Cycling Eyes Races in Sochi, Rio for Revenue as Top Teams Mull Breakaway

Cycling’s ruling body, which is sending elite riders to Beijing for a race next month, is planning to stage events in Brazil, Russia and India as it comes under pressure from teams to raise revenue.

The Union Cycliste Internationale aims to put on a race that passes through Sochi, Russia, as early as 2013 and will discuss the plans with President Dmitry Medvedev on Sept. 9, UCI head Pat McQuaid said yesterday in a phone interview. The inaugural Tour of Beijing is from Oct. 5-9.

All but four of the 27 races on the UCI’s elite schedule are in Europe. The ruling body is seeking to boost the sport’s profile and income as some teams mull a breakaway competition because they don’t get a cut of the sport’s revenue. The Aigle, Switzerland-based UCI, whose budget is being stretched by the strength of the Swiss franc, is prepared to share future profits from the new events, McQuaid said.

“The teams need to understand that they are part of this strategy,” McQuaid said. “Some of the team managers are radicals, some of them are thinking too short-term” by planning a breakaway, he added. “The UCI has to be wary about that.”

The financial growth of cycling has been stunted by doping scandals, such as the positive test by 2010 Tour de France winner Alberto Contador, which have made it harder to attract sponsorship teams rely on to survive. Typically, squads have an annual budget of $10 million, according to team association president Jonathan Vaughters. The Tour de France is among only “one or two” races that make a profit, according to McQuaid.

TV Cameras Barred

Earlier in the year, some teams hired a bank to look into starting a breakaway series, former Giro d’Italia race director Angelo Zomegnan said in an interview, declining to identify them or the bank. During July’s Tour de France some of the U.S.-based teams including Garmin and HTC barred cameras from their vehicles on the grounds they don’t get a cut of the race’s television revenue.

Vaughters, who manages the Boulder, Colorado-based Garmin team, says teams are “constantly” vulnerable to sponsors pulling out. The HTC team from San Luis Obispo, California, whose rider Mark Cavendish won five stages at Tour de France, is folding after this season because it says it can’t find a new sponsor. Johan Bruyneel, who oversaw Lance Armstrong’s seven Tour wins, said in a July 19 interview the prize money teams get from the race is some 55,000 euros ($78,000) and doesn’t cover expenses, Bruyneel said.

Bruyneel’s RadioShack team will next year merge with Leopard-Trek, which doesn’t have a main sponsor this season, the teams said yesterday. Leopard-Trek’s Andy and Frank Schleck came second and third at this year’s Tour.

Tour de France Income

It would be “very hard” for teams to share more of the Tour de France income because the race’s financial structure has been established for decades, McQuaid said. The Amaury family -- which has controlled the event since the 1940s -- and Lagardere SCA shared 136.6 million euros of dividends from the Tour and other sports events between 2004 and 2008, filings by Amaury Sport Organisation, or ASO, show.

McQuaid first explored holding a race in Beijing after it was awarded the 2008 Olympics, although city authorities became too “preoccupied” with the Games to carry through their initial interest, he said. Late last year, they phoned him to say they were interested in an event to promote cycling and reduce car pollution. Paris-based ASO will organize next month’s race that will include all top teams.

The race won’t bring quick profits for teams, McQuaid said.

“There is no way the Tour of Beijing is going to be realizing the TV revenues of the Tour de France for a very, very long time,” McQuaid said. “This is a long-term strategy.”

Medvedev Meeting

He said he plans to speak to Medvedev at a sports conference in Saransk on Sept. 9 about a stage race that would include Sochi, the host of the 2014 Winter Olympics. He is also in talks with cycling federations in Brazil and India about staging top-level races there, he said, adding the 2016 Summer Olympics in Rio could help provide a platform for an annual race in South America’s biggest country.

The UCI, which has an annual budget of about 22 million Swiss francs ($26 million), is also coming under financial pressure because most of its income is in euros and dollars and its 90 staff are paid in francs, McQuaid said. The currency surged more than 18 percent against the euro in the year through yesterday as a hedge against financial losses.

“There is continuous pressure on the UCI to balance its books and make ends meet and so therefore other revenue streams are really necessary,” McQuaid said.

To contact the reporters on this story: Alex Duff in Madrid at aduff4@bloomberg.net.

To contact the editor responsible for this story: Christopher Elser at at celser@bloomberg.net

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