F1 teams not happy? Try being in the Tour de France

Admittedly I am a big Tour de France fan. I’m not a cyclist, I don’t ride a bike but for some reason I do love watching the Tour. It’s like a travelogue of places in France of which I doubt I’ll ever have the chance to see. Once I learned the tactics, strategies and nuances of the Tour, I became a fan much like new Formula 1 fans who get hooked on the details of the series.

It’s a team spot and an individual sport just like F1. It’s grueling, punishing and as high profile as it gets. The technology is second to none in cycling and it has its fair share of controversy and human-interest stories—just like F1.

Something else that’s similar to F1 is the struggle teams have in maintaining their investments and programs and becoming a profitable team in the long-term. Unlike F1, the owners of the Tour, Amaury Sport Organisation (ASO), owns 100% of the sport and shares no profits from the sale of broadcasting rights, sponsorship and advertising, merchandise, hoardings, publicity caravans and host town fees from towns that pay to be part of the Tour.

To be fair, the cost of fielding a professional team is nowhere near that of a F1 team. It’s estimated that a World Tour team budget is approximately €12 million while top teams in F1 spend $200 million or more.

While the ASO’s financial reporting is inclusive of all its events, they do hover around €165 million. That’s for all of ASO events so the Tour itself most likely represents a large percentage of that total. On the other side of this equation is that the costs to ASO for broadcast coverage is enormous. Helicopters, medical staff, police and logistics are massive.

There has been a continuing call for team solidarity and even threats of boycotts of the Tour over profit sharing. Some teams feel the ASO should share the profits to the teams and unlike the Tour, F1 already does this and to a considerable amount.

If you assumed the €165 million was split between 22 cycling teams, that’s around €3.5 million per team and given they may spend around €12 million for their efforts, that’s nearly 30% of their operating budget. It’s significant and on par with F1 prize money sharing percentages for teams.

F1 teams should consider themselves in decent shape and be thankful the ASO isn’t the commercial right’s owners of the series. Contextually, the stakes are very high for the Tour and while the totals are different, the impact is the same. The ability for teams to continue in a challenging economy.

I could be completely out of the loop but one thing I have not seen is a cyclist paying to ride on World tour team. Most have a salary and some of the stars of the sport can earn $3-4 million. Still, contextually that’s 30% of the team budget compared to possibly 16% for an F1 team if you consider a $40 million per year against a $200 million budget.

The complexities and costs in F1 are truly staggering and one has to assume that a cycling team gets a lot of help from equipment manufacturers for the privilege that F1 does not enjoy. The similarities start to break down when you dive into the cost structures of the two series but there still are some commonalities.

I was intrigued to see the frustration of teams such as Oleg Tinkov, owner of Tinkoff Saxo team, and their demand for ASO profits. It sounds very similar to what we are hearing from Sauber, Force India and Lotus. At least they are getting millions in return for their efforts unlike cycling teams and perhaps F1 boss Bernie Ecclestone is right, they should spend less.

Hat Tip: INRNG

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I can only handle so much drama in my life and between F1 and Game of Thrones I have more than enough!

Read the book Bobke II by Bob Roll, a funny book about the early days of mountain biking and tales of the tour.

Dr T

I haven’t had the chance to watch much of the tour in recent years, but I would say the difference is that you can actually go out and buy parts for bikes from the manufacturers involved and there are a huge number of people out there cycling. So there is probably a bit more incentive.