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Oleg Tinkov says cycling in "huge crisis" as he predicts more teams will collapse

Russian entrepreneur says teams must be allowed to share in TV rights if sport is to survive

Oleg Tinkov, the Russian entrepreneur who is closing down the WorldTour team he bankrolls at the end of this season, has said that others could depart a sport he sees as suffering "a huge crisis," naming BMC Racing and Katusha as among other top flight squads at risk.

Speaking to Denmark’s TV2, Tinkov said: “I haven’t tried to sell the team, what does selling mean in cycling? Teams are collapsing, like mine, and I am sure that soon there will be more than a collapse.

“The business model in cycling is wrong. I am sure that BMC and Katusha will close the shutters soon,” said Tinkov, noting that besides his own team, Switzerland-based IAM Cycling has already been confirmed as leaving the peloton at the end of the year.

“Cycling is in the midst of a huge crisis, but if ASO does not agree to share TV rights with teams as happens in Formula 1, it will never change,” he added.

Tinkov decided to pull the plug on his team, which he bought from Bjarne Riis for €6 million in 2013, due to what he saw as lack of support from inside the sport for reforms he suggested that he believes would make it more sustainable.

While Europe’s richest football clubs become ever more wealthier as a result of their share of lucrative TV rights, in cycling those are owned by race organisers, with Tour de France owners ASO in a dominant position, followed by the Italian business, RCS, which owns the Giro d'Italia.

Between them, the two businesses also own some of cycling's biggest stage races such as Tirenno-Adriatico and Paris-Nice, as well as four of the five one-day Monuments, the exception being the Tour of Flanders.

The billionaire, who made his money through the financial services firm that bears his name,  expanded on his thoughts yesterday in text accompanying a picture he posted to Instagram of himself next to his private jet.

“Let me be more accurate,” he explained. “I believe not only BMC and Katusha, but also Orica, Dimension Data and perhaps Lampre are in the risk if cycling financial model won't be changed.

“We'll ending up with 2 layers – Goverment budget teams such as Astana, FDJ, Lotto's and bike producer's team from the other side.

“There are exceptions such as Movistar or Etixx, but for how long their talented managers will [be] convincing rich sponsors to support? I don't know.”

The solution he puts forward to the “crisis” he sees engulfing the sport lies in revenue sharing between organisers of major races and the leading teams, backed by outside investors.

Tinkoff is a member of Velon, the joint venture created by 11 WorldTour teams in 2014 to provide additional income streams for them as well as giving greater stability to the sport.

> 11 teams launch Velon joint venture in bid to overhaul pro cycling

“I see the only model that works,” said Tinkov.

“ASO and some hedge-fund create new vehicle – This structure buys RCS and create TOP professional league of 12/14 teams, dropping off impotent UCI.

“ASO signs strong contract with pay-per-view TV Co. and covers only top and monument races.

“ASO pays €€€ to the top chosen teams on annual basis – Salary cap for the team is a must!

“Peloton in that league should be reduced to 150 riders Max, 14 teams (12+2 wild cards) X9.

“UCI should take care of juniors and small teams and races to develop riders for elite business project.”

He concluded: “Here is my idea, that's pretty obvious, I don't pretend on the rocket science!”

> How Oleg Tinkov plans on shaking up cycling

Simon joined road.cc as news editor in 2009 and is now the site’s community editor, acting as a link between the team producing the content and our readers. A law and languages graduate, published translator and former retail analyst, he has reported on issues as diverse as cycling-related court cases, anti-doping investigations, the latest developments in the bike industry and the sport’s biggest races. Now back in London full-time after 15 years living in Oxford and Cambridge, he loves cycling along the Thames but misses having his former riding buddy, Elodie the miniature schnauzer, in the basket in front of him.

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23 comments

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Stumps | 7 years ago
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Simon E, agree with your points as F1 and premiership footie as a way NOT to go. But stupid football wages dont exist in all countries with, i'd estimate, 95% of clubs on sensible wages.

The article on Sky's accounts is a good read which shows they got  just short of £3.2m for entering races, a mere splash in the ocean compared to their £18m wage bill.

The sport is evolving at a quicker rate than it can sustain hence the teams folding however with a personal fortune of approx £1.4b the only reason i can see for Tinkov pulling out is due to him not getting his own way as its blatantly not money.

If we want the sport to continue along the same route then it has to prostitute itself as F1 and the likes have done or do we want a sport thats less in the limelight but more sustainable ??

 

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earth | 7 years ago
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So what is the issue?  What's changed in recent years that is casting a shadow over the sport?

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me | 7 years ago
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Tinkoff and the like are the cause of the problem by paying the salaries.  The more that's paid, the more people expect, and the spiral continues.

