Sky Reaches The End of the Road

Sky has announced it is pulling out of sponsorship of the pro team and 2019 will be the last year for the UK media firm in the peloton. Now the team faces a race to secure funding for 2020 with realistically only months to do this. It’s yours for £30 million a year.

First remember that Team Sky and the legal entity behind it, Tour Racing Limited, is owned by Sky which has been taken over by Comcast. A legal point but important because it means the squad is Sky’s property rather than the more usual structure of team managers owning the team and selling sponsorship rights. Consequently a replacement sponsor won’t just have to commit a sum of sponsorship, they need to buy the squad off Sky. Presumably this will cost pennies given that without sponsorship the entity near-worthless. One asset, or liability depending your point of view, retained by Sky is the long duration rider contracts, such as Egan Bernal’s five year deal and Geraint Thomas’s three year extension. Sometimes if a sponsor vanishes then remaining contracts become worthless but it’s likely that Comcast, Sky’s new owners, are liable. In short Bernal and Thomas, or their agents, probably won’t lose a penny …but they could have change of control clauses in their contracts.

Is the new ownership a reason for the sponsorship being dropped? This has been suggested here before and is the best hypothesis. Sky has been bought by US broadcast Comcast and this marks the exit of the Murdoch family including James Murdoch who has been the team’s biggest supporter.

To some extent Sky’s sponsorship ending is normal anyway, nine years of continuous sponsorship is a long stint, corporate sponsorship deals that last half this are normal. Plenty of sponsors have come and gone during Sky’s time, think Argos, Sharp, Saxo or Orica. In recent years Sky’s not had the impact that it did at the beginning: Tour de France wins have become “baked in”, victory has become expected rather than exceptional while recent years have been clouded by negative headlines about “Jiffy bags”, parliamentary enquiries, credibility-stretching tales of lost laptops and Froome’s salbutamol case and some of these matters persist with medical hearings about a former team doctor Richard Freeman happening next year, the kind of publicity they can’t afford.

There’s now a clock ticking. Apparently Dave Brailsford was only informed of the decision within the last few days and the team were told last night. If Sky are signed up until the end of 2019 that doesn’t give the team a year’s notice, they have months to find a replacement because the team can’t go into autumn without financial backing. When BMC announced it was pulling out, the team only secured a replacement sponsor in CCC by July, by which point there had been a huge exodus of their riders. This was different to Sky because all the BMC riders were said to be on one year deals meaning they had to find a job elsewhere but the lesso is that riders whose contracts are up won’t wait too long for good news, the best will be cherry-picked in the spring and the others will sign elsewhere during a Tour de France rest day. In short the deadline for a replacement is July but the sooner, the better for them.

Management is bound to be distracted by the search for a sponsor but the team’s staff is big enough to walk and chew gum at the same time, to have some people handling sponsorship and others on the road. They had Froome’s salbutamol case hanging over them last year and still won plenty.

Can they secure a replacement? For starters they have Ford as a vehicle supplier, a blue chip sponsor already on board. As for reaching other sponsors the marketing pitch should be easy to write given the team’s record in the Tour de France, the prize that counts above all others. Boardrooms might shrug if they were asked about taking over, say, Astana or Dimension Data but Sky’s success ought to open doors. No sponsor will buy in based on past performance, Chris Froome will be 35 by the 2020 Tour de France and Geraint Thomas 34 and if the team have Egan Bernal they’ll also need to secure the roster of millionaire domestiques that has been their modus operandi in stage races.

The chart for Team Sky’s budget shows the spend is a moving target, the sums involved to outdo rival squads go up every year so a replacement hoping for similar dominance needs to consider this World Tour inflation rate in order not to stand still. Landing landing a replacement sponsor is one thing, finding one to match the funding supplied by Sky – both the quantum and the flexibility to draw down millions as and when – is another matter. As Sky’s accounts have made clear the team has been able to draw down money almost at will, very different to most other sponsorship deals where a corporate allocates a fixed sum and it’s up to the team to spend it appropriately.

How much do they need? The headline budget is £35 million from the last set of accounts for 2017 but Sky’s sponsorship was £25 million as notes to the accounts show (screengrabbed above). It’s still an amount likely bigger than the rival team budgets and also it may well have increased since 2017 too. Still it’s what they call a “unique proposition”, come in with the kind of spending Sky has done and the Tour de France is practically yours. Not that the sum has to be matched, perhaps Sky are replaced but on a lesser budget to rival teams an we get to see just how good the management are?

Sky are leaving, seemingly a result of the Comcast takeover. The announcement is sudden, the 2020 season may seem distant but it means only months to secure a replacement but there is the prospect of being able to buy a franchise that has dominated the Tour de France and this ought to interest potential replacements.

137 thoughts on “Sky Reaches The End of the Road”

  1. Oh dear. Now I have Boyz 2 Men in my head.

    A post-Sky peloton will be interesting if no other big sponsor comes in. Not least because it will show if all the reasons the hater hated are true.

    Plus ça change?!

    • That’s what I was thinking too, regarding any potential loss of the team entirely – with them and BMC gone, that’s the two bigger budget squads gone. Would anything change? It would be interesting to see.

      I suspect it won’t, personally. After all, what Sky are doing with their despised train isn’t exactly new.

  2. As you point out, Sky will be liable for a hefty wage bill for 2020 onwards for a number of riders. It’s possible if Brailsford can find a backer that there’s deals to be done on that front and that Sky/Comcast will pay part of wages cost. If that happens you’d think Brailsford would have to find upwards of £15 million to keep some semblance of the current setup. That would seem quite plausible.

