The rumor mill has been churning lately with a real humdinger: Amaury Sport Organisation, owner of the Tour de France, Vuelta a España, and a host of other races, is putting out feelers to buy the Italian cycling properties of RCS Sport, owner the Giro d’Italia.
Tour de France director Christian Prudhomme laughed off suggestions that ASO was considering the acquisition of rival RCS Sport, which also runs Strade Bianche, Roma Maxima, Milano-Sanremo, Tirreno-Adriatico, and Giro di Lombardia.
“I have not heard anything about that,” Prudhomme said when asked by VeloNews during a visit to the Santos Tour Down Under last month. “Now you make me laugh. This rumor is not true.”
New RCS Sport general manager Paolo Bellini — who joined last month in the wake of a financial scandal that saw five top-level officials resign or be dismissed after $15 million were found missing from company coffers — also denied that the Giro is on the auction block.
“RCS is not for sale,” Bellini told VeloNews contributor Gregor Brown last week. “I’ve not heard anything about that. At this moment, I can guarantee that is not the case.”
Sources, however, have indicated that ASO has inquired about the Italian cycling properties. How serious those inquiries were is hard to gauge, but any merger or buyout would have huge implications.
French-owned ASO is already the largest and most powerful player internationally in producing bicycle races, and currently owns or operates 19 races worldwide under its umbrella of cycling properties.
A takeover by ASO, which bought a controlling interest in the Vuelta a España in 2008, of RCS Sport’s Italian cycling properties would give the French company a near-monopoly on the most important and lucrative dates on the European racing schedule.
Whether RCS Sport’s owners would be willing to part with its six cycling properties could come down to a matter of price.
RCS Sport is a subsidiary of RCS MediaGroup, which owns a mix of magazines, newspapers (including La Gazzetta dello Sport and Corriere della Sera, book publishing houses, and advertising agencies. It recently bought out a Spanish media group, giving it control of top Spanish dailies as El Mundo and MARCA.
Though unconfirmed, a move to sell off even portions of its cycling properties could make sense for RCS MediaGroup, which has seen its revenue drop across its media properties amid Italy’s worsening economic crisis and diminishing returns on print media. Last June, the company sold off 14 magazine titles as part of an effort to raise €400 million.
Its cycling properties would have nowhere near that value, and it is widely believed that the Giro is the only profitable event among them. According to financial reports, ASO earns 24 million euros annually from French TV, its largest contract, so the Giro likely earns substantially less than that from RAI, the Italian broadcaster.
A merger or buyout between the two rival race organizers would make sense, especially when it would come to packaging and selling TV rights across the most important events on the racing calendar. Whether the Italians would let their cherished Giro fall into the hands of a French-owned company remains to be seen.
The Tour and the Giro were both born as vehicles to sell more newspapers. In today’s ever-changing media landscape, it’s TV rights that drive the value of cycling properties.
It’s difficult to read just how well the family-owned ASO is doing with its own cycling properties.
ASO is a subsidiary of the Amaury Group, also called the Éditions Philippe Amaury. The company also owns the L’Equipe, Parisien, and Aujourd’hui newspapers, and much like the newspaper industry worldwide, is losing readers, and the advertising revenue that comes with them. One L’Equipe reporter recently said that the French sports daily’s circulation has dropped by half in less than five years.
Though unconfirmed, it is believed that the Tour is the real cash cow, while other races in the ASO stable break even or even lose money. Cycling is a core business for ASO, which also produces the Paris-Dakar rally, Paris marathon, and Open de Paris golf tournament.
In addition to its mainstays, such as the Tour, Paris-Nice, Critérium du Dauphiné, and one-day classics Paris-Roubaix, Liège-Bastogne-Liège, Flèche Wallonne, and Paris-Tours, ASO has quietly branched out into the lucrative Middle East market, running tours in Oman and Qatar as well as an event in Japan.
ASO has steadily widened its reach within Europe, starting new events, such as the World Ports Classic in the Netherlands, the Arctic Race of Norway, and a new planned event in the United Kingdom next year.
Whispers of a possible play come against the backdrop of growing anxiety among teams, which are clamoring for a new business model to carry the sport toward what they claim would be a more profitable and stable future. Team owners argue that cycling is under-sold and could have an even wider, more profitable reach if teams could have a piece of ownership in races, particularly the Tour.
Talks of a breakaway cycling league, dubbed “World Series Cycling,” seems to have died on the vine. Teams continue to prod for change, but realize that race promoters, and above all, ASO, hold all the cards.
As it stands now, the lucrative TV rights are firmly in the pockets of the race promoters. If ASO did indeed buy out RCS Sport, those pockets would need to be altered to hold more cash.