The Finances of Team Sky

Wednesday, 1 July 2015

Team Sky

Team Sky’s annual accounts have just been published. Here’s a look at their budget, spending, wage bill and the behind-the-scenes change in team ownership.

2014 wasn’t a great one for Team Sky. The spring classics season didn’t work out and then when three grand tours came along nothing worked either, take the Tour de France where the only time a Sky rider stood on the podium was when Mikel Nieve got the combativity prize once in the Pyrenees. Plus the Bradley Wiggins selection soap opera ahead of the Tour. Still here’s another tale of 2014 with bumper sponsorship and soaring wages.


What is Team Sky’s budget? The income statement above lists the figure in black and white: £24,479,000. ($38.1m / €31.1m, exchange rates below). That’s up 11% on 2013 and thanks to gyrating exchange rates it means the same value in dollars but a 16% rise in Euros. This matters because Sky competes with a lot of European teams and has a lot of expenses in Euros, from fuel to kit so it amounts to financial tailwind for the team.

Teams are business-like but they are not run for profit and UCI rules constrain this, here’s the rule:

“The income deriving from the activities of the UCI WorldTeam must be allocated exclusively to its operations or to the development of cycling… …The allocation of the profit must be decided after the annual accounts have been established and audited. No advance payment of profits may be made to beneficiaries during the course of the year.”

Of course a company can avoid making a profit by paying the money out to its staff but in the case of Team Sky it seems they operate instead by drawing down on cash from Sky UK and others as and when it’s needed rather than the alternative model used by some teams which rent out naming rights and jersey space in return for a settled sum per year. Now onto the money that flows into the team’s coffers.

Title sponsorship is what it says, the money from Sky. Only it’s more complicated as Britain’s Sky pays in as does 21st Century Fox of the USA.

Behind the scenes the ownership has been changing, originally Sky Italia owned 25% of the team but it sold its holding to 21st Century Fox in 2013. The new accounts report 21st Century Fox has just sold some of its shares to Sky UK which now owns 85% of the team. All of these are subsidiaries within the same corporate empire but it shows the British element taking over. Also the accounts say Team Sky’s sponsorship agreement runs until the end of 2016.

Performance sponsorship is related to the other sponsorship contracts, for example Pinarello, Shimano and Tata Motors’ Jaguar brand. Race fees are stipends paid by organisers to cover expenses when a team participates in a race, the numbers are not made public but you can see it’s a substantial component of team income, less for Team Sky but vital for the likes of Europcar. Now we’ve seen where the money come from, where did it go?

The wage bill of £18.2 million ($28.2m / €23.1m) jumps by 17%. This line item is every team’s biggest expense and by some margin but here Sky’s spend on wages alone is huge, it dwarfs many other teams. Remember this is the 2014 accounts so it includes Wiggins and Froome but is before the signings of König, Roche et al. Looking ahead it seems Sky are set to save with Bradley Wiggins’ “retirement” and letting Richie Porte go (to BMC Racing) but any savings could be spent on new hires.

Note the line on “bike and performance equipment”, this is where the team buys its own material, preferring to buy some gear rather than take on a sponsor. They have a large, private stock of Veloflex and FMB tires but there’s only so much rubber you can buy, it’s not clear if this sum includes pricey training camps in Majorca and to Tenerife or whether travel for training is still classed under “race costs (travel and accommodation)”.

As the slide above shows the team has 20 staff on its books. But it had 28 riders you say; this is because the riders are usually taken on as “contractors” who sell their services to the team, often driven by tax purposes. Instead the “staff” are the managers and others, a number that has risen from 12 to 20.

Hidden among the accounts is the UCI World Tour registration fee of £66,000 ($84k / €102k) is a reminder the UCI doesn’t make big money from the teams in the World Tour. There’s also a small transfer fee of £36,000 in 2014, loose change compared to the total sum of more than £3 million sitting on the balance sheet, presumably incurred when buying the likes of Bradley Wiggins out of his contract with Garmin-Sharp and Ben Swift from Katusha too.