    The other effect will hopefully be that the continuing calls to make changes to ‘stop’ Sky will now take a back seat. I’m sure there’ll be plenty who would like to see the back of the team under any guise but I’d say a new team with a smaller budget would be the best outcome. Cycling doesn’t need to lose teams.

  3. Source for Brailsford only being informed “last night”? Several journalistic sources stating it was 1-2 weeks ago.

    In case any case, all those Sky dislikers will now have one major reason to look forward to 2020.Their demise (as Sky, not yet completely) seems to coincide with the inevitable Froome decline. A fifth Tour before the end would seem appropriate. G got his big win before the end and Bernal will flourish wherever. Sky had a good run for a bunch of hopeless Brits from a country that had never stood on top of a grand tour podium before.Eight wins later, all with British riders, they can hold their heads up.

    I won’t count them out just yet though. Brailsford is not the kind to walk away. Those cheering the end might do well to check up his sleeves…

  4. “James Murdoch who has been the team’s biggest supporter.”
    I’m sure a few would argue that honour belongs to RonDe!

    I don’t think Sky, or the team behind the name rather, will disappear completely. I think they will get a new sponsor and carry on potentially in a more restricted way with a smaller budget. A compromise might be having a very good Tour squad but not the depth that allows them to deploy effectively 2 separate teams and dominate the Tour and the Vuelta, or Giro and Tour. You’d expect Kwiato might have to move on to. I’d expect Froome to retire at the end of this year. With him retiring even with Sky staying on as mega money sponsors the GTs will have been harder to come by anyway, so I expect this year to be the end of an era.

    • If I had the finances of JM you might be right. But I don’t. Neither would I be sad if Sky completely finished. What’s done, is done; the wins are in the books. If it is to be the end I can only hope they finish in a blaze of glory to put the lid on the fact of where they started and where they ended up. All three grand tours in one year? Surely not an impossible aim for their tenth, and maybe final, season.

    • Richard, I believe Froome has talked this fall about racing for several more years. Assuming he means it and performs well this year, it will be interesting to see if a new sponsor would want to move forward with him as the face of the team or not. As sad above, he’ll be 35 and if not in 2019, then the inevitable decline must be on everyone’s mind.

  5. Will this mean that Ivan Sosa, said to be destined for Sky but not yet confirmed, is in doubt?

    On a more general point 35M€ out of the overall teams budget must surely have an effect on salaries for middle ranking riders.

      • What would you do if you were Sosa INRNG?

        Quite interesting? He’s so talented I can’t believe Trek wouldn’t take him next year, so what’s to lose for him getting a year to see how the best team functions and maybe take that forward elsewhere?

        The person who sprung to mind immediately was Ben Swift… he needs to really perform this year or it could be a bright career unfortunately fizzling out to an early retirement?

  6. The point about Sky’s ownership is interesting. Seems no media outlets have picked this finer legal point up yet. Perhaps Sky still want to own the team but design to spend less on it?

    • Surely that can’t be the case…?
      34m is a drop in the ocean to Sky considering what the spend elsewhere.
      And if you compare the public profile to what a football or similar sponsorship costs the return was spectacular.
      It would seem bizarre that they would take sponsorship from one team with a proven structure and leadership and put it into a smaller team starting from scratch – that makes no sense.

      • My initial thought was if they are liable to rider wage as the owner anyway, why do this out of a sudden.

        As Jim below layed this out, it’s actually not the case. Sky is not exposed to rider contract through Tour Racing because it is a limited liability company. They can let the company go bust and sell off the bus and that’s the end of the story.

        The negative publicity may compel them to give riders a good severance package but that maybe it.

        • I don’t think they can just ‘let the company’ go bust. Liquidating a company is not cheap, but bankruptcy has implications for the directors if they can’t pay creditors.

          • It is cheap considering the outlay – probably a few thousand pounds if they did a Company Voluntary Liquidation. It is not a complicated entity really – bunch of liabilities (mainly rider contracts), limited assets – vehicles and other bits.

            What implications would there be for the directors if the issue that has caused the company to be no longer viable as a going concern is the fact they have lost funding? A director has a fiduciary duty to run the company in the best interests of the shareholders and to promote the company unless it is insolvent which technically in this case without funding it would be.

            I am not saying this is the way it will go, as I think the company which team sky operates under will either be passed on or just closed once all affairs are addressed when new owner/sponsor comes along.

  7. I think this is a litmus test for pro cycling and cycling industry as a whole.

    Can the industry attract the same level of investment into one team?

    If yes, then the sport is in a relativity good shape with long terms commercial returns that a company is comfortable will be profitable. If no, then the risk managers in large companies are betting the sport is on the way down and a risky proposition with little to no return on investment.

    • Its a sport not an industry. Big Teams – US Postal, Telekom, Renault, Raleigh, Faema etc etc – have come and gone, the sport has continued. Riders might have to ride for less or some other team will up their spend and dominate.

      • Agreed Richard S.
        Although I still feel it’s abhorrent that riders are treated in this way year in year out.
        We all know the TDF will happen every year, likewise many of the bigger events, they all need riders. How an earth cycle has grown into one of the very few sports with tentpole events that hasn’t found a way to empower it’s participants rather I still find upsetting.

        I realise events do not have money to split between participants and teams but there just has to be a way of structuring elite road racing so it’s less of a wild west approach. There’s ways they could even improve visibility and audience with more recognisable teams than this constant changing.

        • How do you feel bad for people who get paid 6-figures to ride a bike?

