Lotto-Soudal Budget and Accounts

A look at the budget and accounts for the Lotto-Soudal team. While other squads have seen budgets soar over the years, this one’s not kept up. The team has been a World Tour stalwart but it faces headwinds if it wants to remain one.

The company behind Lotto-Soudsal is called Captains of Cycling CV. In 2020 this included the men’s World Tour team, the U23 men’s development team and the Lotto-Soudal Ladies squad.

Lotto-Soudal’s total income for 2020 was €15,919,466 according to the audited set of accounts lodged with the NBB, Belgium’s central bank. These are the latest accounts available.

Lotto Soudal budget accounts

Here’s the screenshot that shows total operating revenue (bedrijfsopbrengsten), sales (omzet) and total operating costs (bedrijfskosten). As you can also see the bulk of the money was spent on services and diverse goods (diensten en diverse goederen) and salaries, social charges and pensions (bezoldigingen, sociale lasten en pensioenen), these two lines make up almost all the budget.

2020 was the year the coronavirus pandemic arrived and much of the cycling season was disrupted, with big races shunted to the autumn. The team signed Philippe Gilbert, Caleb Ewan took two Tour stage wins, they finished mid-table in the victory rankings and a more modest 17th on the UCI tables. Financially the pandemic had a direct impact on the team as riders took a temporary pay cut so the €15.9 million sum would have been higher in a normal season.

€7 million on wages, and another €7 million on other things? That’s what the accounts suggest… but not so fast. This is where things get more complicated because every pro team spends most of its budget on rider wages, at Ag2r it’s been 70%, 73% chez Groupama-FDJ and back when Sky published detailed numbers 80% went on wages. Lotto-Soudal can’t be so different. After all, keeping a team bus topped up with diesel or paying service course rent is small change compared to the wage bill. Plus if we scroll through the accounts, notes at the back report 43 employees. We know they had 28 riders and once you add on managers, mechanics, doctors, soigneurs, PR and so on you can easily get past 43, a lot more people are involved. So what’s more likely is that they have a core of salaried staff and then hire in others on top as contractors and service providers and a chunk of the €7 million spent services is part of this, plus salaried riders in the first €7 million could get bonuses or image right payments from the second €7 million pot too. I can’t prove this but it’s the most likely explanation. The question is what share of this second €7 million is spent paying riders and staff, the best guess is that it’s about half.

Here’s the budget over the years. As you can see it’s risen, but not at as much as other teams (the Sky/Ineos budget doubled over the same period), we don’t have all the data from all the teams but squads have seen wages rise significantly and as a result budgets have increased. Less so at Lotto-Soudal. Note 2020 still could have been a record year, remember the pay cuts taken by riders because of the pandemic suspension, this means the reported number was reduced exceptionally, it’s bound to have risen for the 2021 accounts which will be published later this summer.

The team has 42.5 full-time staff and 0.1 part-time staff, an average over the year and they worked 69,175 hours which works out at 31 hours a week and the wage bill for these salaries (remember, others might be hired as contractors) was €7,708,390, or €111 per hour which is… almost meaningless. Still, the number of staff and the hours worked tells us something?

Notes to the accounts mention that Lotto is the biggest sponsor, Soudal is next, then Ridley bikes after them comes clothing sponsor Vermarc. Together they supply 90% of the team’s income with smaller sponsors and income from race organisers making up the usual small top-ups.

The accounts also include an audit report from accounting giant EY and they give Captains of Cycling a clean opinion, there’s nothing contentious.

Ask people to name a Belgian pro team and chances are most reply with “Quickstep” rather than Lotto-Soudal, Intermarché or Alpecin. But Quickstep aren’t legally Belgian, the company behind the team is called Decolef and run out of an address in Luxembourg. UCI rules allow a team to choose their flag, any flag. This matters because different countries have different laws, rules and tax rates. Some pro teams can shop around for the cheapest jurisdiction, others can’t. Lotto-Soudal is sponsored by the Belgian state lottery, the government so it can hardly be run out of another country, there would be an outcry. In Belgium the headline contribution from employers is 33%, eg pay Thomas De Gendt €1,000 and you pay an extra third on top in taxes; in Luxembourg this employer payroll tax half that or less but these are headline figures and don’t necessary apply to the teams.