The End? Today Sky UK announced it’s stopping sponsorship of British Cycling, the UK’s governing body, after 2016 and the Rio games. Coincidentally the pro team’s accounts out today show funding to 2016 as well and there’s no commitment beyond. This isn’t to say it’s stopping, but unlike past accounts which have mentioned sponsorship extensions, this one does not. It’s not a big deal for the company either, its annual marketing spend is buried in its own accounts, £1,117 million meaning the pro team is about 2% of Sky UK’s marketing budget.

Other teams? Some teams don’t publish accounts at all. Some can be difficult to track down or just contain a few statutory lines of information such as the revenue, profit and the value of their assets without giving away much more. Sky’s annual report offers a much bigger picture with line-by-line spending details, it’s by far the easiest to get and the most informative. If you want more on team finances then last September Ag2r La Mondiale’s €11 million budget was given a closer look in Ag2r La Mondiale’s Team Budget.

Conclusion
There’s a lot of mythology and fascination around Team Sky. They’re bringing a dedicated restaurant truck to the Tour only lowly Europcar have been doing this for years. When they bring motorhomes it’s innovation but 1931 Tour de France winner Antonin Magne said “le Tour se gagne en dormant“, the Tour “is won by sleeping”. What Sky bring more than others is a truckload of money but crucially they seem to spend it well.

These accounts give an insight into Team Sky but the team enjoys an exceptional budget so the finances on display here are not representative of the rest of the World Tour where many teams have half or even one third of money to spend.

  • Exchange rates at 31 December 2014: £1 GBP = US$ 1.55 = €1.27
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Netraam July 1, 2015 at 11:22 pm

Compared to some other budgets in the world tour, that is massive! For instance, on this Dutch forum we estimated the Team LottoNL-Jumbo budget to be between 8 and 10 million euros, less than a third!

RonDe July 2, 2015 at 12:34 am

Vaughters just read this and wept.

Adam July 2, 2015 at 11:38 am

He just said on Twitter the budget for Cannondale-Garmin is $16m for the year!

Jerome July 2, 2015 at 12:55 am

First time I’ve heard Ritchie Porte is going to BMC, is that a scoop or did I miss a press release?

Chuffy July 2, 2015 at 1:22 am

Yes, you slipped that in very quietly Inrng!

Gold Leader July 2, 2015 at 4:38 am

Porte’s move to BMC was mentioned by Daniel Friebe on The Cycling Podcast’s Tour de France preview special from this week (after postulating on a earlier podcast that he was bound to stay at Sky). Will be interesting to see if/how that affects Porte’s riding for the rest of the year. I suspect that he will bury himself for Sky out of loyalty/friendship with Froome.

Anonymous July 2, 2015 at 6:31 am

I know!!!! I thought i must have missed somthing too!!

SeeingElvis July 2, 2015 at 5:57 am

So now they’ll have 2 GC riders who can’t finish the job?
(Said from comfort of armchair)

The Inner Ring July 2, 2015 at 9:47 am

Several sources seem be saying the same thing, we’ll see as deals get formally signed in August.

Larrick July 2, 2015 at 11:01 am

Allan Peiper hinted heavily at the TDU that Porte would be joining him.

The Anon July 2, 2015 at 7:22 pm

So still just rumour at the moment?

La Gazetta said Porte to BMC in mid-June, no idea how reliable that is though.

Deg's Tash July 6, 2015 at 12:53 pm

Seeing as BMC like the mid season transfer window, could this happen in a similar circumstance to Rohan Dennis?

noel July 2, 2015 at 9:58 am

so for that budget you’d really expect to be competing for top step of all the GTs… if Porte leaves that puts a lot of pressure on Fragile Froome.
G, Kennaugh, Konig, Roche, Nieve?? To see a GT winner away from Froome in the current squad takes a leap of faith. What has big Dave got up his sleeve?

