Did something huge just happen? When I heard the news that Red Bull, the sports drink behemoth and supplier of at least 10% of my kids’ daily energy, joined up with BORA Hansgrohe, that seemed like a big enough deal. But now it’s being reported that they are buying a majority stake in the team from current owner Ralph Denk, which is an entirely different matter and one we rarely bother to talk about.
But first, here are some things to know about Red Bull, which I am doing for amusement and — I am not kidding — because of my kids’ uncontrollable interest in their products. [Sigh. It could be worse I guess.]
Red Bull is actually an Austrian company founded by a guy who went to Thailand and drank a Krating Daeng, which literally translates to “red bull,” in case anyone finds their origin story at all unclear. I don’t remember having krating daeng in Thailand, but then there’s a lot I don’t remember, at least from the first couple visits, pre-kids. And if Thailand turned my boys into Red Bull customers... again, it could be worse. Anyway, for more Red Bull factoids, go here.
Red Bull, the company, are everywhere in action sports, with ties to car racing, X games, and too many other things for me to bother tracking down. They also own space in Wout Van Aert’s dome, or at least on it, with his distinctive helmet the product of a sponsorship that may or may not continue. [Wout is tied to Visma-Rent-a-Bike until the end of 2026, in case you think today’s news puts him on a syrupy path to BORA. If so, it’s not a short one.]
So their interest in cycling is just another point on the continuum of sports sponsorship that’s been going on for a long time. The purchase of team stock is something else entirely. Team ownership in cycling is weird and even somewhat anonymous in many cases, where the owner isn’t inserting him- or herself (OK, him) into the conversation. Rich guy Jim Ratcliffe owns INEOS and pops into view on occasion. Same for Zdenek Bakala, who now owns Soudal Quick Step, having bought in during the heyday of his countryman Zdenek Stybar. [Side note: everyone in the Czech Republic is named Zdenek.] Jumbo’s Richard Plugge seems to have come up as a sports director — and he seems more like the nominal “owner” with Pon behind the scenes — while Jonathan Vaughters is a former racer who teamed up with Doug Ellis and formed a development team after his retirement from the peloton, which evolved into the Slipstream/Garmin/EF squad of today. Denk himself is a former racer and bike shop owner who founded NetApp, undoubtedly with some backers, though who I couldn’t say. There are lots of ways to become a cycling team owner, and a decade or so ago there were lots of distressed assets for sale. Honestly, I can’t even tell you who owns half of these squads. Sometimes I wonder if cycling is just a money-laundering operation.
[Unrelated: sponsoring the Podium Cafe is an excellent use of money! We accept cash, no questions asked.]
Anyway, for Red Bull to come into the sport of pro cycling is big enough, but as a majority owner of a team is a far, far different statement. This is no two-year dipping the toes in the water. This is a big commitment. And if you look at how Red Bull does ownership commitments (above and beyond their myriad sponsorships), you will see that they tend to be serious. Their Formula One sponsorship is two teams deep (and they own other racing teams) and littered with trophies. They own soccer teams in Germany, Austria and New York, plus development squads associated with them. They go in and go big, meaning that they play to win. Even their local Salzburg hockey team went from nowhere to the top of the Austrian league with their help. Probably books have been written about their sports ownership. This isn’t one of them.
It’s enough to say, for our purposes, that it wouldn’t take much for them to push the already-successful BORA machine to a new level, beyond just nabbing Primoz Roglic for a few years. Cycling budgets top out in the 50-ish million USD, as far as we know, and that’s paid out after all the sponsors come in. For a team to add $10m to its budget — which is like the tire budget for one of Red Bull’s smaller motosport teams — is a huge deal for a cycling squad. This might not change overnight, but you can bet that this summer there will be a great deal of chatter around who is talking to BORA about their next contract. In a year or two, agents will probably be telling all the other teams “I’ve got a meeting with BORA tomorrow” as a way to blackmail them into giving their client a raise. Red Bull’s Austrian roots make you wonder if Specialized will stay around as their bike supplier or if another bike company is about to take on a big(ger) presence in the peloton.
More than anything, though, Red Bull’s move makes you wonder what other companies will take notice. Cycling has been a fairly cheap investment to sponsors since forever. Cycling teams as properties might also be seen as pretty undervalued now? Way out over my skis here, but in every major sport, team ownership stakes are skyrocketing in value. Most of the traditional ones own real estate, as well as brands that we all know and love. Cycling may be a bit light on the former (though your typical big team service course is no joke) but the latter is where there is surely some value. Maybe a lot of value. Maybe we will see some rival brands or similarly large companies join Red Bull here. It can’t possibly be just them and Jumbo for total supremacy, not for long. Not with Netflix filming their every moves.
This brings us back round to the UCI. Can they alter the World Tour relegation system to give greater assurance of indefinite World Tour licensing? If they can’t or won’t, then the opportunity for the sport to go big will probably be limited to the teams with the greatest security, which could mean the rich getting richer and richer, while other teams just show up to provide some background color. For a real arms race to revolutionize the sport’s finances, we would probably need a more certain structure. Except that ASO and RCS, collective owners of the three grand tours and other top races, will still demand a say in who plays, and all of this will still be at least partially about doping. Lord knows the moment we declare the battle over, it will start again. And if a bunch of rich team owners want their property to keep its WT value, they will have to choose between accepting appropriate regulation and oversight, or kicking off another ugly showdown with the Tour.
Wow, that’s a lot of uninformed projection for one day. I guess I’ll just add that this isn’t our first round of predicting Cycling’s financial structure revolution, and we usually end up with more of a continued, slow-building change rather than anything dramatic. But it’s hard not to wonder if this time is completely different.