Russian Billionaire Cranks up the Pressure on Cycling’s Beleaguered Bosses – Simon Chadwick

He may not possess the urbanity of Carlo Ancelotti, be owner of the world’s biggest sporting brand, or have Cristiano Ronaldo at his disposal, but Russian billionaire Oleg Tinkov is intent on creating cycling’s equivalent of Real Madrid’s galacticos.

At the same time, he is also set on becoming a poster boy for reform in the drug-tainted world of elite professional cycling.

Entrepreneur Tinkov has been engaged in businesses ranging from electronics and frozen food, to brewing and credit cards.

But he is probably best known for his sponsorship and ownership of professional cycling teams, most notably Tinkoff Credit Systems.

Reportedly worth US$1.4 billion, Tinkov is now seeking to use his wealth and influence to create the kind of sporting super team we are more used to seeing at venues like Madrid’s biggest football stadium.

The team already boasts a roster of some the sport’s biggest stars, including former Tour de France winner Alberto Contador. 

But he wants more; indeed, he has repeatedly cast covetous eyes at the sport’s star names including Chris Froome and Fabian Cancellera.

Now Tinkov wants to extend his influence into the organisation and governance of cycling.

Mixing it up

The Russian believes that every top rider in cycling should ride in all of the sport’s major races, namely the Tour de France, the Giro d’Italia and Spain’s La Vuelta.

To induce the riders, Tinkov has offered them €1 million euros. Tinkov’s ambitions go further still though: he wants to see more exciting races and a bigger sporting spectacle – achieved through initiatives such as shorter, faster stages and cameras on bikes.

Tinkov’s reformist zeal and commercial ambitions are both ironic and compelling.

They are ironic in many ways; for instance, his cycling team is managed by former Tour de France winner Bjarne Riis, a man stripped of his 1996 Tour victory for doping offences and someone persistently dogged by suspicions of drug taking.

Former professional rider Tyler Hamilton, a former teammate of Lance Armstrong, has gone as far as claiming Tinkov told his riders, “I do not care what you do, just do not get caught”. (Tinkov has responded by insisting he is “totally against doping”).

But the businessman does have an important point to make: cycling is in dire need of change. And it is a fact of which Tinkov, most professional teams, and governing body the Union Cycliste Internationale (UCI) are all acutely aware.

Not only does the sport live with a legacy of transgression, but at its heart sits a business model that is overly reliant upon sponsorship revenue.

It is in this context that 11 professional cycling teams have recently announced a new initiative – Velon – designed to “make cycling better”.

This is more UEFA Champions League than Real Madrid’s galacticos, although Tinkov’s team is one of the 11 involved. The premise of the organisation is interesting, obvious and inevitable: to make cycling a more attractive commercial proposition.

Win at all costs 

Event ownership and governance in cycling have been problematic for some time; for instance, the sport’s biggest event – the Tour de France – is owned by a private family, not by the UCI. Furthermore, it’s main (albeit relatively modest) income streams come from sponsorship.

Such events are free to view and merchandising business is limited. This is in stark contrast to, for example, the Champions League or, for that matter, Formula 1, the NBA or tennis’ Grand Slam events.

Velon is an attempt to copy what those in other sports have been doing, in some cases for decades.

Yet critics are concerned that the last thing cycling needs is for money and yet more commercial influence to drive it.

After all, one view is that this is what got the sport into trouble in the first place, prompting the “win at all costs” culture of drug-taking.

Other critics are alternatively concerned that Velon is just another example of the industrial concentration and elitist development of sport that has recently led to the likes of Real dominating football and Red Bull monopolising the F1 World Championship.

The suspicion is that, while Tinkov and those of his ilk make money, cycling as a whole will suffer.

But the initiative is about more than simply making money; there is no doubt that the residue of drug-taking needs to be eradicated and that the sport’s image and reputation must be managed more effectively.

Velon’s emergence, allied to Tinkov’s comments, also raises important issues about more customer-focused events that provide a compelling spectacle without inducing their participants into ingesting illegal substances.

Hard slog

While Velon has the blessing of the UCI, it is not actually the governing body’s initiative and one therefore has to ask where the organisation can go now?

Over the last two decades, the UCI has been something akin to the paternalistic guardian of a hugely dysfunctional family.

In fact, claims have repeatedly been made that the UCI was complicit in perpetuating cycling’s drugs scandals, which reached its nadir as the Lance Armstrong case reached its denouement.

The election of new UCI president Brian Cookson in 2013 was meant to be the prompt for major reforms within the governing body and, indeed, in professional cycling as a whole.

To some extent it has done this, leading to new doping regulations being introduced. The UCI also constituted the Cycling Independent Reform Commission (CIRC):

… to investigate the problems that our sport has faced in recent years, notably the allegations – particularly damaging to our image – that the UCI was implicated in wrongdoing in the past.

However, the CIRC was supposed to have reported its findings by the end of last year, yet we are still waiting for them.

While determining the right solutions for cycling’s malaise is imperative, as commercial and market forces have instigated their own changes it has rather cast the UCI as an organisation loitering with intent rather than actually enforcing rapid and much needed change.

Tinkov and Velon are therefore not simply entrepreneurs seeking a “fast buck” from the cycling business.

They in effect represent a major challenge to the established order, not only driving the implementation of a new business model but also fundamentally threatening the sport’s long-established system of governance, the nature and format of events we are used to seeing in cycling, and the type of riders we are likely to see in the years ahead.

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Professor Simon Chadwick holds the position of Chair in Sport Business Strategy and Marketing at Coventry University Business School, where he is also the founder and Director of CIBS (Centre for the International Business of Sport). Simon is the founding Editor of ‘Sport, Business and Management: An International Journal’, is a former Editor of the ‘International Journal of Sports Marketing and Sponsorship’ (he continues to serve as an editorial board member for several other sport journals), and has authored and published more than 600 articles, conference papers and books on sport. His academic research has appeared in journals including Sloan Management Review, the Journal of Advertising Research, Thunderbird International Business Review, Management Decision, Marketing Review and Sport Marketing Quarterly. Simon has co-edited the books ‘The Business of Sport Management’ and ‘The Marketing of Sport’ (both Financial Times Prentice Hall), ‘Managing Football: An International Perspective’ (Elsevier), ‘Sport Entrepreneurship: Theory and Practice’ (F.I.T.), and ‘International Cases in the Business of Sport’ (Routledge). Alongside his books, Chadwick has created a Sport Marketing talk series for Henry Stewart Publishing, is Editor of a Sport Marketing book series for Routledge (Taylor and Francis), and is a visiting academic at IESE and Instituto de Empresa in Spain; the University of Paris, France; the Russian International Olympic University in Sochi, and the University of Pretoria in South Africa.

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