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Why the Tour of Utah’s business model works
- Updated: August 9, 2016
KEARNS, Utah (VN) — Seated on a child’s chair in the nursery of a suburban recreation center, Tour of Utah Chairman Steve Miller presented the business philosophy that keeps his race alive.
“We believe in living within our means,” Miller said. “It’s about being frugal and using our dollars wisely.”
The frugal approach may seem strange for Miller, who is a board member the multi-billion dollar Larry H. Miller group, which owns the race. The Miller empire includes a nationwide network of car dealerships, the NBA’s Utah Jazz, the Megaplex movie theaters chain, as well as a dozen or so other companies. Forbes Magazine recently valued its chairman (and Steve Miller’s mom) Gail Miller at $1.7 billion.
But Miller is not made out of money, and his family’s cash commitment to the Tour of Utah has limits.
So while the country’s two other weeklong stage races — the Amgen Tour of California and the USA Pro Cycling Challenge — operated with budgets north of $10 million, the Tour of Utah has eked by on comparative peanuts. How low? Miller pegged the current budget at one-third the cost of a $10 million event, so approximately $3.3 to $3.5 million.
“The goal is to execute at the highest level possible, and to do it for a fraction of what the big races do,” Miller said. “That way it’s a more sustainable model.”
The plan appears to be working. The history of U.S. bicycle racing is rife with dead races that boasted multi-million dollar budgets. Most recently, the USA Pro Cycling Challenge died after management was unable to find ownership to help backstop the event, which lost several million each year.
Utah, however, has slowly grown into a stalwart on the international calendar, despite its paltry budget. When the Miller family purchased the race in 2007, its operating budget was a few hundred thousand dollars. Over the ensuing nine years, the Millers gradually invested, and the race blossomed.
Now, with the USA Pro Challenge cancelled, Utah is now the country’s second-largest race. It’s become the premier ground for young, up-and-coming Grand Tour hopefuls to challenge WorldTour riders.
“The guy who wins the Tour of Utah one year will go on to win the Tour de France, maybe in five years time,” said Cadel Evans, who attended the 2016 event. “To be part of that journey is fantastic for any race.”
And its frugal approach may be the smartest way forward for American cycling.
Grow slow to limit losses
Major American bicycle races lose money — it’s just the nature of the business. The Amgen Tour of California has never disclosed its total losses since its launch in 2005. During its five-year run, the USA Pro Challenge lost more than $20 million.
Miller did not disclose his race’s total losses, but said it is comparatively small. This year …
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