Cycling is a ruthlessly commercial and capitalist sport which is almost completely sponsor driven. The biggest way to get value for sponsors is by winning races, and the crown jewel is the Tour de France.
Figures for World Tour team budgets are nearly as much of a mystery as pro cyclist salaries and it’s a rarity for teams to disclose their financials.
Lots has been discussed about team budgets since French newspaper l’Equipe did their best to approximate these numbers, we decided to look at which team budgets took them the furthest in terms of sponsorship exposure, and if it’s possible to ‘buy’ success.
According to l’Equipe’s estimates on WorldTour team budgets (including TdF wildcards):
1. Team Sky: €35M
2. Katusha: €32M
3. BMC: €28M
4. Tinkoff: €25M
5. Astana: €20M
6. Etixx-Quickstep: €18M
7: Movistar: €15M
=8. Lotto-Soudal: €14M
=8. Lotto-Jumbo: €14M
10. Dimension Data: €13.5M
11. Orica-BikeExchange: €13M
12: Giant-Alpacin: €12.5M
=13: Trek-Segafredo: €12M
=13: AG2R La Mondial: €12M
15. Cofidis: €11M
16. IAM: €10.5M
=17: FDJ: €10M
=17: Cannondale: €10M
19: Lampre-Merida: €7M
20: Direct Energy: €6M
21. Bora-Argon 18: €4.5M
22. Fortuneo-Vital Concept: €3.5M
Typically wages account for the largest proportion in the budget, but for Team Sky, David Brailsford was quoted by The Times as saying, “L’Equipe had a chart that put us way on top of everybody else and that chart didn’t consider the cost of the riders when we acquired them. For example, Geraint Thomas has grown up with us, Ian Stannard too. They came up through the system, Luke Rowe the same. Sergio Henao we signed as a neo-pro. Mikel Nieve we took on from Euskatel for a good deal, and Poels was not the most expensive rider when we got him. Even Chris, he came to us from Barloworld.”
Brailsford’s point highlights Sky’s philosophy and while their payroll may not be the largest in the peloton, the fact remains that they have the largest budget to implement ‘marginal gains’ with the likes of dedicated trucks for their special washing machines.
How to evaluate things like sponsorship value? Well, our simplistic view of this was by looking at the number of victories. Wins generate media exposure, goodwill, brand halo, etc.
The simplest way to go about determining a team’s wins is by their accumulated UCI points for 2016. UCI points work by taking the points from the top 5 riders on a team.
When we put each team’s World Tour rankings up against their estimated budgets, here’s how the teams looked in terms of ‘value’:
Winners and losers
Movistar leads the UCI team point rankings because they have the third and fourth placed individual riders overall (Valverde and Quintana). They also represent the team with the best ‘value for money’ as their UCI points vs team budget are the highest. Next best is Tinkoff.
Contrary to popular belief, BMC has performed right on ‘expectation’ based on their winnings and team budget. Katusha performs the worst on this linear regression line.
Tour de France
We didn’t think it was enough to stop here. The Tour de France is the undisputed pinnacle when it comes to sponsorship exposure with a reported television audience of 3.5 billion people in 188 countries who watch the Tour de France annually. This figure sounds inflated, but I think we can safely say that the Tour catches the widest mainstream audience.
So how do we equate the value of sponsorship towards the Tour de France in isolation? Accumulated prize money awarded to each team at the end of the Tour is one way of looking at it:
It’s not to say that this comparison isn’t skewed somewhat. The Tour de France prize money is dominated by the overall general classification competition, as it should be. First place overall (Chris Froome) is worth €500k alone. The green jersey winning prize is only worth €25k, nearly the same as 6th place in the GC competition. Because of this, Team Sky runs away with any comparisons using prize money despite their large budget.
Winners and losers
Team Sky is the undisputed winner which can be seen on the graph because of reasons just explained. Tinkoff performed just under expectation, understandably after losing Alberto Contador.
Until seeing the graph, less obvious perhaps is the ‘value’ that AG2R La Mondial, Movistar and Orica-BikeExchange in their expected performances based on budget and what they brought to their sponsors during the 2016 Tour de France.
Going against what the graph says, I would argue that Dimension Data held the attention of the fans and received above par exposure with five stage wins in a comeback story with a social cause.
Some of the standout losers include Katusha (by a large margin) as well as Astana, BMC, and Jumbo-Lotto. All have large budgets but did not perform.
Can success be bought cycling? Yes, as we can see this clearly in the graphs, simply because the linear regression line trends upwards. Bigger team budgets equate to more success in most (not all) cases, and in many cases budgets are rising at a rate of 10-15% per year. Lots has been debated about salary caps, and the case for salary caps is strongest for sports in which the correlation between money and wins is relatively strong. However, in a sport with such disparity as pro cycling, salary caps are simply discounts for billionaires. How to implement this in this in pro cycling remains a complex question.
Thank you to Chris Jensen for contributing to the data analysis of this article.