The Wealthiest People in Pro Cycling, Part I

Time for the annual update on the wealthiest people in pro cycling. If you thought this meant Alberto Contador, Mark Cavendish or Peter Sagan, think again because this is about the people rich enough to hire these star riders.

A lot has changed in recent times, volatile stock markets have benefited some but hit others. In the first of a two-part series here are the billionaire and millionaire World Tour team owners and sponsors.

What’s the fastest way to become a millionaire? Start as a billionaire. Oleg Tinkov has seen his wealth slide in recent months and has probably become a millionaire, a downward trend for someone used to almost continual advance. Tinkov is a serial entrepreneur and it all began during a bike race. The son of a coal miner, he got good at cycling and travelled to Uzbekistan for a race where he spotted some blue denim jeans, then the height of fashion and above all very rare. He spent all his cash to buy four pairs of jeans and returned to Russia where he sold them for four times their price. In time came shops selling electronics to factories making dumplings to breweries and now a financial services company built on credit cards and fledgling banking services. Don’t call him an oligarch as this refers to well-connected Kremlin kronies and Tinkov styles himself as a self-made man, a challenger to the system as he describes in his biography:

“I want entrepreneurship in this country to advance so that fewer people work at Gazprom [the oil and gas monopoly] with fat faces and grey suits, and more people become young, innovative entrepreneurs”

Russia is risky and the recent Rouble crisis has hit Tinkoff Bank hard and with it, the Tinkov’s 50% stake in the bank and his warnings about quitting the sport have generated plenty of headlines. But he could fund the team privately if he wanted, he sold a large share of his holding before the crisis and remains prodigiously, conspicuously wealthy. A shrewd entrepreneur but I can’t help wonder if he got outplayed by Bjarne Riis? The Dane sold his team to Tinkov for well over a million Euros when the Russian could simply have waited a few months to build his own team, more so since the Dane has been feeling the heat of an anti-doping enquiry he cashed out on a high.

Tinkov’s swipe and Russia’s oil and gas industry puts him at odds with Igor Makarov, owner of the Katusha team. Makarov made his billions in gas and got out just in time. In 2013 he sold his Itera business to Russian oil and gas giant Rosneft for $2.9 billion (€2.1bn) for the stake, all at time when the oil price was north of $100. He got out when the going was good. Where Makarov put the cash is confidential of course but it’s likely to have been diversified although as part of Vladimir Putin’s Kremlin komanda it’d look unpatriotic if he moved all his wealth abroad. Being a billionaire hasn’t stopped him making noises about the costs of supporting the Katusha team but as absurd as it sounds, the more the Rouble crisis bites, the more Katusha must race on. No Kremlin insider can be seen to back down, especially in the field of sports, dear to President Putin and so close to the Rio Olympics. Despite being one of the world’s wealthiest men he finds time and meaning to attend UCI Management Committee meetings where he’s arguably the sport’s most powerful figure. He still rides, the picture above shows him getting off his yacht to go for a ride.

If you think Makarov’s timing was good, meet Marc Coucke. The Belgian is Monsieur Omega Pharma, he founded the company in 1987. It grew over the years and in time he floated Omega Pharma on the stock exchange but when the financial crisis hit and stock prices plummeted he bought it back in 2012 at a low price. Since then markets and valuations have soared and Coucke’s sold his business again this time to US company Perrigo.

Reports said he’s pocketing €1.45 billion, tax free. He’s one of the few team owners to get richer and richer. But will he in stay in cycling? Coucke’s bought into LOSC, a French Ligue 1 soccer club whose wage bill is double that of Etixx-Quickstep and there’s talk of him taking over the club. Coucke’s a visible businessman in Belgium, aided by his love of bold suits and loud shirts

Now for the billionaire cycling team owner you’ve probably never heard of. Coucke has sponsored the OPQS team for years, Zdeněk Bakala is the one who owns it. The Czech billionaire bought the team with Dutch sidekick Bessel Kok and is a textbook capitalist who left his country with little more than a sandwich in his pocket for the USA. He went to business school and investment banking on Wall Street until the Iron Curtain fell and he opened the offices of an investment bank in Prague before going solo. According to Business New Europe, a magazine, he bought a coal mining business for €400 million, sold off assets from the mine to generate €2.5 billion and then floated the remaining business on the stock market for €4.5 billion.

