Alternative approach:
<li class="cycle-item slide-<?php echo $i; ?>">
<span class="featured-title"><?php the_title(); ?></span>
<a href="https://wordpress.stackexchange.com/questions/97055/<?php the_permalink();?>"><?php the_post_thumbnail('featured'); ?></a>
</li>
then hide the span with CSS, show it on hover of the <li>
element, position it over the image with CSS.
Example:
li.cycle-item {
position: relative;
}
li.cycle-item .featured-title {
display: none;
}
li.cycle-item:hover .featured-title {
display: block;
position: absolute;
top: 20%;
left: 0;
}