Paolo (not his real name) is a mid-level foot soldier within the management of a UCI WorldTour team. He has been working inside the pro peloton for a couple of decades, more or less. He is a patient man. In his line of work, he has to be. After some discussion, he agrees to walk me through the multi-million-dollar budget required for a bike company sponsoring a WorldTour racing team.

Following a brief history lesson about racing sponsorship and its rising costs from the mid-90s to present day, he’s ready to start breaking down the cost structure. I met with Paolo four times over a period of two years to write this piece. Conversations are reconstructed from my notes and are not completely verbatim, although I’ve tried to remain faithful to their content, and to Paolo’s speech mannerisms, throughout.

You probably know about omertà, the wall of silence that’s surrounded doping in the pro peloton for most of a century. But there’s a similar wall around the inner financial workings of pro cycling teams, particularly when it comes to things like rider salaries and sponsorship figures.

Fiscal omertà is a fact of life throughout the 18 teams that make up the UCI WordTour. Factor in Pro Continental squads scrambling for one of a handful of Tour de France wildcards, and you have two dozen organizations fighting over the same limited pool of cash, like hyenas tearing open an antelope on the Serengeti plain.

Financial resources are scarce. Behind-the-scenes competition is every bit as fierce as it is on the road. And sharing critical information — like overall budgets, rider and staff salaries, and the price of sponsorship that is the mother’s milk of professional racing — is protected by omertà. Always.

Except when it isn’t.

“Officially, nobody knows. But unofficially, everybody knows. Because inside the peloton, everybody knows everybody.”

That’s Paolo talking. If anybody knows what’s inside the soft underbelly of pro cycling, Paolo’s your man. Literally born into the sport, he was birthed while his father was away on the sportive circuit. He grew up racing bikes, first as a junior, then an elite amateur, and finally as a pro rider with one of the less-distinguished Continental outfits.

Paolo was never a rouleur. He was more of a high-octane cronoman, the kind of selfless hardman who could haul a flagging team captain across the last 50 grueling kilometers of Flandrian countryside into a headwind before struggling, cracking and, inevitably, getting shelled out the ass-end of the lead group like a dog shitting a cherry pit. Ultimately, he’d limp across the arrivée in obscurity, somewhere near the back of the pack. Day after day, stage after stage, race after race, for six tough years.

That turned out to be ideal preparation for a worker bee inside the pro cycling hive. Working his way up through a string of Continental teams, Paolo finally landed a middle-management slot with one of the top-end WorldTour outfits, back when the WorldTour was the ProTour.

Seasons came and went. Teams formed, splintered, regrouped, and died. But the men (and, increasingly, women) inside those teams — managers, mechanics, soigneurs, directeurs sportif, doctors, physiologists, masseurs, owners, and plenty of others — tended to stay on, year after year. Same faces, different sponsors. Over time, Paolo got to know all of them. And vice versa. Everybody knows everybody.

So ask Paolo about the cost of a year’s sponsorship for the full cadre of Tour de France teams, and he pauses only briefly. He does a little mental arithmetic and says, “About 80 to 120 million for the whole peloton. WorldTour plus the invited Pro Continental teams. That’s in euros, not dollars.”

Then comes the zinger. “And that’s just to sponsor bikes and equipment.”

How Dope and the ProTour Tripled the Sponsorship Price Tag

“In the old days, it was easy,” Paolo says. “Title sponsors such as ice cream or washing machines or the national lottery, they brought in all the big money. The cost of being a bike sponsor was relatively cheap, maybe 1 to 1.2 million euros.” (Note this is cash outlay only, and does not include in-kind sponsorship — basically, anything other than cash.)

In the waning years of the 20th century, three pivotal things happened to fundamentally and permanently alter the DNA of competitive cycling.

The first was the exposure of widespread doping, which began with the 1998 Festina scandal and was, perhaps, bookended with the 2012 USADA report focusing on Lance Armstrong and doping practices at the U.S. Postal Service team. “Many of the big money sponsors got out of cycling forever,” Paolo says. “And the ones that remained just weren’t willing to spend the same kind of money as before.”

So the bike sponsors stepped in to fill the gap. And prices went up.

Paolo hesitates briefly, considering what he is about to say. His English is perfect, but with an odd accent combining French and Italian and — who knows, maybe some Flemish or German — into a linguistic smorgasbord.

“The second thing was that mountain-bike sales slowed down in the United States, and bike companies that had never been involved in road racing wanted to get in. Americans didn’t know so much about cycling then, and the only race they cared about was the Tour de France.” He glances at me, assessing whether I’m likely to take offense. “So the only teams they wanted were the ones in the Tour. And prices went up some more.”

Cannondale was the first of the big American (or, at least, non-European) brands at the Tour de France, with Saeco in 1997. Trek and Giant showed up on the start line in 1998 with U.S. Postal Service and ONCE, respectively. Specialized joined the bunch in 1999, taking the only sponsorship available, the dregs of the Festina squad.

