AIRmail Special Issue: Pro cycling is increasingly dominated by a small handful of teams – teams that have the financial strength and the management expertise to acquire top riders and consistently execute winning race strategies. Team Jumbo-Visma virtually dominated the sport last year – taking all three grand tours, including all three podium places in the Vuelta. Thus far this year, we have seen Alpecin-Deceuninck dominate the early season, taking all three of the first monuments. Team UAE, which has a seemingly limitless budget as well as the sport’s best all-round rider in Tadej Pogačar, has dominated in the overall UCI points category – which is a measurement that many analysts believe to be a better representation of overall performance. And of course, we have now seen Pogačar dominate the Giro d’Italia in a virtually unprecedented manner. Going back a bit further in recent history, Team Ineos (SKY) dominated the sport for almost a decade.
# Catch up on pro cycling – and its context within the broader world of sports – with AIRmail … Analysis, Insight and Reflections from The Outer Line. You can subscribe to AIRmail here, and check out The Outer Line’s extensive library of articles on the governance and economics of cycling here. #
Total domination of the 2023 Vuelta by Jumbo-Visma
On the one hand, these teams should be congratulated for (1) attracting committed sponsors and patrons who are willing to invest significant sums in the sport, (2) the identification and acquisition of talent, and (3) the experience and know-how to assemble a winning competitive strategy. As we have often noted in the past, there is more to winning than simply having a big budget, but having that money certainly helps. Teams like Visma-LAB and Alpecin also have clearly superior management approaches and racing strategies, which differentiate them from the rest of the peloton.
But despite this well-deserved success there is also a worrisome downside when individual teams begin to dominate a sport. Cycling, just like all other sports, derives its excitement from a high level of competition – fans tune in because they want to see riders battle it out, to see who is going to win. If the same teams or riders seem to win too many of the key events, that tends to make the sport less compelling or interesting to watch. The uncertainty of the outcome is what attracts sports fans. If the outcome is predictable, many fans will choose not to watch – even though it may still be an interesting event. Formula 1 racing is experiencing a similar fate at the moment. Although the ongoing Giro d’Italia has been exciting, many fans are complaining that men’s cycling has simply become boring to watch.
UAE and Visma battle it out
The UCI published a survey a few years ago which confirmed exactly this: if a handful of big-budget teams dominate the sport, this decreases fan excitement and engagement. Fans simply aren’t as interested in watching bike races if they think the outcome is predictable. And if such trends continue over time, fewer fans could lead to lower sponsorship interest, eventually a decline in revenue, and a downward spiral for the sport. When this happens, the governance body needs to find ways to carefully control and balance these two factors – assuring that the sport remains competitive.
Comments from Christian Prudhomme, Tour de France director: “It is certainly important to think about how to prevent a small number of teams from overwhelming the competition. It’s not good when some teams have unlimited resources while others are way, way behind. I don’t have an answer yet as to how we should do that. Will there come a time when you have to work with budget caps, as various experts indicate? Don’t know. The best part is when the four aces start in four different teams in the Tour. It would be a disaster for me if Mathieu van der Poel, Jonas Vingegaard and Tadej Pogačar played for one team. For the excitement of the competition, it is essential to have the champions in different teams. Although I don’t think these champions would agree to be in a team with their biggest competitor anyway.”
Tour de France director Christian Prudhomme
Many sports – particularly American franchise league sports – have attempted to deal with this challenge by regulating the amount of money that teams can spend, in an attempt to keep team budgets within a defined range. These spending limits are often referred to as budget or salary caps, and the specific form they take varies widely between sports.
But are there also other, more creative systems which could help make cycling more competitive? Below, we briefly review the applicability of budget cap arrangements in pro cycling, and we also propose some preliminary ideas for a new points-based cap system that could be utilized to maximize competitiveness at the top levels of the sport.
Cap the top earners?
1) Budgetary or Salary Cap Systems:
Budget caps are common in league sports, and represent a spectrum of funding, spending, and talent investment rules which are either dictated by the regulating agencies, and/or agreed to by all of the teams – to enhance stability, economic sustainability, and competitive parity. However, in some sports, including pro cycling, which lack a true league structure, there are significant legal and organizational policy changes needed to prevent team owners – and their deep-pocketed sponsors and patrons – from dominating the sport at the expense of lesser-capitalized teams.
We first explored pro cycling budget caps in 2021 with a review of strategies which have been successfully applied in other sports. We noted that there are many specific factors or unique complications which characterize pro cycling: currency valuation disparities between nations where teams are licensed, inflationary concerns, and multiple-source contracts (which benefit star riders like Mathieu van der Poel, who is reportedly paid by Canyon bikes and his team separately). Pro cycling teams and sponsors change frequently, and a spending cap could create a barrier for new sponsors to invest in the sport.
