collapse


Vespertine

  • Domestic Rider
  • Country: gb
  • Posts: 75
  • Liked: 86
Team Sky Annual Reports
« on: October 02, 2013, 13:13 »
http://inrng.com/2013/10/finances-team-sky/

Twitter is providing all sorts of interesting links today. 45K on research.

Oh yeah?

Loads more to get stuck into there also, will read a few time, maybe comment some more  :D

Moderator Comment I have merged all comments about Sky Financials made in other threads into this thread in order to keep everything together. Cheers. AG
  • ReplyReply
  • « Last Edit: October 03, 2013, 03:06 by AG »

    Mellow Velo

    • National Champion
    • Country: wales
    • Posts: 897
    • Liked: 451
    • Awards: Velogames Classics Champion 20142013 CQ Ranking Giro Game
    Re: Team Sky Annual Reports
    « Reply #1 on: October 02, 2013, 13:25 »
     We all like a nice graph, yes?
    I'll through this one from L'Equipe on the minimum cost of running a WT team into the mix.



    So, Sky could, in theory, be running two teams. :D
  • ReplyReply
  • "Lance now has more testicles than Tour de France titles."

    just some guy

    • Fourth Generation humanoid bot
    • Legend
    • Country: 00
    • Posts: 20397
    • Liked: 4692
    • Awards: Thread of the Year 2013Most Helpful Member 2013Art of Brevity 2012Most helpful member 2012Best member of staff 2012
    Re: Team Sky Annual Reports
    « Reply #2 on: October 02, 2013, 13:26 »
    We all like a nice graph, yes?
    I'll through this one from L'Equipe on the minimum cost of running a WT team into the mix.



    So, Sky could, in theory, be running two teams. :D

    or a womens .... I digress sorry carry on
  • ReplyReply
  • Fignon - In my day, doping methods were derisory and the riders´exploits were massive.
    For the last 15 years or so  it has been the other way rond: there is a huge number of ways in which riders can dope, and any exploits are derisory.

    Vespertine

    • Domestic Rider
    • Country: gb
    • Posts: 75
    • Liked: 86
    Re: Team Sky Annual Reports
    « Reply #3 on: October 02, 2013, 13:30 »
     :lol They could be running a full woman's team just with the remainder from delta in the exchange rate between 2011 and 2012...  :lol
  • ReplyReply

  • KeithJamesMc

    • Road Captain
    • Country: gb
    • Posts: 1696
    • Liked: 1393
    Re: Team Sky Annual Reports
    « Reply #4 on: October 02, 2013, 14:09 »
    I couldn't resist I've gone and downloaded all the Team Sky accounts from 2009-2012 to figure out a few things:

    1. Cost of Wiggins "acquisition" - £1.954m paid to Garmin (2010 accounts). It looks like Team Sky also paid Katusha £196k for Ben Swift.

    2. Cost of the Initial Death Star Fleet - £1.714m (includes two buses, two trucks, a van and ten cars)

    Much more to come including:
    - more on acquisition fees
    - spiralling rider salaries
    - increased support from BskyB/Sky Italia/21st Century Fox - way beyond the inital £40 over 5 years.
    - huge jump in race fees after Wiggo started winning
    :D
  • ReplyReply

  • L'arri

    • Just the facts, Ma'am ...
    • Monument Winner
    • *
    • *
    • Country: be
    • Posts: 5250
    • Liked: 3014
    • Dopeology.org @DopeologyDotOrg @L_arriviste
      • Dopeology.org
    • Awards: Best Opening Post 2012
    Re: Team Sky Annual Reports
    « Reply #5 on: October 02, 2013, 14:22 »
    I couldn't resist I've gone and downloaded all the Team Sky accounts from 2009-2012 to figure out a few things:

    1. Cost of Wiggins "acquisition" - £1.954m paid to Garmin (2010 accounts). It looks like Team Sky also paid Katusha £196k for Ben Swift.