Augie March July 2, 2015 at 10:20 am

Gerraint Thomas, you get the feeling, could be a GC rider if only he could decide what sort of rider he wants to be. In this day and age you really can’t be a cobbled classics rider and someone who can have a legit shot at a three week race. Victories in E3 and Algarve in the same year is impressive, but if G wants to go for Flanders/Roubaix or maybe a Grand Tour, he will have to give up the other style of racing.

hoh July 2, 2015 at 10:43 am

+1

Can’t agree more. But by the interviews he gave, he still wanted to do both. If he doesn’t pick soon, I’d expect big Dave to make the pick for him.

noel July 2, 2015 at 11:02 am

I think G’s heart lies in the Classics… he just doesn’t seem the type of guy to be spending the spring doing 3 week blocks of Mt Teide repeats…

Anonymous July 2, 2015 at 2:41 pm

Konig is clearly capable of a GC win with the right support.
I also reckon both Yates will swap to Sky once there are leadership vacancies.
And Tao is a more long term prospect.

Gold Leader July 2, 2015 at 11:03 am

Perhaps the rainbow bands up his sleeve? Isn’t Kwiatkowski rumoured to be heading to SKY?

Anonymous July 3, 2015 at 3:16 am

Quickstep signs all worthwhile rainbow striped riders…

another dave July 2, 2015 at 12:06 pm

Obviously it’s not tongue in cheek
Ill have to keep up on all the podcasts now with what little time is left in each day
who knows maybe its the carrot he needs

Cameron Isles July 2, 2015 at 1:57 am

Isn’t Team Sky itself just an extension of the Murdoch empire’s marketing arm and therefore the £15M title sponsorship has to be seen not as income but as an expense to the wider group?

I’m not suggesting its merely a vanity project; it’s advertising/promotion/goodwill and possibly the best bang for their buck that they get. But surely the key figure here is the £6M they receive from actual sponsorship. Subtract this from the £24M they spend and someone somewhere is writing off £18M per annum. No??

How then is cycling any different from, say, non-America’s Cup sailing? Where billionaires race fancy boats against each other off the coast of Sardinia with impressive-looking blue chip logos on the spinnakers, but where you know that that advertising isn’t actually paying for that boat or the Paul Cayard or Chris Dickson and crew sailing it?

Don’t get me wrong. I still like it. But I’d like it even more if the sport could generate wealth like F1 does. Sky are probably the closest to cracking it one day. They must generate £150M worth of exposure during the Tour alone. Would be nice to see them translate that into more than £6M of sponsorship.

J Evans July 2, 2015 at 8:56 am

Have you seen how increasingly dull F1 has become since the 1990s? That’s what happens when money is your focus.

Cameron Isles July 2, 2015 at 11:08 am

@J Evans: Don’t get me started on F1. That was the sport I left to come here!

I’m just saying back in the day at least Ron Dennis, Frank Williams/Patrick Head, Eddie Jordan and co could sell a livery full of advertising packages to the corporate world and then spend 1$ less on the race car and go racing. They were the best at what they did and they all made money.

Where is the equivalent in cycling? You’re never going to get quality people involved if the sport isn’t lucrative. If owning a team isn’t lucrative. Having an actual rule forbidding profit is crazy. Giving race organizers historical rights to the one dependable revenue stream – jersey advertising – is crazy. Letting race organizers make exclusive deals with apparel manufacturers is crazy. Placing advertising restrictions on national champions’ jerseys and the world champion’s jersey is crazy. The very framework of the sport creates instability. Instability begets doping. Doping puts the corporate world off. Honesty isn’t incentivized and it’s a vicious cycle.

frood July 3, 2015 at 11:04 am

F1 generates income for a tiny proportion of the participants, most are utterly in the financial mire. however for many it is the same model as team sky operate – an advertising platform/medium for the likes of red bull, mercedes, renault etc. there are classic teams like williams who are clinging on like grim death since the old model of sponsorship has declined so thoroughly. half the teams don’t even carry sponsors any more.

a huge, huge bonus in cycling is that the teams are forced to be non-profit. as soon as a sports team is beholden to the year-end dividend, the game is up (pun intended).