How many riders does a team need when the most they can field is about 9?  How big a motorhome?  Does no-one learn anything from F1 or football?

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Simon E replied to me | 7 years ago
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me wrote:

Tinkoff and the like are the cause of the problem by paying the salaries.  The more that's paid, the more people expect, and the spiral continues.

How many riders does a team need when the most they can field is about 9?  How big a motorhome?  Does no-one learn anything from F1 or football?

The tone and content of your post it suggests you don't know much about this cycling lark.

Regarding team size, they have 20+ riders for a reason. What happens when 2 events overlap, when riders are injured or recovering from the last big block of racing? Apart from the fact that it's a long season and they burn out both phyiscally or mentally as it is. Additionally, they have different abilities and preferences - you wouldn't put Richie Porte or Nairo Quintana into Paris-Roubaix any more than Andre Greipel or Tom Boonen would lead a team of sprinters and rouleurs on a high altitude climb-fest.

IMHO the snooze-fest that is Formula 1 and international/premiership football are definitely not good example to learn from. Most cycling fans I know desperately hope those sports are not used as a model or source of new ways to engage a wider audience. They are also run in completely different ways to WorldTour cycling.

It would be good if the wide disparity in team budgets and rider salaries could be addressed but these are not simple tasks. It's easy to sit here and rail about it but in the end only those involved in the sport really have any idea what the teams, sponsors, UCI and organisers are trying to achieve (never mind how many balls they are juggling in the process).

Tinkov has his views, and knows more than most, but the impression many get is that he is solely interested in Oleg Tinkov and absoutely no-one else. He's not someone who is going to do what's best for the future of the sport, even if he stuck around (which he's not, it seems).

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Jimmy Ray Will | 7 years ago
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Tinkoff is right, the sport is in crisis, and will need to change. 

One of its major challenges is rider slaries and associated with that team budgets. I for one see no issue with top cyclists being paid top money... I think the argument of keeping salaries low as a way to support the sports long term financial sustainability is a little short sighted.

This is a global sport, its a sport that includes the worlds biggest annual sporting event, so why shouldn't it look to generate revenues in line with other top global sports. 

That for me is the crux of it... instead of fighting for the crumbs on the table, the sport, led by UCI should be looking at how it maximises revenues generated. 

For donkey's years, competitive cyclists have endured exploitation and ridiculous conditions / salaries probably because of some internal feeling of uilt at getting paid for doing something they love. 

That bollards and not something that the sport should stand for.

In this we should look a tthe women's scene... they are kicking off, and changes are happening, and happening fast. 

 

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dottigirl replied to Jimmy Ray Will | 7 years ago
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Jimmy Ray Will wrote:

In this we should look a tthe women's scene... they are kicking off, and changes are happening, and happening fast. 

I thought women's cycling was in even more of a mess? Although it's apparently a better investment than men's (and many other sports) with regards to exposure.

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Simon E replied to dottigirl | 7 years ago
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dottigirl wrote:

I thought women's cycling was in even more of a mess? Although it's apparently a better investment than men's (and many other sports) with regards to exposure.

Women's racing is better value. The cost of running a team is tiny but that's because many riders are unpaid or on a pittance and sponsors can get something back for a very small investment.

Exposure is hard to come by, mainly because the media - both traditional and online - have ignored women's racing for too long. However, change is happening and big strides are being made and it's getting better. It certainly seems a more exciting (and interesting) prospect than many aspects of men's cycle sport.

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Yorkshire wallet | 7 years ago
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Just out of interest, how much does it cost to run a team like Sky over the course of the year, across all the events it runs at?

As a motorsport fan I'm interested to see how it compares to running a season in MotoGP, another sport that's got lots of financing problems behind the curtain.

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Charles_Hunter replied to Yorkshire wallet | 7 years ago
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http://inrng.com/2015/07/team-sky-budget-finances/

 

Yorkshire wallet wrote:

Just out of interest, how much does it cost to run a team like Sky over the course of the year, across all the events it runs at?

As a motorsport fan I'm interested to see how it compares to running a season in MotoGP, another sport that's got lots of financing problems behind the curtain.

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Yorkshire wallet replied to Charles_Hunter | 7 years ago
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Charles_Hunter wrote:

http://inrng.com/2015/07/team-sky-budget-finances/

 

Yorkshire wallet wrote:

Just out of interest, how much does it cost to run a team like Sky over the course of the year, across all the events it runs at?

As a motorsport fan I'm interested to see how it compares to running a season in MotoGP, another sport that's got lots of financing problems behind the curtain.