    2. Cost of the Initial Death Star Fleet - £1.714m (includes two buses, two trucks, a van and ten cars)

    Much more to come including:
    - more on acquisition fees
    - spiralling rider salaries
    - increased support from BskyB/Sky Italia/21st Century Fox - way beyond the inital £40 over 5 years.
    - huge jump in race fees after Wiggo started winning
    :D

    Be sure to root through Sky's bins too, Keith, and report anything you find! ;)
  • ReplyReply
  • RIP Craig1985 / Craig Walsh
    RIP KeithJamesMc / Keith McMahon

    AG

    • Classics Winner
    • *
    • Country: au
    • Posts: 4507
    • Liked: 1736
    • Awards: Winner, 2013 National Championships prediction gameFan of the Year 2013
    Re: Team Sky Annual Reports
    « Reply #6 on: October 02, 2013, 14:30 »
    interesting.

    I would love to see the financials for the other teams.   

    To be honest, I am quite frankly amazed that running a top flight cycling team only costs 21mil.   That is nothing ....
  • ReplyReply

  • Froome's Thoughts

    • Domestic Rider
    • Country: gb
    • Posts: 131
    • Liked: 113
    • Cycling blogger, Team Sky, Chris Froome
      • Froome's Thoughts
    Re: Team Sky Annual Reports
    « Reply #7 on: October 02, 2013, 16:47 »







    Source & Further reading: Innrng.com
  • ReplyReply
  • « Last Edit: October 02, 2013, 16:52 by Dim »
    Life is like riding a bicycle. To keep your balance you must keep moving.

    ~ Albert Einstein, letter to his son Eduard, 1930

    KeithJamesMc

    • Road Captain
    • Country: gb
    • Posts: 1696
    • Liked: 1393
    Re: Team Sky Annual Reports
    « Reply #8 on: October 02, 2013, 19:42 »
    Sky Rider Transfers – Who?, How much? To whom?

    Reading Team Sky accounts, you can clearly see the following amounts for rider transfers:

    Year Amount
    2010 £2140k
    2011 £650k
    2012 £302k

    The accounting policy has not changed in all of the years which is “amortise the fee over the length of the riders contract”
    From the 2010 accounts is the following schedule:

    2010201120122013
    £584k£584k£486k£486k

    It is well known that Team Sky paid a transfer fee for Wiggins who was on a 4-year contract and Swift who appeared to have a signed a 2-year contract.

    Basic maths, therefore gives the transfer payments of £186k to Katusha for Swift and £1944k for Wiggins to Garmin. £2m was the figure mentioned in the press at the time, so the maths is pretty solid. The strange amounts are probably because the accounts are in GBP, whereas the payments would have been made in USD or EUR.

    Now where it gets interesting are the payments of £650k in 2011 and £302 in 2012. Who were they made to?

    In 2011, Team Sky signed Davide Appollonio, Alex Dowsett, Jeremy Hunt, Michael Rogers, Rigoberto Uran and Xabier Zandio. The only one’s really worth anything are Rogers and Uran. With Rogers leaving in 2013 implies he had a 2-year contract and Uran leaving in 2014 implies he had a 3-year contract. With the £650k amortised over 2-years, I can only deduce that Team Sky paid HTC £650k for an experienced road captain to help Wiggins in the Tour.

    In 2012, Team Sky signed Cavendish, Eisel, Suitsou and Pate from HTC who had folded and therefore no transfer fee was required. Richie Porte was signed from Saxobank and it was well documented that that Porte wanted to leave in 2011 but Riss would not let him go and wanted him to ride for the final year of his contract. So probably no fee was paid for him. Sergio Henao was signed from Gobernación de Antioquia-Indeportes Antioquia where he had been riding for only a year. So I think that Henao was signed for £302k on a 2-year deal.

