Just over a month ago, we rolled out Cyclingnews' first Transfer Mechanics piece of 2020. We highlighted the biggest names on the market for the 2021 season, the teams that needed to strengthen their rosters and cherry-picked a handful of riders out of contract to try to understand their futures.
A few weeks on, and the landscape of professional cycling has altered drastically, perhaps for ever.
Races have either been postponed or cancelled; riders and staff, like those at Lotto Soudal, have begun taking pay cuts to help their teams survive; tentative new race calendars have been drawn up, but even the most optimistic would admit that we could reach 2021 before racing fully resumes.
If the current outlook seems bleak, it's because it is, and all stakeholders - from the riders and teams to the agents, the media, and race organisers - are going to suffer.
The rider transfer market is just one small part of the sport that will need to adapt over the coming months, with the Tour de France and a possible new calendar central to the sport's continuity and health.
In terms of the actual rider transfer market, everything is on hold. As one team boss told Cyclingnews over the weekend, the hubbub and chatter that took place during January's Tour Down Under over possible moves has faded to silence.
Instead, teams are focused on their short-to-medium-term survival, while the only calls agents are making are to their clients as they look to reassure them.
The reality is that Lotto Soudal's pay-cuts are likely to be the norm rather than the exception within the WorldTour, with some smaller teams perhaps not paying at all.
One agent told Cyclingnews that they were simply "waiting for a flood of emails to come in from team bosses" to inform them that salaries would be cut. When a typical team in the WorldTour spends 50 to 70 per cent of their yearly budget on wages, it is logical to start cutting from that side.
Over the next few weeks, the sport is likely to see more and more teams cut rider and staff salaries, cut back their budgets and try to survive the uncertain weeks and months ahead. It might be voluntary to start with, but every sport and every professional team in sport are moving in this direction.
For instance, in Spain, soccer federations have made $552m available in club loans should teams need funds to survive. In Italy, the Juventus football players have accepted a four-month salary cut to save the club €90m million. Their highest paid player, Cristiano Ronaldo, reportedly earns in the region of €30m a year. To put that into context, that's the budget of nearly two WorldTour squads.
In Germany's Bundesliga, several high-profile squads have taken similar measures to Lotto Soudal's, with Bayern Munch and Borussia Dortmund players agreeing to a 20 per cent cut in their wages. Nascar and the NHL are set to make cuts, too. In Australia, both the NRL and AFL have suspended their campaigns and, with a lack of television money to prop them up, there will be a severe financial impact. Roughly 500 players in the NRL have been told that they face up to an 87 per cent pay cut.
Last week, Sport Business reported that NRL chief executive Todd Greenberg said: "We're at a moment in time where the game's cost base will need to be reset and that cost base is across the entire sport, from players and clubs, to central administration. Everyone has a role to play in resetting the cost base. I think if we're being realistic about what we're facing, the resetting of the cost base is across the entire game, and that includes every single one of them, including me."
The picture doesn't look any different for sports such as F1, where half the season has been cancelled and the stock price has dropped by over 40 per cent in recent times.
Where this leaves cycling is still unclear, and there's evidence to suggest that the outcome could go in several directions. On the one hand, cycling's quirks and imperfections could act as its saving grace. The pandemic could pave the way forward for a bloated calendar to become more streamlined and flexible.
The sponsorship model, while some would argue is antiquated, still provides a high return on investment for sponsors, and there's no fear in a drop of event ticket sales because no such revenue stream existed within cycling in the first place. The teams also don't rely on TV revenues, so there's no direct risk there, but teams are still at the mercy of the one funnel of cash that keeps them going: their sponsors.
It’s unclear if sponsors will have terms within their contracts that stipulate if Tour de France selection and participation must take place in order for them to honour their deals, but if such a clause exists it might be key if the race is cancelled this year. Such a move would be a disaster on the PR front, however.
Very few businesses are going to come through the coronavirus pandemic without feeling the strain. If you're a holiday firm such as Sunweb, your revenues for the spring and summer have been wiped out. If you're Ineos and have just spent over €100m on a soccer club in the last 12 months, you may look at the falling share prices in oil – which have hit an 18-year low – and wonder where you can save cash. Movistar and other telecom giants might come through choppy waters relatively unscathed but, even for the likes of longstanding sponsors such as QuickStep and Lotto, there's an air of uncertainty.
