by 
As Escape collective As reported on Thursday, the UCI is considering imposing a budget cap for professional cycling and is using the services of accounting/consulting giant PwC to study how such a cap might be implemented. While new rules are still a long way off and the UCI is still in the exploratory phase, implementation by 2026 is a goal.
With that in mind, and after a few seasons in which a small handful of teams have been particularly dominant, now seems like just the right time to consider a big question: What would salary cap-style rules look like? in professional cycling?
To answer this question, we should probably take a step back and consider some broader questions. Finally, some cycling fans are probably wondering what budget (or salary) caps even apply. Let’s dive in.
How do salary caps work in professional sports?
To put it simply, some professional sports limit the amount of money teams can spend. Budgets may be largely capped, or there may be somewhat tighter limits on the payroll of a team’s athletes, such as a salary cap, a practice particularly common in American professional sports. Spending can also be limited in other ways. Some sports instead choose to use less restrictive tax systems that penalize teams for having their payrolls exceed a certain amount, with the penalty increasing as spending increases.
These limits can be set in a variety of ways, often tied to revenue, and in American sports they are typically agreed upon by leagues in collective bargaining with players’ unions.
The National Football League is a prime example of a relatively simple salary cap. All 32 teams in the NFL must keep their team-wide payroll under a certain amount, which fluctuates somewhat each year but generally increases. Teams that violate the cap face extremely high penalties, making noncompliance virtually untenable. Assembling a roster is therefore a delicate challenge, requiring teams to invest wisely or simply be unable to sign certain athletes they would otherwise like to acquire.
At the other end of the budget-limiting spectrum is Major League Baseball, which simply imposes a so-called “luxury tax” on its 30 teams. Teams whose payroll exceeds a certain specified amount are taxed a percentage of the excess, with some of the money going to the players and another portion going into the MLB’s revenue-sharing pool. To some extent, large market teams are generally willing to accept luxury tax penalties; Eight teams have achieved this in 2023.
Financial justice initiatives are far more common in American professional sports, but they are beginning to emerge elsewhere as well. The English Premier League is testing a salary cap for the 2025-2026 season using an “anchor” system to determine the spending limit directly based on the revenue of the league’s smallest teams. Formula 1 uses a broad budget cap that limits spending on cars and other costs but specifically excludes driver salaries.
How could spending restrictions on cycling be implemented?
Based on a PwC presentation to the UCI (a copy of which was obtained by). Escape collective), we already have an idea of what approaches could be applied to professional cycling. PwC’s report highlights seven different approaches from North American and European sports. These seven frameworks, which are not all mutually exclusive and can therefore be combined in various ways, were evaluated to determine how well they apply to professional cycling.
Three potential approaches to budget capping (approaches that PwC calls “financial sustainability models”) have been approved as “applicable” to cycling: a budget cap based on an “anchoring model” as a spending cap, and a luxury tax model.
First of all, the basic idea of a budget cap was considered appropriate. Setting a cap based on a calculation based on the finances of the lowest budget teams, similar to the EPL’s previously mentioned “anchor system”, was also seen as a viable option. This also applies to the general idea of a luxury tax, whose benefits include redistributing excess spending to smaller teams.
Two of the models received a yellow light for having “limited application”: the designation of “designated players” and the carryover of “unused cap space” from previous seasons.
The listed exception for designated players, as expressed, for example, in the so-called Beckham rule in Major League Soccer, allows the salaries of a selected number of players to be excluded from consideration of the cap. PwC noted that this approach presents challenges in cycling, where rider salaries are not currently public. Carrying over unused cap space is currently part of the NFL’s salary cap system; PwC once again highlighted difficulties in managing possible rules in this framework.
The other three models were classified as “not applicable” to cycling: a soft cap, where there are many exceptions for different circumstances, which sets caps based on revenue and limits teams’ financial losses.
Reasons cited for inapplicability included the overly complex nature of a soft cap and its inherently less effective impact as a budget constraint. Meanwhile, caps set specifically based on team “revenue” would make little sense in cycling, where the bills are generally paid by sponsors. For similar reasons, a system modeled on the UEFA Premier League rules to curb financial losses was deemed inapplicable to cycling.
What might a budget cap for the WorldTour look like?
All of these assessments combine to provide the potential for designing a system with some, but not all, of the above aspects. Currently, the UCI appears to be considering a hybrid system that combines a broad cap on budgets with a specific threshold for rider salaries, which, if exceeded, could result in teams paying into a shared pool aimed at lower-budget teams.
A (completely hypothetical) example of how such a luxury tax on salaries could work is the implementation of a rule requiring a WorldTour team to pay 20 percent of every dollar spent on rider payroll over a threshold of $30 Millions of dollars will be paid into a pot shared by the five teams with the smallest budgets. For example, if UAE Team Emirates competed with a total driver salary of $40 million, the team would have to give up $2 million to somehow distribute it among smaller teams at the lower end of the budget spectrum, such as Cofidis and Arkéa-B&B -Hotels.
Overall, it seems relatively straightforward, although as mentioned, cycling has many unique complexities that could make any rules around budget constraints challenging.
For one thing, the North American sports that employ salary caps and similar methods so effectively are run by overpowering closed leagues, which is not the case in professional road racing. These leagues and the teams in them also bring in huge amounts of money. Leaguewide revenue in Major League Baseball topped $11 billion in 2023, while the NFL generated more than $20 billion last year. With so much money, it’s hardly surprising that there are numerous individual MLB and NFL players whose annual salaries are significantly more than any WorldTour team spends on driver payroll.
Leagues with real salary caps also have expenses Minimum values to ensure that there is salary pressure coming from the opposite direction and not simply a cap on teams’ spending, although in most cases there is little need for minimum spending in major American sports because team budgets are generally nowhere near them . In cycling, however, the sponsor-dependent financial structure means that at least a few WorldTour teams are always on the brink of collapse every few years, which would make it difficult to enforce meaningful minimum spending levels.
The finances of cycling teams are also unusual in that rider compensation is often paid by sponsors associated with the team, but not necessarily as a direct part of the team’s payroll. How these could be taken into account (in the truest sense of the word) in a new budget constraint remains unclear. Finally, most sports leagues with financial fairness frameworks exist in one or perhaps two national tax jurisdictions; The WorldTour’s current 18 teams are registered in 11 different nations. These conflicting tax laws could be mitigated through a collectively negotiated, legally binding agreement between the teams and the UCI, but there is no guarantee that such an agreement will materialize.
In any case, none of these challenges appear to be so difficult to overcome as to stop the UCI from considering some kind of cap for 2026 as a real possibility, and with only two days of WorldTour racing left in 2024, that is actually not that far away anymore. Of course, it remains to be seen whether everyone involved in the sport can be convinced to go along with the plan, and it is unclear what final form the spending restrictions might take, but hypotheticals could become reality sooner or later.
Did we do a good job with this story?