He now owns the Etixx-Quick Step team but takes a back seat most of the time and probably spent much of 2014 with other things than cycling on his mind, he owns a large stake iron ore producer Ferrexpo. Iron ore prices have halved but if you think that’s a headache, Ferrexpo has most of its operations in Ukraine. It’s is just one part of his portfolio but indicative of Bakala’s falling wealth which, going by the guestimation of Forbes, has almost halved. Bakala did get excited about the reform of the sport a while back with proposals for a total overhaul of the sport, a joint venture with the UCI where the governing body would set the rules and calendar… and Bakala would take care of the rest, funding a breakaway league in conjunction with the modestly-named Gifted Group. Has this gone away or has Bakala’s idea been rebranded as Velon? He’s a figure in Czech politics because of his wealth and influence and media empire but lives in Geneva and is a keen cyclist who’ll ride the Cape Argus in South Africa when he’s visiting his winery there.

Andy Rihs BMC Racing is a more discreet figure. His father Ernst started a hearing aid business that went from the garage to a global consumer healthcare giant called Sonova and at the time of writing it is worth about US$9.6 billion. Rihs has been selling down his stake but his remaining 5% stake means a holding valued around $250 million. But he’s worth much more as he owns BMC and has financial stakes in wineries, hotels and watch making, normal since the BMC factory in Grenchen is near the Breitling HQ in an area famous for its luxury timepieces. He’s also opened the new velodrome in Grenchen, a project he part-funded and the reason why Rohan Dennis will attempt the Hour Record in Switzerland. Rihs isn’t in the media a lot nor tweeting like crazy but you will see him at the races, dressed in the team kit where the uninitiated might mistake him for a mechanic.

New to the World Tour team owners club is Michel Thétaz. He founded Independent Asset Management in 1995. Better known as IAM, it manages billions of Swiss Francs on behalf of its clients out of Geneva in Switzerland. Estimates of his wealth are hard to come but in dollar terms think hundreds of millions. He’s a keen cyclist who might ride 5,000km a year but this only part-explains the sponsorship. Cycling’s demographic attracts lotteries, laminate flooring and car brands like Skoda so fund manager like IAM looks out of place. More so if you look at it the other way around, Swiss financial firms typically sponsor polo, yachting or show jumping. Thétaz prides himself on IAM’s independent thinking and doing things that others don’t.



Orica-Greenedge owner Gerry Ryan is still waiting for that co-sponsor to show up but there’s no worry as Ryan can afford to bankroll the team for years, reports say he’s worth AU$340 million (US$280 million). The only worry he once quipped was for his son as it was his inheritance that was being spent. Ryan started out building camper vans and caravans in 1975 and Jayco has been a big success going from eight employees to – as the auto industry pulls out of Australia – potentially Australia’s biggest vehicle manufacturer. But there are only so many caravans to sell and he’s really become rich with the Walking With Dinosaurs show to which he owns the rights, and his media and entertainment business also stages other shows. There’s more business and he’s been a generous donor to other sports too. Cycling must be his preferred sport as he was President of Cycling Australia, a role recently relinquished.

Summary

Each story is different but there are are three themes above:

A lot of the World Tour teams are bankrolled by a billionaire shareholder, a sugardaddy for whom spending millions on a hobby sports team is better than buying a yacht

Another theme is dwindling wealth, whether it’s the falling oil price, stockmarket upheavals or the nexus of these two events, the reported wealth of the team owners above has taken a bath

They might be billionaires and millionaires but many are out for a ride. That rider you see in team kit on a replica bike could be fan but they might just be a billionaire team owner

This is just the wealthiest World Tour team owners and major sponsors. Part II looks at others from sponsors to race owners.