    So in summary, here are my best guesses at the Team Sky transfer deals:

    Year Fee Rider Team
    2010 £1944k Wiggins Garmin
    2010 £196k Swift Katusha
    2011 £650k Rogers HTC
    2012 £302k Henao Gobernación de Antioquia-Indeportes
  • ReplyReply

  • Fus87

    • Classics Winner
    • *
    • Country: dk
    • Posts: 4313
    • Liked: 2173
    • Awards: Velorooms Tour de France BINGO champion 2014National Championships Predictions Game Winner 2014Velorooms Monday Quiz ChampionPoster of the Year 2013
    Re: Team Sky Annual Reports
    « Reply #9 on: October 02, 2013, 20:03 »
    This all sounds very well-thought out.

    But I think you're wrong about Henao:
    Gobernación de Antioquia was a Continental team, and these are only allowed to sign their riders on one-year contracts, meaning that unless Henao had extended his contract before Sky became interested (and that sounds highly unlikely, as he was pretty much confirmed as a signing in the spring already from what I remember), a transfer fee would not have been necessary.
  • ReplyReply
  • RIP Keith


    just some guy

    • Fourth Generation humanoid bot
    • Legend
    • Country: 00
    • Posts: 20397
    • Liked: 4692
    • Awards: Thread of the Year 2013Most Helpful Member 2013Art of Brevity 2012Most helpful member 2012Best member of staff 2012
    Re: Team Sky Annual Reports
    « Reply #11 on: October 03, 2013, 11:05 »
    interesting.

    I would love to see the financials for the other teams.   

    To be honest, I am quite frankly amazed that running a top flight cycling team only costs 21mil.   That is nothing ....

    and Garmin something like 10 Mill  and other teams less
  • ReplyReply

  • Vespertine

    • Domestic Rider
    • Country: gb
    • Posts: 75
    • Liked: 86
    Re: Team Sky Annual Reports
    « Reply #12 on: October 03, 2013, 14:27 »
    interesting.

    I would love to see the financials for the other teams.   

    To be honest, I am quite frankly amazed that running a top flight cycling team only costs 21mil.   That is nothing ....

    I thought exactly the same. 21m is relative peanuts. To think that they spend the most also makes me ponder more about just exactly who is making all of the money out if this whole foul jamboree.
  • ReplyReply

  • KeithJamesMc

    • Road Captain
    • Country: gb
    • Posts: 1696
    • Liked: 1393
    Re: Team Sky Annual Reports
    « Reply #13 on: October 03, 2013, 14:32 »
    This all sounds very well-thought out.

    But I think you're wrong about Henao:
    Gobernación de Antioquia was a Continental team, and these are only allowed to sign their riders on one-year contracts, meaning that unless Henao had extended his contract before Sky became interested (and that sounds highly unlikely, as he was pretty much confirmed as a signing in the spring already from what I remember), a transfer fee would not have been necessary.
    Ahhh, very interesting. Agree it is not Henao then.

    My thought process last night on the payments and transfers and knowledge of what is permitted or not to be capitalised was:
    1. The payments were for other teams for individual riders - that is the approach I took. Reverse engineering the transfers to give the likely rider the fee was associated with; or
    2. The amounts could be for an individual rider and the costs associated with doing the deal eg agent / legal fees / upfront incentives. If this is the case the fees would be spread over many riders.
    3. There could have been a "bonus clause" in the Bradley Wiggins transfer ie If Wiggo wins the Tour de France, Team Sky owe Garmin an extra US$500k - this could have the 2012 rider transfer figure. If so, brilliant on Vaughters (or his adviser) for negotiating.

    After reading your post and looking at the list of transfers in 2012, I'm now swaying to option 3 - there was a bonus in the Wiggo transfer :D
  • ReplyReply

  • AG

    • Classics Winner
    • *
    • Country: au
    • Posts: 4507
    • Liked: 1736
    • Awards: Winner, 2013 National Championships prediction gameFan of the Year 2013
    Re: Team Sky Annual Reports
    « Reply #14 on: October 03, 2013, 14:48 »
    I thought exactly the same. 21m is relative peanuts. To think that they spend the most also makes me ponder more about just exactly who is making all of the money out if this whole foul jamboree.

