The Surprising Economics of the Tour de France

Fights to the edge of physical limits, on

tracks, where your old Volkswagen bus would

overheat – broken bones – Scandals.

These are reasons why a billion people a year

are watching.

Have you ever heard of the Giro d’Italia?

– I don’t know.

Maybe…

The Vuelta d’Espana?

– Ehhhh

Deutschlandtour?

– No.

None of these races is the original.

Why cities rebuild their roads just so they

have the chance to become a stage in the tour

de france and how a car magazine invented

the greatest cycling event in the world by

accident.

With the day of its invention, the world went

mad for bicycles – everybody wanted to have

one – everybody wanted to cycle or watch someone

who can.

Bike racing

became more and more popular.

The newspapers picked up on that,

– Television and radio did not yet exist – and

thought, we can use this for us: we’ll sponsor

these events and report about them.

People loved the races.

They stood at the track and

bought newspapers.

They wanted to know..: Who won, what jersey

did he wear and which bike did he ride.

The bicycle industry was booming.

For 50 years, no one had thought of running

a road race over several days – this idea

was born out of necessity.

Because the newspaper L’Auto had fewer and

fewer readers, the editorial team had to come

up with something new and more exciting.

That’s how the idea for the world’s biggest

bicycle race was born – “the gigantic professional

race to revolutionize the world of cycling”.

And that is exactly what happened.

The first Tour de France was so successful

that after a short time readers almost exclusively

bought L’Auto.

The other newspapers had to shut down.

Yes, we’re talking about the Tour de France,

but the motto was – “to do the biggest bike

race in the world” – so the Tour quickly lead

to Germany, Italy and Spain.

But at some point even the biggest tour was

not exciting enough anymore.

The boss of L’Auto was annoyed.

In his opinion too many starters crossed the

finish line.

So he promised: the next tour will be harder.

One year later he chased the riders through

the high alps – the stories about the tour

became more exciting – L’Auto sold even more.

For storytelling purposes, the tour leader

had to put on a squeaky yellow jersey – now

iconic.

So, let’s summarize:

The tour now lasts not 6, but 15 days.

The route leads over really tough mountains

Everyone can see at a distance who the leader

is .

The tour is getting longer and longer.

In 1926 the route was longer than from Paris

to Moscow and back.

There was always a lot of experimentation

with the Tour formula.

For example, it turned out that people found

it more exciting if there were several shorter

stages.

After the liberation of France (in 1944),

L’Auto was banned for political reasons.

Shortly afterwards a new magazine was launched

to take over the Tour.

L’Equipe – financed by the (later publishing

magnate) Emilien Amaury.

New name – old recipe – same success.

For the first time, French television now

had to pay for the rights to report on the

tour.

The tour should no longer just sell the newspaper,

but also finance itself.

It is becoming more economical – there are

more sponsors, the stage cities have to meet

new criteria and the broadcasting rights bring

in more and more money.

Until 1989, French automaker Peugeot was willing

to provide cars for free and thought it was

totally generous.

But from now on it costs to be an official

supplier.

Peugeot refuses to pay more than 500,000 francs.

Competitor Fiat gratefully accepts the offer

of 6 million and becomes the new sponsor.

Everything’s going great.

The profits are still going up – until the

first doping incident.

But the Tour de France doesn’t mind for long.

How popular it is can be seen in the anniversary

year 2013.

250 cities want to become stage finishes.

Almost the whole world is applying – including

Tokyo and Qatar.

Things couldn’t be better.

For whom?

For the tour owners A.S.O., the Amaury Sports

Organisation.

It now owns the entire Tour de France.

Actually, it’s a three-week promotional event

that is the biggest cash cow for A.S.O..

But how does that actually work?

The ASO pays French states around 300,000

euros a year.

In return, it is allowed to use the roads

– that means driving on them – and using them

as advertising space.

The only other costs are personell costs and

prize money.

That’s it!

ASO has nothing to do with police and roadblocks.

The cities pay for those themselves.

And they’re even happy to.

Because the Tour de France brings in a lot

of money:

“A week before the tour started, all hotels

and restaurants were fully booked.

A caravan of 4,500 people, each of whom spends

an average of between 150 and 200 euros, just

do the math …”

Utrecht is a good example of how much it costs

cities to be there.

In 2015, the city raised almost 17 million

euros for the Grand Depart.

What else does it take to be a stage city?

You pay money to ASO and commit yourself to

specific advertising.

Only authorised Tour de France products can

be sold at the start and finish.

A mayor once got upset that he had to pay

so much money to see the racers for ten minutes

– and the advertising caravan for several

hours.

Speaking of the advertising caravan:

For almost everything the tour has a partner

or official supplier.

Skoda, for example, has provided the car fleet

for years.

The main partners of the Tour de France must

contribute 5 million euros to stay with it.

Then there are official partners who have

to contribute around 2 million.

And then there are the official suppliers.

Various caterers, car rentals, hotels, airlines.

They also pay another million each.

Remember.

The A.S.O. pays a total of 300.000 Euro and

the riders bring their own bike.

The race hasn’t even started yet, and the

A.S.O. has already made a fortune.

But the winners are not only the tour owners

and the cities – the sponsors also benefit,

otherwise they wouldn’t have been doing everything

they could for decades.

Why?

Hours of visibility.

Now you might think – Amaury you cunning fox

– that’s not bad.

But on top of that there is also the TV income.

There are no exact figures – but it is estimated

that at least half of the total income of

the tour is generated by the broadcasting

rights.

– One billion people are sitting in front

of the TV.

You’re not giving that away.

How did this race become so incredibly lucrative?

“Be innovative”

The tour was pimped again and again.

Shorter stages & tougher mountains.

It was always made more exciting.

The different jerseys that were added little

by little helped of course.

“Get the whole world” – If you are everywhere,

you have fans everywhere.

(Video: Grand Departs on map) Early in the

history of the Tour, riders who didn’t come

from France won and they were celebrated.

“Tell a good story” – and the founders were

able to do that.

They were great writers and marketers and

knew how to get their readers excited about

the race and the riders.

“Be the Original” – The Tour was the first

big stage race and the original is rarely

beaten.

Since 1903 the tour has been held every year.

Except when there was a war.

Sounds easy, but it’s not.

Ask the Vuelta.

“The what?”

“Mediatization” – The Tour de France and

the media are a perfect match:

The Tour isn’t an evening sport on prime time.

Cycling races are relatively easy to integrate

into the television programme.

Especially during the summer break, when many

people suffer from sports withdrawal.

The spectacular stages – the really exciting

ones – are of course at the weekend – when

almost everyone can watch them.

“Easy to understand” – If you can ride

a bike – you can understand the Tour de France.

Sure – strategy also plays a role, but one

thing is clear: the first rider to cross the

finish line wins.

But in the Tour you don’t just watch the race

– the cities are also shown from their best

side.

Again and again people watch a race and then

think: I want to go there.

Damn, that’s a beautiful chapel.

Even the people who don’t care watch it because

they just think it’s beautiful.

That’s why it’s the most watched sport

by non-sports fans.

And that is why three weeks are marked in

the calendar of racing fans.

What is your most memorable moment in the

Tour de France?