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Economic “Cycle”

23/3/2020

 
By Ed Valentine

Will Liverpool be awarded the title? What about relegation? Is Euro 2020 (2021) going to be moved to a single location? The football questions and comments are Twitter timelining past our eyes quicker than the rolls change on a fruit machine. In a sporting context much of the focus has been aimed on the big money Premier League and Champions League. With reduced economic activity taking place across the world sports professionals are forced to upload social media posts of paint-dry wit and humour to pass the time. While the highly paid mega starts may be financially immune the more modest sporting outfits are faced with some difficult choices.
 
Much of the headline talk of the Premier League, the Euros and the Champions League centres on who will win and the loss of revenue across the main associations. ‘Will Liverpool win the league?’ is surely the most asked question in sporting terms.
 
Outside of the footballing bubble sporting events have had cancellations pinging in like some sort of postponement vidiprinter. As most governing bodies’ event rosters were phoning in sick the Paris – Nice cycling road race was in full swing. What started as a distraction from world events it was quickly overtaken by them. With riders dropping out quicker than the sporting events were chalked off the global sports calendar the racing was cut short a day before the final stage in Nice.
 
The race isn’t normally the go to tour for this time of year however the cancellations of the Italian classics attracted the big names of Sagan, Quintana, Nibali and unsurprisingly 5 Pro Continental teams (Pro Continental is like the 2nd tier of cycling, similar to the Championship, the gulf in cash is enormous).
 
This highlights the economics of the cycling peloton. Teams had to race in order to keep the doors of their business open even though from stage 3 onwards the race took place largely behind closed doors, or at least those parts of it to which doors could be easily attached. The final stage was cancelled with the remainder of the calendar put, as you’d expect, in to doubt.
 
Road racing doesn’t have turnstiles or matchday programmes or scarf sellers outside the arena. The business model is largely one of two things - sponsorship driven with team naming rights and jersey/team car sponsoring to make up the lion’s share of income, the larger teams like INEOS (previously Team Sky) have a budget of about €35-40 million thanks to their wealthy backers; or nation state backing like Astana or UAE McLaren. Lower down the order teams are not so fortunate. Movistar, Trek-Segafredo and Sunweb get by on budgets of around half that of the hyper teams. No TV time or prize money stretches the spend as the cash burn is still quite big even in a lockdown scenario.
 
In the 1990s the cost of title sponsorship was about €2 million. Now it’s many times more than that across the UCI World Tour peloton. The smaller teams in the Continental Tour will have slightly more than €2 million in 2020. A prolonged period of no competition would be a major threat to much of the feeder series into the main tour. Teams could fold like pieces of paper. To highlight this the NetApp team were founded in 2010, they then became NetApp-Endura in 2013, then Bora Argon in 2015 and now go by the name of Bora-Hansgrohe.
 
While the sporting world remains a hostage to fortune, we can just cross our fingers that the authorities can provide the right sort of financial medicine across the sporting world. If they don’t many teams will have to get on their bike.

Riding High

10/2/2015

 
By Ed Valentine

Earlier this week Lance Armstrong gave a 50 minute interview where he spoke about his view on his own performance enhancing drug use during his 7 Tour De France (TDF) victories. He stated that if he had the chance to relive his career from 1995 he would still use banned substances in competition. He rationalised this by claiming that it was the culture in the sport of cycling at the time.

“It was an imperfect time… everyone was doing it” was his claim. Looking at the data from the tougher stages of the previous Tour de France races over the last couple of decades it can be seen quite clearly that from about 2011 times are getting slower not faster which suggests that doping is becoming less prevalent within the peloton. With better bike technology, training methods and nutrition amongst other things spectators should be seeing riders make progressive gains with streamlining and precise mechanism shaving time off year on year. Times for the big climbs on the TDF are actually radically increasing as the graphs below show.

The quickest time for Alpe d’Huez, a gruelling 13.8km climb with an 8.1% gradient, was 2 minutes 55 seconds slower in 2013 than in 1997.


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The climbs of Hautacam and Montee de Chamrousse have also produced progressively slower times over the last 5 years or so.
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Digging deeper by looking at the cyclists’ power to weight ratio we can see these figures have fallen off a cliff in the 2010s. In the late 1990s riders like Pantani could average out at about 6.6 watts per kilo. In 2013 and 14 the average at the front of the peloton is about 10% lower at 5.9 watts per kilo.

Armstrong said that in 2015 there would be no need for doping now but back in 1995 it was totally invasive and the culture of doping made it a level playing field like bringing knives to a gun fight.

Drug testers have stepped up their act and cycling now is much cleaner than before but it will only take a dope to change that.

