Tour de France economics

From John Redwood's Diary

Some have written in to ask why I missed out the Tour de France from my list of English sporting events that have managed to project themselves onto the world stage and create jobs and profit for England. The clue is in the name . It is difficult to claim the Tour de France as a great traditional English event.

I understand that many Yorkshire supporters have come out to line the route and enjoy the cycle competition. Good luck to them. I cannot , however, see that this is a great business triumph. As I understand it all the viewing along the route is free, so there is no ticket revenue. The UK has doubtless paid a substantial sum to the French  promoters of the race to have it here. Councils have spent substantial tax revenues on providing viewing hubs with toilets, large screen tvs and entertainments to provide this free to spectators. They have also spent a lot on road closures, safety inspections and signs. It will be a heavily loss making popular event, offering  free entertainment to many. Anytime a Council or government  wants to provide free or subsidised entertainment it is likely to be popular with those who go.

First a little background: The Tour de France is paid from 2 sources of revenue: 1) sponsorship (including a carnival of advertising vehicles that runs before the riders) 2) towns paying for the privilege of being the start and end stages. The figure for Sheffield hosting the event is estimated at £1m.

What Mr Redwood misses is that while the route is free, which means limited ticket sales there are spin-offs as highlighted by The Star:-

Campsites and hotels are full, and some roads will be closed from tonight in a wave of significant disruption that also affects much public transport.

And those extra hotel guests are going to have to eat somewhere. So, out of that £1m, some of that is going to be returned in extra tourist revenue.

The other benefit is that the Tour de France coverage on TV is a combination of cycle race and tourism video. The helicopter crews and commentators love to pick out interesting places on the route. And tens of millions of people watch this every day, so you get to show off your town to huge numbers of people for £1m.

I'm not sure if the numbers add up, but that's how it's supposed to work...