How The World’s Most Difficult Race Turned A $100 Million Enterprise
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The Tour de France is among the world’s most difficult sporting occasions. Thousands and thousands of followers descend on smaller French cities to look at particular person levels, and 176 cyclists compete at their absolute restrict for 3 straight weeks. So in the present day’s e-newsletter covers every little thing it is advisable know, from the race’s 100+ yr historical past and structure, to the thousands and thousands in prize cash and sponsorships that every bicycle owner and crew acquire.
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Buddies,
The Tour de France is among the world’s most difficult sporting occasions.
That’s as a result of 176 cyclists on 22 groups of eight cowl a race course extending 3,500 kilometers — roughly the space between New York Metropolis and Salt Lake Metropolis.
These athletes will cycle practically day-after-day for greater than three consecutive weeks, climbing mountains, hills, and cobblestone streets. And so they’ll spend greater than 4,800 minutes (greater than three full days!) within the saddle, reaching prime speeds as much as 60+ mph.
Tour de France cyclists who full all 21 levels will burn greater than 120,000 energy in the course of the race. That’s the calorie equal of consuming 1,625 apples, 872 slices of cheese pizza from Pizza Hut, 252 McDonald’s double cheeseburgers, or 619 authentic glazed Krispy Kreme doughnuts (aka, it’s a ridiculous quantity of energy!).
However extra importantly, the Tour de France has additionally grow to be an unlimited enterprise.
Take the crowds, for example. Thousands and thousands of individuals will line the streets, from Bilbao, Spain, to Paris, France, to see the world’s greatest cyclists compete for a $2.8 million purse.
And the groups stand to profit, too. The typical biking crew derives roughly 70% of its finances from sponsors, and a very good efficiency within the Tour de France can all however assure a crew thousands and thousands of {dollars} in sponsorship income for the next yr.
So right here’s every little thing it is advisable know in regards to the cash and enterprise behind biking’s most well-known race: The Tour de France.
This yr is the a hundred and tenth operating of the Tour de France — however I guess you didn’t know that the race truly began as a sales gimmick.
The story goes like this: French newspaper L’Auto was on the verge of shutting down on the flip of the twentieth century, so the corporate’s management crew requested its writers to give you concepts to spice up circulation, and 26-year-old sports activities author Géo Lefèvre advised internet hosting the largest biking race in French historical past.
Then, in 1903, the Tour de France launched and was a smash hit. L’Auto’s circulation elevated 160% from 25,000 to 65,000 newspapers delivered each day within the occasion’s first yr. And their circulation finally elevated by 340% over the following 30 years.
The race was then shut down from 1940 to 1946 due to World Warfare II. And with L’Auto getting taken over by a pro-Nazi German group in the course of the struggle, the Tour de France’s possession was given to the French newspaper L’Equipe.
However even with the race rising every year, L’Equipe wasn’t making any cash on the occasion. So that they determined to promote it in 1965 to a privately-run French sports activities organizer named Amaury Sport Organisation (ASO), and ASO has run it ever since.
The Tour de France is among the world’s most profitable biking occasions. This yr’s 176-rider discipline will break up a $2.8 million purse, together with $545,000 for first place, $220,000 for second place, and $110,000 for third place.
Tour de France Particular person Prize Cash
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1st place: $545,000
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2nd place: $220,000
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third place: $110,000
And whereas just one individual can win the $545,000 first place prize, there are nonetheless many different methods to win cash all through the 3-week-long competitors.
For instance, the King of the Mountains (Polka Dot Jersey) will take residence $28,000. The perfect younger rider and essentially the most aggressive rider will take residence $22,000. And the groups themselves can win between $55,000 and $22,000 for a podium end in Paris.
Ps. It’s customary for the Yellow Jersey winner to share the highest prize of $545,000 with crew riders and workers, as they play a major position in serving to them win.
The Tour de France primarily makes cash in 3 ways: 1) Broadcast rights (55%), 2) Promoting & sponsorship (40%), and three) Metropolis internet hosting charges (5%).
Now, ASO is notoriously very personal in the case of its funds. Nevertheless it’s estimated that the Tour de France brings in $75 million to $180 million in annual income. And with a rumored ~20% revenue margin, the occasion is making a minimum of $15 million in revenue.
Right here’s a fast breakdown of every revenue-generating class.
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Broadcast Rights
The Tour de France is offered on tv in additional than 200 nations globally.
This permits ASO to gather thousands and thousands of {dollars} in charges from networks like France Télévisions ($25 million), NBC ($8 million), Eurovision Sport, and ESPN.
That is distinctive as a result of most biking broadcasts historically lose cash — it costs NBC $2 million simply to broadcast the occasion. However ASO has turned it right into a money-making endeavor because 150 million individuals in Europe watch the race every year.