Cyclists - Strategy and Incentives

17/9/2014

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By John Considine
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If I did not force myself away from the television then I could watch hours of coverage of the major cycling tours.  I can't fully explain the attraction.  Maybe it is the scenery, the blur of colour, or the fact that I became hooked when Irishmen like Sean Kelly and Stephen Roche were at the top of the sport.  Whatever the reason, there are some days that provide compelling viewing.  Last Saturday was one such day.  The Vuelta a Espana entered its second last stage.  In all probability the winner would be determined on the Saturday.  Sunday's final stage was a relatively harmless time trial - although the crash of Nairo Quintana a week earlier in another time trial meant anything could happen.

The last 12km of the race featured a gruelling category one climb.  As the race arrived at this point the top five riders in general classification were at the front.  It was now or never for each to improve their position.  Each rider wanted to improve their position but going to the front risked doing the work for those they were seeking to overhaul.  Fifth placed Fabio Aru did not seem in a position to attack and third placed, Alejandro Valverde, is not a noted mountain top finisher.  Fourth placed Joaquim Rodriguez was the first to mount a serious attack.  However, he was hauled back and passed.  Then it was the turn of second placed Chris Froome to make his bid for glory.  Froome attacked and race leader Alberto Contador tucked in behind him.  Then as the finish approached, Contador left Froome in his wake and went on to win the stage (and effectively the Vuelta).

The top 5 in general classification finished in that order on the climb to Puerto de Ancares.  It was fascinating to see the rider decide when they needed to attack the position of the man in front of them on general classification.  And, it was equally fascinating to see the rider being attacked see off the challenge before attempting a similar strategy against the rider ahead of him.

An interesting aside on the incentives faced by cyclists arose from the Stage-20 commentary provided by Sean Kelly on EuroSport.  Kelly and his co-commentator were discussing how cyclists tend to get back on their bikes as quickly as possible after a fall.  I was surprised that Kelly compared this approach to that of footballers.  It is slightly disappointing to find people from one sport complaining about those in another sport.  I was disappointed that one of the sports people I most admire was taking such a line.  My faith was restored in Kelly's very next sentence when he pointed out that cyclists get back on their bikes because there is little to be gained by staying on the ground.  It was clear that Kelly was not complaining about footballers.  Instead he was pointing out how both cyclists and footballer react to the incentives they face.

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Dublin Ironman Triathalon

7/8/2014

 
By Paul O'Sullivan
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It was announced last month (see here and here) that Ireland, specifically the Dublin-Wicklow region, will host an Ironman 70.3 (half a full Ironman) in August 2015, with the possibility of a full Ironman taking place in 2016. With the huge increase in participation in triathlons, duathlons, cycling and adventure races in Ireland over the last few years, such an event is likely to attract many Irish and non-Irish participants and fans.

As usual, various commentators have been quick to point out the huge benefits, particularly increased visitor spending and increased exposure as a tourism destination, that hosting such an event (Ironman 70.3) will have for the country. In this article, Oisin Quinn, Lord Mayor of Dublin, is quoted as saying that “.. the event will attract a flood of participants from around the world.” Quinn is also quoted as saying that "Triathletes usually come for two or three bed nights and bring two or three supporters with them, so that will have a direct boost to the local economy," he added.” 
 
According to the same article “The event is expected to attract up to 3,000 competitors and 20pc of entries will be reserved for foreign athletes.” As well as this, “Event organisers say the economic value of hosting this much sought-after event could be as much as €18.7m in direct spending into the local economy, as well as substantial benefit from worldwide TV coverage.” It is not clear how this figure has been arrived at. An attempt to elicit this information from the Ironman organisation has not been successful. 

As with most claims by supporters of hosting such events, there is some element of truth in their claims. There will undoubtedly be participants, with family/friends/coaches in tow, from outside of Ireland, each spending money in  Ireland that would not be spent here in the absence of the triathlon taking place. As ever, though, measuring such gross effects is not the correct way to measure the contribution of such an event. What really matters is the net effect, i.e. the contribution of the event net of what would have happened if the event did not take place.

Similar to a point made in a previous post by Robbie Butler in relation to the Irish Open golf (see here), the effects of the triathlon are likely to be mostly a substitution effect at national level. While the‘local’ economy of Dublin/Wicklow may benefit, this will likely be at the expense of other areas of the country.

Given the time of year, it is also possible that a ‘crowding-out’ effect may occur as triathlon visitors compete with ‘normal’ tourists for flights and hotel rooms so that the‘net’ tourism effect may be lower than expected.

With regard to the idea that TV coverage will act as a showcase that will increase tourism in the future, the implication of that idea is that there are many potential tourists who have never heard of, or have never had any intention of ever coming to Ireland, but will come here solely after watching TV coverage of the Dublin triathlon. I cannot imagine that that effect will be very large.