Now it’s fine that a team meets its local obligations, worthy even. Only this good practice is a problem when competing with other teams. Just as teams race against each other, they also compete to hire and retain the best riders. It’s here that operating out of an expensive country has its costs, a proportion of the budget paid into the team by the Belgian government in lottery sponsorship… goes back to the Belgian government in social security payments. The point here isn’t to review Belgium’s tax arrangements – this is a cycling blog – more to show that of the money paid into the team, a lot has to go back out on taxes when other teams can keep a greater share if they’re run out of lower tax countries. It’s the fiscal equivalent of pedalling into a headwind for Lotto-Soudal in their rivalry with Luxembourg’s Quickstep. If you played Velogames and your fantasy credits got taxed differently according to the country you picked you’d surely opt for a tax haven? Team managers might think the same although they have to respect their sponsors and make wider considerations about their image and so on.

The point is comparing headline budgets is superficial, a Euro spent in one country has a different value in another. So even if we had all the team budgets and could compare numbers it would be fun but only tell half the story. The ideal metric to compare team budgets would be the net salary paid to riders, to take the amount earned by riders on each team and compare.

As for other teams, there’s no data for the whole World Tour. There are sometimes lists of team budgets floating around the media, usually during the Tour de France, but the numbers just don’t tally with the audited accounts (this blog’s done Ineos, Ag2r and Groupama-FDJ… and should do more teams in the coming year). One in 2016 said Lotto-Soudal was on €14 million when the correct number was €17.2, one fifth bigger. So if the numbers are wrong for those teams that make accounts public then they’re probably wrong for those teams that don’t.

The Future
Let’s not work the crystal ball too hard but Lotto-Soudal are one of the teams at risk of relegation from the World Tour as explained in the recent “2022 Points Race” post here. This would be a disaster, part of the team’s remit in the annual report is to have (my translation) “a Belgian team present in the international peloton at the highest possible level”, to get relegated would be to fail in this stated goal. Even if they get enough UCI points to stay in the World Tour, we know co-sponsor Soudal is off to join arch rivals Quickstep next year, a major source of funding is about to end. Can they find a replacement? They have to, it’s hard to imagine Lotto alone stepping up. Hopefully a new co-sponsor is being lined up and can be announced during the year; if not they’re in trouble.

46 thoughts on “Lotto-Soudal Budget and Accounts”

  1. I have a soft spot in my heart for “Red Lotto”. I could see from the outside that things were kind of slowing down, per se. Really bums me out to hear the uphill battle they face; plus they’re the MPCC “good guys”.

    It’s an outright face slap to know Quickstep is the favored Belgian squad when they aren’t truly Belgian. Is this something Lefevere cares about…probably not when he and his riders are paid quite handsomely. Plus they just win a ton (see MPCC remark above)

    Maybe the Belgian backers just need to “pony up”. I understand that in itself is hard to do as well, but I really doubt the other country backed squads have experienced the same issue (Astana, UAE, Bahrain…)

    • Soudal’s departure has been in the works for some time and so a replacement has time to come in but we’re talking six months, riders/agents etc will want guarantees.

      Lotto does have this pan-Belgian mission which means they have to have both Flemish and Walloon riders. New signing and neo-pro Arnaud De Lie is an important rider for them here. But can the lottery cover the whole team? The Captains of Cycling entity was originally founded in order to distance the team from Lotto and give it a bit more commercial freedom. Fingers crossed.

  2. “the headline contribution from employers is 33%, eg pay Thomas De Gendt €1,000 and you pay an extra third on top in taxes;”

    Is that quite right? Surely if the contribution from employers is 33%, then Thomas De Gendt only gets home the 67%. Which means to pay him €1,000, you need to pay an extra 33/67 = 49.25ish% on top.

    (although it may well be the case that contractors being paid for services and image rights face a different tax rate.)