          It’s very easy to see why cycling has a very unstable structure… the revenue stream isn’t clear at all. Other sports have a very strong revenue stream that flows directly to the teams, and mostly to pay team salaries. Cycling doesn’t in any way, it’s dependant mostly on sponsorship, and much of the sponsorship is closer to charity/donations in nature.

          • It’s unstable as you say, but the reverse is that it is also very accessible, a new team can come in and start the Tour de France without having to build a 60,000 seat stadium, build a fanbase of millions, rise up through leagues etc (all good things but expensive). Team Sky may be leaving but couldn’t have come in if there were barriers to entry too.

      • I agree it is at its very core a sport and will go on even if there is no money. But in its current form there is no getting away from the fact this we are talking about professional sports teams that require funding to be so. In addition there is a larger industry that surrounds cycling, bike companies, distributes, clothing companies, etc etc.

        The largest pro team backer can be argued is representative of the overall health of cycling industry, not the basic sport (people will always ride a bike).

        US postal in the US drove cycling popularity in the US. After they left the cycling industry in that country declined. Sky similarly in the UK have ridden the wave and contributed to the wave. It is interesting and not likely to be a coincidence that they pull out of pro cycling at the same time as Evans Cycles is/was on the verge of bankruptcy.

        The next backer is a litmus test of which way the industry is heading.

        • I don’t care to be honest. I’m interested in the sport. Somebody will build bikes, somebody will sell them, and somebody will race them. Whether or not somebody who does none of those things is able to make money out of it is of no interest to me whatsoever.

          • Exactly. People can’t get over the dogmatic idea that more money means better sport.
            If Sky disappear the sport will carry on – and with more equality in spending. It won’t be perfect, it won’t be ruined.

        • “It is interesting and not likely to be a coincidence that they pull out of pro cycling at the same time as Evans Cycles is/was on the verge of bankruptcy.”

          I think you’re conflating things here, personally, in claiming a lack of coincidence. Speaking as a long-time consumer, Evans aren’t struggling because of a declining wave – Evans are struggling because they’re a physical retailer having to compete against the online warehouse discounters.

          I started cycling seriously as a dirty dirty mountain biker when I was 14, so a few months shy of 20 years ago. Being a teenager, Mountain Biking UK was my magazine of choice.
          MBUK used to give away an Evans catalogue a couple of times a year (those were the days, paper! Imagine…) and always carried a double page advert for them too. It struck me even back then that Evans were “bl**dy expensive” compared to the likes of Wiggle and the emerging Chain Reaction, let alone the smaller boys like Merlin, Stif and Winstanleys – even Evan’s “Sale” prices weren’t much different to what Wiggle and CRC were offering by default.

          I stepped away from actually cycling for a few years in my early 20s (I still followed road and MTB racing) and when I came back a handful of years ago, I was slightly amazed to find that Evans were still going.

          However, the Evans I found were now a lot closer to CRC and Wiggle in terms of online prices, and would also Price Match anything found online from those two if you filled in a form and sent a link to the product. So they’d gone from being really expensive (well, basically RRP for everything) to being much more reasonable – and as they have a branch where I live, I started to become a more regular customer. Delivery to store or collecting stock items can be more convenient than conventional mail order.

          So add this more aggressive pricing policy and Price Matching to their collection of retail outlets in presumably expensive areas (most branches I’ve ever seen are in cities rather than retail parks) and you’ve got a timebomb waiting to happen – the obverse of which is, if physical retail was cheap you’d think Wiggle and CRC would do it themselves; or also, how much margin must those two still be making despite the heavy discounting if Evans could afford to do it?

          I’m just surprised it’s taken them as long as it has to go under, and I think we will see Evans reappear as basically an online-only retailer, perhaps with a few stores crowbarred into branches of Sports Direct as a competitor to Decathlon.

      • +1 Industry vs sport is far from new. In 1930 Henri Desgrange more-or-less threw the bike industry out of his TdF, making up the revenue difference with a publicity caravan.
        If I was the king of pro cycling I’d have LeTour (maybe every 4 years?) conducted by national rather than trade teams, though I’d probably stop short of requiring that the riders show up with their own handlebars and saddles to be fitted to a spec-issue bicycle. While the bike industry and pro racing certainly have a symbiotic relationship they are not one and the same!

  8. Recent history suggests that it’s unlikely there’ll be another Sky in terms of budget size for a while. An interesting chapter in cycling is coming up.

    • Errr. And you say that without a shred of evidence?

      What recent history are you talking about? You mean the recent history where there has always been a financially dominant pro-team – Sky, Astana, Discovery, Postal etc etc…

      You never know Shane Sutton could land a medal haul at the next Olympics and suddenly we have a Chinese state sponsored team ripping up the peloton. An Exec at Samsung might suddenly get into riding. The old Postal rider now at Google might sequester some google dough to plough into a new US led team.

      I hate that cycling relies on this – but the idea that a new dominant team will not arise goes against recent history no?

      • Find a team in the last 20 years that has had a budget as big as Sky’s, even adjusted for inflation. There’s your evidence.

        I hope you can see that the rest of your post relies on a strawman

      • More likely sponsored by one of the tech unicorns. Team Alibaba or Team Tencent? Neither sounds particularly attractive. Team Huawei would be cool as it is rubbing the west in the face.

        • Happy to if you come in with actual figures – how much was La Vie EnC budget? In comparison to the second highest, likewise Astana etc?

          Also if you’re adjusting for inflation wouldn’t you also need to take into account exponential growth of budget in peloton’s wealthiest team? Is Sky budget really that much higher than Astana 09?

          I was just stating that there has always been a wealthiest team but would like to know the figures your argument rests on?

