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Pegasus Sports hits back at UCI

By:
Cycling News
Published:
December 24, 2010, 14:33 GMT,
Updated:
December 24, 2010, 15:02 GMT
Edition:
First Edition Cycling News, Saturday, December 25, 2010
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With timeline of application process, team says it met UCI's rules

Pegasus Sports manager Chris White issued a statement today refuting the UCI's assertion that the team had been "unprofessional" in its bid to gain first a ProTeam license and then, after being ranked outside the top 20 teams and therefore ineligible, a Professional Continental license.

The team were denied the second division registration by the UCI, forcing riders to seek other teams although White has said he may continue the project as a Continental team. Some of its star riders have already signed other contracts - Robbie McEwen and Robbie Hunter have gone to Team RadioShack and Dominique Cornu signed with Topsport Vlaanderen.

White said, "We were taken aback and extremely disappointed by the urgency and unprecedented action of the UCI to issue a press release that severely tarnished the image of Pegasus Sports without first giving us the courtesy of an explanation."

The statement says the team has not yet received an explanation for the denial of the license from the UCI, and the only information came from the press release issued by that organisation yesterday.

The Australian insisted the team had adhered to the UCI's procedures for the license application and provided a timeline of documents submitted to back up his claim.

He said that after the UCI's press release it was imperative to share the facts. "Our goal is to be transparent and honest… We don’t want to get into a boxing match or a mudslinging contest. However, we will protect our name and integrity so we can move on to creating a viable racing program."

The team was initially structured around an 'equity' guarantee by a major shareholder, he explained. White confirmed to Cyclingnews that Pegasus Sports was to be bankrolled by Gillett family. They pulled his support on December 7, "due to a number of factors external to Pegasus Sports", just days before the UCI's licensing procedure ended.

White would not say whether there was a contract in place with the Gillett family.

The following timeline of events was included in the statement:

1 OCTOBER

Among other documents lodged with the UCI and their auditor was the original bank guarantee. I confirm that the UCI’s auditor in their initial report confirmed the existence and veracity of this bank guarantee.

Due to a misunderstanding, there was an ‘essential’ document (a financial underwriting document) missing from our 1 October submission. The UCI auditor in the ‘Initial Report’ highlighted this and, as a result, Pegasus Sports was not listed as an initial PRO Tour applicant.

By 7 October this document was lodged and in place with the UCI.

31 OCTOBER

As the UCI pointed out in its most recent press release, Pegasus Sports were ranked 23rd and as a result PRO Tour qualification for 2011 was not possible.

The UCI in line with regulation 2.15.056 requested immaterial amendments to two sponsorship contracts and as such Pegasus Sports was referred to the UCI License Commission.

18 NOVEMBER

Based on independent legal advice sought in Australia, Pegasus Sports resubmitted amended sponsorship contracts to conform to regulation 2.15.056. The License Commission was not satisfied with the sponsorship contracts as re-submitted and did not agree with the advice that Pegasus Sports had been provided with. The License Commission requested further edits to the said sponsorship contracts to be completed prior to 10 December. The requested edits were completed and subsequently submitted.

7 DECEMBER

Notification from the majority shareholder of Pegasus Sports was received, stating that they were retracting their support from the program.

Additionally, there was some confusion over whether the original bank guarantee lodged and approved as valid on 1 October had been released. This led Pegasus Sports to request on 8 December an extension of time to complete the PRO Continental licensing process. The UCI licensing commission denied this initial request for an extension of time.

10 DECEMBER

With the events of 7 December materially impacting Pegasus Sports existing license application, Pegasus Sports sought the UCI President’s support to allow further time to deal with the catastrophic effects of the retraction of our major financial backing. The President recommended an extension of time be granted. In a great display of compassion for the human impact, the UCI License Commission granted Pegasus Sports an additional 5 days.

11 – 15 DECEMBER

The entire organization was involved in a drive to reposition the Team’s cost base to assist in ensuring financial stability. Within the Team there was unanimous support for these tough actions and a strong willingness to see out the tough times together.

Pegasus Sports worked closely with its’ bankers to put in place a second bank guarantee in the form of a Letter of Credit. (This Letter of Credit still remains in place with the UCI as the beneficiary.)

Coupled with this approach was engagement with our existing sponsorship base to help us to close the remaining funding gap.

15 DECEMBER

Pegasus Sports lodged within the time frame the required documents, specifically;

Balanced budget (in surplus) Bank guarantee/letter of credit (Still held by UCI) Contracts (employment and sponsor) Insurance

I confirm that the budget as at 15 December for 2011 was in surplus.

17 DECEMBER

In response to the UCI auditor’s report (dated 16 December) advising that there was no bank guarantee in place Pegasus Sports provided evidence to the UCI from it’s bankers (National Australia Bank) that the Letter of Credit was funded and in place with the UCI’s bank account (UBS SA).

Pegasus Sports has been advised by the UCI that the Letter of Credit is in place. Subsequent to the non-issuance of the PRO Conti license Pegasus Sports have requested that the UCI release the Letter of Credit and to this date the UCI has refused to release same.

20 DECEMBER

Based on feedback received directly from the UCI’s auditor, there were concerns raised in relation to the quantum of some revenue items. These items — along with a new sponsorship contract that was concluded post 15 December — were added to the Team’s financial position and an updated budget was sent to the Licensing Commission on the morning of 20 December.

The effect of these adjustments and adding the additional contract was that the Team’s budget was in a surplus position of greater than $500,000.

24 DECEMBER

The UCI and the UCI License Commission are yet to communicate directly with the Team regarding the reasons for non-issuance of the PRO Continental license.

All information in this regard has only been communicated through a public forum.

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