The latest set of Team Sky’s accounts has been published and here is a closer look at their finances including a bumper budget.
Team Budget = £34.5 million
Team Sky’s budget for 2017 was £34,496,000, up 11% on the previous year as the screengrab from their filed accounts shows. It was equivalent to US$46.2 million or €38.6 million.
Again that’s for the year ending 2017, once the calendar year is done the accounts for Tour Racing Limited, the corporate entity better known as Team Sky are prepared and this time they were signed off in June. The team used to filed the accounts during July but now they’re posted just ahead of the statutory deadline of September (helpfully avoiding budget talk during the Tour?) As you can see the team makes no real profit, the surplus generated is equal to the tax bill due.
Since inception in 2010 the budget has more than doubled. Loyal readers will remember that 2015 saw a small decrease in part because the British Pound was riding high and therefore the currency went further when offering contracts in Euros to riders so budget movements are in part due to the exchange rate but the 2017 spend increased due to “strong rider performance leading to higher staff and rider costs”, meaning more wages and bonuses.
The screengrab above shows the three categories of income:
- Title sponsorship is obvious and notes to the accounts show that £21.5 million came from Sky and £3.8 million from 21st Century Fox. Why this split? Because Sky owns 85% of the team and 21st Century Fox the other 15% and the sponsorship payments are pro rata
- Performance sponsorship means other sponsorship for example from the likes of Pinarello, Castelli, Ford, Kask and others who don’t just supply the team but pay to supply the team and “other income” can include prize money, appearance fees and the participation fees that the UCI stipulates race organisers must pay World Tour team for starting
- Value in kind is presumably the value of items given to the team, be it team cars or frames.
Here you can see the staffing costs and the story here is that they’re taking a lot of their staff (like managers, cooks, soigneurs, mechanics) onto the team’s books whereas in the past they hired them in as independent contractors, for example in 2011 they only had three full-time staff. Don’t confuse staff with riders through, it’s different which explains why the wage bill for staff is only £2.9 million.
Where is it spent? In the past Sky’s accounts used to breakdown the expenditure on wages, travel and so on but this year this isn’t in the notes any more. In the past wages accounted for roughly 80% of the budget and like all teams the wage bill is the biggest expense.
One note in the account mentions a provision for £2.8 million. This means they’ve set aside this money expecting “economic outflow to be probable”, a fancy way of saying they might have to cough up this money. This might be a small footnote in the accounts and a technical accounting matter but as a lump of cold hard cash it’s still significant.
Any assets? Not much, they have £2 million worth of vehicles, be it team cars, trucks and (if they’re not leasing it) Dave Brailsford’s motor home but these have been depreciated and written down to just £170,000
The team’s principal sponsor, Sky, is the subject of takeovers in London and New York. US telecoms and media company Comcast is battling 21st Century Fox to takeover Sky on the London Stock Exchange. Meanwhile Disney is trying to acquire 21st Century Fox too. This presents two ultimate scenarios: Comcast owns Sky or Disney owns Sky. In both cases a slew of media reports say James Murdoch, the biggest backer of the pro team, is leaving. For all the Wall Street reporting there’s no detail on the fate of the cycling team sponsorship, just a story to watch.
Team Sky’s budget for 2017 was £34.5 million, their highest amount and by extension the biggest ever seen in the World Tour. This reflects an increased wage bill. 2018 should be bigger and it’s likely 2019 will be even bigger as they’ve just re-signed Geraint Thomas on a huge contract and according to The Cycling Podcast they want to give Egan Bernal a five year deal worth millions, quite possibly the biggest and longest contract to date in pro cycling.
There’s been a lot of talk about team budgets, caps and more. Yet there’s no hard data for the World Tour meaning a public debate built on guestimates. The UCI does get each team audited but the findings are kept very private. Sky are one of the rare teams to publish a full set of accounts (Ag2r La Mondiale do to), it’s a legal requirement in the UK. Keep an eye on the stockmarket takeover of Sky which could change the title sponsorship in the years to come.
- Accounts available online at companieshouse.gov.uk
- Exchange rates at 31 December 2017: £1 GBP = US$ 1.34 = €1.12