    Cyclismas did a really good series about ASO and cycling ...

    I cant seem to find the links for some of them ... but will post what I can find
    http://www.cyclismas.com/biscuits/marie-odile-amaury/
    http://www.cyclismas.com/biscuits/amaury-sport-organisation/
    http://www.cyclismas.com/biscuits/arnaude-lagardere/
    http://www.cyclismas.com/biscuits/amaury-wealth/
    http://www.cyclismas.com/biscuits/salary-caps/
    http://www.cyclismas.com/biscuits/cadf/
    http://www.cyclismas.com/biscuits/worldtour-prize-money/

    The last 3 are particularly interesting



     
  • ReplyReply

  • AG

    • Classics Winner
    • *
    • Country: au
    • Posts: 4507
    • Liked: 1736
    • Awards: Winner, 2013 National Championships prediction gameFan of the Year 2013
    Re: Team Sky Annual Reports
    « Reply #15 on: October 03, 2013, 14:50 »
    and I am going to quote Kvinto from and old thread where we discussed this, as it was really impressive analysis

    As it often happens, I was looking for a simple answer where there is none and what was intended to be a ‘superficial idea’ turned into the complex issue but I was very lucky to find a good analysis from 2011, when during the Tour teams tried to secure TV revenue sharing by barring broadcasters from their vehicles at some stages and Garmin-Cervelo manager / AIGCP president Jonathan Vaughters came up with this quote:

    “ASO may get as much as $200 million from TV rights, while the 22 Tour de France teams typically have an annual budget of $10 million each from sponsorships”

    It was caught by the media and the number of different stories emerged in the internet giving snippets from mosaic of TV revenue battle. As I said I was lucky to find a good (no, it is actually nothing short of brilliant) analysis from that time at Cyclismas. They offered a 16-part series of articles from Sept 28th to Oct 20th 2011 about the Tour TV revenue sharing debate starting from an excursus in history emphasizing on Amaury’s reign, financial growing and methods used throughout it, then steeping in the world of numbers: about ASO, Amaurys, UCI, teams, comparison to other organizers/races and what to expect in the outcome, this is a ‘must-read’:

    http://www.cyclismas.com/2011/09/the-man-who-sold-the-tou/ (The first part, they have a ‘next’ at the bottom to shift to the part 2 and so on. A bit inconvenient since the articles are not listed so when I started to read first one I had no idea about true number of parts)

    Though full year old this is a very topical theme. I’ll try to summarize, with some of my own little thoughts.

    First of all, since the series are revolving mainly around the Tour editions from 2010 and earlier and other races are used only for comparison while currently only the RCS are eager to negotiate the issue we can compare TV audience of the Tour and Giro. Since TV revenue is the issue then the difference in TV audience should be somehow proportional to TV revenues.
    Estimated television audience throughout the world (for what was easy to find):

    2011 Tour de France – 3.5 billion viewers
    2012 Giro d’Italia – 0.775 billion viewers

    The Tour is 4.5 times more popular (TV favourable) than the Giro worldwide and I assume that hence Tour television deals should be thus bigger.

    OK, the summary (in random order):

    Amaurys have been in the media business since 1944 and for almost the same time they are in the Tour. They have long record of quarrels on both media (print and journalist unions) and sport organizing (the UCI) areas, and they know when to relent and when to stay firm. Their experience of dealing with people calling for a greater share of the cake is unquestionable.

    By the time when Emilien Amaury came to the Tour after WWII the influence of the event on L’Auto / L’Équipe sales majorly dwindled, since other newspapers became covering the event too and the first ever profitable Tour was only in 1974 when they began to implement practice of receiving money from host cities. That year “Brittany’s market gardeners and vegetable growers” paid 1,800,000 French francs for the prologue and two stages. Since that time the prices have risen and London’s 2007 grand depart cost €1.5 million (~10,000,000 French francs).

