I highly recommend that you download this PDF of Organizational Forms in Professional Cycling – Efficiency Issues of the UCI Pro Tour, a research paper on the economics of the sport by Luca Rebeggiani of the University of Hannover and Davide Tondani of the University of Parma.

ABSTRACT: This paper gives a first economic approach to pro cycling and analyses the changes induced by the newly introduced UCI Pro Tour on the racing teams’ behaviour. We develop an oligopolistic model starting from the well known Cournot framework to analyse if the actual setting of the UCI Pro Tour leads to a partially unmeant behaviour of the racing teams. In particular, we show that the blamed regional concentration of their race participation depends on a lack of incentives stemming from the licence assignation procedure. Our theoreticalresults are supported by empirical data concerning the performance of the racing teams in 2005 and 2006. As a recommendation for future improvements, we derive from the model the need for a relegation system for racing teams

By “relegation system”, they’re talking about something like in European football leagues, where the worst teams in the first division are replaced by the best teams from the second division at the end of the season. They also use some pretty sweet equations:

Anyways, just read the paper!

BRAIN had a quick story last week about how the Olympics aren’t really on the radar for the bike industry, except for the debut of BMX. The hypothesis seems to be that road racing revolves around the Tour de France even in Olympic years, while mountain biking has moved away from racing altogether, at least for the US market.

I couldn’t agree more. That’s why I suggested in the latest of my ROAD columns that, “instead of the gatekeeper to the Olympics being in charge of professional cycling, the people that run the Tour de France would be in charge of professional cycling.”

The Pro Cycling Tour has announced the teams for their Commerce Bank Triple Crown of Cycling. The roster includes a handful of marquee teams with US ties - High Road, Slipstream, CSC - plus a few random foreign teams (Sparkasse?) and then all the domestic teams down to DLP Racing. It’s not the Tour of California start list but if PCT president Dave Chauner can generate enough local revenue with this mish-mash of a lineup, then why pay all the expenses and start money to bring the Big Names over? The loftily titled Philadelphia International Championships is a big deal in Philly with or without, say, Tom Boonen.

Anyways, the press release also quotes Chauner as describing his races as “NASCAR on bicycles” and adds, “just like NASCAR, all three events will garner expanded live television coverage”.

Please. NASCAR sets a good model for cycling as a business model, but not as an entertainment. NASCAR’s appeal is about speed, noise, crashes, and the drivers’ nerves of steel. Cycling is about the riders’ endurance and effort, and how the races are embedded in the local landscape. The two are completely different products.

Cycling has its own set of unique and compelling selling points, but “NASCAR on bicycles” isn’t one of them. It doesn’t sound big; it just sounds like a crappy version of “NASCAR in race cars”.

via press release

In 1987, 5-time Tour de France winner Bernard Hinault and legendary NBA disappointment Derrick Coleman both used products that were recently released in a colorway inspired by Dutch artist Piet Mondrian. For Coleman, it was the Nike Dunk sneaker. For Hinault, it was a Look bike. Here are the current versions:

More thoughts on this in my upcoming ROAD Magazine column…

via VeloNews, Sneakerfiles and SoleFresh

This is a great look: bringing a short-term sponsor on board for a specific race. In this case, it’s what looks like the Italian division of a forklift company sponsoring Saunier Duval-Scott for the Giro d’Italia. As the press release points out, it’s a good sales strategy to help a sponsor get their feet wet.

But it’s also interesting conceptually - thinking of the team as a series of geo-targeted sponsorships instead of one big sponsorship. Focusing on this kind of short-term package might work well for teams that are taking that “we’re going to build our own brand without a title sponsor” approach, especially domestic teams. Since there’s no consistent national coverage (or promotion, for that matter), the attention that a team receives from outside the cycling community is clustered around specific events. So, for the weekend that cycling is a big deal in Tulsa, selling a mini-sponsorship to a local business wouldn’t be a bad idea.

via press release

Now that Toyota won’t be renewing the biggest sponsorship in domestic cycling, it will be interesting to see what happens to United Pro Cycling Team, LLC. When they launched at the end of 2005, they were talking about revolutionizing the sport by promoting the United brand (as opposed to that of their sponsor) to generate revenue through merchandising, their fan club, a bike company, and so forth. They came hard out of the gate in 2006, with J.J. Haedo winning the first stage of the inaugural Tour of California, and they’ve had some great moments since, like Dom Rollin’s stage win this year. They’ve run a well-marketed, winning program, so you can’t say that they’ve been a bust. But they haven’t met their own expectations, either.

At least initially, their sponsorship prices were based on some lofty projections. At Interbike in 2005, Kurt Stockton and I had a meeting with a clothing company right after United’s team owner Sean Tucker met with them. When our meeting started, the first thing we heard from the company was, “That guy just asked us for more pieces as part of the sponsorship than we sold in North America this year.”

I won’t guess at how well their jerseys have sold, other than to say that I’ve never seen one not on a team member. United Bicycles flopped amid rumors that sales were in the single digits. The 25,000 registered fans mentioned in the release is 25,000 more than most teams, but a fraction of the six-figure membership that Sean originally envisioned.

Not to knock Sean - he’s run a good race team and done a solid job of building the United brand (thankfully dropping the faceless rider who graced the original logo); I just think he bumped up against a lower ceiling than he anticipated. Looking at the United program, it’s not so differentiated from other domestic teams but an attractive sponsorship property nonetheless.

Tuesday’s episode of Bob Costas’ “Costas Now” show on HBO featured a round-table discussion with Costas, old-school sportwriter Buzz Bissinger, NFL player Braylon Edwards, and Will Leitch, founder of Deadspin, a major sports blog. Bissinger pretty much went crazy and attacked blogs as sandboxes for crass, uninformed idiots - which they often are. You can watch the segment here. He starts ranting at about the 14:05 mark.

The underlying premise was that blogs are killing the craft of traditional sports journalism, which of course scares traditional sports journalists like Bissinger and Costas. That premise is correct to a large extent, but it misses another major factor: that the athletes themselves will play a role in the demise of the sportswriter by using those same tools to bypass the traditional gatekeepers of the information and talk directly to fans.

Here’s an example:

Earlier this year, there was a big to-do about how the Red Sox players were threatening to boycott their Opening Day games in Japan unless the team’s clubhouse staff received the same $40,000 bonus promised to the players. Every sports media outlet covered the story, but no reporter could possibly explain the players’ perspective as well as Red Sox pitcher Curt Schilling did in this blog entry.

If they write like that, athletes will do more than pictures of Matt Leinart partying to make sportswriters obsolete .