Cameron Isles July 4, 2015 at 12:02 am

Which leaves us pulling for either an Italian leading a Kazakhstan team DS’ed by a convicted blood-doper with one of the worst records of doping in team sport; a former ONCE/ASTANA Spaniard with close ties to a now totally discredited Danish DS; an inscrutable Colombian who, prior to the Tour, returns home to a country that’s practically a byword for corruption; and a Kenyan who used to feed live kindergarten rabbits to his pet python. I don’t know about you guys but I wouldn’t mind some alternatives.

The Inner Ring July 4, 2015 at 12:03 am

Cameron Isles, a lot of prejudice in there. But cheer on Pinot then because nobody seems to have a bad word about him.

Sam July 2, 2015 at 9:46 am

Cycling has to be one of the least stable sports going, whether its the races themselves disappearing from year to year, or teams on manic replacement sponsorship replacement hunts, the failure of which sees teams fold on a regular basis (eg Europcar still on the hunt, Cult Energy going likewise)

There was a report produced around a year ago, estimating the $$$ value of sponsorship. INRNG (or any other poster here), do you remember that report?

Anonymous July 2, 2015 at 10:43 am

I’m not saying that cycling has the perfect system. Some changes would be improving. The problem is that most of those who are calling for change – e.g. Velon – are not interested in change for the best of the sport: they want money.
Velon clearly think that the teams should have all the power. This would be bad for the sport as it’s a conflict of interest.
People sometimes complain that the teams are not constant – not important. It’s the riders and the races that are remembered.
The races are constant – and this integrity has been maintained largely by the groups who run the races. (So, why should they not profit? The teams want the cash, having done very little for it.)
It all comes down to what do you care about – the sport of cycling, or the money that is to be made from it (possibly – it’ll never be football or F1 as some team owners seem to think – and have those sports been improved by the increasing power of the teams?).
Money should not be the goal – for them it is, but why would it be for a fan?
They say cycling is not sustainable: it’s been around a long time and will still be around when they’re long gone.

J Evans July 2, 2015 at 11:03 am

Oh, this was me. And just to add, I’m not saying that the likes of ASO are not motivated by profit, but ASO have long realised that the long-term integrity of their races is what will keep them profitable: their motives are just as selfish, but their consequent actions have – mostly – been to cycling’s benefit.
Were this power to be shifted to team owners, do we honestly think that this would remain the case?

RonDe July 2, 2015 at 11:36 am

The value is in the races. None of these current teams will exist in a decade or two. Some won’t exist in a year or two. We know that teams come and go, always have, always will. It is the races that are the constant. So if teams want more money/control I suggest they start buying the races which is what this historic sport is all about. Tinkov can threaten to boycott the Tour all he likes. We don’t need Tinkoff Saxo are easily replaced. The Tour de France is not.

Pierre-Jean July 2, 2015 at 3:37 pm

Exactly. If pro-teams refused to race the Tour, it is very likely we would have national teams instead, much to the delight of many.

Cameron Isles July 3, 2015 at 2:13 am

@Pierre-Jean
http://www.nzherald.co.nz/sport/news/article.cfm?c_id=4&objectid=11466394
Be careful what you wish for. You think Russia, Kazakhstan, Turkey, USA, Italy, Colombia and Spain would send a clean team? I like the devil I know in this instance.

J Evans July 3, 2015 at 9:57 am

National teams are a horrible idea: unfair on people from ‘weak’ countries – the likes of Sagan – and just brings an element of nationalism into the sport that it is much better without.