      • There is actually a Chinese super team in the works in 2020 with Shane Sutton and Brian Smith attached. At launch they claimed to be big budget and aimed to take on Sky, albeit with a commitment to Chinese riders as well. Perhaps they will now be looking to buy some Sky riders instead?

  9. I hope this team disappears – and takes their murky behaviour with them (‘murky’ is being very kind).
    At the very least I hope that any new budget will be significantly lower than the present one and we’ll no longer endure a TdF where almost every crucial stage is a procession led by a train of some of the world’s best riders working as domestiques.
    I’d also hope that the seeming power they wield when it comes to what rules are and are not applied, and how, will be diminished.
    Good to have the Murdochs out of the sport. Good to have them out of anything.

    • “Murky” is the name of all professional sports. The human body is not made to handle all that pressure on beatroot juice and a good night sleep. People need to grow up or watch … audaxes.

    • Did you say that about Astana with their bustings? Or BMC when Sammy Sanchez got done? What about Bahrain-M with Siutsou?

      You should remember you’re talking about peoples jobs, livelihoods going down the sink when you say you hope a team disappears.

      As for processions… this has been a part of cycling for years? Cycling is quite boring when it comes down to it… I love it, but you wishing for a different sport if you want think without Sky it will get magically more interesting. Don’t forget Dumoulin finished 2mins ahead of Roglic this year. So minus team Sky you’re only going to get the Dumoulin show anyway.

      • Yes, no and it past me by.
        They’ll get other jobs with other teams mostly and no-one’s going to be left in penury, so let’s not get the hankies out yet.
        It has: dominant teams have come and gone – and in between these times the TdF’s been more interesting to watch. Also, other than Sky and Postal, I’ve never seen other teams dominate – Indurain won loads, but Banesto didn’t ride like this from what I recall.
        That was just this year’s result.

        • Again where is your evidence. In recent times Banesto has handed onto Telecom, who in turn handed over to Postal (I’ve skipped over Mercatuno because Pantani was doped out of his skin, and the Willy Voet affair effectively created a unique set of circumstances), anon to Sky.
          I don’t think there is a team who has won that hasn’t had a bigger budget than most. So budget does predicate the best riders etc.

  10. I doubr very much if Sky, the company, has given guarantees directly to any of the riders. It sounds like they’ve only contracted to provide cash until the end of 2019. Should no-one else step up to fund the team, then Tour Racing Limited goes in to receivership, the buses get auctioned off to pay any outstanding debts, and the riders are left to whistle. It doesn’t matter who owns the company, that’s how limited companies work. And since the riders themselves are mostly (all?) paid through personal service companies, they’re pretty low down on the list of creditors.

      • Wise comments Jim. Maybe the riders needs to be a little more doubting about multi-year contracts too – or accept the fiscal disadvantages of being mere employees rather than contractors.

    • Wouldn’t they have a case against Sky? If it was a company by itself they’d be stuck but given it’s 100% owned by Sky the parent company is on the hook, no? Especially if the parent company that’s responsible for liquidating it. But this seems technical, I doubt it’d come to this.

      • Sky is the major shareholder and also the main backer of Tour Racing Limited. If their contract as the latter comes to an end, then they potentially lose all their original equity stake, which currently amounts to £85 for Sky and £15 for Fox. The fact it’s a 100% owned subsidiary makes no difference. Some may feel they have a moral obligation to go further, but goo luck trying to argue that in court.

        When Digital Terrestrial TV was introduced in the UK almost 20 years ago, ITV set up a subsidiary called ITV Digital in an attempt to build a pay TV platform to rival Sky. They didn’t have the pockets to outbid Sky for the rights to the Premier League, so they instead bought the rights to the second tier football competition (it’s called The Championship now, not sure if that was the case then) for some over-inflated price. The number of subscribers this actually attracted was risibly few, so ITV just threw in the towel and let ITV Digital go bust. There was lots of huffing and puffing in the press from football chairmen who had budgeted on a large windfall from TV money, and the Football League even took their case to court, complaining how unfair it all was. Their case was dismissed almost instantly due to lack of parent company guarantees.

        That’s how limited companies work. Your risk is limited to your equity stake, in this case that’s a whole £100. If the people you do business don’t like that they can go elsewhere or try to get guarantees from higher up the chain. I suspect that neither is the case here. Let’s at least hope that their bus doesn’t go the way of the Wiggle one (did we ever hear what happened there? Last I knew it was stranded somewhere in Spain.).

        • Jim is right,

          They are just a shareholder, whoever the directors are had fiduciary duty to act in the best interests of the company and promote it’s success but once a company is insolvent (as will be the case for Tour Racing Limited without funding, then they can just look to liquidate the company and walk away.

          The contracts are just liabilities for Tour racing limited. Whether it goes that way is another matter but if they don’t have to honour the contracts as they will signed with Tour racing limited not Sky itself.

    • In the event that the team is wound up, I’m sure that the team bus(es) will be simply returned to the lessors rather than auctioned off.

      The last financial statements indicate they hold only £170k in Property, Plant and Equipment which is not even enough for one of those buses. Maybe there’s a small truck in that, but certainly not team cars or buses.

  11. Having ruminated on this further (and expurgated Boyz 2 Men) one wonders how much Comcast’s exit is a result of Sky’s precious bad press, and if this is a lingering effect from Lance Armstrong on US corporate sponsorship of cycling.
    It could simply be a cost cutting measure. But does appear quite premature given the contracts and money in place. 2020 would seems more natural end point.