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Promoting & Sponsorships
The Tour de France additionally has a sturdy promoting and partnership enterprise. These sponsors are break up into completely different classes — foremost companions are 1st tier, and official companions are 2nd tier. And firms like LCL (Yellow Jersey) and Skoda (Inexperienced Jersey) pay $12 million and $4 million for official jersey sponsorship.
The publicity caravan is one other main part of the Tour de France’s promoting and sponsorship enterprise. It is a parade of name companions that put collectively artistic using shows and hand out promotional items like occasion swag and meals.
The publicity caravan takes place earlier than every stage of the Tour de France, and 47% of Tour de France fans go to the race primarily to see the publicity caravan.
These manufacturers will spend $17,000 (one automotive together with your decals) to $1 million (a number of automobiles, a number of employees, thousands and thousands of things handy out) on the publicity caravan. And greater than 15 million objects shall be handed out to followers over three weeks.
Tour de France Publicity Caravan By The Numbers
In whole, the publicity caravan generates a number of million {dollars} in income for ASO.
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Metropolis Internet hosting Charges
Metropolis host charges for the Tour de France are the occasion’s smallest income generator, however they nonetheless command high prices from cities seeking to be part of the Tour.
These charges vary from $65,000 on the low finish to greater than $5 million on the excessive finish.
Tour de France Metropolis Host Charges
Cities are prepared to pay this as a result of followers can attend the occasion without spending a dime, which brings thousands and thousands of vacationers into city. Take final yr’s grand départ in Denmark, for instance. They declare these three days generated an financial affect of $108 million, with 722,000 worldwide and home vacationers and 1.6 million followers in attendance.
However typically talking, host cities expect to make again 3x to 6x their funding.
The economics behind knowledgeable biking crew are fairly fascinating.
The typical Tour de France crew derives most of its annual finances (70%) from its title sponsor. They pay their riders between $45,000 (minimal wage) and $6 million (2x Tour de France winner Tadej Pogačar). And the lower-end groups would possibly spend $10 million yearly, whereas the higher-end groups spend greater than $50 million yearly.
Right here’s a take a look at the highest 5 highest spending groups from 2021:
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Ineos Grenadier ($55 million finances): Sir Jim Ratcliffe, web price of $20.6 billion
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UAE Crew Emirates ($38 million finances): Funded by state-owned aviation firm Emirates, which generated $3 billion in revenue on $32.6 billion in income final yr
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Jumbo-Visma ($29 million finances): Funded (however ending in 2024) by Koninklijke Jumbo Meals Groep, which generated over $11 billion in income in 2022
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Fast-Step ($27 million finances): Owned by billionaire Zdenek Bakala
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AG2R-Citroën ($25 million finances): Funded by French automaker Citroën, which generated$16 billion in income for 2022
Now, greater budgets enormously affect profitable, with 9 of the final 10 Tour de France champions relationship again to 2013 coming from groups throughout the prime 4 budgets. So many lower-budget groups have argued {that a} price cap must be launched — much like what we’ve seen in Formulation 1 during the last 2-3 years.
Dialog Starters: Wish to impress your loved ones and mates in the course of the 2023 Tour de France? I acquired you. Under you’ll discover among the race’s most fascinating details.
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Many Tour de France riders shared cigarettes whereas racing all through the Nineteen Twenties, with the thought being that smoking would assist open the lungs earlier than large climbs.
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The Yellow Jersey was picked just because the French newspaper that began the race in 1903 was printed on yellow paper (a part of the promoting technique!)
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The Tour de France has simply two relaxation days over three weeks. However these aren’t actually relaxation days, as cyclists nonetheless experience for 2-3 hours to maintain their muscle tissue from cramping.
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The Tour de France has lots of constants from yr to yr, together with the time (July), format (time trials with levels), and ending (Champs-Élysées in Paris). However the precise route that the riders take does change from yr to yr.
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Cyclists are a lot sooner now than up to now. Ex. Maurice Garin won the primary Tour de France with a mean pace of 16 mph, however this yr’s common pace will most likely find yourself nearer to 25 mph.
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The typical crew brings 3,900 vitamin bars, 20 jars of jam, and three,000 water bottles (plus tons of of kilos of nuts, raisins, apricots, and figs).
And as for the favorites, your greatest guess is Denmark’s Jonas Vingegaard or Slovenia’s Tadej Pogačar. Vingegaard gained final yr, and Pogačar gained the 2 races earlier than that.
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I hope everybody has an ideal weekend. We’ll speak on Monday.
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If you happen to’re feeling the vitality and wish extra cycling-related content material, take a look at this interview I did with Lance Armstrong final yr. It’s the most well-liked episode of the podcast ever — and Lance is tremendous open and trustworthy about his wins *and* losses.
Huddle Up is a 3x weekly e-newsletter that breaks down the enterprise and cash behind sports activities. If you’re not already a subscriber, enroll and be part of 100,000+ others who obtain it straight of their inbox every week.