Motormouth July 2, 2015 at 8:15 pm

I agree with your point overall but inre: ‘constant teams’, to me it seems that financially unstable team structure create a massive amount of pressure on short term gains for everyone involved, which is a driving factor for doping right? The need for a rider to achieve results to secure a fat contract for the next year, the need for sponsors to have results this year to allow negotiations for the next, the need for good press this month, this week, etc… these are all pressures brought to bear for the sake of the short term. Not to mention external reasons sponsors have for leaving (market pressure, change in ownership, etc).

If teams were stabilized or structured in a way to exist long-term the team and riders would have the ability to weather injuries, bad luck and the like. Unlike today where that can mean you or the team lose next year’s sponsorship. I mean, all the news articles make it sound as if every year is this rat race for teams just to scrape by, and not many do.

Would the pressure for results still exist regardless of finances? yes of course, but possibly less driven by sake of livelihood and more from ego/competition.

I don’t know if for-profit is the answer (and what different motivations that would bring), a rule change to allow teams to carry forward money ‘to be spent in future years on cycling’ could be a way to create some economic stability, as an example.

National teams could definitely accomplish this as well.

And I agree that race organizers need to retain power, it’s a good dynamic.

J Evans July 2, 2015 at 8:34 pm

Cheats will always cheat. The notion that it’s the financial insecurity that helps cause this is completely unproven. The teams like to put this forward to further their arguments.

Joe K. July 2, 2015 at 2:13 am

That looked like excerpts from an audited financial statement. Are all World Tour teams required to make public their audited financial statements every year like a listed company on the stock exchange?

Sam July 2, 2015 at 9:48 am

Nope. Not at all. You’ll struggle to find any visibility elsewhere.

The Inner Ring July 2, 2015 at 9:49 am

These are excerpts from the accounts. As the piece above mentions few teams have accounts available to read.

TourDeUtah July 2, 2015 at 7:04 am

So, where is the profit garnered from ?

Granted, billionaire cyclo-hobbyists exist, but, they still want to see their hobbies make money.

Then, there is the topic of how do the smaller budget teams exist ?

Rob July 2, 2015 at 9:49 am

Profit here is merely the reconciliation between the revenue and operating expense lines; ‘profit’ is therefore just any left over cash which was received and not spent throughout the accounting period.

I think the key thing for smaller teams here will be manifest in the largest expenditure line items; staff and rider remuneration and bike and performance equipment. Larger budgets mean that larger teams can throw their cash around in transfer markets, offer larger bonus’ and attract the best talent. I’m sure it takes some pretty serious financial coaxing to tempt GC riders away from their leadership roles to be shoehorned into workers roles – this is the basis of the Team Sky model.

Smaller teams therefore subsist with lower overheads, lower rider wage bills and therefore much less talent rich squads. It seems that we’re moving more and more towards the Premier League’s “throw money at them, and they’ll come” mentality, whilst Sky have been nothing short of revolutionary in this approach, it can definitely be argued that not all change is good change.

The Inner Ring July 2, 2015 at 9:51 am

You can set up a company and rent out the naming rights and jersey space to sponsors. Subtract your wage bill, expenses and if there’s money left that’s the profit. Sky doesn’t operate on this model, it uses the classic model of belonging to the sponsor. These day’s that’s rare, most teams are go for the “rental” model created in the 1980s by Cyrille Guimard.

Special Eyes July 2, 2015 at 1:28 pm

Examples Inrng ?

HWSB July 2, 2015 at 2:09 pm

Slipstream Sports, for example.

The Inner Ring July 2, 2015 at 2:39 pm

Yes, Slipstream is the name behind the brand whether Cannondale, Garmin, Chipotle etc. There are plenty, whether Etixx-Quickstep, Giant-Alpecin, Ag2r La Mondiale, Europcar, Movistar and probably most of them. Sky and FDJ are among the rare teams owned by its sponsor.

Will July 2, 2015 at 8:22 am

It’d be interesting to know how that 8m wage bill breaks down.

