Start of the Tour de France: Business with the “Mythos Tour”

Status: 07/01/2022 12:40 PM

The Tour de France begins today. For three weeks, the world will be watching cycling. There is a lot to earn on Mythos Tour, but as an economic factor it lags far behind football.

Thomas Spinnler,

Year after year, the toughest bicycle race in the world for three weeks tells the story of victory and defeat. The cyclists ‘pressure is enormous: a bad day, a crash that is not their fault, a tactical error in a crisis situation – all this can ruin many days’ hard work. In connection with this drama, there is talk of the “Myth Tour de France”. This myth is part of the business model, it is a means of selling a product.

For Ralph Denk, founder and team leader of the German touring team “BORA – hansgrohe”, the “myth” has decades of tradition: “The story of how it happened is exciting: the newspaper invents a bicycle race to develop a drift in circulation” – He said The first tour took place in 1903, initiated by the sports newspaper “L’Auto” of the universe. This turned into a success story of almost 120 years and the business idea remained. The trip has been organized since 1947 by the “Amaury Sport Organization” (ASO). It belongs to the French family group Amaura, which also publishes the sports magazine “L’Equipe”.

Maurice Garin, winner of the first Tour de France, 1903

Image: Image Alliance // HIP

Dramas about winners and losers

Newspapers need a story. The tour produces stories big and small about “country road heroes” for three weeks. There are hundreds of them and they all have their charm, says Denk. Exciting sports duels can be told, often with tragic results.

The 1989 Tour was not forgotten, in which the two-time French Tour winner Laurent Fignon in the yellow leader’s jersey lost eight seconds in a time trial with American rider Greg LeMond on his last day in Paris. Le Mond, the 1986 Tour winner himself, returned in 1989 after a serious hunting accident with dozens of shotgun pellets stuck into his body. Dramatic stories such as the one about winners and losers are broadcast on L’Equipe the next day, broadcast on TV or followed on the internet.

Laurent Fignon’s last yards in a yellow jersey on the Champs Elysees during the 1989 Tour de France.

Image: alliance / dpa image

attention and presence in the media

Even the doping scandals of the last few years have not hurt the route: “At the peak of interest a few years ago, a crisis occurred when it became apparent that doping was practically universal. But sports fans in particular quickly forget and the fascination with the sport has not changed as a result, so interest is growing again, ”says Professor Sebastian Uhrich from the Institute of Sport Economics and Sports Management at the German University of Sports in Cologne. Ultimately, scandals would also be part of the fascination.

“The products sold during the tour are media coverage and media coverage,” explains the sports economist. “It is these two factors that make them attractive to advertisers.” According to Denek, in terms of media coverage, it is the largest annual sports event of the year.

Jan Ullrich is reading the French sports newspaper L’Equipe in a yellow T-shirt.

Image: alliance / dpa image

The three pillars of marketing

Who else is waiting for the newspaper in the morning? Nevertheless, ASO makes money from the stories from the tour. Marketing is based on three pillars, explains Uhrich: “On the one hand, this is income from the advertising industry and sponsors. On the other hand, there are broadcast rights that are sold to media companies, ”says a sports economist. This is basically the same for all sporting events. “The special feature of the itinerary, however, is the income generated by the destinations, as cities have to pay to become the destinations of the milestones.”

About 60 percent of an ASO’s income comes from television broadcasting rights. Last year, the race was broadcast on 100 TV channels in 190 countries and 60 channels were broadcast live. The organizers receive additional income from advertising and sponsors. According to estimates, this share in sales is from 30 to 40 percent. Cities will do the rest.

Football is much more lucrative

It is not possible to get transparent data on what the Dealership generates annually for the trip. Estimates for the past few years range from 150 to 200 million euros. There is probably more now. Compared to the turnover that FIFA is likely to achieve this year from the FIFA World Cup in Qatar, the Tour de France is just a medium-sized sporting event. Here, too, you should rely on the estimate: FIFA’s revenue is likely to be around $ 7 billion this year. Last year, 2021, i.e. without the World Cup, it was 766 million.

International football leagues are also much more profitable for the organizers. The Premier League, the richest league in the world, has sold TV rights for 2022-2025 for over five billion euros. If you compare with the Bundesliga, which can be sold all year round, it’s understandable why the sums generated by TV rights and sponsorship are much higher there, says Uhrich. “The tour doesn’t generate sustained interest, so it’s not as interesting as the product.”

The tour dominates the economy of cycling

Nevertheless, the cycling race is a profitable business for sponsors and professional teams: “In terms of media coverage, it performs well compared to other sports,” explains team manager Denk. So the tour is by far the most important event of the year for the bands. Cycling dominates, so every sponsor and competitor wants to be there. BORA-hansgrohe achieves 60 to 70 percent of the annual advertising value on the route. It also depends on sports success – adds the team leader. If the team or driver is successful, it could also be over 80%.

“The business model for cycling is solid,” says the former cyclist. The cycling team is approximately 90 percent financed by sponsorship. Merchandising such as selling jerseys is much more difficult than in football: brand identity is only temporary, the manager explains.

Tour de France photojournalists: Not a single moment is wasted.

Photo: photo alliance / Augenklick / Ro

“Still room for improvement”

The average annual budget of a team consisting not only of drivers, but also logistics, mechanics and medical staff is 18 million euros. Denk does not disclose his budget. According to media reports, the budget of the currently most expensive British cycling team, Ineos Grenadier, is over EUR 50 million. “We still have room for improvement,” Denk doesn’t want to talk about it anymore.

A marked difference in the amounts achieved in football, thanks to sponsorships and television rights for example, has an impact on salaries. Professional cyclists earn an average of € 350,000 a year. With a salary said to be around six million euros, two-time tour winner and title defender Tadej Pogačar is the highest paid professional.

2020 and 2021 winner Tadej Pogacar in a yellow jersey

Image: AP

The salary depends on the market

The Spanish newspaper El Mundo published in 2021 what Lionel Messi reportedly earned in four seasons at FC Barcelona from 2017 to 2021. The amount is over 550 million euros. That should be enough to finance the annual budgets of the 22 teams on the tour.

A look at the cash prize list also shows that it is not possible to have wealth that draws drivers to France to face the rigors of the race. In 2022, almost 2.3 million euros will be paid, the winner will receive 500,000. euro. At the Wimbledon tennis tournament, participants enjoy around 46 million euros in cash prize. Denk’s manager sees it as a sport: “The market decides what you pay. In other disciplines, athletes earn more, not because they are better athletes, but because more people watch it on TV and more goods are sold. ”

Ralph Denk, team leader at BORA-hansgrohe

Image: alliance photo / dpa

“Great Loop”

Denk would like a podium finish in Paris and a stage win for his team; also an exciting sport and a route to be decided only in the last stages. This is good for viewers who will be cheering for three weeks. And that’s good for coverage, media attention, and exposure from an economic point of view. Because the tight and dramatic result fuels and renews the myth of the Tour, making people remember the race decades later – like the story when Laurent Fignon lost the Tour in 1989 after 3,285km in the last meters of the Champs Elysees.

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