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The Economic Attractiveness of Professional Road Cycling Analysis and Challenges

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The Economic Attractiveness of Professional Road Cycling Analysis and Challenges THE ECONOMIC ATTRACTIVENESS OF PROFESSIONAL ROAD CYCLING ANALYSIS AND CHALLENGES Aantal woorden / Word count: 17 837 Chiel Deckers Stamnummer / student number : 000150447404 Promotor / supervisor: Prof. Dr. Johan Albrecht Masterproef voorgedragen tot het bekomen van de graad van: Master’s Dissertation submitted to obtain the degree of: Master in Business Economics: Corporate Finance Academiejaar / Academic year: 2018-2019 Deze pagina is niet beschikbaar omdat ze persoonsgegevens bevat. Universiteitsbibliotheek Gent, 2021. This page is not available because it contains personal information. Ghent Universit , Librar , 2021. Preface The dissertation ‘The economic attractiveness of professional road cycling’ is presented here. It contains an analysis of the evolution of the economic appeal of the sport and a discussion of possible improvements, which ends in a new business model. This Master’s Dissertation is submitted to obtain the degree of Master in Business Economics: Corporate finance. A long lasting passion for road cycling has made the task of writing a master thesis about the future of road cycling an interesting and fulfilling task. The appeal and business model of road cycling are subjects that have enticed me for years and this assignment gave me the opportunity to research it in depth. I would like to take this opportunity a few people which were vital to the successful completion of this project. First and foremost, I would like to thank my supervisor Prof. Dr. Johan Albrecht for the opportunity, useful insights in the subject matter, and access to his network. Secondly, my gratitude goes to Prof. Dr. Daam Van Reeth and VRT for providing data on television ratings. I thank Iwan Spekenbrink and his Team Sunweb for a nice and insightful talk, and Maxim De Vriese from Renson for making it possible. Last but not least, I thank everyone who has taken the time to review and provide feedback on this thesis. Ghent, August 13, 2019. II Table of contents Preface ......................................................................................................................................................... II Table of contents ......................................................................................................................................... III List of used abbreviations ............................................................................................................................. V List of tables and figures ............................................................................................................................... V List of tables .............................................................................................................................................. V List of figures ............................................................................................................................................ VI 1. Introduction ............................................................................................................................................... 1 2. Analysis .................................................................................................................................................... 2 2.1. Important events and structures ........................................................................................................ 2 2.1.1. The structural reforms ................................................................................................................. 2 2.1.1.1. First internationalization campaign ....................................................................................... 2 2.1.1.2. The UCI ProTour (2005) ....................................................................................................... 3 2.1.1.3. The UCI WorldTour (2011) ................................................................................................... 5 2.1.2. Stakeholder power and interests................................................................................................. 7 2.1.2.1. Race organizers ................................................................................................................... 7 2.1.2.2. The riders and the teams .................................................................................................... 10 2.1.2.3. The governing body ............................................................................................................ 11 2.1.3. Doping scandals ........................................................................................................................ 12 2.1.3.1.The problem......................................................................................................................... 12 2.1.3.2. Operacion Puerto ............................................................................................................... 13 2.1.3.3. Lance Armstrong ................................................................................................................ 13 2.2. Evolution of the economic attractiveness in numbers ..................................................................... 15 2.2.1. Television ratings ...................................................................................................................... 15 2.2.1.1.Ten most watched races in 2018 ........................................................................................ 15 2.2.1.2. Tour de France ................................................................................................................... 16 2.2.1.3. Giro d’Italia and Vuelta a España ....................................................................................... 20 2.2.1.4. The most popular one- day races ....................................................................................... 21 2.2.1.5. Talk shows .......................................................................................................................... 22 2.2.1.6. Comparison with other sports ............................................................................................. 23 2.2.2. Team budgets ........................................................................................................................... 26 2.2.3. Evolution of road cycling sponsorship ....................................................................................... 27 III 2.2.3.1. Stability in team sponsorship .............................................................................................. 28 2.2.3.2. Nature of the sponsors ....................................................................................................... 31 2.2.3.3. International character ........................................................................................................ 32 2.2.3.4. Comparison with other sports ............................................................................................. 35 2.2.3.5. Event sponsorship .............................................................................................................. 37 2.3. Conclusions ..................................................................................................................................... 38 2.3.1. Interesting evolutions and links ................................................................................................. 38 2.3.1.1. Impact of structural reforms ................................................................................................ 38 2.3.1.2. Impact of doping scandals .................................................................................................. 38 2.3.1.3. Relationship among budget, viewership and sponsorship evolution .................................. 39 2.3.1.4. Globalization ....................................................................................................................... 40 2.3.1.5. Power of ASO and RCS ..................................................................................................... 40 2.3.2. General conclusion on economic appeal .................................................................................. 40 3. Challenges .............................................................................................................................................. 42 3.1. Challenges and possible solutions .................................................................................................. 42 3.1.1. Race attractiveness ................................................................................................................... 42 3.1.1.1. Alternative race formats and Hammer Series .................................................................... 42 3.1.1.2. Investing in women’s professional road cycling ................................................................. 43 3.1.2. Financial attractiveness ............................................................................................................. 44 3.1.2.1. Television rights .................................................................................................................. 44 3.1.3.2. New media rights ................................................................................................................ 45 7.1.2.3. Fan experiences ................................................................................................................. 45 3.1.2.4. Ticketing systems ..............................................................................................................
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