Vaughters on cycling’s broken economics - 'The commercial model of bike racing is absurd'

His argument begins with what teams actually own, or more accurately, what they do not. WorldTour licences exist, but Vaughters portrays them as flimsy and temporary, the kind of thing that cannot be treated as a true asset. “The teams are operating on these like flimsy three-year licenses that are actually reviewed every year,” he says. “So it’s effectively a one-year license really.” In his telling, that is not security. It is exposure, because the entire structure leans on one revenue stream.

That dependence on sponsorship might be survivable if costs were stable, but Vaughters sees an inflationary spiral, driven largely by rider salaries and the performance arms race that trails behind them. “Certainly the biggest cost increase in cycling is the riders' salaries and then all the peripheral, you know, sports science and whatnot that support that goes around that,” he says, before pointing to the arms race that warps the entire market.

“A team like UAE… we will spend as much as we need to spend to win everything. Well, that’s going to just bleed out into the rest of the marketplace. That’s going to inflate everything.”

He does not pretend it is a single outlier, either. “Red Bull is a little bit the same philosophy right now. Like we’ll just spend against it until, until we get there,” he says. The knock-on effect is predictable and punishing for everyone else. “It raises the cost of sponsoring a winning team, you know, a team that can win big things.”

Then comes the comparison that makes his argument feel less like cycling inside baseball and more like basic economics. “We’re just as expensive as F1. We’re just as expensive as, you know, as European football, as, you know, as a lot of American sports,” Vaughters says.

In those sports, he argues, sponsorship is not asked to carry the whole structure. “Those sports are operating on a principle of the core revenue is the media rights revenue. And then additionally merchandising and additionally ticket sales sponsorship is just a frosting on the cake, right?”

Cycling, by contrast, is trying to float without a hull. “We’re trying to float the entire ship on just sponsorship because these other sources of revenue don’t exist,” he says. “We don’t have collective merchandising. The teams do not receive anything from media rights.”

If that sounds like something that should be fixable, Vaughters does not share the optimism. When the conversation turns to rights, he points to the centre of gravity. “That’s tricky because all the media rights, essentially, ASO owns all the media rights, or at least the valuable ones,” he says. And then the line that lands like a diagnosis. “That battle has been going on for 30 years, and it hasn’t moved an inch.”

This is where his investment argument bites. He contrasts cycling with the logic of franchise leagues, where finishing last does not erase the value of owning a team. In cycling, he says, “There is no asset because the license is effectively one year. So what are you buying? Like one year of, you know, that’s a donation. That’s not an investment.”

So what can be done, if the media rights lever is stuck? Vaughters offers two routes, one structural and one financial. “Create permanent franchises so that people will invest as opposed to donate and keep the cost a little bit more under control so that cycling is an attractive place that generates value for a sponsor as opposed to like an overly expensive sort of bloated entity that you’re like, nah, I think I’ll do F1 instead.”

He is flexible on the label, even if he is firm on the need. “We can call it all kinds of things. call it with salary caps. can call it budget caps. can call it this, that, the other thing,” he says. Because the real issue is what sponsors are being asked to believe in, and what they can realistically achieve. “If you go to a sponsor now… and say… can we win the Tour de France? The answer now is no. Like no, sorry, you’re gonna have to double it in order to get there.”

And finally, he returns to governance, or the absence of anything that behaves like a league. Outsiders ask a simple question, he says: “Where’s the league? And I’m like, there’s not really one.” Then he answers the harder one, about whether the regulator is there to protect team value. “Are they really looking out for the commercial interests of the teams? No, no, they’re not. They’re like, I mean, not at all. I mean, the UCI actually pushes against the commercial interests of the team.”

Vaughters is not predicting collapse tomorrow. He is describing a system that has been running on goodwill, sponsorship and inertia, while the cost base accelerates and the underlying asset remains, in his words, a liability. In that gap between price and value, cycling’s next fight is already waiting.

Watch the full episode with Jonathan Vaughters in the Domestique Hotseat 👇