More sponsors, but a fixed supply of Tour de France teams. Constant supply, increasing demand — pure cause and effect. Prices went up, seemingly overnight, and the cash buy-in for team sponsorship doubled, typically to about €2.5 million (USD$2.65m).

The third leg of the tripod was the UCI’s formation of the ProTour, in 2005. Explicitly designed to replicate the Formula 1 motor racing concept, it ushered in the big-money era of modern road racing, and all that goes with it.

ProTour licenses were limited to 20 teams (now 18), increasing the value of a license and, indirectly, the price for a team to earn and keep one. Which meant that budgets, and therefore sponsorship costs, increased. Teams had to prove financial responsibility, and sponsors had to commit to multi-year contracts — four years at the ProTour’s inauguration. This meant that budgets, and therefore sponsorship costs, increased further.

As with Formula 1 racing, the UCI’s intention was to raise the sport’s performance level, and it succeeded. Competition among ProTour teams for the best riders became more intense than ever.

Rider salaries — for top riders, anyway — increased to stratospheric levels. Budgets, and therefore sponsorship costs, increased still further. Ultimately, bike-sponsor fees soared to the current range of €3.2-4.5 million (USD$3.4-4.8m), more than triple what they had been 20 years before.

When €4.5 Million Just Isn’t Enough

“For a WorldTour team, the cash is going to be between 3.2 and 4.5 million euros every year, depending on the team and the sponsor,” Paolo tells me. “Slightly less for a strong Pro Continental team, maybe 2.1 to 3.5 million. For a title sponsorship, the total climbs to €6 million. [Co-title], €4-5.5 million. The cash is the biggest piece, but it’s not the only piece, and it’s not as big as it looks.”

The reason for this necessitates a very deep dive down a very dark rabbit hole. Hang on to your bidons, folks. This will be a long descent.

“You have the bikes,” Paolo says, emphasizing each phrase with a gesture like slicing an imaginary loaf of bread. “It used to be 120-180 bikes, per team, per season. But now with big teams of up to 30 riders, it’s more like 200, not including spare frames to replace those destroyed in crashes. So, that’s four, five, sometimes six bikes per rider — a couple of regular bikes, a couple of time-trial bikes, and maybe a climbing bike. All electronic shifting, except sometimes a rider will want mechanical shifting for Paris-Roubaix, or other races.”

He pauses before adding, “And if discs come back, the number of bikes will go up even more.” Since this conversation, discs have come back to pro racing. Paolo is not a disc fan.

“Usually, bike sponsors buy their own groupsets. Only three or four (in 2016) are sponsored by one of the big component companies, and that’s not so good for the bike sponsor. They (the component brands) want everything on the bike — brakes, drivetrain, wheelsets, pedals, seatpost, even saddles and shoes. Also, the component brands negotiate directly with the team, not with the bike sponsor.”

Paolo is emphatic about this point. When bike brands pay for sponsorships, they can recoup a lot of their investment by selling off pieces of it — wheels, tires, saddles, bars/stems, pedals, sometimes brakes or drivetrains or even chains— to sub-sponsors, who pay for the privilege. This has three effects, all of which benefit the sponsor and/or sub-sponsors.

For the bike brand, participation of sub-sponsors obviously offsets at least some of its initial cash outlay. But it also eliminates the cost of sourcing those product categories itself — an additional quarter to half a million euros, depending on the source pricing and the number of components and spares. So the brands receive a double benefit from sub-sponsorship.

For the sub-sponsoring equipment brand, in addition to having its products ridden at the very highest levels of the sport, it can parlay sub-sponsorship into an OE agreement with the bike brand, usually for the duration of the sponsor’s team contract. Sometimes the agreement can extend to non-racing products, covering a bike brand’s entire range of models and price points, which means a potentially huge increase in business for the sub-sponsor. And of course, the bike brand will likely demand major discounts on the purchasing price. It’s all part of the game.

Finally, by making sub-sponsorship agreements rather than turning those categories over to a single components sponsor — and, effectively, to the team itself — the bike brand writes a bigger cheque to the team at less cost to itself, increasing its leverage when haggling over the cash outlay and additional sponsorship terms, of which there are dozens on a typical WorldTour team contract.

A final sponsorship cost isn’t paid to the team, but is still a significant element in the sponsor’s total budget. Sports marketing, sometimes called technical support or various other names, involves modest salaries but huge expenses, as one or sometimes more employees travel all over the globe to team camps and races. These employees (sometimes contractors) represent the interests of the sponsor to the team, and vice-versa. Often their hotels, meals, and occasionally transportation, are subsidized by the team. But the sponsor ends up paying the tab, one way or another.

There are 16 bike companies in the 2017 WorldTour; Canyon and Specialized are sponsoring two teams each. Figure in the cash, the in-kind (product) sponsorship, and the cost of sports marketing staff, and those brands and their sub-sponsors are paying between four and five and a half million euros, each, for the privilege of WorldTour sponsorship.

Put another way, by signing a standard three-year team contract, each of these companies is placing a €15m bet on that team’s success. And, like businesses everywhere, they expect a return on that investment. But that’s another story.