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The needle and the financial damage done

From Friday's Globe and Mail

When the Tour de France got under way in London three weeks ago, it was with high hopes that the sensational drug scandals of the past few years had been consigned to history and that this would be the start of a new, clean era, in a sport that had been badly tarnished by pervasive cheating.

Officials had booted out suspect teams and riders, toughened standards and increased penalties for infractions. They made all the right noises about taking seriously the warnings of corporate sponsors and television broadcasters, who feared the damage to their brands and products if their names were linked to a sport in turmoil.

Today, after a string of shocking doping cases and expulsions of some of the sport's top performers — including race leader Michael Rasmussen and heavy early favourite Alexandre Vinokourov — those hopes have been dashed. They have been replaced by legitimate questions about whether the most fabled event in cycling, and perhaps even the sport itself, will be able to continue at all.

Whether the sport can survive this disaster comes down to cold, hard cash. Several big-name sponsors are wobbling or already putting away their wallets. The list of the departing and the worried includes sporting-goods giant Adidas; French financial companies Cofidis and Crédit Agricole; German mineral water producer Gerolsteiner; Dutch banking heavyweight Rabobank; car makers Audi and Skoda; Swiss bicycle manufacturer BMC; and T-Mobile, the cellular arm of German telecom powerhouse Deutsche Telekom, whose team has long been long been regarded as the New York Yankees of the sport.

"A lot of the main sponsors are going to pull out of the sport," said Gerard Vroomen, chief executive of Cervélo SA of Switzerland, a bicycle manufacturer with Canadian roots that supplies the CSC team, one of the leading competitors on the pro circuit. "Which I think is a great result. It's the ultimate way to clean up the sport."

Remove the big bucks and you reduce the temptation to cheat. And if enough sponsors and television broadcasters pull the plug, there won't be enough money left to support either the Tour or the sport in the style to which they have become accustomed.

Adidas spends more than $720,000 annually just outfitting the T-Mobile racers and crew; but primary team sponsors such as T-Mobile invest millions in what has become a big-time sport contested by mainly European-based teams in a season that runs about nine months.

Like competitors in auto racing, the cycling teams rely heavily on sponsorship dollars to cover their high costs of competing, including the salaries of riders. Top teams have annual budgets running between $10-million and $15-million, and leading cyclists can rake in $1-million a season, not counting endorsement earnings.

Purses are relatively small. Even the riders on the winning team in the Tour de France will only take home prize money of about $60,000 apiece.

"I don't know why anybody would want to invest their time or their money in that sport right now if they are concerned with the integrity and believability of the outcome," said David Carter, executive director of the University of Southern California's Sports Business Institute.

For now, the Tour is limping on, dazed, bleeding and with broken spirits, toward the most anti-climactic finish this weekend in its 104-year history. Regardless of which rider emerges as the winner, his name will be lost in the shadows as the spotlight shines unrelentingly on the biggest loser, the Tour itself.

Officials of the privately run Tour face an uphill battle to restore its shattered reputation and retain millions of dollars in fees from sponsors and broadcasters who no longer want their names associated with a sport that seems so powerless to stop the cheating.

The Tour is part of Amaury Sport Organisation, a company with total revenue of $197-million (U.S.) last year, which also stages the Dakar Rally and other sporting events and itself is part of a large French media business.

ASO doesn't break out its Tour-specific numbers, but it's clear that a pullout of sponsors and TV networks would be crippling.

Sponsors accounted for about 30 per cent of revenue last year and TV fees provided close to half of annual income. The rest of the Tour's money comes from grants and the regions through which the tour passes in a given year.

The Tour means big tourist dollars to those regions. Adding southeast England to the route for the first time this year added an estimated $80-million in extra revenue to the region's coffers — which means that even in cycling's darkest hour, it may be early to write the obituary for one of the world's most enduring and compelling sporting competitions. Regardless of its troubles, the Tour has become a cultural icon and an important generator of revenue for many communities.

Meanwhile, some sponsors say they're staying put.

"We take the situation very seriously," Computer Sciences Corp. senior marketing manager Theresa McDermit said from a train near Paris. "But it appears to us that there's a movement afoot to actually clean up the sport and we want to be supportive of that."

The CSC-sponsored team has instituted a strict regimen to catch dopers, using an outside agency that conducts extensive testing. Others will have to follow suit if they ever hope to restore the sport's integrity.

The world's most celebrated cycling event began life in 1903 as a gimmick to boost the circulation of its owner, a French sports newspaper, which later became L'Equipe. By 1904, it had its first race scandal when a rider was caught getting an illegal tow from a car. But that pales beside the drug scandals that have rocked the Tour in recent years. Every winner since 1996 has been implicated in doping, apart from American Lance Armstrong, who never failed a test but was accused nonetheless.

"The Tour itself has not always been very serious about fighting doping," Mr. Vroomen says. "So it's tough for me to feel sorry for them. But it's also an event that will ultimately survive all of this."

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