  3. I’ve felt for a while now that the Lotto team have suffered in trying to compete head-on with Quickstep, that’s an impossible task.
    Is this an opportunity for them to renew themselves?
    Not that I have a strong view about it but is it odd that government funding pays ‘foreign’ riders?
    Can / should the team become more ‘Belgian’ if it has to cut its cloth?

    • It’s risky, you really limit yourself, even if it’s Belgium we’re talking about where there are a lot of riders. Plus riders who are Belgian could almost expect a contract which is not a good thing.

      I have hypothesis here that all teams that define themselves by a particular narrow mission – eg nationality but could be left-handed cyclists, whatever – are doomed because they have to fish in a small pond. See Euskadi which was Basque/near Basque only (it’s come back but isn’t Basque any more) or Colomba Es Pasion as when rider is world class other teams will likely bid for them leaving only the average riders for the team; Breton team Arkéa-Samsic went shopping for Quintana after all. It’d be nice to be wrong and see teams with strong local identities but it’s probably very limiting, especially over time.

        • Yes, the exception that proves the rule in a way because they don’t have to win, simply competing in a race like Milan-Sanremo proves their athletes can manage their diabetes whereas other teams/sponsors demand results. The team probably has the fewest wins in the Pro Conti ranks… but a following on social media that dwarfs many World Tour teams.

      • Both cases you cited ended up being shut up for reasons which weren’t strictly related to the problem o fishing pond you’re hinting at.

        Colombia es Pasión wasn’t focussed mainly on results, so they needn’t run on top athletes anyway; they often acted rather, officially or not, as an independent development juvenile team, even when they actually had a Pro Conti licence. The project eventually folded because their strong stance on doping clashed with a second positive after Paredes’. They had committed to leave cycling in case they had further cases. Soon (less than a month later) it came Juan José Amador’s quite improbable positive test for boldenone – which after one and a half year was finally proved as a false positive, but by then the team had gone for good.

        Several people suspected the whole story depended on the strong political and ethical conflicts within Colombian cycling. Quite paradoxically (or not) antidoping was used to put an end to one of the “cleanest” project in Colombian cycling, which had be running at different levels for some 15 years – which isn’t bad at all in modern cycling. Hard to say it wasn’t sustainable for structural reasons.

        Euskaltel Euskadi also struggled essentially because of internal conflicts, in this case between the “historical”management and the main sponsor. It’s not like their original policy (Basque riders *and* riders who had been grown by Basque teams since their juvenile years, e. g. Samuel Sánchez) prevented them to collect decent results for their budget. Truth is that for some reason I can’t fully recall they had huge troubles with the point system, which is a little strange given that in terms of absolute results by a handful of top riders they weren’t that bad. They were consistently getting top-10s in *a couple* of GTs *every year* since 2006 included, more often than not at the TdF, besides the Vuelta; Samuel Sánchez got some GT podia, besides the Olympic title in 2008; since 2009 they had been winning GT stages *every year*, normally high-impact ones, with Nieve, Antón, Izagirre, besides Sánchez. Actually, they hadn’t been sitting lower than a 14th place in the UCI’s team classification since 2007, I think, which in theory should have kept them safe. They weren’t prolific in terms of total wins, that’s for sure. And probably winning a Queen Stage in a GT, although huge in sporting and visibility terms, doesn’t pay off much in UCI points.
        However, they also had been running for nearly 20 years and were having a great moment in sporting terms before suddenly declining between 2012 and 2013. So, I wouldn’t say that it was about their peculiar recruitment policy *as such*. It was more about how their structure might work pretty well in the general economic context of the sport, but struggled within the frame of the “UCI points” concept, plus the tensions which such situation made emerge within the project itself.

        • Interesting.
          I still think it strange that the Belgian Lottery pays for non-Belgians on the team, unless that was Soudal’s contribution?
          In which case, if they are pulling out…?

          • Why wouldn’t a (the) belgian lottery pay for foreign cyclists? At least they shouldn’t differentiate between Belgians and citizens of other EU member states.

