The (non-)sense of a salary cap

March 12, 2012

I mentioned the salary cap in my previous blog. I said:

The only way for teams to stop losing money is for them to work together, and sit down with a united front to negotiate a deal with governing bodies and riders to agree on some sort of salary cap. Not just in their own interest, but also in the interest of the riders, so that costs can be controlled and fat years provide a cushion for any lean years ahead.

I got many responses to the blog, and one came from Joe Papp:

Perhaps only someone who never tried to make a living racing a bike would suggest, with no apparent sense of irony, that the wages of those actually doing the pedaling be artificially suppressed – ostensibly so underfunded and/or poorly-managed teams can escape responsibility for their own failure to secure sufficient backing before applying for a UCI license.

Let me address that as follows:

  1. I don’t think we have much of a disagreement.
  2. I’m not an enormous fan of salary caps, but they can work in some cases – to the benefit of all.
  3. My comment was that the only way teams will make money is if they have a salary cap. Not because they need to keep the riders under control, but because they need to keep each other under control. That’s what a cap does, it deals with the distrust and incompetence among teams. Joe seems to agree. So again I don’t care if there’s a cap, because I don’t really care if teams make money.
  4. Ironically, it appears that in many sports with a salary cap, athlete salaries rise. Caps don’t tend to cap in the long run, they provide certainty which teams can use to plan long-term and as revenues grow, the athletes negotiate their part of that pie. However, in no way do I think caps are a miracle cure, and in cycling they may be no cure at all.
  5. Rider salaries increase when the team landscape is stable. Salaries plummet (for example in 2008) when teams fall over and there is a glut of riders. You’re right, it won’t affect the Contadors of the world, but it does affect the levels below them. A salary cap is a way to stabilize the team landscape, although it is by no means the only action that would need to be taken to achieve that.
  6. Bottom line, if you maximize your pay today and thereby stretch a few teams so that financially or athletically they are no longer competitive and they fold, then your pay comes down again. Let your pay grow a little slower and you improve the chances that it will continue to grow.

And I’ll say it one more time just in case it wasn’t clear already; I am under no illusion that a salary cap magically solves cycling’s problems, or maybe even part of it.

6 Responses to “The (non-)sense of a salary cap”

  1. David Arnold Says:

    It might that rather than a salary cap there maybe needs to be a salary structure with even a minimum level of earnings. This can flex a little to reflect market forces but not change wholesale as a rider in high demand comes available (or is poached). This could be a datum across all teams. The difficulty comes when deciding on where any given rider sits on this pay scale. Uci points seemed flawed so maybe plain and simple negotiation could do the trick. I agree that stabilising both fixed costs and salaries will give a sound platform for all teams to play on a ‘level playing field’ and not be out bid by teams with fatter wallets. The issue is, I guess is pursuading the rich teams it’s a good idea as they would loose their advantage in pulling in top riders with extra high salaries, smaller teams cannot run to. The other issue is that of rider greed. A very natural human response to take as much as possible – make hay while the sun shines and all that. It’s the boom and bust cycle that needs to be broken so to continue the metaphor, still make hay but not so much BUT over a longer and sustainable period. If the riders had more solidarity (as they appear to have little on this topic) and a credible governing body it could be easier to solve. Right now though it does seem too much about making a fast buck now.

  2. Joe Papp Says:

    Thanks for elaborating on this, GV, will read your response in greater detail this afternoon. Would be great to hear more re. comment I left just now on previous post. Genuinely interested to hear your input on that topic (inhibitors to companies sponsoring the sport). Cheers.

  3. tom hewitt Says:

    Why is cycling a team sport in the first place? Why aren’t riders compensated with purse winnings? It appears that the “team” concept exists mainly because individual riders, without distinctive kits, are very difficult for spectators to recognize. What do I care if Mark Renshaw rides for Rabobank or Highroad? Should I admire two riders on the same team ganging up to defeat a single escapee from another team? The obligatory lauding of team members by winners in post-race interviews is becoming trite and sometimes silly. Of course, ad hoc teams would inevitably form during the course of a race and few riders would be able to travel the world on their own dime to compete but would that make cycling a less interesting and exciting sport?

    • Cycling is a team sport because it takes a team to win. Cavendish wouldn’t win very many races on his own, and without Cavendish, most people would never have heard of Renshaw. Of course, if they don’t win, somebody else will so in that sense it doesn’t matter, but that’s like saying the bike doesn’t matter because if we ban bikes, some runner will still win the Tour. For me, the team tactics make cycling more interesting.

      • tom hewitt Says:

        Team tactics don’t always make a race more interesting. In the US, United Health Care gathers up at the front and controls a criterium from shortly after the start to the final sprint. That’s not very interesting or exciting, which has led the Nature Valley Grand Prix to lower the number of members in a team. The team concept seems to be cultural/societal phenomenon, maybe an outgrowth of the Deming approach to management or generally collectivist thinking, where everyone has there own little contribution to the success of the big enterprise. Strangely, the members of the team that helped the winners to the podium don’t seem to bask in the same adulation. You might have things a little backward. On the basis of what occurred Saturday, without Renshaw nobody would have heard of Cavendish.

        • It’s true, team tactics don’t always make a race more exciting, but for me it usually does. And given the effect drafting has on power requirements, cycling is a logical sport to have a team element.

          I’m not sure the team concept is a societal phenomenon, it’s the logical evolution of the sport. The first cycling races were individual (while society was a lot more collectivist) and then people figured out they could achieve better results by working together. Even in an individual sport like marathon running this is the case, except that individuals are paid for the domestique tasks rather than officially making them part of a team.

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