    • I doubt its cost cutting.
      Simply because it’s not a huge amount to them.
      It must be a bad news vs good advertising decision.
      And to them the bad news and fading impact of repeat wins doesn’t give them the bang for their back that sponsoring Sky had done. Although really it probably just comes down to James Murdoch not being there any longer. I doubt the public profile the team had really ever translated into great advertisement for them in terms of signing up new users, would be very interesting to see what even the vaguest statistics might say on that. But despite liking Sky and their victories I never once thought about getting the service.

      Although admittedly I would get some Quick Step flooring if ever I was in need!

    • In the 7 days preceding the confirmation of the Comcast purchase of Sky at an all-cash price of over 38billion USD, Comcast benefited to an amount of over 10 times the annual cost of Team Sky due to the 1% currency fluctuation that occured that week – specifically the fall in the value of GBP.

      Their decision to exit is not a financial one, it is purely a corporate house keeping move.

  12. Hard to believe that Geraint Thomas signed the biggest contract of his career with a clause that the sponsor could pull out after a single season and he’s left without a contract. Inring, as you mentioned, Sky is the team owner, not just a sponsor, the issuing of multi-year deals a few months ago, and now pulling out is a bit odd. This does not bode well for the future of big time cycling.

    • I can not imagine that Bernal and Thomas did not take into account the possibility that Comcast would withdraw from the sponsorship as they signed their contracts.

      Bernal’s contract extension went through the media in early October when the Comcast deal was already over. There has been some speculation that Comcast might withdraw for some time, Mr. INRNG has been pointing this out for some time.

      Therefore, it seems likely to me that the parent company is in some way liable for the contracts and Comcast does not come out of the contracts simply by liquidation of the operating company.

      • Even if the owners were liable for the riders wages, the riders wouldnt have a team to ride for.

        “Here is your paycheck, Mr. Bernal. Oh by the way, you are sidelined for the next 4 years of your career because the team folded”.

        The people getting caught in this will be the staff, the youngest talents and perhaps riders who only having a season or two left in the tank. The rest will find other teams to ride for – even at a lower wage.

      • I think Jim’s point is that they are liable, to the tune of $100 and no more. Wah wah wah wah wah. If you’re a rider, unless your contract is somehow binding on the new parent company, you are SOL. A shame, though, they’ve got an armada of young Columbians ready to ride that train. That’s a great young team waiting to happen.

        Might I add that the comments on this site are often as good as the article. Thanks to all for caring about the sport we love. There will still be races, and great racing.

  13. More bad news for professional cycling. I’ve never been a fan of the team but would prefer to see other teams take their game and budgets up a notch then to see the most successful team ever toppled.

    • Far more sustainable for the one rich team to have a smaller budget than all the other teams having to (somehow) acquire more money.
      The money simply isn’t there for cycling – never will be.
      And more money doesn’t equal better sport.

    • It’s not great for the sport but just yesterday Jumbo got a big new sponsor in Visma and in general there’s never been as much money in the World Tour as there is now, the same for the Pro Conti ranks, and more broadcast hours etc. The test is how this fares all in a big downturn rather than one team who may well get a replacement.

      • This is what’s so curious about the sport as a whole, at the moment.

        A few things:

        When you say “there’s never been as much money in the World Tour as there is now, the same for the Pro Conti ranks”; whilst I don’t doubt this to be the case, where is it coming from and going? Teams in Britain and the US seem to be disintegrating, folding all over the place, usually due to loss of a key backer and being unable to find a replacement.

        Finally, further to the discussion on Twitter with Will Fotheringham and Richard Moore about durations of team sponsors that aren’t states or lotteries (and that there’s only 6 longer than Sky anyway), what’s the average length of existance for a team?

        Rider contracts are usually two years, sponsor contracts rarely much longer than that.
        How long do teams themselves usually last?

        I ask because part of the discussion revolves around Sky’s ownership of the team via Tour Racing, which is seen as unusual because usually teams are owned by management. We know LeFevre and Madiot have been in position a long time (coincidentally with two of those 6 sponsors, FDJ and Quick-Step) but how long do teams usually last, and do they ever successfully change hands in terms of management? It just got me thinking of Lampre turning into UAE, whether Bahrain were new or not, stuff like that.
        Even Sir Dave has been in position the whole length of Sky’s existance, after all…

        • Where is it coming from? All the sponsors, take EF which will be paying more in sponsorship than Cannondale, or UAE which has increased its spend, Groupama which adds to FDJ’s budget etc… and Sky’s budget which has gone up and up etc. But we’ll see if this continues, we’ve got old data and things seem to be calming down.

          Where does it all go? Mainly going on wages, the “prune juice effect” where increased funding coming in the top goes straight out to the rider wages.

  14. I would imagine the mobile and land lines between Majorca and the rider’s agents and lawyers have been pretty busy since the news broke to the riders last night.
    Clauses in contracts are no doubt in legalese and many in number and are being picked over as I type in fusty rooms with bodies trying to categorise phrases into OK and not OK and does this affect this and not that.
    I remember about 30 years ago arguing with a German Lawyer the significance of a capital F describing First… in a Company document that took an hour to rationalise. IIRC it was all about time or primacy, thankfully I have forgotten the outcome.
    I guess there might be some comfort in TRL owning to contract but realistically I would not want to be a middle of the road rider at Sky.
    G has his wedding business, Froomey no doubt a comfortable bank balance, others have age and ability on their side but some will be shivering at the thought of 2020 and the hoops they will have to ride through to get a contract post-Sky.
    Then there’s all the back-room staff, DS’s and even Brailsford himself, no doubt he is comforted by liquidating his own company a year or so back with very healthy cash balances, but still as brilliant as he has shown to be,imo, what manner of interpretation will be put by others in cycling on some of the experiences along the way to such success.
    Will it be” Infamy, infamy they’ve all got it in for me”!