    From its setting up in 1992 ASO inherited L’Équipe‘s existing events (like Paris-Roubaix or the Tour de l’Avenir) – and added new ones: from acquiring Paris-Nice (2002) or Dauphiné (2010), creating Tour of Qatar (2003) or the newest - World Ports Classic (2012) to commanding non-cycling events like Rally Dakar, l’Open de Golf de France or Marathon de Paris. And the Tour is the jewel in the crown.

    Evaluating TV revenues of the Tour is not easy since:

    1. ASO sell TV rights for all their events including non-cycling ones. As an example: French Television bought the rights for whole set of ASO events for €23 million per year since 2009 (to 2013) with a correction for inflation of 2% per year.
    2. TV companies are quite reluctant when it comes to revealing how much do they pay for sport rights.
    3. “While the Société du Tour de France used to file annual accounts, once the race fell under the control of ASO in the early nineties a shroud was pulled over the race’s profitability.”(quote)

    However some numbers are open and might be used as a pattern:

    “In that year – 2003 – out of a total 117 days of sport organised by ASO, 74 of them were cycling (motor sports accounted for 21, golf 16, equestrianism 4, and athletics 2). In total, cycling contributed 70% of the company’s revenue (motor sports accounted for 21%, athletics 4%, golf 4%, and equestrianism 1%). ASO’s total income – somewhere between €110 million and €120 million – was split between TV rights (44%), marketing (39%), competitors’ rights (12%), and local communities (5%).”(quote)

    And a very interesting table, which shows total revenue and the profit of ASO (all events) from 2002 to 2009:



    At the best scenario of 2003 TV revenue of cycling share of ASO would be: €120m*0.7*0.44 = €37m with the value of net profit - €120m*0.18 = €21.6m
    If the tendency of 44% TV rights and 70% cycling share of revenues would remain until 2009’s  €145.2m of total revenue (it wouldn’t of course, but for my beloved ‘superficial idea’ it’s quite enough): €145.2m*0.7*0.44 = €44.7m with the value of net profit €31.8m

    Giving, say, 25% of revenue of 2003 to teams - €9.25m would lessen ASO profit from €21.6m to €12.3m which constitutes -43% which will hardly ever happen. Having €5.0m from ASO would be a win. On the other hand we are talking about the Giro (and RCS races) which happens to be 4.5 times less TV favourable and they should dig deeper into their pockets to offer teams a good incentive to send the strongest squad to Italy. Given the numbers it looks quite utopian. RCS are not a charity organization (nor is ASO) and while they are more interested in attracting best riders by paying them/their teams (the practice was used before, Armstrong in Giro 2010 for instance) I’m not sure about the size of their cake, though on the other hand, even if supposed money won’t be big it might be used for bio passport program / anti doping which benefits both – teams and organizers and would make the RCS good PR but if RCS cannot offer big money which is how I see it, it cannot also enforce ASO to do the same without their good will.

    At this point I think the bubble of ‘hidden in TV revenues’ well-being of the teams bursts. TV revenues won’t lessen teams’ dependence on sponsors. And even if they would, the money might get burned in increased wage bills.

    Btw, the wages – their minimum will increase at 10% since 2013: http://velonews.competitor.com/2012/06/news/aigcp-and-cpa-agreement-may-portend-more-than-higher-salaries_225328 . Something Jonathan Vaughters deserves credit for. He took over as AIGCP president in times of turmoil of UCI vs ASO war for Tour invitations changing Lefeavre and ever since teams unite their forces with lesser reluctance, but making up a sum that organizer is allegedly supposed share with them will not help.