With Porte gone do you think Sky will go for Meintjies? Contract finishes this year, 6 years younger than Froome and Thomas.

garuda July 2, 2015 at 8:39 am

They need Quick-Step to piss off Uran, then tempt him back to the fold. Mentjies should be a shot in the dark bet at this time.

Sam July 2, 2015 at 9:51 am

I understand a return by Uran may be possible. They liked him and he liked it there. And Lefevere may not want to spend the $$ necessary (or have the $$ left) to keep him.

Gold Leader July 2, 2015 at 10:06 am

I thought the rumour (again care of The Cycling Podcast) was that Polish world champion was moving from EQS to SKY. As a GC rider? see Noel above

Alex July 2, 2015 at 10:29 am

Both Uran and the world champ are heading to Sky

Sam July 2, 2015 at 11:07 am

yes, he’s moving to Sky. And Golas is going with him. And Uran may be joining them.

noel July 2, 2015 at 11:10 am

Uran seems like a step back rather than a step forward, no? He doesn’t look like a GT winner to me, rather a (very likeable) potential podium shot. Is that really what Sky want/need? Konig looks to have that role covered already.

Sam July 2, 2015 at 11:43 am

Uran? Well tbf he’s got 2 x Giro runner-up results (1 of which was with Sky), which is precisely 2 more than anyone else on their current roster for that particular GT. Also the only rider who’s got a monument podium on their palmares. He’s versatile in a way that Froome has shown little sign of being to date.

Teams have different reasons why they want particular riders, its not necessarily because they want to win the Tour with ’em. And if they have a big budget….

J Evans July 2, 2015 at 6:45 pm

It’s so he can make lots of cash. It certainly can’t be for their record in developing one-day riders (which is what his focus should be for now – as it should for Thomas).

J Evans July 2, 2015 at 6:46 pm

Kwiat, that is.

J Evans July 2, 2015 at 6:58 pm

For Uran, it’s probably a good move. He’s getting no support at EQS and with Sky he can perhaps win the Giro or Vuelta.

Tobias July 2, 2015 at 8:26 am

It would be interesting to know how much is staff versus rider?

This will hardly move the needle:

585,000 for office expenses – that is a hefty rent any where in the world
780,000 pr and marketing – seems like an awful lot – must be buying some sponsorships at events or special VIP booths

I would argue most teams could do with 1/10th to 1/20th of those two

Tobias July 2, 2015 at 8:30 am

Oops… you break out the staff
1.5M – I would have expected it to be higher especially at the top… if riders are getting paid that much…. and management is smarter than riders ?

The Inner Ring July 2, 2015 at 9:52 am

Have a read of the piece again, staff and riders are not the same 😉

Will July 2, 2015 at 8:54 am

Just like football – the management get paid a lot less than the players but have much longer careers

NS July 2, 2015 at 9:33 am

Shocked! £778,000 for the worst PR in the entire World Tour (and marketing… a cover-all expression that can mean more or less whatever you want in this day and age).

It’d be entirely fascinating to see the component parts which add up to that figure.

Still… I suppose the cost of learning to talk meaningless, upset no one, corporate biz-speak has escalated in recent months.

RonDe July 2, 2015 at 11:42 am

How do you figure its “the worst PR in the world”? It has been impossible to discuss cycling for the last few years without mentioning Sky. There are memes aplenty about Sky (Death Star, Crash Froome, Wiggo, marginal gains, fancy new Jags as support vehicles).

Worst PR? If that’s the worst they can do let’s hope that don’t get good or we might never discuss anything else.

noel July 2, 2015 at 12:08 pm

RonDe – I tend to agree. Sky may rile the traditionalists (for whom they can probably now never do anything right) but I have a feeling that their image amongst the non-cycling-fanatic general public is a quite a bit better… those TT Jags look pretty good on the telly…

Dave July 2, 2015 at 4:31 pm

absolutely not a Sky fanboi, but in the current UK cycling boom Sky is synonymous with cycling to the broader public and casual fan, and they’ve been around long enough now that most of the marginal gains that have been sneered at have been adopted by the detractors; who dare finish a stage now and not warm down on rollers?

