Rob Giteris, CEO of British bicycle brand Factor, has spoken out against the ongoing World Tour relegation battle.

Speaking exclusively to Cycling News, Giteris described the current system as "very half-baked" and agreed with EF Education Easy Post director Jonathan Vaughters' recent assertion that it could mean the death of the team.

As the 2022 season draws to a close, the deadline for the UCI's three-year ranking system is approaching, and while the UCI has indicated that it is considering reforms, at this point, despite 20 teams competing for licenses from 2023 to 2025, the there are only 18 teams on the World Tour.

Giteris' company, Factor Bike, has sponsored Israel Premier Tech, one of the teams currently in danger of relegation from cycling's top teams, since 2020. The current contract expires at the end of this season.

While much attention has been focused on the 18th place and the World Tour license, Giteris explained that for Factor, and for other sponsors, the difference is not whether they have a World Tour license, but whether they are invited to the Tour de France.

"Sometimes there is a demotion," Giteris explained, "and sometimes you don't get to go to the Tour de France. Unfortunately, the Tour de France is very important to our industry."

"In almost every survey, the Tour de France accounts for nearly 50% of the annual value.

In that regard, there is a safety net for relegated teams, with the top two non-WorldTour teams each year automatically earning a wildcard entry into the Grand Tour, while the third place is invited to a WorldTour one-day race such as Paris-Roubaix.

"We won one of two spots in the World Tour, even though we won't get into the "World Tour. To me, that's business as usual."

"But if we were to be demoted, to the third spot where we would be invited to the One-Day World Tour but not to the Grand Tour, all bets would be off because the value of the sponsorship would change dramatically.

Currently, Israel Premier Tech is in that third spot. Another WorldTour team currently in the relegation zone, Lotto Soudal and Total Energy, are above them in the 2022 ranking and thus not guaranteed a spot in the Tour de France.

Guiterice explains that for most teams, bike sponsorship represents the second largest financial injection for the team, after title sponsorship.

The difference between a good pro team and one that doesn't get a wildcard invitation, he says, could be the full amount of its cash injection.

"If you look at the difference in cost between what used to be called the Pro Continental (UCI Pro Team) and the World Tour (UCI World Team), it is an enormous difference.

"We used to sponsor Team Loompot. It was a pro conti team and they competed in Paris-Roubaix and other races. We didn't give them cash, we gave them bikes. For a very good pro team, I think it would be about 750,000 euros."

Pro cycling is built on a model of sponsorship and, of course, the perceived value of a team affects the size of its sponsorship. This in turn affects the financial security of the team.

For sponsors, there are risks associated with teams fighting relegation. A bad season could result in a team being dropped from the World Tour and out of the Grand Tour invitation slots. The risk of this happening and the resulting drop in sponsorship value would undoubtedly affect the amount of money that brands invest.

This includes bike sponsors, title sponsors, and numerous other technical sponsors.

"(If a team is relegated) the return on investment will be very different. At the end of the day, this is about business. And with sponsorship, you look at ROI," Guiterice said. [If you're not competing in the Tour de France, even if you're competing in a one-day race, the ROI is very different. So you can't justify it to the shareholders. Why are they paying for the World Tour if they are not participating in the World Tour?

Understandably, Giteris was reluctant to reveal the details of his negotiations with Factor and Israel Premier Tech, but as a result of the above, most sponsorship deals include a clause that allows the sponsor to withdraw if they are demoted from the World Tour.

This is just one of the consequences of World Tour demotion.

Returning to Vaughters' point, Giteris explained how relegation can be the death of a team.

"Relegation is probably a good thing until it happens to you. I just think the current system was very half-baked."

"We just finished a global pandemic," he continued, describing extenuating circumstances that he thought the UCI should consider reconsidering its plans.

"Who would have thought when we first signed on with Israel Premier Tech that we would experience a global pandemic?

"So I think there is definitely a need for flexibility, at least in the current situation, and I think we need to think more about how the relegation system works, because it is a bit of a cliffhanger.

"Jonathan Vaughters and Sylvan Adams have both said that. The demotion of a player currently on the World Tour could mean death for the team.

"The riders' contracts are contingent on them being on a WorldTour team, and the sponsors' contracts are contingent on them being on a WorldTour team. If a rider leaves, the sponsor leaves, and even if the rider doesn't leave and the sponsor doesn't leave, there is still a contract that the rider has to be paid. So the team has to pay their salaries, and they probably don't have the funds.

"I think the UCI's intentions were right, but if you look at something like soccer in Europe, there is revenue sharing and it's not being driven to death. And there is an incentive to go back to the higher categories.

"In European soccer, you can drop four or five years. In professional cycling, you either make it to the Tour de France or you don't, and if you don't, you are already pretty much doomed.