Cycling ‘Breakaway’ League Said to Plan Equity Offer to UCI
The organizers of a proposed 10-race series that Union Cycliste Internationale President Pat McQuaid called a “breakaway” league are working on a plan that would give the sport’s governing body an undisclosed stake, two people familiar with the situation said.
The offer comes as sports marketing company Gifted Group Ltd. tries to win UCI support for World Series Cycling after its first proposal was rejected, said the people, who declined to be identified because the discussions are private and ongoing. London-based Gifted Group didn’t offer any equity to UCI in the first plan.
McQuaid said in an interview earlier this year that he considered the series to be a “breakaway” league because it would threaten events such as the Tour of Switzerland. The UCI also sees the plan to stage four-day races on four continents in between events such as the Tour de France as too much of a logistical challenge, one of the people said.
“The UCI doesn’t want to get involved in something unless they are absolutely sure it will be a success,” Daniel Malbranque, the former general secretary of the professional riders’ union, said by telephone.
Malbranque, who is now a consultant for the UCI, said he had no information about the discussions between Gifted Group and the ruling body. Gifted Group Chairman Jonathan Price, a former Manchester United sponsorship executive, didn’t immediately return a call and e-mail seeking comment. UCI spokesman Enrico Carpani said the organization had no comment.
Gifted Group has raised 20 million euros ($25.9 million) from investors to start the series, and wooed as many as 10 of the top 18 cycling teams with a promise they would split 64 percent of sales. Investors would have received 26 percent of revenue, and Gifted Group 10 percent, according to a pitch to investors last year drawn up by London-based bank N.M. Rothschild & Sons Ltd. The series has projected earnings before interest, taxes depreciation and amortization of 39 million euros in 2017 according to the pitch. UCI would get an undisclosed share, the people said.
Gifted Group has also reached an agreement with a television company to buy the broadcast rights to the series, one of the people said.
Teams currently don’t get a share of television revenue, which goes to race organizers such as Tour de France owner Amaury Sport Organisation. Jonathan Vaughters, manager of the Garmin team and president of the teams’ association, says cycling’s competition model should be brought in line with sports that spread the winnings around like the National Football League.
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