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BSkyB, News Corp. Are Said to Consider Breakaway Cycling Series

February 28, 2013

BSkyB, News Corp. Are Said to Consider Breakaway Cycling Series

Bradley Wiggins of Great Britain and Team Sky cyclists ride in the peloton during stage four of the 2013 Tour of Oman from Al Saltiyah in Samail to Jabal Al Akhdhar in Jabal Al Akhdhar, Oman on Feb. 14, 2013. Photographer: Bryn Lennon/Getty Images

British Sky Broadcasting Group Plc (BSY), the U.K.’s biggest pay-TV provider, is holding talks about becoming a partner in a new cycling championship involving most of the teams that compete in the Tour de France, three people familiar with the situation said.

BSkyB wants to increase its bet on cycling after bankrolling Team Sky, whose rider Bradley Wiggins last year became the first British winner of the Tour, the people said. News Corp. (NWSA:US), which owns 40 percent of BSkyB, is also interested in broadcasting the series outside the U.K., one of the people said. The people declined to be identified because discussions are private.

The so-called World Series Cycling project is gathering pace as the sport’s ruling body, Union Cycliste Internationale, which has opposed it for more than a year, is weakened by the fallout from Lance Armstrong’s doping confession. A BSkyB executive and attorney met with a dozen teams on Feb. 13 in Geneva and another meeting about the project is scheduled for today in Paris, two of the people said.

“It’s an opportunistic move: it’s probably a time when people are in favor of a breakaway” championship, Tim Westcott, an analyst who covers BSkyB and sports rights for media consulting firm IHS Screen Digest, said.

BSkyB spokeswoman Alice Macandrew didn’t immediately return a call and e-mail seeking comment on last month’s meeting with teams. News Corp. spokeswoman Miranda Higham declined to comment on the company’s plans for the sports-rights market.

Increased Funding

The plans are being led by two former soccer executives: Jonathan Price, a former Manchester United sponsorship manager, and Thomas Kurth, who oversaw a group lobbying for Real Madrid and other European teams. Under their proposal, cycling teams would get some 50 percent of the series’ revenue.

Currently, cycling’s TV income goes to race organizers like the family-owned Amaury Sport Organisation, which controls the Tour de France, and teams have to rely on sponsorships to survive. Paris-based ASO isn’t part of the World Series Cycling project at the moment, the people said.

Price didn’t return a call seeking comment on the project, while Kurth declined to comment. ASO officials couldn’t immediately be reached for comment.

The objections of Pat McQuaid, president of cycling’s ruling body, slowed the project to a virtual standstill last year, two of the people said. McQuaid said in January 2012 that the series would threaten historic races such as the 80-year-old Tour of Switzerland. Since then, the UCI has come under criticism from anti-doping authorities for its handling of affairs relating to Armstrong, including receiving a financial donation from him.

Gathering Teams

Less fearful of retribution from the UCI, the number of teams that agreed to race in the series has risen to 12 from eight in recent months and three other squads are also holding talks with Price’s Gifted Group Ltd., the people said. Czech billionaire Zdenek Bakala, who owns the Quick-Step team that includes the U.K. sprinter Mark Cavendish, allied with Price’s group in December.

Should BSkyB and News Corp. take a stake in the championship, it would fit with their strategy of seeking more influence on sports TV rights, partly in an effort to control costs as spending on competitions such as English soccer’s Premier League spirals, Westcott said. News Corp. subsidiary Fox International Channels last year bought a controlling stake in the Dutch soccer league’s media company. In 2011, News Corp. made an approach to buy Formula One.

Changed Plans

Cycling will be “a whole lot” cheaper than F1 and soccer to get involved with because it doesn’t have a global appeal, Westcott said. In probably the biggest current broadcast deal in cycling, France Television pays as little as 23 million euros ($30 million) a year to show the Tour de France among other events owned by ASO, Westcott said. BSkyB agreed to pay 760 million pounds ($1.2 billion) a year to show Premier League soccer, starting from the 2013-4 season.

Price and Kurth -- who had planned to hold as many as 10 new races on four continents in 2014 -- are now proposing to stage fewer new events and incorporate established races in the championship in an attempt to win over McQuaid, according to two of the people.

McQuaid didn’t immediately respond to an email seeking comment. In a Feb. 25 telephone interview, UCI management board member Brian Cookson confirmed McQuaid was in talks with the former soccer executives.

“They’re talking,” Cookson said. “The answer is not to have a breakaway league but to do something that improves the existing system and takes the sport in a new direction.”

To contact the reporters on this story: Alex Duff in Madrid at aduff4@bloomberg.net; Tariq Panja in London at tpanja@bloomberg.net

To contact the editor responsible for this story: Christopher Elser at at celser@bloomberg.net


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