  15. Everyone here knows how I feel about this team. “The vision for Team Sky began with the ambition to build a clean, winning team around a core of British riders and staff,” Brailsford said in the team’s statement. Well, one out of two then?
    Now let’s see who might pony up 35 million to own a team that was booed and had piss thrown at them at the sport’s biggest yearly event. How about a petro-sheikh who wants to one-up his rivals in Bahrain or the UAE? You know, that guy who had nothing to do with the murder and dismemberment of that journalist in Turkey or perhaps the Sprawl-Mart heirs, who are doing so well with the cycling clothing company they bought recently? Maybe someone named Trump? Wait…wait…I got it….Rick Delaney!!!!

  16. From the moment the takeover occurred, this was surely inevitable, sooner or later.
    And it’s happened sooner.
    Why pay £35 m for bad headlines and have half of France booing, and hurling abuse, as your team goes past?

    Where has James Murdoch gone to, could he come to the rescue in another guise?

    • He’s still at 21st Century Fox but due to leave soon. He’s on the board of Tesla and said to become the chairman, maybe they could sponsor but their cars don’t seem to have the range to handle a stage as a team car once you stick bikes on the roof which would be awkward.

      • Interesting point.

        Electrical cars are much more efficient at low speed around 30-40miles. There would also be less aero issue with the bikes on the rack due to low speed.

        Rescently Kia had to adjust down range estimation of some of their models because they aparently did more city miles during testing. So a Tesla doing 30 miles all day may exceed range estimates, which is currently at around 300km.

        Charging at night where there are no fast charging facilities may be more of an issue. Tesla can change batteries within 5 minutes, if they can swap in fully charged batteries even that could be addressed.

        Plus EF had been using a Tesla as a team car (read it from cyclingnews comment session, don’t quote me on it).

        • If a Tesla can handle the Tour team car duty (albeit with a bit of cheating, for example with a charging truck in-tow), it would be ultimate proof that the age of electrical vehicles has arrived and they can handle almost any situation.

          I doubt Tesla needs cycling to boost their brand awareness given the way they reach their audience. But it can be a great way to onvince those on the fence.

          • Also need to consider the other driving that team cars do on a race day.

            Even for a race like the Tour Down Under which minimises transfers thanks to the whole race being based out of one central location, each car can do upwards of 120km in transfers on top of the race route each day, plus running around on various other errands.

  17. At the very least, this is going to make for the most interesting (and ridiculous) transfer rumour mill the sport has ever seen.

    I will also be interested to see what impact it will have on the competition for 2020 WorldTour slots. If it becomes clear that Team Sky will be wound up and there is a slot open, I could see the realistic possibility of Pro Continental teams trying to get hold of Sky riders in the August window for mid-season transfers in an effort to gain an advantage in the last part of the year.

  18. They’ll find a new sponsor, just not one that will spend as much. This is why they’ve hoovered up the best stage races talent over the past couple of years. Froome, Thomas, Kwiatkowski, Poels will go at the end of the season but they will be replaced by the new generation

    • no mention of Sky on Team Wiggins website – are you sure they are involved? There are 18 Company logos up there so looks like they have plenty of other associations.

      • Sky appeared as a sponsor on the Wiggins shoulders in the first couple of seasons, but that seems to be it – it finished at the end of 2016 when both Wiggins himself retired and Sky were replaced by HSBC as sponsors of British Cycling.

        The team was set up for Brad’s hour record, primarily, then became an U23 team in more recent seasons. Their kit was supplied by Rapha for the first couple, and they’ve always had Pinarello bikes but beyond that I don’t think there was much other crossover of suppliers as components have always been from the SRAM empire rather than Shimano, and speaking of Empires there’s Giro in for other bits and pieces rather than Kask.

        It’ll be Le Col Wiggins or something along those lines next season.

    • Each to their own on taste, for me they’re heavy and very expensive although the threaded BBs are a potential great touch. Either way they’re owned by a fund with big backers, they’re likely to want to stay in the sport for all the promotion and visibility it brings. Bahrain-Pinarello anyone?

      • Fully agree on proper BBs (even if they’re Italian thread rather than BSA)! I’m staggered how many thousands people seem willing to spend on frames with creaky “press fit” rubbish. Another benefit of Pinarellos (and very few other brands) is they make good quality frames in very small sizes without compromising on geometry – handy if you are a small female or budding young junior. But I agree with you about the pricing.

      • “Bahrain-Pinarello anyone”

        That’ll never happen with McLaren now at Bahrain. Pinarello is is an LVMH brand as is Tag Heuer. TAG Group who sold Tag Heuer to LVMH and now own a big stake in McLaren .. and McLaren Group are already in a long-standing relationship with Specialized and do all the materials development for Specialized.

        Besides that, LVMH (through Tag Heuer) always take a competitive sponsorship position against TAG Group (as they do in Formula 1 where TAG Group are tied to McLaren whilst Tag Heuer are tied to Red Bull).

  19. flicking through their line-up, they only have 11 riders contracted past 2019..
    Bernal (2023), Castroviejo, Froome, TGH, Kwiatko, Moscon, Puccio (21), Rowe (21), Sivakov, Stannard, Thomas (21)
    – if this isn’t all tied up by mid-year, then the bulk of the rest are going to start drifting away similar to BMC this year… although I guess you could argue that that is a pretty good core to build around anyway.