Reliable cycling team budget information is rarely available, so any analysis requires many assumptions. Regardless, history shows that teams with the most funds to invest in star rider contracts, long-term development of junior-level talent, highly-personalized medical support and physiology programs, and cutting-edge equipment tend to have greater success. This tendency toward financial imbalance and market dominance by a handful of parties – “survival of the fittest” or economic Darwinism – tends to occur in all free markets, especially sports.
But, just as in unregulated industries, markets sometimes have to institute controls to avoid crashing. Just as the unfair dominance of business monopolies are theoretically corrected by implementing anti-trust laws, sports leagues can agree to budget/salary caps or revenue redistribution models to maintain a competitive environment and encourage fan interest. But can pro cycling adopt such a model, and what can we learn from other sports before we implement a change?
Salaries comprise somewhere between 50% and 70% of a team’s budget
In general, salary caps typically attempt to limit a team’s total athlete payroll, rather than limits on what can be paid to individual athletes. In most sports, salaries comprise somewhere between 50 and 70 percent of a team’s budget or annual revenue estimates. (Recent business expert estimates of pro cycling salaries corroborate this phenomenon – at 65 to 70 percent of the average team’s budget.) Individual athletes might earn widely variable salaries within such a system, but a total team salary “ceiling” reduces large financial and market-related disparities.
There can be hidden dangers in so-called “soft” and “hard” restrictive cap models. A “soft” cap might have exclusions or loopholes that make the ceiling unenforceable due to signing bonuses, deferred compensation, and other incentive clauses. A “hard” cap with an absolute limit could potentially violate labor and human rights laws by preventing an athlete from earning what they are worth.
The “luxury tax” model is one way to allow teams to exceed salary caps, but only if they pay a punitive “tax” for the excess – as much as four or five times the amount by which a team exceeds the cap. In league sports, that tax revenue is then somehow distributed amongst the other teams to promote greater competitive equity – which helps sustain small-market or poor-performing teams against other richer teams. However, these “taxes” can lead to unintended consequences when a top player has to be traded or released in order to maintain financial stability, weakening the team. Such approaches would also be difficult to implement in a non-league sport like cycling, which doesn’t really have a central entity that could equitably receive and distribute revenues from a luxury tax type of mechanism.
Where does that leave the smaller team?
In 2021, we posed several critical questions pro cycling must address if it is to implement a budget cap:
- How would the salary cap figure be calculated?
- How would a cap impact a team?
- How would the cap be phased in so as not to dramatically disrupt the sport?
- How would a cap ceiling be adjusted over time due to inflation or recession?
- Should it be a “soft” cap, in which there are equitable means for individual teams to technically exceed the cap?
- What about teams entering or leaving the “system” from year to year?
- Should the cap include guidance or rules on maximum individual salaries?
- What kind of intra-team incentives or controversies could such a cap system potentially cause?
- Are there legal considerations or consequences?
A budget cap model could reduce competitive inequities in the sport if cycling’s stakeholders could agree on answers to these questions. However, if not carefully considered, it could also lead to a range of potentially unpredictable and undesirable impacts. As an ironic counterpoint, many critics within the sport argue that cycling’s inherently weak and unstable sponsorship model already creates a sort of informal cap. Sponsors regularly leave the sport, often causing entire teams to disband. New teams may pop up and assume those WT licenses, but historically, the teams’ former riders often see their worth plummet to pennies on the dollar because there is too much available talent and too few open contracts. When this happens, many teams choose to dispassionately replace more expensive riders with the now cheaper but equally talented surplus talent made available by a liquidated team.
There are certainly legal and logistical challenges to enforcing consistency and parity in a pro cycling budget cap model of any kind. In fact, it could convince some sponsors to not participate at all. If a proposed budget cap is instituted in 2026, as has been suggested, we wonder if this will finally drive reforms and stronger agreement within the AIGCP teams organization, or push riders associations – like the CPA and TCA – to rapidly evolve from advocacy and “joint agreements” and instead negotiate collective labor bargaining to preserve the rights of riders to earn the greatest rewards during what is usually a very short professional career?
Racing for points
2) A New Points-Based Cap System:
Given the logistical and possibly legal challenges of utilizing budget caps to maintain competitiveness in pro cycling, we would also suggest consideration of a cap system based on the UCI Points ranking.
The UCI maintains a detailed ranking system of individual and team points based on competitive performance, although the current model has both its supporters and its critics. Riders accumulate differing levels of points based on how they place in each individual race, and where they place in the final standings of stage races; different races offer differing levels of points, depending upon the difficulty and prestige. Although many fans don’t follow it, or are only vaguely aware of the points system, at the end of the year each team has a total points count, encompassing all of its riders. There is a prize for the top points-winning team and individual each year, but it goes under-reported in the media and barely noticed by the fans.
