On the same day Michael Valgren won the Omloop, Astana team staff got an email saying their employer was waiting for sponsorship cash and the team later confirmed it is in financial difficulty. This followed news on Friday night on Vesti.kz where team manager Alexandr Vinokourov warned his team had not received its funding for 2018 and was paying travel costs out of “savings”.
The team’s not bankrupt but management must be nervous: why make this public because even if the promised cash shows up it will only deter riders from renewing or joining the squad?
Ok for now
The Vesti interview was notable because it was not a press release, normally news goes via the official channel. It seems riders have been paid for January but we’ll soon learn if there is cash to continue funding the payroll.
What to make of the interview done in public? One theory is Vinokourov wanted to use the Kazakh media to make an appeal for the political backers of the team to unblock the cash but that’s a pure guess, in part inspired by the long sections where “Vino” is promoting the Kazakh aspect of his team and how it has brought on riders like Alexey Lutsensko. A times the interview reads like a sales sheet. Vinokourov says if the money is not forthcoming the team will stop.
Who sponsors the team?
Astana is the name of Kazakhstan’s capital city and the team is sponsored by Samruk Kazyna, the state sovereign wealth fund that owns the country’s oil and gas firm, the postal service, banking, telecoms and more. In addition the Astana Presidential club is a sponsor, this is a multi-sports club created to promote sport and itself funded by Samruk Kazyna. Other sponsors include Air Astana, itself owned by Samruk Kazyna. In short Samruk Kazyna is the team’s benefactor. You might have seen the Expo 2017 logo on the kit and this exhibition has come and gone. Samruk embarking on a large privatisation programme, the likes of Air Astana are up for sale.
This has never been a team short of cash, not surprising when they’re backed by a nation-state. They’ve been up there with Team Sky, BMC and Katusha in years past as one of the big league spenders and it was not long ago they had Nibali, Aru and Landa plus Fuglsang and more on the roster. Even when the team’s licence was in jeopardy the funding never seemed in question.
Funded for 2018?
Why is the money drying up? It’s not clear. Teams must to prove funding as a fundamental condition of their licence: rule 2.15.069 bis says the UCI’s auditors must review “essential documents” including “the sponsorship contracts duly signed with the main partners”. So in order to get their licence for 2018 the Astana team will satisfied the UCI auditors and the Licence Commission. This suggests the contract was in place but the cash hasn’t shown up. If true enforcing the contract isn’t easy, to launch legal action against your sponsors is to start sawing the branch you’re sitting on.
Astana is a Kazakh team by branding but legally it’s a business run out of Luxembourg called Abacanto SA. The legal status matters because if Abacanto can’t meet its financial commitments it can be declared bankrupt and riders and others can file these charges more easily in Luxembourg than Kazakhstan.
Licensed to race… for now
Teams have to inform the UCI if their financial situation changes, a serious change of circumstances can even see the UCI review the team’s licence. Not receiving income from your principal partner seems likely to trigger this although the UCI has no interest to pull the team from racing pre-emptively. But it will be making enquiries.
The Bank guarantee, the last resort
All World Tour teams post a bank guarantee with the UCI, large enough to cover three months’ wages. The UCI can’t dip into this, it can be called on if someone has a claim of an unpaid debt from the team. Triggering the payment means the end of the team twice over. First because it marks a change in the status of the team and the team’s finances are in jeopardy and so in turn is its licence. Second because riders, especially the big ones, will have contracts allowing them to walk in the event of non-payment of wages rather than leaving them tied to the same squad.
It’s not like there’s a line of blue chip corporates queuing to sponsor the sport and if there was few would be linking up with Astana which has had its share of doping scandals and run by a manager who could be on trial in a Belgian court next month. Still this team was itself born from the wreckage of the Liberty Seguros team engulfed by Operation Puerto, stranger things have happened.
If the money runs out
The licence is in jeopardy. The team could ride on with limited resources, after all it’s better to race than not for riders looking for a contract in 2019, to put themselves in the shop window and to keep the legs turning. Easier said than done and some riders could be poached promptly. Here’s the chart of team sizes comparing the 2017 and 2018 seasons. As you can see several squads have room to recruit (Astana don’t as they’re at the 30 rider max).
This is for cherry-picking, Katusha might fancy Alexey Lutsenko; maybe Trek-Segafredo could get their GC man in the shape of Miguel Ángel López and so on but only a few riders would be signed and they’d be lucky to transfer their existing salary.
The team says there’s only a temporary delay and perhaps Vinokourov’s public appeal will unblock the promised funding? If so this is unusual and even if the cash comes tumbling tomorrow it’ll have repercussions especially given the dire warning that the team will stop if the money doesn’t show up as promised. Already riders and their agents are starting the game of contractual musical chairs for 2019 and whether you’re a star rider, a mechanic or a masseur you’ll surely think twice about staying with the team?
Exploring the options reveals there are few. As explained above if the temporary shortfall can’t be plugged then things can go south fast, the bank guarantee isn’t an overdraft but a last resort and riders will be contractually free to move if their wages don’t come through.