    OK, some other interesting points from the series:

    1. The UCI.

    During 2008 and 2009 they had to dig into their reserve fund lessening it from 12.8m CHF (swiss franks) of 2007 to 7.6m CHF in 2009. Only in 2010 they managed to reduce their expenses bringing the reserve fund to 7.8m CHF (~ €6.5m) due to changes within the stuff. They also subbed GCP (an organization that organizes just one event – Tour of Beijing) for €177k (2009) and €445k (2010). Considering that among UCI races only the Worlds are profitable (12m CHF – revenue, 10.5m CHF – overall profit which includes road’s share of profit at 8.6m CHF) they are currently losing money on Beijing digging deeper into the reserve fund that is not big. Theoretically, if money would end there are quite enough of parties interested of giving the UCI a “helping hand”, though this is an unlikely scenario atm. But look at who’s trying to squeeze into European Cycling Union now.

    2. Prize money

    Prize fund of 2011 Tour was €3.4m. Out of this sum €1.4m went for participation allowance. The base number is €51,243 for every team. This is a sum negotiated every year between teams (AIGCP) and GT organizers. These €51,243 were accepted before Vaughters came to AIGCP and ever since it has been renegotiated every year. And every year it has remained unchanged. For other WT races UCI sets a minimum of €7,500 per race, per team. Just one ASO race is paying more than the UCI-approved minimum participation allowance.

    3. Cycling Anti-doping Foundation ( CADF).

    The contributions in shares:
    2009 (8.2m CHF): ProTourTeams – 37%, ProContiTeams - 29%, Organisers – 13%, UCI – 10% GTOrganisersExtra – 0%, Riders – 3%, Other – 9%
    2010 (7.9m CHF): ProTourTeams – 40%, ProContiTeams - 19%, Organisers – 12%, UCI – 14% GTOrganisersExtra – 9%, Riders – 3%, Other – 3%

    Every race organizer contributes to CADF 15% of its race's minimum prize money, set by the UCI. There is an abyss between GT’s and other races’ prize money so that CADF contributions are also very different. For example: Ladies Tour of Qatar - €30 (contribution to CADF), Tour of Qatar - €210, Amstel Gold Race - €6,000, Paris-Roubaix - €7,500, Tour de Suisse - €20,250, Giro d’Italia - €127,500, Tour de France - €150,000. Since 2010 three GT organizers must also cover  €190,000 each for pre-race out-of-competition tests. Hence Tour de France contributes for anti-doping €150+€190=€340.

    Contributions to CADF among teams: ProTourTeam - €120,000 per year, ProContiTeam - €60,000, ContiTeam/Women - €1,000. Considering that some teams have their inner anti-doping programmes – and for instance Garmin pays for such a programme around €375,000 at best bringing their anti-doping expenses to about half a million euros which is higher than ASO contributes for anti-doping for all their races (€397,935)

    UCI covers 14% of CADF contributions (€880,000). These are money of teams and organizers:
    ProTourTeams pay €50,000 of registration fee plus €100,000 for a 4 year license. The registration fee of ProContiTeams - €13,750, ContiTeams - €2,250 and Women pay €1,000. 
    Organizers pay: €24,000 per one day WT race; €3,450 per stage of week-long WT race; €4,700 per stage of Giro/Vuelta; €5,000 per stage of the Tour; €2,100 per 1.HC race and then from min €151 and higher for other races.   

    PS: I was trying to abbreviate though it is loooong anyway, nevertheless the original article was absolutely worth of reading it.
  • ReplyReply

  • Vespertine

    • Domestic Rider
    • Country: gb
    • Posts: 75
    • Liked: 86
    Re: Team Sky Annual Reports
    « Reply #16 on: October 03, 2013, 16:44 »
    Crikey Moses! This place knows more about Pro Cycling than Pro Cycling itself!!!
  • ReplyReply

  • just some guy

    • Fourth Generation humanoid bot
    • Legend
    • Country: 00
    • Posts: 20397
    • Liked: 4692
    • Awards: Thread of the Year 2013Most Helpful Member 2013Art of Brevity 2012Most helpful member 2012Best member of staff 2012
    Re: Team Sky Annual Reports
    « Reply #17 on: October 03, 2013, 18:14 »
    Crikey Moses! This place knows more about Pro Cycling than Pro Cycling itself!!!