Comments from Patrick Lefevere, CEO Soudal Quick-Step: “First we have to see whether the current distribution of UCI points is correct. Many people have already wondered about this. Why does a stage in the Tour de France have almost as many points as a Monument? Why does the World Cup have so many points? If the UCI classification were more appreciated and the public understood it, then a system with points limits could work. But what is the value of the points? Who will then drive for the points?”
Patrick Lefevere, CEO Soudal Quick-Step
An alternative way to regulate competitiveness would be to enforce a numerical cap on the total number of points that any team could bring to an individual race, based on the points earned by its individual riders. To make implementation simpler to manage, the riders’ individual point totals for the previous year could be used to set the point cap for the current season. That point total would be adjusted for the points of any individual riders leaving or coming on to the team, so that the system for the current year reflected the riders actually on the team
Individual races, or race categories (grand tours, stage races, one-day races) would be graded by the maximum number of collective rider points any single team could enter into the race. In other words, teams would have to show up with a mix of riders that simultaneously maximized their chances for a win but which was also below that race’s points threshold. Teams would now be forced to construct a race squad which had the optimal talent mix – GC riders, sprinters, lead-out train, climbers, etc. – but still stay under the team points cap.
The key question here, of course, is how such a cap would be determined and set. Would it simply be a reasonable number set by the UCI, or a special committee of experts? Or would it – perhaps better – be based on a formula – perhaps the calculated average number of points per team multiplied by 2, or by 3? Would it be the same for all events, or would it vary by type of event? Would there be allowable means of exceeding the cap if the team paid certain penalties, like the luxury tax in professional American basketball? How would it adjust year by year, and so on… there are many questions.
Three GC contenders in the Vuelta for Jumbo in 2023
Obviously, a points system would be strongly opposed by some of the more talent-rich teams that can enter two or even three GC contenders to a grand tour (e.g., Jumbo-Visma in 2023), along with supporting strong domestiques and lead-out specialists. In the proposed points system, such a team might have to pick just one GC contender instead or compromise itself with a weaker supporting squad. Weaker teams on the other hand, would be able to bring all of their strongest riders to the Tour, since their overall talent level as a team is lower. Teams would still have to field the required number of riders per event; i.e., they could not slip under the points cap by simply fielding fewer riders.
An example here is instructive. Using UCI point totals at the end of the 2022 season for riders selected to ride the 2023 men’s Tour de France, and focusing on the higher-ranking eight-man teams, some interesting insights emerge. Team Jumbo-Visma fielded a team with a collective total of 12,544 points. UAE’s squad represented 9,148 points, while Ineos and Soudal-Quick-Step’s totals were just 5,435 and 3,231 respectively. If, to look at just one hypothetical example, the points cap for the race had been set at 10,000, UAE would have come in just under the threshold, but Jumbo-Visma would have far exceeded it. Thus, Jumbo would have needed to leave out either Wout van Aert, or Christophe Laporte and Dylan van Baarle plus one other rider in order to be compliant. In retrospect, this would have been critical, since all three Jumbo riders were key to the team’s strategy of stringing the race out for three weeks and burning off any competition. In short, such a hypothetical cap might have made the 2023 Tour de France more exciting; Vingegaard would not have been able to exploit his super-strong team to bludgeon the rest of the race day after day.
From the stronger teams’ perspective, this would seem to be an unfair restriction. These teams have worked hard and invested a lot of money over many years to build elite programs, and now the sport’s governance is essentially penalizing them for that success. But from a wider viewpoint, that is exactly the intent of these types of caps – to counter one team’s dominance and make the sport more competitive even if there is a difficult initial adjustment in the sport’s regulation. The key here is clearly being able to find and achieve the right balance between these both of these competing objectives.
UAE at the head of the ‘arms race’
Richer (higher capitalized) teams would be forced to be more discerning in terms of how they buy riders and build their teams. If such teams cannot field all of that talent in key races, then they would be forced to rethink spending the money to recruit that talent in the first place. Poorer (smaller capitalized) teams would be less constrained, or not constrained at all, in terms of which riders they could bring to an event. If the richest teams didn’t have the incentive to buy up all the best racers, this might have the effect of making racing talent more widely available, and it might also soften the current “arm’s race” in terms of rider salaries.
The constraints of this kind of a points system could be loosened for the richer teams by some form of a luxury tax mentioned above – some kind of steep penalty that those teams would pay for exceeding the cap, that would somehow be distributed amongst the poorer teams. But as mentioned, receiving and distributing those excess funds on an equitable basis could be complicated in the case of cycling.