Star Wars, Top Gear and the Wild Atlantic Way

4/8/2014

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By John Considine
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When Minister Michael Ring launched the Wild Atlantic Way (WAW) last February, it was pointed out how it included a wide range of outdoor and sporting activities.  On its website, Failte Ireland said it included 150 golf courses, 17 trails and 50 looped walks.  The Golf Courses include Ballybunion - a favourite of US Ryder Cup Captain, Tom Watson.  The WAW also included the Galway Greenway project that is to include 78km of traffic-free cycling.  The provision of venues for recreational cycling complements the cycle-to-work scheme introduced in 2009 and continued by the current government (see previous post here).

Included in the 159 Discover Points are Skellig Rock View, Skelligs View Point, Little Skellig and Great Skellig.  So popular are the Skelligs that they have attracted some intergallactic travellers (at least of the Hollywood kind).  This week filming of the Star Wars movie started on the Skelligs (see Irish Times report here).  The idea of selling the WAW via the small screen was also an idea put forward by the Kerry politician Brendan Griffin who proposed inviting BBC's Top Gear to film along the 2,400km route.  While Top Gear have yet to confirm any such plans, there has been a notable success with Belgium's biggest holiday programme due to start filming soon (see Irish Examiner report here).

While the rebranding of tourist facilities and associated outdoor activities has been well received on the whole, there have been a few questions raised about the cost of the inititive to the public purse.  In the last week, there has been an eyebrow or two raised at the cost of signage for the route (here).  A total of €2.75m for 2,400km.  If it increases participation in physical activity and outdoor sports it may be money well spent.

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Doping in Sport: Man Vs Horse

24/7/2014

 
By Robbie Butler

In 1998 the Tour de France made its one and only visit to Ireland. As a teenager, I  vaguely remember watching the riders race through the streets of Waterford city.  Today I recall little from the race. My one abiding memory from the race is sadly that of a doping issue, involving a team I had never heard of but still remember, Team Festina. 

Many argue that 1998 was the year cycling was permanently tarnished by doping disclosures. A police investigation in France during the ’98 Tour forced two teams (Festina and TVM) to exit the race. As a result a peloton strike ensued with five teams opting to pull of the Tour in protest to the treatment of Festina and TVM riders. As a result, my interest in cycling was lost forever.
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This week news broke that the Queen’s horse Estimate had tested positive for morphine. You may recall the Sir Michael Stout trained mare, the first horse in history to win the Ascot Gold Cup for a reigning monarch last year, amid joyful scenes in the Royal Box. While the story of Estimate comes as a surprise to most in racing, it is only recently that the sport was left reeling by news that 11 Godolphin trained horses had tested positive for banned anabolic steroids, including Classic winner Encke. This got me thinking. Could both sports be the victims of on-going performance enhancing drug-use?

I decided to compute at the average speed (kmph) of the winner for both the Epsom Derby (premier three-year-old flat racing in Europe) and the Tour de France for the post-war period. One would expect a marginal improvement in both events given improvements in sports technology, nutrition, sport science and training methods. The data is presented with a trend line applied to each event.
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The illustration above proves to be very interesting. Since 1947, there has been little improvement in the speed or winning time (blue line) in the Epsom Derby (flat trend line). The winning horse has run the course at around 55kmph on average. One could interpret this as evidence that the sport is ‘clean’. This could also point to no improvement in training methods or horse nutrition, little innovation or improvement in jockey performance or lack of development of equipment in the horse racing industry, which could aid perfromance. 
 
The Tour de France paints an entirely different picture. The average speed of the winning cyclist from 1947 to 1957 is recorded at 33.45kmph. Compare this to 2003-2013 where the average speed of the winner rises to 40.37kmph. That's an improvment of more than 20%. 2013 winner Bradley Wiggins rode 30% faster on average than 1947 winner Jean Robic. This could be a result of the fact that the race is roughly 25% shorter than the first post-war race, meaning riders can afford to use up more energy cycling faster. It could also point to the fact that the cycling industry has been far better over the course of the past seventy years, than those in the horse-racing industry, at technological innovation, nutrition and sports science, resulting in faster times.  Or better still, maybe humanity is evolving more rapidly than our equine cousins and in the centuries ahead cyclists will complete the 2.423km covered in the Derby faster than the winning horse! 

I’m not so sure....