            Concerning Euskaltel-Euskadi; the most famous sporting project of the Basque countries is of course the Athletic Club, the most succesfull spanish pre-war football club and still one of the relevant football clubs of the country (and among best managed financially while still remaining a club – e.g. owned by it’s members). Famously only players of basque descent or players learning their trade at basque clubs play for Athletic, including French players (Lizarazu, Laporte) or Basques of african origin such as Jonas Ramalho and Williams brothers.

            For a long time they fielded only players from their academy (as also Real Sociedad and other basque clubs did), but circa from 80s they started to lure players from other basque clubs. Erreala responded by breaking the “Basque only” policy and is the more succesfull since – albeit sometimes playing in the second tier, while Athletic remain one of the three never relegated La Liga founding members…

            It seems it is still possible to voluntarily curtail the availaible talent pool and remain somehow competitive even in the probably much more ruthless elite soccer level. Of course, Athletic Club is not only a sporting project, it became a kind of cultural institution and it’s strict but ever loosening policy is probably part of the reason they are still relevant – at least domestically. They also have one of the best spanish football academies (perhaps still the biggest source of spanish national team) and their young stars tend to remain because of a strong basque and club identity bounds. Some “top” level players never left Athletic (Julen Guerrero, Iker Muniain)…

            On the other hand, Athletic was absolutely dominant a century ago (by far most spanish titles before the birth of the pan national league system), one of the spanish heavyweights until 1950 (even without civil war emmigrants) but after – and after the starting globalization of football – they became less and less succesfull. (League title and a league-cup double of the supremely talented early 80s generation are the last and only relevant trophies since 50s; there are two recent supercup victories (gloryfied pre-season friendly) in clashes with Barcelona, several lost finals (defeat by Atletico – actually a former Athletic Club spin-off founded by Athletic members relocating to the capital – in a Europa League final under El Loco Bielsa…)

            I suppose it would still be possible to have a basque-only or any nation-only WT cycling team but as cycling talent pool is growing globally, it would be probably less and less sustainable. Of course, unless you are Slovenia.

          • There’s a couple of Aussies on the team, notably Ewan, who let’s assume is on a healthy salary?
            I’m not sure of how confrontational Belgian politics is but for sure if that was Britain there would be a rumpus about funding foreign riders out of British lottery funds.
            And other EU riders as well now 🤣

          • Has sod all to do with being fanatically nationalistic or not.

            PS I seem to recall that the case with the old Euskaltel-Euskadi was such that the government at Basque Country tightening its purse strings was the cause and the signing of non-Basque riders (with a sufficient number of points, all else be damned) was the effect, i.e. a last ditch effort or the sole way to guarantee the teams presence in WT – which in turn was the prerequisite for Euskaltel staying as a sponsor or, unless I got it wrong, reconsidering its decision to step out after the 2013 season.

          • Just like and I hope equally as obviously as my comment was a reply to the comment immediately above mine.
            You don’t have to agree with me, but I must say it would have made me happier if you had given me credit for at least understanding to what part of which comment you replied to.

          • I simply couldn’t comprehend how you could think that British people complaining about money being given to foreigners – as they routinely do – is not down to nationalism.
            Read British media, e.g. the comments section of the daily mail (the country’s most popular news website), and you’ll see an endless foaming tirade about money being given to foreigners who are in desperate need of it, nevermind some cyclists.

      • Totally agree, teams that have a strict limit of athletes only from one limited region severely handicap their chances.

        Teams can have an ethos of one nation, but need to be open to riders/staff from other backgrounds. Even if you limit this a little, you still need to be open to it. It even helps in negotiations with your hometown athletes, doesn’t let the athlete have too much bargaining power.

  4. There’s no good reason not to cap team budgets, and to make that cap net (i.e. after tax). It can be done – if the will is there – teams would have to sign up to it in order to be allowed to compete.
    It wouldn’t be perfect, there would be ways around it; it wouldn’t solve every financial inequality; it wouldn’t guarantee fairness or better racing. But it would be an improvement on the current system, put teams on a more even footing and prevent large increases in budgets, which can put teams out of business as well as ensuring more and more riders end up at a small number of teams.
    More money doesn’t equal better sport: we just have it drilled into us incessantly that more money makes anything better.