  20. This is kinda sad news for me. I’m not a Sky superfan but their (and Team GB’s) rise is what turned this from a past time/ method of travel to sport that I love. As much as I follow the Classics, the GTs and read up on all the history and this blog, I can’t deny the fact the exploits of Wiggins and Brailsford are what got me hooked. It’ll be weird not seeing them on the start line in 2020.

  21. At this point it’s begun to feel more like a case of get out before you get guillotined. Cold, hard financial calculations have led to a decision that benefits Sky’s riders and the sport as a whole.

    • I’d tend to agree with this.
      There’s been a real souring of the whole Team Sky ethic that has particularly gained momentum during the current president-ship of Lappartient.
      What they couldn’t do with course design, legal battles and out on the road, the money men in suits have resolved.

      In hindsight, I think this may have been the correct decision. Sky and their team have left a British legacy and it’s far from all bad. BBC Sport have an article on the situation.
      But the knives were out and it seemed only a matter of time until the next problem reared it’s head.
      We’ll see if a replacement sponsor can be found. Sky’s contribution to the team is around £25 million, the rest is from partners.

  22. How about RZC Investments/Walmart? The new generations of Waltons love cycling and have transformed Bentonville AR with and extensive trail network… They also recently invested in Rapha.

    • Walmart would be awesome. I can picture their jerseys now; blue with “How May I Help You?” written on the back. They could hire some inexpensive Chinese riders to help expand the market. Their bike sponsor would probably be pretty crummy though.

      Disclaimer: I occasionally shop there. I just couldn’t resist making sarcastic comments.

      • If they really want to have their own team, a connected business like Rapha having connections with EF will certainly not be an obstacle.

        Pinarello were with Sky and Movistar simultaneously for a few years, it’s over a decade since Specialized were with only one WT team at a time, CCC is tied up with both CCC and also the youth team that Kwiatkowski supports, the list goes on…

    • That joke was already made above. Seems the buyers of RAPHA might be the same kind of business genius types as some named Trump, so perhaps they’ll pony up the wads of cash?
      I read recently somewhere they lost a pile o’dough in their first year vs the previous year when the brand made a hefty profit. The old, “Wanna make a small fortune in the bike biz? Start with a large one!”
      OTOH, there’s the Rapha founder, built the thing out of nothing + a lot of marketing BS = big profits….then sold it off at the peak to some dolts with more dollars than sense. Capitalism distilled down to it’s amoral essence!!!

      • Agreed on the capitalism distilled, but not in the guts of the argument. I’m pretty sure the Waltons are not idiots, and that they are instead bleeding Rapha cash – on purpose.

        Why would you want to lose money, you say? Because this is not their only venture and a loss here offsets wins elsewhere for tax purposes. Combine this with some debt rejigging (see: Sears) and a a few years from now the brand is dead and the employees out of work, but the owners are wealthier.

        • These are the Walton grandchildren, so what successful ventures have they created? RAPHA was all about 25% growth year over year, but the thing lost a big chunk the first year under their ownership. I’m far from a vulture capitalist so you could certainly be right, only time will tell whether the RAPHA founder cashed out at the top or not.
          This was an interesting piece on the situation
          The most interesting bit for me was this – “I responded that the clothing was secondary; Rapha created an image of cycling that cyclists responded to.” which is the reason for my antipathy towards the brand. A bunch of marketing BS about nothing.

        • Well, They did almost kill Colt this way. Actually both the private equity owner’s strategy to load it with debt to extract money & the fact that Trump is in power meaning gun owners are safe and there’s no panic buy.

          On the other hand, PE does collect business like we collect toys/bikes as well. Don’t they want brands to “disappear”. Rapha is expanding heavily previous year in expectation of future growth. They layed a lot money to open new venues. There’s even one in Shanghai now but a out of town-ish outlet park location is quite out-of tune with your usual Rapha city centre location. The judges will be out there as to whether this strategy is successful.

          • My suspect is that they are trying to fit a Walmart mode on Rapha. This collides with Rapha’s premium market position/strategy. Likely a disaster in the making. On the other hand from media interviews, this expansion appears to be also what the founder wanted (that’s why he went onto the capital market in the first place).

          • So as a Rapha member I’ll only add this:
            The ethos at the granular level is ‘Make riding better here, now. Expand the community. Ride hard and enjoy it. Represent cycling well.’
            They sell premium stuff. When it’s on sale, the prices are generously discounted. The kit looks and feels good. The club members are good enough folks to spend off-bike time with.
            I won’t argue the Waltons’ reasons – it’s megamondo-financioso – who cares? More to the point: who is gonna do anything about it?
            I do hope they treat their employees well, because they deserve it – they are doing a good job.

  23. Three points that seems to be missed by everyone are:

    1: Sky as an entity is unlikely to even be in existence come 2020 .. so it isn’t so strange that Sky won’t commit beyond the end of 2019

    2: 21st Century Fox still own 15% of Tour Racing Limited and I doubt that – having already spent $40 billion on Sky and lined the coffers at 21st Century Fox to the tune of $15 billion in the process – Comcast will be keen to buy 21st Century Fox out of their share of Tour Racing Limited

    3: Read the notices carefully and no-one actually says that Comcast are out of the picture – everything is about Sky which won’t even exist as a brand come 2020.

    Even if Comcast want to continue their involvement, it makes very good business sense for them to dissolve the current Tour Racing Limited structure.

    Finally, other contenders are the LVMH group. They are already invested in Sky and the team’s success through Pinarello … and Tag Heuer are no longer committed to BMC. Compared to the sort of money Tag Heuer invest in some sports (such as F1), Team Sky’s budget is peanuts.

    • Point 2 has not been missed out at all, the team press release confirms that 21st Century Fox will be pulling out at the same time.