    shhh don´t tell anyone  :s
  • ReplyReply

  • KeithJamesMc

    • Road Captain
    • Country: gb
    • Posts: 1696
    • Liked: 1393
    Re: Team Sky Annual Reports
    « Reply #18 on: October 03, 2013, 18:42 »
    Analysis of Team Sky Accounts 2010-2012

    Line Item2009201020112012CAGR (2010-2012)
    Title Sponsor Revenue6659997105291338315.7%
    Performance Sponsorship Revenue33263138410511.1%
    Race Fees and Other Income12803013391074.8%
    Total Revenue66514603166802139821.1%

    The Title sponsor revenue is the sponsorship provided by Owners (BskyB – 60%, Sky Italia – 25% and NewsCorp – 15%). The contribution provided by the NewsCorp is presumed to have changed to 21st Century Fox with the split up of the Murdoch empire. Of note, is that David Walsh’s employer, The Sunday Times, is no longer a sponsor of Team Sky

    Sky have steadily increased contributions by 15.7% per annum which if in truth is not terrible given the increased exposure from the team given their success in 2012 in the the TdF

    Performance Sponsorship Revenue however only has increased by 11% over the same period. I would say this is not very good given the improvement in performance and the addition of IG Cycling as a “behind” sponsor in 2012. We know that adidas was dropped as the clothing sponsor in 2012 and long negotiations took place with Pinarello over contract renewal. I assume that there was a lot of 3-year initial contracts that were signed in 2010 which Sky wanted the rates radically improving.

    Race Fees and Other Income have grown substantially, I can only assume that as the team has grown more successful that they have been able to negotiate better “appearance” fees for the non-WT races.



    Line Item2009201020112012CAGR (2010-2012)
    Staff and Rider Renumeration3608660110011539433.3%
    Race Costs (Travel and Accommadtion)2001406136614642.0%
    Bike and Performance Management322014140721272.8%
    Sports Science and Medical1972162215.9%
    Vehicle Running Costs276209216-11.5%
    Registrations1360747310.3%
    Research1028645-33.6%
    Office Expenses43478362401-8.4%
    PR and Marketing72141085981114.1%
    Legal and Professional Fees10219131160-14.5%
    Depreciation5165315311.4%
    Foregin Exchange Revaluation339110-252
    Total Operating Expense66514481165782136121.5%

    Most of Cost (72% in 2012) is spent on Staff and Rider remuneration which should be of no surprise. Wage inflation of 33% is amazing given that the actual size of squad probably has not increased that much. Better quality and Win Bonuses account for the uplift.

    The other point of note is that most of the line items are quite stable implying that the many costs are probably fixed.

    The exception to this is PR & Marketing which I assume covers Communications (Internet & Face-to-Face) and general sponsor entertainment. I assume that Team Sky have hired an expensive outside agency to handle this for them.



    Fixed Asset Notes2009201020112012
    Property Plant and Equipment1714210921192119
    Depreciation051610471578
    Carry Value171415931072541
    Rider Transfer Values214027903092
    Amortisation58414932455
    Carry Value15561297637
    I include some of the less boring balance sheet items for note.

    The Death Star fleet cost in total £2.1m and has been steadily depreciated. Of note is that the Fleet will be fully depreciated in 2013. I fully expect Death Star Fleet v2.0 in 2014.

    The Rider Transfer Fees I have discussed elsewhere, but it is of note that the amortisation will be found in the Salary line.

    There is little else of note in the working capital, apart from that from time to time, Sky have supported Team Sky with loans when the cash outflow has progressed faster than the budgets. Nothing significant.

