The Finances of Team Sky



2013 was a great year for Team Sky on the road and in the accounts department. A second Tour de France win was obvious but behind the scenes they took on board a substantial new sponsor and signed an agreement to fund the team through to the end of 2016.

What is Team Sky’s budget? The income statement above lists the figure in black and white: £22,061,000. ($36.5m / €26.7m, exchange rates at the bottom of the page). Teams are business-like but they are not run for profit – UCI rules constrain this – so there’s no surplus. Now onto the money that flows into the team’s coffers.

Team Sky lists three sources of income. Title sponsorship comes from the naming rights, like Sky and the other brands you see on the jersey, which included 21st Century Fox during the year. Performance sponsorship is related to the other sponsorship contracts, for example Pinarello, Shimano and Tata Motors’ Jaguar brand. Race fees are stipends paid by organisers to cover expenses when a team participates in a race, the numbers are not made public but you can see it’s a substantial component of team income, less for Team Sky but vital for the likes of Europcar.

Having covered these accounts before one discreet element was that the team was part owned by BSkyB and Sky Italia, the British and Italian entities operating the Sky brand in their respective countries. This had explained the willingness to race the Giro and include several Italians on the team roster from the start. However one change during 2013 was that Sky Italia disposed of its holding in the team to 21st Century Fox. The ownership is now 60% BSkyB – 40% 21st Century Fox. This Italian to American switch is listed in the notes of the accounts but has a sporting reality, see how Bradley Wiggins made the Tour of California a target for 2014.

Having looked at the money coming in, let’s look at what it was spent on during 2013.

A comparable year to the previous period. One thing that stands out is the wage bill, it’s big at £15.6 million. It’s the same in 2013 as 2012 and back in 2011 it was £11.1 million. Mark Cavendish might have left the team before 2013 but the team issued new contracts to Bradley Wiggins and Chris Froome among others and this accounts for the spend. Note the line on “bike and performance equipment”, this is where the team buys its own material, preferring to buy some gear rather than take on a sponsor. We’ve seen the team using non-Shimano rims and aero wheels and they have a large, private stock of Veloflex and FMB tyres.

Vehicle running costs include keeping the two “death star” buses on the road, the tanks take 650 litres so fare il pieno during the Giro could cost €1,000 a go for diesel although teams rarely fill the tank to the top because it’s just more weight to drag around. The bus drinks fuel even when parked as the motor doubles as a generator to power aircon and onboard electricity for fridges, shower pumps and electronics.

You can see the wage bill above with the team having a staff of 12. Given it had 27 riders and many more staff from mechanics to “carers”, their word for soigneurs, most of these are hired as contractors as opposed to employees. The difference is related to tax, it is up to the contractor to cover their employment and social security charges. This isn’t always a saving but it puts the onus and expense on the rider… and there are no charges at all for those living in Monaco.

Big budget team… or cheap publicity?

The image above isn’t from Team Sky’s accounts but cropped from parent company BSkyB’s 2013 annual report. As you can see the company spends £1.117 billion (yes, billion with a b) a year on marketing. So if Team Sky is one of the wealthier squads in the World Tour, its budget of £22,061,000 is just 2% of BSkyB’s marketing spend… and remember from above that BSkyB owns 60% of the team so pro rata for the £14.6 million “title sponsorship” income implies £8.6 million for 2013, or just 0.8% of BSkyB’s marketing budget.

Sponsorship through to 2016

The final note of the accounts shows there is funding in place until the end of 2016 from the title sponsors. The sponsorship commitment should allow the team to recruit more riders to make amends for a difficult year. I gather there’s a further talk of the team continuing to 2018 too.

Conclusion

This is one of the rare teams to publish their accounts in full, in fact I think it’s only one to give such comprehensive disclosure. But Team Sky is also an exception for its budget, the spend is far above average for the World Tour and sometimes double or more than of rival teams in the same tier.

The more interesting exercise would be to compare team accounts, for example to show where and how Team Sky spends its money compared to other squads, for example it’s said others have a giant rider wage bill but spend less on coaching staff and other “performance” items like training camps than Team Sky.

Thanks to reader Andrew for sending in a scanned copy