For example, few consumers will be thinking about refitting their kitchen extractors – Bora – in a global recession, or upgrading the flooring of their home, using QuickStep's products right now. And it's worth adding that cycling was fragile enough before the pandemic, with Astana, Katusha-Alpecin and Bahrain McLaren all having problems paying their riders in 2019. It's not often reported, but a number of teams don't receive their yearly sponsorship up front, with most squads paid in installments. If that cash flow suddenly stops because a sponsor pulls out, runs out of funds or diverts its cash to pay its own employees and survive, a team can quickly sink.
Bike manufacturers, who account for two title sponsors at WorldTour level and have significant investment, may also be placed in financial trouble. Bike sales have improved in some territories despite the pandemic but, when it comes to cutting budgets, companies always start with their marketing capacity and if there’s no racing on the horizon, your global exposure only suffers. The bike manufacturers already took a beating thanks to Trump's tariff war with China, with Scott – owned by Korea's Youngone Holdings – already suffering in the last few years. The E-bike might offer some hope but a company like Dorel, which owns a number of companies including Cannondale, was already losing value.
It all means that teams are scrambling to stay alive. As Jonathan Vaughters pointed out last week in an interview with Cyclingnews, it doesn't matter if a team boss has a three-year contract with a sponsor; that piece of paper is worth very little if the business backing your team goes under. As for teams that run men's, women's and Under-23 projects, there could be some very difficult decisions to make.
A frozen market
This level of uncertainty has affected the transfer market and, from speaking to agents and teams, activity have completely frozen.
Typically, this would be one of the most active points in the year, with the Classics riders keen to impress as their market values reach their peaks. Instead, the likes of Oliver Naesen, Dylan Teuns, Niki Terpstra and Nils Politt – all free agents at the end of 2020 – have been reduced to gym bunnies on Zwift and other online platforms.
The Classics riders may find a way to boost their value if the spring Monuments are rescheduled in the second half of the year, but by then the racing scene will look very different. For example, it's not impossible to imagine the Tour of Flanders taking place within close proximity to the Tour de France, and it's not impossible, therefore, to imagine a Tour contender running away with a string of Classics results that they would have never envisaged had the season panned out as normal.
That said, even if pay-cuts are rolled out, the high-profile riders on the market should still hold the majority of their value. The Yates brothers, Bob Jungels and Richie Porte will all have offers coming in. Chris Froome, who is also out of contract, is unlikely to command the same level of offers as he did in 2017, when he last signed a contract, but the British rider will still find a team if he wishes to race in 2021. The likes of Thibaut Pinot and Romain Bardet will hold their value owing to their past results and high profile, while super domestiques at the top of their game are also likely to come through this crisis.
However, it's the riders closer to the periphery who will suffer the most. Riders who are 32 or 33 and had hopes of racing for another couple of years may be jettisoned by their existing teams if budgets are reduced, while riders who had a modest 2019 and then saw this season evaporate, may be forced to accept lower contracts on smaller squads.
Paradoxically, it could be the teams that relied on the investment of über-rich super fans that come through this period intact. For example, Ineos and Israel Start-Up Nation. EF might also benefit from their incredibly proactive social media campaigns and their experience in engagement with fans. This approached saved them once before and it could be called on once again.
Riders coming through the U23 system also face uncertain times. Some squads, like Michael Creed's US project, Aevolo, have already announced that they will extend their age limit to 24 next year, but there's no indication as of yet whether the UCI will make this the rule rather than the exception. Belgian stage race Le Triptyque des Monts et Châteaux would have taken place in the next few weeks, often acting as a shop window for the best U23 prospects on the market. With the event shelved, teams will have to be even more cautious when it comes to bringing on new talent.
The knock-on effect from this could be a reduction in stagiaire posts available at the end of the year, while riders already hunting contracts have just a few months to make an impression, rather than a full season. This could create a huge bottleneck of U23 talent if this year’s crop are allowed to repeat their 2020 season next year.
Tour de France
When it comes to the future of the market and the teams, so much relies on the Tour de France. Agents are proposing two scenarios for their clients: one in which the Tour takes place and their seasons can just about get back on track, and one in which the Tour is cancelled.
As Patrick Lefevere discussed last week, so much rests on the Tour. It's the sport's marquee race, and it's the biggest event for sponsors to showcase their brands, counting for around 70 per cent of a sponsor's annual visibility via the global media the Tour attracts.
One can argue that TV figures have dropped in recent times, and that teams have found ways to diversify exposure and increase engagement with their fans, but the Tour is the Tour, as the saying goes.
For now everyone is waiting. A new post-coronavirus calendar for the second half of 2020 will determine so much for the sport – not just the transfer market but possibly the survival of teams and professional cycling as we know it.
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