April 9/20 8:29 am - UCI Admits to Financial Difficulties Due to Event Cancellations & Postponements

Posted by Editoress on 04/9/20
 

In the current context of the coronavirus pandemic, the President of the Union Cycliste Internationale (UCI) David Lappartient called an extraordinary meeting of the UCI Management Committee on 2 April. A series of economic measures were adopted at the meeting to confront the sporting and financial consequences of the world health crisis for the International Federation, in a situation marked by the postponement - or even cancellation - of all upcoming cycling competitions.
 
Cycling at a halt
 
The serious situation of international cycling, forced to a halt several weeks ago until at least 1st June 2020, has been studied in depth. The impact of the world health crisis on the UCI International Calendar is considerable: as of this date, the UCI has received more than 650 requests from organisers for the postponement or cancellation of events over a period that currently extends until the month of August. This figure represents 30% of the year's UCI International Calendar. Road and mountain bike are the most affected disciplines. For example, the Giro d'Italia, the Tour des Flandres and Paris-Roubaix, three prestigious UCI WorldTour events, have been affected. Likewise, the UCI Mountain Bike Cross-country World Championships presented by Mercedes-Benz in Albstadt (Germany) have been postponed. In addition, several rounds of the Mercedes-Benz UCI Mountain Bike World Cup must be rescheduled, while others have had to be cancelled at the request of their organisers. The UCI World Championships for BMX Racing have also been pushed back, and those for para-cycling road risk cancellation.

On top of this difficult situation comes the postponement of the Tokyo 2020 Olympic and Paralympic Games, finally pushed back one year by the International Olympic Committee (IOC) - they will take place from 23 July to 8 August 2021 and from 24 August to 5 September 2021 respectively -, after a period during which there had still been a possibility of maintaining the initial dates. Wishing to guarantee the security of athletes and sporting equity between nations for cycling events whose qualification procedures were still ongoing (mountain bike, BMX Racing, BMX Freestyle and road para-cycling), our Federation had made a proposition to the IOC and the International Paralympic Committee (IPC) to stop the procedure as of 3 March, taking into account that until that date no nation had been prevented from travelling to events. Our Federation continues its discussions with the IOC and the IPC given the postponement of the next Olympic and Paralympic Games to 2021.

It is clear that the aforementioned postponements and cancellations will unfortunately lead to a significant reduction of revenues for the UCI.

Inactivity that weighs heavily on UCI finances

The current pandemic is hitting organisers of cycling events hard. A considerable number of races have been cancelled, and our Federation has recommended all organisers of competitions in zones at risk to cancel their events. In solidarity and as part of the support measures put in place since the beginning of the crisis, the UCI will reimburse all calendar registration fees to organisers of cancelled events due to take place in the period during which the holding of events is fully restricted. The calendar fees represent a significant part of the UCI's revenue. This initiative will have consequences on the UCI's financial results.

Conscious of the impact of the current crisis on the professional peloton, the UCI created a working group, composed of representatives of riders (CPA), teams (AIGCP) and our Federation. The UCI and its partners have agreed on the framework that will enable teams facing serious financial difficulties to be able to take necessary measures so they can continue in the context of the pandemic. With this temporary flexibility approved by the players of professional road cycling, our Federation wishes to support teams whose activities have been touched by the Covid-19, while maintaining the respect of the riders' rights and in accordance with the UCI Regulation. Further measures of support could be taken during the UCI's regular discussions with its partners, depending on the evolution of the situation.

Particular consideration is being given to the UCI World Championships and UCI World Cups. The rounds of the Mercedes-Benz UCI Mountain Bike World Cup are notably important in terms of revenue for our organisation. The postponement or cancellation of numerous UCI events as well as the general economic situation have of course also had an impact on the overall marketing activities of our Federation.

Concerning UCI World Championships, the effects of the Covid-19 have already been felt with the postponements of the UCI BMX World Championships in Houston (United States) and the UCI Mountain Bike Cross-country World Championships presented by Mercedes-Benz in Albstadt. The situation of the 2020 UCI Road World Championships in Aigle-Martigny (Switzerland) is of course being closely followed, even though these Championships would appear to be safe from the consequences of Covid-19 given their date (20-27 September).

Moreover, the postponement of the Tokyo 2020 Olympic and Paralympic Games will lead to a considerable loss of earnings for our Federation. We need to anticipate both a possible postponement - to 2021 - of the payment of Olympic revenues initially expected in the second semester of 2020, and a probable reduction of the sum paid to the International Federations (IFs).  This amount enables the UCI to fulfil its development mission vis-à-vis its 196 National Federations throughout the Olympic cycle, via the UCI World Cycling Centre (WCC) and its Satellite Centres around the world. The UCI is one of the few IFs with this type of Centre and has trained some 120 athletes each year since 2002. We are following this question very closely and are in constant contact with the IOC as it currently examines the extra costs resulting from the postponement.

At the same time, our Federation is facing an interruption of its commercial activities after the closure, on 16 March, of its headquarters in Aigle (Switzerland) to the public. Likewise, the UCI WCC has put a temporary halt to its training activities after deciding its trainee athletes should return to their countries. Our high-level athletes continue to be coached, at a distance, as part of their training programme and to maintain their sporting level.

Finally, it should be noted that our Federation's asset portfolio has suffered from the effects of the pandemic on the financial markets, combined with the collapse of oil prices.

The good management of our activities over the years and our strategy of selling our UCI World Championships well in advance will enable us to honour our commitment vis-à-vis the cycling family and get through this crisis with limited damage, as long as the situation does not last longer than current predictions.

A necessary cost-saving plan

In a health and economic context where there is no clear view of when the crisis will end, the UCI has established several scenarios of the impact of current events on its results. Conscious that the situation is worrying and that the savings made until now have been marginal (costs linked notably to the interruption of travel of UCI International Commissaires) the UCI Management Committee approved an unprecedented cost-saving plan with the following principal points:

• The UCI's leaders (elected and Senior Management) have decided to reduce their salaries or allowances.
• Full or partial furlough - at different percentages - for all 130 employees of the UCI and UCI WCC.
• Freezing of recruitment for an undefined period.
• Total revision of projects and objectives that had been fixed for 2020 and following years, and those in progress.
• Resizing of solidarity projects for National Federations.
• Generalisation of virtual meetings for the Management Committee, UCI Commissions and seminars.
• Examination (in progress) of contracts of service providers at events, consultants and general providers.

"Our International Federation is going through a crisis that we haven't experienced since the Second World War," declared the UCI President David Lappartient. "Inactivity is hitting athletes, teams, organisers, partners and the large majority of people and organisations that contribute to the vitality of our sport, across all its disciplines. The UCI, cycling's governing body, has not been spared, far from it. The postponement of the Tokyo 2020 Olympic and Paralympic Games, the multiplication of postponements and cancellations of events on the UCI International Calendar, and the uncertainty that weighs on the second part of the season are having a large impact on our sport in general and our Federation in particular. It is time for the cycling family to rally and, as one, prepare our sport to recover from this health and economic crisis that it has been hit by. Each of us is called on to be united, responsible and strong. That is why the UCI has taken some drastic action that should enable it to weather the storm. These choices are difficult but necessary if we wish to rebuild cycling post-Covid-19."