A Cycle-to-Work Scheme

4/7/2014

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By John Considine
Five years ago the Irish government, where the Green Party was the minor coalition partner, introduced a cycle-to-work scheme.  The scheme encouraged individuals to cycle to work by allowing the purchase costs of cycling equipment, up to €1,000, to be offset against income tax.  The Minister for Finance stated that, at the time the scheme was introduced, it was estimated that 7,000 employees would avail of the scheme over the first five years at a costs of €0.4m to the Exchequer.  Unfortunately, in an effort to reduce administration costs, the statistics on the uptake of the scheme were not collected.  Almost three years after the scheme was introduced the Irish Bicycle Business Association produced their Report on the Cycle to Work Scheme Tax Incentive.  The report makes some big claims about the success of the scheme and its contribution to the Irish economy.  It is worth looking more closely at some of these claims.
One of the claims in Section 4.3 of the Report is that the scheme has saved "the Economy €15.3million a year".  This figure is derived by using a daily saving of €170 and multiplying this by "90,000 (new cyclists)".  The Minister for Finance claimed 7,000 employees would take up the scheme whereas the IBBA report suggests there will be 90,000 new cyclists.  That's some difference.  The IBBA Report figures have the advantage of being estimated after the scheme was introduced.  It is unfortunate that the government decided against collecting data on the uptake of the scheme.  It would allow us to validate the IBBA data.  If the 90,000 figure is correct then the scheme could have cost the Exchequer a substantial amount in income tax forgone.  It also raises questions about the forecasting ability of those advising the Minister for Finance.

It would be important to validate this €15.3m figure as it seems to comprise the majority of the total of €19m in benefits from the scheme.

The report also claims that recent research (and a newspaper report from May 2011) shows the "decline in deaths for cyclists over the past decade has been greater than for any other group in the research".  It is difficult to find support for this claim when one looks at the table and figure below.  There has been a welcome improvement in the total number of road fatalities in Ireland.  Road fatalities in 2012 are about 40% of what they were in 2000.  However, the numbers do not support a claim that the decline in deaths for cyclists has been greater than for any other group.
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The ABCs of Funding by Gender in Ireland

17/5/2014

 
By Eoin Whyte
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The ‘Rooney rule’ was adopted in 2003 and established a set of guidelines for all NFL teams in their selection process for head coaching and senior football operation jobs. Under the new rules all NFL teams are now required to interview people considered to be of an ethnic minority when making an appointment for any of the sport’s top coaching positions. The rule has made a significant impact on the number of African American head coaches in the NFL. In 2002, the year prior to the adoption of the Rooney rule, there were only 2 African American head coaches employed in the NFL. Four years later this number had increased to 7. 

Madden and Ruther (2011) argues that this increase illustrates that there had been discriminatory influences in the previous selection process of new coaches in the NFL. According to Madden & Ruther, discrimination occurs “when the marginal or last African American coach hired must be better than the marginal white coach”. Table 1 below, from Madden & Ruther (2011), details how, prior to introduction of the Rooney Rule, there was a significant discrepancy in the number of African American coaches to white coaches in the NFL. The table also highlights how, prior to the rule, African American coaches enjoyed a significantly higher win rate averaging 9.1 wins a season versus 8.0 of their white counterparts. Sixty-nine percent of African American coaches got their respective teams to the play offs versus thirty-nine percent of all other coaches. Since the Rooney rule however, these discrepancies has evened out and the win rate of African American coaches has decreased.

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The Madden & Ruther paper comes to mind when examining the Irish data for International Carding Scheme funding between 2008 and 2014.  It is interesting to note that there are  discrepancies in the funding between males and females in Athletics, Boxing, Cycling and Swimming, what I label the ABC’s of Irish sports.

The first chart below highlights that more male athletes have received funding than their female counterparts in all of their respective sports under ICS funding between the  discussed years. 65 males were funded in Irish athletics versus 64 female athletes. 79 male boxers were funded versus the mere 3 female recipients. 42 male cyclists were funded as opposed to the 10 female counterparts. And 36 male swimmers were granted funding in comparison to 27 female swimmers.

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However on average, female athletes have been granted more funding than their male counterparts. The second chart illustrates how female boxers on average received over 3 times more funding than male boxers. In athletics, on average females enjoy 16% more funding than male athletes. Cycling has a 21% difference in the average funding for male and female athletes in favour of female athletes. While the average funded female swimmer also earns 53% more than the average male swimmer.
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Of course is it is easy to recognise these figures being possibly distorted by the success of Irish female athletes such as Taylor (Boxing), Murphy (Swimming), O'Rourke and Loughnane (Athletics), all of whom are amongst the higher funded recipients.

However, these differences still pose some questions.  Akin to the African American coaches’ previous higher success rate in the NFL, do Irish female athletes receive more funding versus their male counterparts only because they have to be exceptional in their respective sport to receive funding in the first place?  Or, are females athletes funded to a higher level in an attempt to encourage more females into sport?  It is hard to say. It requires further investigation.

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