How does the world’s most prestigious cycling race make money? Who sponsors the teams? And how does financing impact the riders’ strategy?
Right about now, more than 150 of the world’s most elite cyclists are charging up Col de la Hourcère in the French Pyrenees.
Over a 3-week period from August 29th to September 20, these aerobic beasts will traverse some 2,165 miles up and over 8 mountain passes. They’ll spend more than 4,800 minutes in the saddle, and reach speeds of up to 63 MPH. They’ll vie to bring their countries, teams — and sponsors — glory.
The Tour de France is a historic and global phenomenon. Each year, fans from more than 180 countries turn in to watch the race.
But despite this popularity, the economics of the sport are largely shrouded in secrecy.
How does the Tour de France — an event that is free to the public — make money? How does the sponsorship model of a professional cycling team work? And how does this all affect how the riders choose to compete?
How the Tour de France makes money
Cycling’s most important race was born out of financial necessity.
At the turn of the 20th century, a French newspaper called L’Auto was struggling to stay afloat. The paper’s staff was asked to come up with ways to increase circulation — and Géo Lefèvre, a 26-year-old sportswriter, suggested putting on the biggest cycling race the country had ever seen.
Launched in 1903, the Tour de France was an immediate success.
In its first year, the Tour nearly tripled L’Auto’s circulation from 25k to 65k newspapers per day — enough to kill off their main competitor, Le Vélo. Over the next 3 decades, this figure would see a 34x increase.
A front-page L’Auto story in 1903, announcing the arrival of the newly-created Tour de France (L’Equipe)
During WWII, the Tour was put on hold. When peacetime resumed, L’Auto — which had been taken over by a consortium of pro-Nazi Germans — was shuttered and ownership of the Tour was shifted to a successor paper, L’Équipe.....MUCH MORE
Up until the 1960s, the newspapers had monetized the tour in a number of ways:
The Tour’s revenue streams were largely focused on monetizing the large crowds that gathered along the route. And early on, there were concerns that an overabundance of brands and sponsors would corrupt the purity of the sport.
- They auctioned off stops on the route to the highest-bidding cities.
- They charged companies a fee to follow riders in logo-plastered publicity “caravans” and throw out swag to spectators.
- They rented out physical ad space along the route.
- They allowed local brands to sponsor the tour.
“This caravan of 60 gaudy trucks singing across the countryside…is a shameful spectacle,” the French journalist Pierre Bost wrote of the caravans. “It bellows, it plays ugly music, it’s sad, it’s ugly, it smells of vulgarity and money.”
Despite this diversification of revenue streams, the Tour still operated with a deficit.
But this changed when the race was taken over by its present-day owner, the privately-owned French sports organizer, Amaury Sport Organisation (ASO), in 1965....