    • Agreed. Even the plutocrats that own teams in NFL and NBA operate under under some restrictions while their big stars rake in millions. The idea that controls come at the rider’s expense is exactly what the teams spending 50 million a year want you to think. I read somewhere that Ivan Basso was lamenting that his team didn’t have the 80-120 million(?) he claimed was needed to be in the WT.
      To that I can only say WTF did you do “Mr. Mars”? WT is an expensive joke. How much longer before it falls apart?

        • I dunno about that – my guess is between EOLO, KOMETA and (gawd!) now BURGER KING he’s probably got more than that already? I tried to find the piece where he claimed he needed that pile o’euros but so far no luck. He’d have to buy one of those hard-fought-for WT licenses…maybe that’s where all the millions go? 🙂

    • Even as Inrng alludes to in the main article, it’s not as simple as introducing a salary cap. Some teams hire in riders as contractors, so are not actually paying the rider a direct wage but instead a fee goes to a third company who pays out to the rider. Or the rider is reimbursed via image rights or bonuses rather than a standard wage.

      Given how we (royal we) as fans so often complain the UCI can barely manage to ensure safe racing, or a wide range of other operational issues in the sport (still waiting on that enforced & livable minimum wage for the Womens peloton) i have significant concerns they could handle policing a salary cap.
      Larry above references to the NFL & NBA, which have crazy amounts more money than the UCI and they still face a battle to ensure all the relevant parties are playing fairly. In the UK we’ve seen in the last few years how teams went around the Rugby Premiership salary cap (look up the Saracens case, and lately the Leicester Tigers are under investigation) and how tough it was for the RFU to police.

      Not saying it shouldn’t be talked about, just that without significant buy in from the teams themselves it’s a non-starter unless somehow the UCI gets a few extra resources to run proper enforcement.

      • Yes, that’s why I say a ‘budget cap’, not a ‘salary cap’. As in the team’s overall budget (and including any outside payments, of the type you mention).
        And, as I say above, ‘It wouldn’t be perfect, there would be ways around it’ – there are always people who will try this, as we see in other sports – ‘but it would be an improvement on the current system’.
        And yes, I too wouldn’t trust the UCI to do anything properly.

        • Except “budgets” are not the problem. As evidenced here and in the other finance pieces, we can clearly see the vast majority of budget is spent on wages. Upwards of 70% as cited by Inrng above for the likes of Ineos/Sky, FDJ & AG2R. This is also aided by a lot of costs being pretty flat and similar for all teams in terms of travel/logistics/equipment etc.
          This is where F1 goes for a total budget cap, vs the Salary cap used by NFL/MLS/Premiership Rugby. If you driving force of inflation and financial instability is salary, you put in a salary cap (it’s also why at least in the UK there is a discussion about salary caps in the EFL), but if like F1 your issues are in R&D rather than wages you go for the overall budget (and in fact wages in F1 are exempt from the new cap because they are a relatively small %)

          I don’t think a budget cap is at all the right solution for cycling, there are too many disadvantages vs a purer salary cap. But again, i don’t see an appetite from the teams or UCI to pursue this.

    • Nobody – anywhere – needs to earn more than 1 million Euros a year. Even if that’s only for a three-year contract, that’s enough money for life.
      As long as you have a decent minimum wage, no-one is going to suffer.

    • As cycling is a sport based in Europe, there is a good reason – salary/budget capping would likely be ruled an illegal restraint of trade.

      Perhaps cycling should follow F1 and be based out of the US for business purposes. Decades of talk about cost controls led to no action at all because there was no mechanism to force it to happen, Liberty Media takes over ownership and a budget cap is brought in within the first three years.

      • As you say, other sports have managed, e.g. Rugby. I don’t know how rugby does it, but isn’t this in Europe?
        Also, I don’t know if this is what counts, but the UCI is based in Switzerland, not in the EU.

