what’s the race and what does it need? How does it get better? How do we make a business together where we all benefit? In a way it’s wrong to fixate on just TV. It’s about the whole digital platform.
“Cycling lends it way to that in some ways, but the lack of stability is not good for the sport. It’s no good for the organisers because they don’t know who is turning up. It’s not good for the riders because they don’t have mortgages for three years and it doesn’t help the fans. It’s not benefiting anyone to have such a weak system. We’re all trying to draw more investment into the sport because it deserves more.
“What holds you back is the volume of people but that’s unavoidable. There are a lot of teams, a lot of race organisers, agencies and broadcasters. The reason why it takes time is because a lot of people want to be involved. It’s not a stumbling block but they want progress tomorrow.”
Tomorrow’s cycling is far from certain and while it will always survive, grow, shrink and evolve the battle for control and agreement is certain to shape the future.