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Pedaling for Cash: Tour de France No Easy Ride

Team Orica GreenEDGE at the 2013 Tour de France.
Doug Pensinger | Getty Images Sport | Getty Images
Team Orica GreenEDGE at the 2013 Tour de France.

With the 100th edition of the Tour de France under way, the 198 riders competing in this year's bike race will have their sights firmly focused on the finish line in Paris. But getting there requires more than extraordinary endurance; it requires cash. Lots of cash.

Prize money from races cannot cover the costs it takes to compete; the Tour de France only awards $2.6 million total in prize money which is broken down between jersey winners for each of the race's 21 stages. Meanwhile the average annual budget for a UCI (International Cycling Union) ProTeam - a team which has obtained a license to race in all World Tour races including the Tour de France, the Giro d'Italia or the Vuelta a España - is $11.4 million.

Seventy one percent of that budget is devoted solely to payroll; auditors Ernst & Young put the average salary for a UCI ProTeam rider is at $142,000, but annual salaries for top riders in the Tour can go up to $5 million.

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That leaves a big funding gap to cover the costs of equipment, transportation, hotels and salaries for coaches and trainers and medical staff in its 240-day competition calendar. And that is where sponsors come in, and where cycling becomes big business.

Sponsors cover 94 percent of a team's income with 59 main sponsors for 40 professional cycling teams, including all 18 of the UCI ProTeams and 22 further teams which compete in a series of secondary races, according to a 2013 report by auditors Ernst & Young.

"There isn't revenue sharing (sharing revenues of teams in a league) or franchising in cycling like most other sports. We depend fully on sponsorship," Brian Nygaard, Communications Director for the Australian UCI ProTeam Orica GreenEDGE (OGE), told CNBC.

Bicycle maker SCOTT Sports has sponsored the OGE team since the 2012 season, providing bicycle forks and frames, helmets, leisure wear, running shoes as well as financial contributions to the team.

These financial contributions help pay for other team costs such as riders' salaries and training - annual training can cost from $11 to $32 million for a training facility and trainers.

Meanwhile global brands are keen to be represented at the highest level of racing.

"OGE represents SCOTT on races worldwide and in one of the new growing markets for cycling as well as in Asia," Jochen Haar, PR and Communications Manager for SCOTT Sports, told CNBC. Professional cyclists also help sponsors build better bikes for consumers.

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"Our professional riders are the first ones who are involved in new frame designs and developments…The technology we help develop will be in a bike that someone buys later," Haar said.

Teams also use sponsorship funding to cover transportation for coaches, trainers, riders and the bicycles. Specially modified trucks carry bicycles from race to race. Nygaard said it cost the OGE team about $195,000 to specially modify its truck to transport equipment.

So when the riders cross the finish line on July 21, glory may not be their only reward. More funds could start rolling in, and with them, perhaps more glory.

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