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Tour de France: Cycle of sporting profitability

Billed as the ‘greatest free show on the planet’, the Tour de France begins this weekend in the Dutch city of Utrecht, and will draw vast crowds wherever it goes – along with spectacular revenue.
The final stage of last year’s Tour de France, the world’s biggest road cycling race. The tour is a financial powerhouse, with a French broadcaster paying €24 million for television rights. Eric Feferberg / AFP
The final stage of last year’s Tour de France, the world’s biggest road cycling race. The tour is a financial powerhouse, with a French broadcaster paying €24 million for television rights. Eric Feferberg / AFP

Despite the long, dark shadow cast by the doping scandal that led to the US cyclist Lance Armstrong being stripped of his seven titles, the Tour de France continues to live up to its own extravagant billing.

It calls itself the “greatest free show on the planet” and the curtain rises on Saturday on the 102nd performance.

But as well as being a spectacular sporting tournament, the tour represents seriously big business. And that is nothing new for an event born of commercial need at the start of the 20th century.

This year’s 3,360-kilometre slog leads 198 riders from the lowlands of the Netherlands to the steep gradients of the Alps and Pyrenées before the climax on the Champs-Elysées in Paris on July 26.

The choice of the Dutch city of Utrecht for the Grand Départ – the 21st time a starting location outside France has been selected (last year it was in Yorkshire, England) – is fitting. The local council is proud of its traffic-free city centre and inhabitants’ greater use of cycles than cars for getting around.

Between the start and the finale, up to 15 million spectators are expected to line the routes of the tour’s 21 stages.

For them, the lure of the race is the awe-inspiring display of sporting prowess and human endurance, plus the colourful spectacle that accompanies it. For television viewers in 190 countries, the fast-changing scenery offers a stunning backdrop to the sleek progress of the peloton, or main group of riders.

But not even the most romantic of sporting enthusiasts can deny the grandest of Europe’s three great cycling tours, more prestigious than the Giro d’Italia and Vuelta a España, is also about money.

Television rights are lucrative – the state-owned France Télévisions network pays an estimated €24 million (Dh97.8m) a year – and it would be more but for the French government’s list of major sporting occasions that must be available free. Then there is sponsorship, advertising and fees from towns and villages chosen as staging posts.

The “caravan”, a fleet of vans and lorries that precedes contestants throughout the race, tells part of the story.

Advertisers pay heavily to appear in the procession, which takes 45 minutes to pass. The price has been put at €150,000 for three vehicles, but it is probably more this year. According to one poll, the parade is the main reason almost half the spectators give for attending.

Much of the caravan’s popularity stems from the advertisers’ tradition of dispensing free gifts. When the 2014 Grand Départ took place in Yorkshire, giveaways included five million tea bags and 60,000 packets of sweets.

Tour organisers recount the huge success of early advertisers, such as the makers of La Vache Qui Rit (Laughing Cow) cheese, which “won a place in the hearts of the public”.

Not everyone was impressed; the French playwright Pierre Bost deplored the “parasites”, writing in 1935: “This caravan of 60 gaudy lorries singing the virtues of an apéritif, underpants or a dustbin is a shameful spectacle. It bellows, it plays dreadful music, it’s sad, it’s stupid. It stinks of vulgarity and money.”

Bost’s disdain did not stop the caravan becoming, in the words of the organisers, “an integral part of the event that is the Tour de France”, its multi-shaped and multi-coloured procession causing “young and old alike at the roadside [to] marvel at the inventiveness of the floats and vehicles and clamour to grab the gifts”.

Nor are business instincts a modern trait.

The first tour, in 1903, was a circulation stunt for L’Auto, which despite being a sports newspaper had been created by opponents of Capt Alfred Dreyfus, the French soldier accused – wrongly as was belatedly established – of selling secrets to the Germans. Its raison d’être was to rival the pro-Dreyfus Le Vélo, which mixed sport and political comment.

It was a winning ploy, with daily sales rocketing from 25,000 to 65,000, a trend that continued until the 1933 tour, when a circulation high of 850,000 was claimed. Its first editor, and also the tour’s original organiser, Henri Desgrange, was a world record-breaking cyclist as well as sports journalist.

L’Auto fell from grace after showing pro-Nazi tendencies during the Second World War when Germans were the majority shareholders.

It was forced to close after liberation but its descendant L’Equipe, still an internationally renowned sports daily, is part of the Amaury group which runs the tour and other events including the Paris-Dakar rally.

L’Auto’s other legacy is the familiar yellow jersey worn by the race leader and sponsored for 28 years by LCL bank. The colour reflects the newspaper’s history; it was printed on yellow pages.

What worked for the newspaper also works for contemporary entrepreneurs and the professional race teams. “For a budget of €8.3m, we achieved the equivalent of advertising revenue of €63m in 2011,” says Yvon Breton, the chief executive of one competing team, AG2R-La Mondiale.

An impression of the financial potential can be gleaned in the towns and villages that the tour passes through or from which it starts.

Gary Verity, the chief executive of the Welcome to Yorkshire agency, had to persuade local authorities that his proposed budget of £27m (Dh154.7m) for the Grand Départ made sense. The economic benefit to the area was almost four times that figure and Mr Verity subsequently became Sir Gary, knighted in Queen Elizabeth II’s birthday honours list.

The small Pyrenées ski station of La Pierre Saint-Martin will host the arrival of the 10th stage of this year’s tour, a 167km run from Tarbes. Preparations included a €700,000 bill for repairing roads damaged by wintry weather.

In Provence, the town of Gap paid €180,000 in fees as a point of both arrival and departure in 2013, but calculated economic benefits at €2.5m. A newspaper in western France, La Chronique Républicaine, has produced a 32-page supplement for the route between Livarot and Fougères.

In Utrecht, site of the Dom tower, at 112 metres the tallest belfry in the Netherlands, officials expect 600,00 to 800,000 visitors, at least trebling the city population.

For an outlay of €15m, from public and private backing, the Dutch city expects the event to generate about €33m.

“Utrecht’s economy is offered a great boost throughout all the city’s activities,” says Gijs Boerwinkel, from the Le Tour Utrecht organisation. “Companies are entering new partnerships which will last … and some events leading up to the start of the tour will return when the peloton is far gone.”

And so the cycle of investment and payback rolls on.

business@thenational.ae

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Updated: July 2, 2015 04:00 AM

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