In an interview with Shane Stokes of Velonation, AIGCP President Luuc Eisenga reiterates the need to continue the spirit of cooperation between the sports’ various stakeholders, and to find a way to stabilize the finances of cycling teams.
Yes, the AIGCP must continue their work with the UCI and race organizers to reform the sport’s model. But teams could do much more to improve their own cooperation internally. ProTour and ProConti teams already bring in over €300 million annually to fund their budgets. Teams spend that money in a relatively unrestrained environment compared to successful professional sport leagues. It is instructive to look at a successful model used by a closed league of teams, the Nation Football League of the United States.
The NFL’s “League Think” Philosophy
In the early 1960s then-Commissioner Pete Rozelle led the NFL to adopt a scheme to share revenues among the league’s teams–the first of the major sports leagues to do so–and thus began an era of collectivism among individual team owners that came to define the NFL’s approach for the next four decades.
Under the NFL’s “League Think” philosophy individual owners pooled resources and shared profits to generate a product that, as a whole, was much more valuable than the sum of its parts. The financial parity among teams that resulted from this philosophy enhanced the competitiveness of the NFL as a whole, thereby fostering the massive popularity still enjoyed by the League today.
The largest source of an NFL team’s revenue is from the TV broadcasting deal: each team’s rights are pooled, sold to the networks, and split evenly amongst all of the League’s teams, regardless of a team’s number of appearances, on-field record, or its TV ratings drawing power.
NFL gate receipts are split between the home team and the league pool. 66% of ticket sales revenues are retained by the home team while the other 34% goes to a pool which is divided equally among all teams in the league.
The NFL also collectively negotiates sponsorship and licensing deals with the money being split evenly among all teams. Anheuser-Busch reportedly pays the NFL $200 million per year (including up to $50M in cash rights fees and $150M in marketing, media, and team spending commitments) to be the Official Beer of the NFL. Last year Nike signed a deal ($1.5B over 5 years) to replace Reebok as the league’s official uniform and on-field apparel provider, as well as the producer of sideline-personnel apparel and fan gear. Each individual team is not left to negotiate its own deal with a uniform supplier.
Combining the streams mentioned above, “League Revenue” accounts for more than 60% of a typical team’s income. The MLB, NHL, and NBA also have a form of revenue sharing but the NFL model is the most aggressive among the Big 4 leagues and is credited with the NFL achieving the most competitively balanced league, as measured by the largest percentage of league members appearing in the post-season playoffs tournament over the past decade.
TdF 2014: Wiggins vs. Froome?
Plenty of ink will be spilled on the continuing drama (some real, some imagined) surrounding the competition for leadership of Sky’s Tour de France squad. But the subheading above refers to an imaginary TdF where Wiggins and Froome are on different teams, a scenario I believe would be reality if pro cycling teams took on a bit of the League Think philosophy.
If, like every major sports league in the United States, Pro Cycling applied an inter-team revenue sharing scheme fans would see each race contested by a larger number of potential winners, with each supported by a relatively weaker cast of domestiques. As no NFL team can afford to sign multiple “Elite QBs” like Peyton Manning and Tom Brady, cycling teams would not stockpile Grand Tour contenders.
Imagine if July brought a matchup between Wiggins and Froome. The previous two TDF champions racing cobbles, mountains, and a 50+km TT to settle the score before Paris. Imagine Richie Porte leading Orica-Greenedge at that same TdF instead of riding the Giro for Sky.
Would spreading GC talent across the league be the end of super trains shepherding team leaders through the mountains? Would GC contenders become more exposed and racing become less predictable? At the very least, a Froome-Wiggins rivalry would sell a hell of a lot of newspapers in the lead up to the Tour de France and isn’t that why the race was founded?
The sports enterprise is a joint effort requiring cooperation between teams to generate league revenues. NFL owners have rightly concluded that creating a marketing monopoly and sharing profits is better than leaving teams to fend for themselves with a few rising to the top of the heap through built-in historical and/or geographical advantages. How would cycling be different if team owners collaborated to compete against each other on the road but, off the road, collectively compete against sports like tennis, golf, and sailing for audience share and sponsorships?