        The UCI – or the races themselves – can decide which teams get to ride the races (maybe not under the current WT system, but it can be done). You merely need to introduce a rule (not a law) that says teams can only race if they have a budget cap. I don’t believe there is a law that says ‘You have to let my team ride in this race’.
        Ergo, teams without budget caps can exist, can pay their riders whatever, can have huge budgets – but that doesn’t mean you have to invite them to your race.

        • Sounds easy, just get the UCI to introduce a rule like this at stroke of a pen!

          …Or rather the UCI is a weak governing body and can only really rule on pro cycling when all the parties are in agreement and the teams would never agree to this.

          Anyway this is all going off topic. Back to Lotto’s funding and budget please.

          • The UCI is weak, hence I said ‘or the races themselves’ because they have the power to invite who they want. The whole thing would require some fairly major changes, but I think that those would be good for cycling anyway. But I’ll leave it there, as requested.

          • I don’t think you can coherently discuss the topic of Lotto’s funding and future without also discussing budget/salary caps or other methods of at least partially levelling the playing field.

            The races could contribute to this if they chose to do so by slashing prize money to the minimum allowed under the regulations, paying the minimum participation money allowed by the regulations and paying the remainder to teams which have provided audited accounts, on a sliding scale according to team budget.

            Transfer payments for riders under 30 – and other forms of further defining the role of development teams such as that which Lotto runs – need to be considered too.

        • English rugby is no longer within the ambit of the EU. There is no pan-European rugby salary cap.

          In short, so as not to go further off-topic, a salary cap would have to be proportionate to the sporting goals to be lawful in the EU – which is where most of the teams, riders and racers are. The UCI would need to show (a) what those goals were, and (b) how the cap contributed to them, to have a chance. It wouldn’t be a quick, obvious or easy solution, by any means.

        • In terms of being far more competently organised, such that their worst fiasco (the 2021 Abu Dhabi GP post-race protests) would still count as a relative good day for most cycling races? Hell yes.

          In terms of having a coherent story spanning the course of the season? Hell yes.

          In terms of having a consistent protocol (the FIA flag code) for neutralising a race in the event of an incident? Hell yes.

          In terms of being able to attract young fans to replace the old ones dying off? Hell yes.

          In terms of being able to introduce a binding budget cap? Hell yes.

          Cycling has much to learn from F1 and other forms of motorsport.

          • ‘In terms of being far more competently organised, such that their worst fiasco (the 2021 Abu Dhabi GP post-race protests) would still count as a relative good day for most cycling races?’
            – a race that most people seem to think was decided – unfairly – by a poor application of the rules?

            ‘In terms of having a coherent story spanning the course of the season?’
            – except that the ‘coherent story’ was decided not on the track, but by judges, by all accounts? (And not just in that final race.)

            ‘In terms of having a consistent protocol (the FIA flag code) for neutralising a race in the event of an incident?’
            – isn’t the whole kerfuffle about the Abu Dhabi GP that the race neutralisation rules were not consistently applied?

            I don’t watch F1, but from what I’ve read/heard, the examples you give seem to show that F1 is an even bigger mess than cycling. It certainly doesn’t seem like a shining beacon to follow.

            I feel no need for a ‘coherent season’ story – the races stand alone for me, and they have for decades.

            I can only think of two races where (other than doping cases), the results were decided by some sort of ‘judgement’ – the Mont Ventoux running incident, where times were neutralised; and the 2019 TdF where the stage finish was changed after the stage had been finished.
            Neither of these were remotely satisfactory in my view, but they didn’t ruin the entire season. (Perhaps they would have if their was some season-long narrative.)

          • Others have held F1 up as an example pro cycling should follow. I’d bet ol’ Heinie would be one of ’em were he still above ground. IMHO it’s a great operation (I won’t even call it a sport these days) if your #1 priority is getting rich one way or another. In any actual sporting terms it’s a joke, fraud, disaster, etc. that I stopped paying much attention to once they introduced those laughable, grooved “tractor tires” back-in-the-day. Reports on it belong in US Magazine rather than l’Equipe.

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