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Team Sky's budget grew 10% in final year, accounts reveal

Joe Robinson
21 May 2019

Accounts show that Team Sky's budget grew from £34.5m in 2017 to £38m in 2018

Team Sky have published their accounts from their final full year in professional cycling, disclosing a 10% increase in the team's budget to £38.016m for 2018.

The team's accounts, published on Companies House, revealed that Tour Racing Limited (the holding company of Team Sky) increased its budget from £34,496,000 in 2017 to £38,016,000 in 2018, the highest in the team's 10-year history.

The in-depth details of Team Sky's finances are unique in cycling. While many other WorldTour teams' budgets are taken through estimation and claims from the team, Team Sky are required by UK law to fully disclose the company's accounts within nine months of the end of the financial year.

The 10% increase in the budget came predominantly down to an increase in sponsorship money from Sky, the primary sponsor of the team that stepped away from professional cycling after a decade earlier this month.

Sky paid a total of £23,457,000 in sponsorship costs for 2018 which increased from its £21,527,000 expenditure in 2017. Secondary sponsor 21st Century Fox also increased its spend in the final year, although not by as much, spending £4,140,000 up from £3,799,000.

This saw the cost of primary sponsorship from Sky and 21st Century Fox rise over £2,000,000 year on year, with the same two companies seeing an increase in funding by £4,000,000 since 2016.

The sponsorship of Team Sky's performance sponsors also rose in 2018 from £6,704,000 to £7,876,000. This chunk of the budget would have been supplied collectively by the likes of Pinarello, Ford, Castelli and Science in Sport.

Value in Kind also increased but only by a relatively small margin of £100,000. These costs are incurred through goods such as bikes provided by Pinarello or team cars supplied by Ford.

It should also be noted that the team accounted £3,200,000 for 'staff and rider costs'. This is not salaries, rather holding money for potential payouts.

Also worth noting is the lack of a financial breakdown given in terms of the salary costs for the team. For the second consecutive year, the accounts failed to declare operating costs for the team.  

In 2016, the team confirmed it spent £24m on 'staff and rider costs'. Two years on, we can assume these costs are higher with high-profile contract extensions for riders such as Geraint Thomas and Egan Bernal, and a rumoured 10 riders on a salary in excess of €1m a year.

These are the last finances to be declared with Sky as the majority owner and sponsor of the British WorldTour team since its sale to multinational pharmaceutical and oil company Ineos at the beginning of May.

The accounts reference this sale stating: 'On 15th March 2019, Sky UK Limited, 21st Century Fox Europe, Inc. and Ineos Industries Holdings Limited entered into an agreement for the sale of 100% of the issued share capital of Tour Racing Limited to Ineos. Completion of the transaction is expected to take place on or around 29th April 2019.' 

Rumours suggest that Ineos will increase the team's budget for 2020 to around the £40m mark, however, as can be seen through the team's £38m budget for 2018, is not as great an increase in funding as first thought. 

In fact, it would be the lowest percentile increase in spending since 2015 when the team's budget actually decreased year-on-year.

What this could suggest is that the speculation around a £40m budget is either correct, therefore showing that Ineos are unwilling to push through the barricades in terms of funding a 'superteam' or that the rumours are incorrect and that a future budget could be higher.

Chances are the latter will be correct. Ineos's involvement in professional cycling is a personal project for company majority stakeholder Sir Jim Ratcliffe and part of a larger project of his company investing in sport.

The company has already invested £110m into the Ineos sailing team set to participate at the America's Cup in 2021 and has also been linked to a £2bn offer to buy Premier League football club Chelsea from Russian billionaire Romain Abramovich.

As recently as this morning, L'Equipe reported that Ratcliffe had reignited talks with French football club OGC Nice in regards to a £350m takeover bid of the team and its Allianz Riviera Stadium. This is almost five times the sum of £77m that was first quoted by the Daily Mirror in April.

If this serial investment in professional sport is anything to go by, Team Ineos could be set for a grand budget increase in the coming years.