David July 2, 2015 at 10:54 am

Maybe they could use some of that money to pay someone to read the rulebook in time for next year’s Giro…

Sam July 2, 2015 at 11:08 am

I think that may be Allan Peiper’s first bit of homework to assign to Porte…

Jonhard July 2, 2015 at 11:17 am

And transfer them to BMC too?

another dave July 2, 2015 at 12:18 pm

or OGE

Fred B July 2, 2015 at 12:10 pm

Do teams get any revenue from merchandise? That is a big earner for some other sports.

The Inner Ring July 2, 2015 at 2:42 pm

Yes and typically teams do a deal with the team sponsor where they say “pay us X and give us the team kit” and then the kit supplier produces the goods and gets the sales on the jerseys and replica clothing. But obviously cycling teams don’t have such big identities / fan bases and no stadium to sell out of so it’s a help but not so big.

Fred B July 2, 2015 at 6:08 pm

Yes, no stadium so no revenue there, except arguably race fees are the equivalent. Ticket revenues are relatively fixed and limited by stadium size (for those who sell-out) so merchandise has been a focus for revenue growth. In this case we have to cite the fluid identity of teams as an obstacle to building a fan base which must be part because the sponsor gets team naming rights.

How, thinking aloud, does the rule against profit do anything other than encourage any excess going to riders wages/bonuses and budgeting to spend all income (and hope for the best) with no contingencies?

Eric Farquharson July 2, 2015 at 12:58 pm

Sky is renown for thinking outside the box, not unreasonable to assume therefore that following the ‘bad news’ story of a split with British Cycling there may well be a ‘good news’ story of a new team Sky extension sometime during the Tour, otherwise it would be difficult to sign new new riders on a two year contract.
Of course Sky may also be contemplating a purchase of ASO which would really create a different level of playing field!

Special Eyes July 2, 2015 at 1:47 pm

Sky Cycling is in itself merely another PR tool of its greater media / communication giant parent.
Sky’s television coverage and revenue has been primarily based on football, and there is still huge growth potential in this market in North America, Asia, Middle East and, at some point, Africa.
This is where the REAL money will be made ; factor in live streaming revenue possibilities and the financial figures could be truly enormous.

As an English football fan myself, these numbers of Team Sky’s budget don’t astound me. Our clubs spend more than this on a single player’s transfer !
In fact, reading the article (thanks again Inrng, very good) they do astound me – only for how ridiculously inexpensive (read cheap in the case of some of the aforementioned European cycling teams) the whole set up really is. I mean, some of the hotels and accommodation that the riders have to put up with. We’re talking about elite athletes in one of the largest sports events on the planet here, and they’re expected to stay in cramped crumby budget rooms over some vibrating dance floor. Unbelievable.

I applaud the stance that teams are not run for profit.
Having said that, the sport does really then open itself up to teams like Sky or Tinkoff. Owners who, for whatever reason, are prepared to spend. But they are not spending large amounts of money for a place at the top table of an elite sport in relation to what they would have to do so in other sports.
It’s peanuts in comparison.

Touriste-Routier July 2, 2015 at 2:04 pm

For all those claiming that the teams need more money from the race organizers, please note that they made a “profit” on their travel to races.

They had revenues from the races of of 3,181,000 (almost 2x what they had in 2013) and costs of 1,778,000, yielding a net positive of 1,403,000. The 2014 revenue Team Sky received from organizers is more than the entire budgets of some Pro-Conti Teams, and more than the title sponsorship some Pro Teams secure.

Granted we don’t know exactly how they allocate everything (there is a separate line for costs of running vehicles, how much of which is associated with races), and we don’t know if prize money is included in the “Race Fees & Other Income”, but the point is that ca 13% of their budget came from race organizers.

