In theory, wherever there is an unmet need, economic forces eventually come to bear and flush out a stagnant status quo. When asked why economic forces have not pushed out UCI management and the national federations that prop them up, thereby freeing investors to capitalize on cycling’s latent economic potential, Holowesko said one reason is that “the whole economics of the sport is backwards.” In other words, rather than building lasting worth in teams, the sport has amassed value in its governing institutions, leaving the teams with empty balance sheets and hats out to sponsors.
Citing this economic regression, the lack of ticket sales revenue, and the relatively low value of cycling television rights, Holowesko said he thinks the economics of cycling will change, for the worse.
“Because people will just start leaving,” he said. “I know a number of very important sponsors in the cycling community and I think if they don’t see change in the federation level, regulatory level, they won’t be around in 12, 18 months — including myself,” he said.
Holowesko feels cycling can become more stable, but that change will require the UCI to forfeit some of its conflicted current roles as race organizer, rule creator, rule enforcer, and arbiter (through an opaque qualifying system) of which teams join the WorldTour. Of the movement toward a more modern franchise model, Holowesko explained that, “you need to give up some of the power at some of the different levels to get that done. You know, right now sponsors are basically just doing this for publicity. And with the things that are going on in cycling, publicity is not positive unless changes are made at the top.”
As for who it is that makes that happen, Holowesko doesn’t think it is the riders, but rather, it’s a major sponsor like Garmin or or a team owner that can craft an agreement among at least half of the sport’s top teams.
“Once we have that,” he said, “it has much more power than some of the riders getting together.”
According to Holowesko, cycling’s maturation is also retarded by the fact that it is an Olympic sport tangled with “these terrible national federations, which are all tied up in terrible domestic cycling and Olympic programs.” As an example, he cited the Bahamian federation as an example of nepotistic national Olympic federations around the world.
“It’s approved by the local Olympic association and the same guys have been in charge of the Bahamian Cycling Federation for 20 years. And they are basically appointed and they get money from the Olympic association, so it’s all about money. And they get to travel overseas and they get money to do that. Local cyclists pay them and they are a joke and they don’t do anything to promote cycling — it’s all about themselves. And those are the people that vote for different representatives on the UCI body.”
Holowesko believes changing this self-perpetuating old boys’ network is more complicated than pulling a few weeds at the UCI. “Most national Olympic federations outside the United States and other major countries are a joke,” he said. “The whole system feeding into the UCI is corrupt.” The organization that oversaw Armstrong and much of the peloton get away with defrauding the sport for 15 years extends to, and is supported by Olympic bodies and the voting members around the world. Tearing out that deeply rooted, sinecure reality, Holowesko said, is cycling’s greatest challenge.
One could discount Holowesko’s support of a franchise system as a one-percenter’s effort to turn pro cycling into something that will financially benefit him as a fractional team owner. However, Holowesko’s argument — like the money he spends supporting young cyclists — comes across as one that is sincerely in the interest of stabilizing the overall sport rather than a ploy to further enrich himself.
Holowesko studied at College of the Holy Cross in Massachusetts, and has said that the Jesuit university, which his parents also attended, left a lasting impression on his dedication to service. Along with his mentor John Templeton’s well-documented worldview that humans are obligated to help others, not just themselves, the motivations for Holowesko’s support of young cyclists comes into focus. And with a personal net worth reportedly north of $400 million, Holowesko does not need to make money by building and flipping a cycling franchise.
Comparing his role as a cycling philanthropist to his job as an investor, Holowesko said the inability to effect reform in cycling — something that he can do with a mismanaged company —is very frustrating.
“After a while, you basically say, ‘well why am I doing this?’ You know, I love to ride my bike,” he said.
Rather than invest his time and money in a sport whose governing bodies put self interests before cycling’s overall financial fitness, Holowesko said he wonders why he simply doesn’t just “go to France or Italy and ride around in the hills with some friends and drink wine and coffee and go back home?”
“Most people don’t realize that most of the major teams, particularly most of the major North American teams and a couple of the European teams, only survive because of the good faith of one or two people,” Holowesko said.
Referring to benefactors like Garmin team owner Doug Ellis, the now-defunct High Road’s Bob Stapleton, and BMC Racing’s Andy Rihs, he pointed out that many teams like these survive because of the largesse of wealthy people who simply love cycling. While major sponsors pay many team expenses, they do not cover all of them, and it takes benefactors to pony up financial bridges to keep these teams above water from year-to-year. Holowesko calls pro cycling teams more philanthropies than for-profits.
“It’s not a business,” Holowesko said. “If cycling is going to be sustainable long-term and improve, it has to be a business. It can’t be a bunch of guys who for just charity’s sake want to throw money at cycling. … Those are the people in cycling who can hopefully be convinced to stay and group together and agitate for change.”