 

About 75% (£18m) of the budget on wages.  Lots of money then!

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willythepimp | 7 years ago
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The OnePro cycling approach where you are the team and the sponsors don't pull the plug on the outfit destroying the brand you have built seems like a sensible step. I understand that the name being the sponsor gets more exposure, but the constant 'brand' will in time have a larger pull than the team formerly known as Rapha-Condor-JLT.

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Edgeley | 7 years ago
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Salaries are driven by supply and demand.  If the likes of Sagan can demand high wages and have a choice of employers, then wages will go up.

The opposite should now happen, as there will be fewer teams bidding for the top talent.

Pro cycling is a mess, as Tinkov says.   How it can be sustained with the only income for the teams being from acting as mobile billboards does look difficult.   But moving onto pay-per-view might decrease income - it is because those billboards get seen that they have value.

 

I think there needs to be

a) sharing of the TV rights with the teams

b) a better and more stable approach to who owns and runs the teams.   Football clubs don't disappear just because their sponsor changes.  How to get there is of course much more tricky than just saying that there needs to be more of a "club" approach to teams.

 

 

Maybe a genuine league approach, with the riders having a share in the ownership of teams, and transferring their shares when they retire or move?

 

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Ginsterdrz | 7 years ago
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If cycling is too small for Tinkov to make his vast profits then good riddance. 

What has he actually done apart from inflate top riders pay to abhorrent footballer levels?

Thanks for the legacy Mr T.

 

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tritecommentbot replied to Ginsterdrz | 7 years ago
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Ginsterdrz wrote:

If cycling is too small for Tinkov to make his vast profits then good riddance. 

What has he actually done apart from inflate top riders pay to abhorrent footballer levels?

Thanks for the legacy Mr T.

 

 

He put together a cycling team. What have you done for the sport?

A little gratitude would be nice.

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Stumps replied to tritecommentbot | 7 years ago
1 like

unconstituted wrote:

Ginsterdrz wrote:

If cycling is too small for Tinkov to make his vast profits then good riddance.

What has he actually done apart from inflate top riders pay to abhorrent footballer levels?

Thanks for the legacy Mr T.

 

 

He put together a cycling team. What have you done for the sport?

A little gratitude would be nice.

He does have a point. The wages he is willing to pay are astronomical compared to some teams, just look at how much Sagan has been offered to ride for Astana. Also the team was already created, he just bought it.

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pablo | 7 years ago
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The war has already started hasn't it?  UCI wants to give teams 3 year licenses to give teams financial stability for the sponsors. ASO wants more of a league system with promotion/relegation between the pro peleton and pro continental teams to the point they are restricting the number of pro teams at the 2017 tour.  He doesn't mention Sky which is interesting they have to be looking at return on investment its surely gone past its peak of interest with the general public. 

A pay cycling TVs channel may sound good to Oleg but how many people would subscribe? 

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Charles_Hunter | 7 years ago
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No thanks to pay per view thanks. 

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Morat replied to Charles_Hunter | 7 years ago
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Charles_Hunter wrote:

No thanks to pay per view thanks. 

 

Better than "No View", surely?

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Charles_Hunter replied to Morat | 7 years ago
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Morat wrote:

Charles_Hunter wrote:

No thanks to pay per view thanks. 

 

Better than "No View", surely?

just keep it as it is, he was responsible for some of the wage inflation, get that back down for the top stars and put it on an even keel again. Keep the sport clean, improve the overall experience as seems to be happening and all good. 

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HalfWheeler | 7 years ago
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Most obvious problem is that very few races make money from tv. In fact I'm pretty sure it's only one: the TdF. So for most of the season there is no revenue to share among teams. The sport's worth is from the riders being, essentially, mobile advertisement hoardings.  Cycing certainly doesn't have any worth along the lines of football. To try and mould it into a football shape is pure folly.

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welshman001 | 7 years ago
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Like to wrevilo, I see a power struggle looming. Without the teams to provide the spectacle, then no tours so by inference the owners will have to change their model or accomodate some compromise.

Can you imagine sponsors willing to provide their assistance only to see a dwindling audience? In my opinion, that wouldn't happen in the longer term as figures would decline and force both parties to the negotiating table. That said, with increasing audience figures / popularity, I don't see that happening anytime soon. Therefore, I see simply new teams filling the vacated spaces for example ONEcycling stepping from the one league below.

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wrevilo | 7 years ago
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It's a difficult situation.  Eventually someone will take power.  Like F1, I don't see the governing body doing much.

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tritecommentbot | 7 years ago
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Didn't know Tinkov Saxo were shutting down the team 

 

Tinkov and IAM both gone, any new teams coming together for next season?

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