Velon Open Letter

On 20 September 2019, Velon, with the unanimous support of its shareholders, submitted an anti-trust Complaint to the European Commission against the Union Cycliste Internationale (UCI) based on Articles 101 and 102 TFEU. Velon has asked the European Commission to investigate the way the UCI has implemented existing regulations and sought to introduce new ones that are designed to favour the UCI’s business interests to the detriment of the teams.

In the past year, the UCI has tried to stop what Velon and the teams have pioneered in their joint business on new races (the team v team “Hammer Series”) and technology. Velon and its shareholder and partner teams hoped and expected that its initiatives would be supported by the UCI, as had been the case in previous years. However, in the past 12 months, the UCI has used its regulatory power and political leverage to seek to block the business activities of Velon and the teams in an incorrect and unlawful manner.

• In February the UCI ruled that Hammer Races may not be referred to as a Series under UCI regulations. No explanation has ever been given. Velon, and the teams competing at Hammer events, continued to race for the Series – one of the key, unique features of the new races – despite the UCI’s threat that they may refuse to register Hammer Races in the 2020 calendar if we did.
• Despite the positive reception to the Hammer Series by the fans, teams and riders and strong interest from potential race organiser partners and host cities to stage a Hammer race, the opposition by the UCI has significantly hampered the development of the Series.
• Earlier this year the UCI passed new technical regulations without due process or consultation with any of the stakeholders in the sport (even with its own Equipment and Technology Fraud Commission) that sought to give itself and race organisers ownership and control over the teams’ business on live race data.

The UCI today believes that it should not only be the regulator for the sport but also take new business creation from its stakeholders without their consent. The UCI feels entitled to use its regulatory powers for its own commercial benefit and to take the rights of the teams and riders without consultation or permission.

Despite continued efforts by Velon to engage with the UCI relating to our concerns on their actions, the UCI has refused any constructive dialogue for over a year. Consequently, Velon and its teams have been left with no alternative but to submit the Complaint to the European Commission with the objective of having an external authority’s assessment as to whether the conduct of the UCI in regard to the above matters (in particular its use of its regulatory power and political leverage) infringes EU competition rules.

The Velon teams took the decision to openly publish the fact that they filed the Complaint and a summary of their reasons for doing so in order to avoid any misunderstanding of their actions. Detailed information has been provided to the EU Competition Commission and whilst their review is on-going, we respect their process and do not wish to place additional information in the public domain. For those who seek further background information regarding Velon’s role and the new technology and the new form of racing that Velon’s teams and partners have pioneered, please see the attached Context Notes to this letter.

Our desire is for a stable, predictable and fair regulatory environment for the sport that treats the teams, riders and race organisers in equal manner. Velon, its shareholders and partners, want the development of new ideas, to attract new investment and to create a better business model so that professional road cycling continues to strengthen and develop for the fans and everyone involved in the sport.

Graham Bartlett, CEO

For and on behalf of Velon Ltd, BORA-hansgrohe, CCC Team, Deceuninck–Quick Step, EF Education First, Lotto Soudal, Mitchelton-Scott, Team Ineos, Team Jumbo-Visma, Team Sunweb, Trek-Segafredo and UAE Team Emirates.

Context – A Sport in Need of Change

Cycling has never been more popular in terms of participants but at the professional level – teams stop when their sponsor contracts stop, and traditional race formats are struggling to engage with new fans. The pace of innovation in technology and ideas needs to increase, something pioneered by Velon, its teams and partners.

Professional cycling teams invest more than €400 million per year in the sport. This represents more than 50% of the total investment in professional road cycling. However, professional teams are completely dependent on sponsorship revenues, which make up approximately 94% of their income. Teams finance the sporting careers of some 750 riders by investing an average of 73% of their entire budget in riders and staff. The teams are also financially subsidising many traditional races. They participate in and support approximately 500 standalone races per year; often based on nominal participation fees (not sufficient to cover their costs of attendance) and, more often than not, offering little if any relevant exposure to their sponsor funders. These 500 races provide no “narrative” for fans to connect to.

It is accepted by almost everyone in the sport, including the UCI, that this model needs to be radically changed in order to make it more stable and to attract new investment, to teams and to races. In 2014, eleven of the best teams in the world created a new company – Velon – with the primary objective of introducing new ideas to the sport and changing the way it does business. The strategy was not to fight for redistribution of the existing money, but to generate new revenues from new business through innovation and greater fan engagement.

Velon’s entire business model is based on collaboration and partnerships. Velon has partnered with most race organisers (including the three largest in A.S.O, RCS and Flanders Classics), many UCI WorldTour and Pro Continental Teams and some of the world’s leading media and technology companies to produce engaging fan content and grow the appeal of the sport.

Together with the teams, race organisers and other partners, Velon has strived to create two of the biggest innovations in the sport in its recent history.

The Hammer Series

Until 2017, pro-road cycling had not seen a new race format in its entire modern history. Many other global sports have successfully adopted fast-paced, shorter formats. In 2017 Velon launched “Hammer” – a new Team v Team, impact racing concept for the fans with the intention of creating a truly global series that ran through the season to a grand finale, to crown the world’s best team – proven on the road.

Today Hammer comprises three races, with the ambition to grow this to ten races over the next few years. It has delivered 22.5 million video views of the first three seasons and proved a clear favourite with fans, riders and teams alike.

VelonLive

VelonLive is a fan engaging digital content and live data platform which, over the last 3 years, has generated 100’s of millions of views and new engagements on Velon’s own channels and those of its partners. The massive amplifying effect of delivering this content to fans through the digital platforms of both Velon, its race partners and the Velon teams (and the other WorldTour and Pro Continental teams who partner with Velon), VelonLive offers the single biggest social media platform dedicated to the sport. In a recent UCI survey, the response was emphatic from the fans – more of the video, data and other content Velon has pioneered since 2015 such as:

• A unique, real-time biometric rider data system which increases fan engagement and insight into professional cycling races. No other sport in the world offers live performance data like Velon.
• Live and delayed on-bike action video from many races throughout the season to let the fans see the race from the inside.
• Behind-the-scenes access to the teams via video which broadcasters around the world can now access to enhance the way they show the race.

The VelonLive platform shows 78% year on year growth in terms of reach to the current and new fans of the sport and more new content and ideas are planned for 2020.