There are also potential negative incentives which could be created in a points cap system. For example, teams and individuals currently have every incentive to try to maximize their point totals – this increases their individual value on the open market, their prestige, bragging rights, ability to attract sponsorship, and not least, the team’s ability to stay within the promotion level of the WorldTour. But under this kind of points system, in certain circumstances some teams might now also have an incentive to accumulate less points.
This could lead to situations where it might be in a team’s interest to purposefully not win additional points – to “tank” in the same way that some weaker American franchise sports league teams do at the end of a season, in order to improve their standing in the following year’s athlete draft. Or teams are sometimes forced to trade away or “sell” certain expensive star athletes which weaken the team in order to meet salary caps. These effects could also detract from the popularity of the sport.
Inter-team conflict
It could also lead to conflicts within a team, wherein the team management might want certain riders to accumulate fewer points, but where the individual rider might want to get more points – to increase their perceived value and obtain better contract opportunities. A points threshold might encourage teams to “under-race” certain riders, and over-race others. It could also lead to dangerous situations; for example, a sprint leadout rider might be asked to carry a potential sprinter to the victory line, but then brake suddenly at the finish to minimize their own points.
Many observers already believe that the UCI Points System, upon which this model would be based, is already deeply flawed and not truly representative of actual comparative performance – but there are also many options to improve the system. For example, a multi-layered points model could support this type of cap, similar to the franchise tag in the NFL: each team gets a “franchise” rider who does not factor into the team’s overall points, but then the prevailing points system applies to the rest of the riders.
There are many other questions here as well. Would all race events be subject to the same cap level, or would it vary by type of race? Would the cap change each year or stay constant, and why? Would a sudden enforcement mean that teams had to break rider contracts early? Would it withstand legal challenges from individual teams or riders? And so on.
Comments from Brent Copeland, CEO Jayco–AlUla, President AIGCP “If you want to introduce something like this, you must first study it extensively. How could this affect racing? What influence will it have on the race program of the riders? Many questions will have to be answered first. There are many good ideas to make the playing field more equal for all teams so that no few teams completely dominate races. I think this can make cycling much more exciting. If you have a big budget, you can attract 14 to 15 riders who can win races. If you have less money available, you contract a maximum of five ‘winners’. You regularly miss about 20% of your riders due to injuries and illnesses. Then as a smaller team you only have three or four winners, while the ‘rich’ teams can choose from about 10 to 12 winners. A budget and/or salary cap would also provide more balance.”
Brent Copeland, CEO Jayco–AlUla, President AIGCP
As mentioned at the outset, all sports suffer from this challenge. Just as in the business world, stronger and better funded entities often start to develop and build a dominant “market position.” A more detailed analysis of other sports’ attempts to create parity could yield useful insights for cycling, but there is no doubt that any competitive cap system would be difficult to properly design, implement and enforce. Similarly, the last thing cycling needs to do is discourage big investors and sponsors from entering the sport, but it is critical to try something new or the sport could end up hurting itself over the long term due to reduced fan interest.
At the end of the day, the sport’s governing agency – the UCI – must find ways to simultaneously encourage individual teams to be as strong and successful as possible, but also ensure that the sport retains a “reasonable” level of competitive parity. At the moment, the sport seems to be moving away from that sort of balance, and budget or points cap systems should be carefully debated and considered for the health of our sport.
Comments from Iwan Spekenbrink, CEO Team dsm-firmenich Post NL: “It’s interesting that methods are being looked at to keep competitions exciting. In such a points system, careful attention will have to be paid to whether the distribution of the points is a correct representation of the power relations. After all, cycling is a team sport and not every rider aims to achieve a result, but can, for example, also ride to keep a teammate in position in certain sections of the stage (and then perhaps ride “calmly” to the finish to still be relatively fresh the next day). In short: the points do not always reflect the correct balance of forces.”
“When introducing any system, it must be taken into account that those on whom it is imposed (in this case the teams and their riders) also benefit from it. If the competitions become more exciting and therefore generate more commercial gain, who will benefit from this? Are those the organizers? Isn’t it fair if the teams and riders also benefit from this to some extent?”
Iwan Spekenbrink, CEO Team dsm-firmenich Post NL
This article was created through a collaboration between The Outer Line and WielerFlits. A similar article is appearing concurrently in the Wielerflits publication RIDE, in the Summer 2024 issue.
# Catch up on pro cycling – and its context within the broader world of sports – with AIRmail … Analysis, Insight and Reflections from The Outer Line. You can subscribe to AIRmail here, and check out The Outer Line’s extensive library of articles on the governance and economics of cycling here. #
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