Civil Fraud Quarterly Round-Up: Q1 2021
On July 7 2018, 176 marvellous men on their cycling machines set off on the 3,351 kilometre slog that is known as the Tour de France, and at the end of it – after 3 impossibly gruelling weeks - a Welshman, Geraint Thomas, stood in triumph on the Winner’s podium! British riders have, of course, now won the Tour de France six out of the last seven times. But hanging over this year’s edition, at least for this British cycling fan, was the realisation that this is probably the last Tour pre-Brexit, and so there is an additional level of uncertainty about what the 2019 post-Brexit edition will look like.
Professional cycling is a truly international sport. The calendar of “premier league” races is literally called the World Tour: starting Down Under in Australia in January, moving to the mud and cobbles of Flanders and Northern France in the Spring Classics, then Italy, France and Spain for the Grand Tours – with quick jaunts to Abu Dhabi, Guangxi, Canada, California, and Turkey, if the mood takes you. The teams themselves are a similar jumble; although operating under the names of their main sponsors, most have an affiliation to a particular country, and many predominately hire riders from that nation, such as Spain’s Movistar team. However, Australia’s Mitchelton-Scott team was led by Bury-born Adam Yates, supported by Spaniard Mikel Nieve, South African Daryl Impey, and so on, while the British Team Sky also fielded riders from Colombia, Spain, Poland, Italy and Belgium.
The early years as a professional rider also extend beyond the borders of the UK. The opportunities for training and contracts in Britain have increased enormously over recent years, but the traditional route for young riders is still to move to Belgium, France or the Netherlands, to take up a contract with local teams, and then hope to impress. After they are established, it is usual for riders to take up residence in Spain or Italy to take advantage of the more mountainous terrain – Girona, 100 km up the coast from Barcelona, is home to more than 100 professional cyclists – or to spend weeks at a time at altitude training camps.
One of the big unknowns is how freely the professional peloton’s British riders and the British team’s EU riders – not to mention the various drivers, mechanics, soigneurs, doctors, and assorted support staff – will be able to move around Europe, post-Brexit.
The present agreement is that EU citizens currently living in the UK, and UK citizens currently living the EU, will be able to live and work in the same way as before Brexit – although this will only be confirmed once the full Brexit deal is reached. After 29 March 2019, it looks likely that a British rider will have no automatic right to live and work in the EU, and so the next generation of riders are likely to need a visa if they wish to compete in Europe – which, given there is only one top-tier race which takes place in the UK, will be a significant change. Over the longer term, teams and riders are likely simply to factor the additional administration and cost into their planning – after all, the number of US, Australian and Colombian riders competing in Europe show that visa systems are no obstacle (although in 2014, Kazakhstan’s Astana team had to withdraw two riders from the Giro d’Italia because they did not secure visas in time for the start in Belfast). The problem instead is that the ongoing lack of certainty and information about the landscape post-Brexit will be complicating the decision-making of young riders and professional teams – what additional costs will there be? Is it worth looking for opportunities in Europe when it’s not clear whether they can be taken up?
And similar concerns will be experienced by the organisers of British-based races like the Tour of Britain, the London-Surrey Classic, and the OVO Energy Women’s Tour – will European teams and riders be willing or even able to come to the UK and compete? What additional barriers will there be to their involvement? Will their appeal be limited, just as the races are starting to garner big crowds and enthusiastic support?
A second unknown will be the impact on the high-level administration of the teams. The funding model for cycling is that a team will have one or two “title sponsors”, who provide the bulk of the cash – for example, what we call “Team Sky” is actually a British-registered corporate entity called “Tour Racing Limited”, 85% owned by Sky plc and 15% owned by 21st Century Fox. There will then be a number of smaller sponsors who provide kit, equipment, or funding in exchange for a logo on a jersey. Again, this is an international operation: Sky’s 19 secondary sponsors include Pinarello (registered in Italy), Shimano (Japan), and Kask (USA). Cycling teams are extremely vulnerable to the whims of the companies that sponsor them, and it is not unusual for sponsors to pull their funding at very short notice. Column inches have been devoted to the big banks and multinationals and whether they are about to say farewell to London – what effect will Brexit have on the sponsors of British and Irish teams, when there is so much uncertainty? There is also the question of whether Brexit will bring additional obstacles in terms of registration, tax, and corporate structure – or will it, as suggested, open up the rest of the world, speeding up the development of teams based in Africa such as Dimension Data?
Brexit will also have wider implications for cyclists, right down to the literal nuts and bolts of the bikes we ride. For example, the EU has imposed a 48.5% tariff on Chinese bicycle imports as a protective measure against very cheap cycling products (anti-dumping duties); this protects the manufacturers based in Europe, but keeps prices high for consumers. As the UK starts to strike out alone with trade policy, it becomes possible for a more local decision to be made on the competing interests of manufacturer and consumer, but the availability of bikes and bike parts manufactured in Germany and Eastern Europe may in turn be affected.
Riders, funding, trade - this blog only scratches the surface of the unknowns which face professional and amateur cycling in the years ahead. There will be issues which require a detailed understanding of immigration law, contract law, international finance and commerce, corporate structure, and trade. No doubt we will settle quickly into the new status quo – Kingsley Napley’s lawyers will rapidly absorb the new regulations and principles and be ready to advise. However, that may not be enough to undo the impact of this extended period of limbo – particularly if negotiations continue at their current pace.
Getaint Thomas won the Tour de France gloriously in 2018. Fellow British four times Tour de France winner Chris Froome, who also won the Giro D’Italia this year, came third... Let’s hope that the Brexit negotiations ensure that they are able to compete again next year, and be able to defend their titles...
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