      I think you’re reading way too much between the lines with regards to your point 3. If Comcast were restructuring and rebranding it, they would have simply announced that and changed the team name rather than announce the end of Sky’s backing.

    • To echo DaveRides a bit Sky will surely exist, they’re unlikely to drop the brand like that and why would they put the team through this (and string the media/fans along) if they secretly planned to stay? I can’t see this myself.

      • A brand like that? Sky? Comcast’s brands are much bigger and already have global recognition.

        Except for amongst cycling fans, the Sky brand means nothing outside of the UK, Ireland, Germany and Italy; but pretty much everyone knows what NBC and Universal are and that is important when you have ambitions to build a pan-European network for both entertainment and sports.

        The Sky name may exist as a production studio name, but that’s not what they were in sports sponsorship to promote .. they were promoting sports channels which already command advertising rates which are 5 times those of Eurosport (who they now plan to take on head-to-head). That was the whole point of the team … masses of free advertising on Eurosport which it would cost Eurosport something like £70 million / year to buy equivalent airtime on Sky Sports.

        • You seem to be using quite a US-specific meaning of “pretty much everyone”. Universal is a global brand, but NBC and Telemundo aren’t that well known outside the Americas.

      • Think about it. Comcast has a HUGE international audience through the NBC, Universal and Telemundo brands. Even if the Sky name continued in a minor way, they aren’t going to sponsor a team in Sky’s name for the benefit of a European audience when cycling is a global sport and they could be advertising to a global audience.

  24. I’ve flicked through the comments, so apologies if this has been mentioned elsewhere.

    One point I would add to the article, is although the budget has gone up, so has the wins (or GT wins anyway). The article refers to the Tour a lot, and implies the cost of winning the tour, but arguably the cost of winning the tour was the 21m 2012 level, and the cost of winning 2 GTs is the 34m of 2017.

    ie if the team wanted to “only” win the tour from now on then they would need to replace the 25m Sky sponsorship with 15m maybe? Focus on a core group of 10 riders? But if they wanted to carry on being competitive in all GTs and the classics etc then they would need to replace all 25m?

    ie they have more decisions to make other than “find a like for like replacement”.

    Interesting times however, and a shame in the UK in particular after one pro cycling dissolved and Aqua Blue.

    • Smart comment. A future team built on the Sky base that wanted to concentrate on the Tour and forego the extras of a monument here, a Giro and Vuelta there, would only need to retain a core of about ten riders. That said, Froome and Thomas are nearer their career ends than their beginning so how many years do they have in the tank as winners anyway? It all seems to coincide well with their declining chances in future years. One of them best win Tour 2019 as its likely to be their last best chance.

    • Good point – I’d imagine DaveB is travelling around a lot of offices with powerpoint with the investment options outlined as you mention. I would also imagine the staff are contemplating the new owners forcing a wage cut if they really do pay at the top of the rider market as the rumour mill would have us believe

      • DB’s already received calls from interested parties if he is to be believed. According to CN, they’ve got 10 riders owning more than 1mil euros a year.

  25. I’m no economist but is there anyway that Brailsford or any other director of a team who is looking to tout their team to prospective sponsors on the likely return on their investment?

    I mean is it even something they can even quantify? As any prospective sponsor to do a like for like for what Sky having been bringing to the table in terms of investment to cover the budget of team sky. Is £30 million layout going to bring in more than £30 million in sales/revenue for whoever would be looking to fill the void?

    Does this explain why most sponsors only stick around for a short period in cycling – raise their profile and move on?

    I mean even now when I see a bottle Alpecin I immediately picture Marcel Kittel flicking his hair back in slow motion fashion…

    • Seriously; the model is not unlike pro sailing and some motor racing. And, even though it’s a bit of a shock when our favorite (or most hated) team dissolves, evolution is healthy, and exciting.

      In jest; “You give us 30+ million and in return every time a drunk spectator throws a beer cup of urine on one of our riders you get yards of column inches. Then you get another mile of inches with the interviews of Froome whinging about it…”

    • I wouldn’t know the figures but a Tour win is worth a huge amount, particularly in the U.K. Front page news in all the dailies, prime time news coverage and SPOTY to boot. I’m sure it’s worth 30M but only if they are going to win the Tour. That is something only Brailsford is likely to be able to offer.

  26. Given all the speculation there has been for months about the future of James Murdoch and Team Sky post Comcast takeover, I find it hard to believe that Sir Dave and Co have not already been very discreetly sounding the waters outside Sky and 21st Century Fox. They know how long it takes to set up sponsorship deals.

  27. Great, informative article. Quite an event and the results will be interesting to watch and telling about the true state of the sport.

    As I got to the bottom of the article, my thought is that whatever happens to Froome especially will be the most telling. I wouldn’t pay him 5 euros. I wonder who would?

    • He’s worth more than Richi at the very least. Plenty would pay him a lot.

      How long can he keep winning is another question. On that note, Contador kept on being payed well despite not wining a lot in his last years.

      Deep down, Froome’s very much like AC, he would out Contador Contador when situation requires. Sky just hadn’t let that situation arise often. So potentially a decaying Froome could be very entertaining to watch.

    • If you wouldn’t pay a 6 time grand tour winner 5 euros, a guy who is automatically the top favourite for any grand tour he enters, then that only proves you’re an idiot. As it is he gets paid 4 million euros, apparently.

  28. One person is being overlooked.

    If I was MTS / Astana / Trek/ Movistar etc I would get a very large cheque out for Tim Kerrison. Movistar need him more than most, Trek too.

Comments are closed.