Tobias July 2, 2015 at 4:42 pm

Supplemental factoid

– Cannondale – Garmin (slipstream) current Budget $16m

Richard S July 2, 2015 at 5:49 pm

I’m just joining a discussion further up, my mobile doesn’t let me directly reply to comments.

In my opinion Sky don’t need to directly replace Porte, they have Konig as a potential super domestique and Thomas who can win one week stage races. Plus they need to use Kennaugh more productively. He is far too good just to pull for others on the early slopes good mountain finishes. At minimum he could be a hilly classic and week long stage race winner and potentially a grand tour contender. His interview after winning the British championships on Sunday suggested he would like more faith shown in him by the team. If I were Sky I’d back him and Thomas.

Special Eyes July 2, 2015 at 8:18 pm

Do readers see Sky continuing with their sponsorship of the team after the current deal expires in 2016 ?

I think they will, it would seem odd that they’ve been adding to their shares ownership, only to then relinquish involvement.
I think that Sky Pro Cycling also adds and gives for excellent value to the overall parent company’s corporate goals.
Rightly or wrongly, as was noted above, the brand name has become synonymous with British cycling in general at a time of a huge upsurge in its growth and interest. You couldn’t buy that kind of positive brand success otherwise.

As an aside, as Sky are not renewing their sponsorship of British Cycling after 2016, wouldn’t it be nice if the UK National Lottery, like it’s Dutch and Belgian counterparts, was able to (part) fund British Cycling ? Money very well spent in my opinion.

Othersteve July 2, 2015 at 8:38 pm

Thanks for the great review.

As an American I always find it fascinating that a lot of Brits and Europeans seem to view the sport as having a lot further to go to reach financial success?

My view is that pro cycling is very unique and a contrarian sport with die hard independent fans. Monetizing a fan base like that is difficult even in the cycling-cetric countries. Sky is getting great bag for the small buck that they spend on pro racing from my stand point.

OJT July 2, 2015 at 8:54 pm

Re consolidated ownership. That’s exactly what you do if you want to sell. Far more attractive to buyers, who’d get 85% – and be the controlling shareholder, rather than fiddle about with a less dominant holding.

J Evans July 2, 2015 at 9:02 pm

What does it say about people’s obsession with money that there are twice as many comments on this article than on the one about the mountains classification?

Phil July 2, 2015 at 9:57 pm

To J.Evans,
With all respect to your question, it seems to me that this financial topic is opening up on a subject much less analysed than the mountains classification, for example—where speculation (à la Podium Café, for example) is cheap, easy and (most usually) uninformed, and plentiful (excessive?), ever year.

This article (and the comments) hit positively on many aspects of the current financing of the ‘big guys’ and the underlying interests of various companies. I’m really heartened that INRNG opened up this subject, using the Sky example, in such a stimulating manner.

Flippantly, looking at the main photo: what on earth is the Sky rider, last-but-one on the right, doing with his bottle!

Larrick July 3, 2015 at 8:03 am

Changing the battery for his motor??

noel July 3, 2015 at 9:14 am

well, J, you represent c.10% of the comments on this thread…. you need to stop obsessing about money!

J Evans July 3, 2015 at 9:59 am

True enough, but my posts are about not letting money be the raison d’etre of the sport, rather than ‘amoritisation’.

noel July 3, 2015 at 10:42 am

only teasing… comment away pls 🙂

Anonymous July 3, 2015 at 12:08 am

No figure for amoritisaton? If they pay transfer fees for a rider (such as Wiggins) shouldn’t that be amoritised over the life of the contract?

Larrick July 3, 2015 at 8:06 am

Could be under Depreciation.

Stu Ray July 3, 2015 at 12:09 am

Yet another cracking article INRNG, I always learn something when I catch up with your blogs. Hoping my INRNG casquette slowly imparts such knowledge into my brain 😉

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