    All the balance sheet and reporting points towards a very well financial managed company, which is to be expected when the Group CFO of BskyB sits on the Team Sky board.
  • ReplyReply

  • KeithJamesMc

    • Road Captain
    • Country: gb
    • Posts: 1696
    • Liked: 1393
    Re: Team Sky Annual Reports
    « Reply #19 on: October 06, 2013, 16:35 »
    Comparison of Team Sky & RadioShack 2012

    I managed to get hold of the Radioshack accounts filed in Luxembourg courtesy of a poster on another site.

    The general caveat is that disclosure in Luxembourg seems to be focussed on the balance sheet and therefore I have used the notes to reconstruct the P&L, there are also some categories which are not self-explanatory and I have had to guess the meaning of.

    Line Item 2012 (€’000s)
    Sponsorship 24869
    Other Income 417
    Total Turnover 25286
    Renumeration – Riders 12656
    Renumeration - Image Rights 1210
    Renumeration – Staff 3840
    Renumeration – Medics 300
    General Subcontracting (CSE) 3705
    Biological Passport 120
    Corporate Identity 453
    Receptions & Entertainment 330
    Travel Costs 591
    Rental & Leasing Charge 222
    Others fees - provision (JBSM) 1875
    Miscellaneous 595
    Rider Transfer 99
    Total Operating Costs 25996
    Gross Profit / Loss -710
    Net Profit / Loss    -2307

    The first thing to compare is the turnover which in Sky’s case is Sponsorship plus Race Fees whereas nearly all the Radioshack turnover is Sponsorship.

    Team Sky is at €26,319k (using exchange rate of 1.23) whereas Radioshack is at €25,286k or in other words Sky had 4% more income in 2012 which really is immaterial.

    Next thing to compare is the Wage Bill. Radioshack split out various categories (eg Image Rights) which Sky do not, but a rough ball park comparison is Team Sky €18,935k (72%) whereas Radioshack is at €18,105k (69%). Again the difference is immaterial.

    The other costs outlined in both Sky’s and Radioshacks are not really worthwhile comparing especially given that both team cost categorisation are probably radically different.

    But what is important is the difference in financial management:
    -   Sky’s profit and loss is immaterial, effectively they are being run at breakeven;
    -   Radioshack’s losses are huge. €2.3m in 2012 and €7.6m from creation in 2010 to the end of 2011. €9.9m of cumulative losses!!!;
    -   Sky’s balance sheet is nothing surprising effectively the team needs no funding;
    -   Radioshack’s balance sheet is a train wreck. Promobe Finance, which I presume is a Becca company is owed €5.3m, plus various credit institutions are owed a further €1.6m; and
    -   Radioshack have complicated off-balance sheet arrangements with Promobe finance guaranteeing the losses and further providing bank guarantees for €4.8m to the UCI and DKV Euro Service.

    Basically, if I was a company trading with Radioshack, I’d want a guarantee before I did any business with them as well.

    In summary, there is not a difference between Sky and Radioshack in terms of revenue and expenditure, but the difference in the way the companies are financially managed are measured in light years.

    And, of course Sky get far better results for their expenditure :D
  • ReplyReply

  • Froome's Thoughts

    • Domestic Rider
    • Country: gb
    • Posts: 131
    • Liked: 113
    • Cycling blogger, Team Sky, Chris Froome
      • Froome's Thoughts
    Re: Team Sky Annual Reports
    « Reply #20 on: October 06, 2013, 20:03 »
    The whole Team Sky 'staff and rider remuneration' for 2012 was equivalent to 2 average annual wages for Manchester City players and 3 average NBA wages.

    And that is from one of the richest WT team...a long way to go for cycling it seems.




  • ReplyReply

  • Flo

    • #1 Alberto Contador fangirl
    • Classics Winner
    • *
    • Country: nl
    • Posts: 4773
    • Liked: 1451
    • Awards: Reigning Spring Classics Prediction ChampNational Championships Predictions Game Winner 2014Fan of the year 2013Best fanboy/girl 2012
    Re: Team Sky Annual Reports
    « Reply #21 on: October 06, 2013, 20:07 »
    The whole Team Sky 'staff and rider remuneration' for 2012 was equivalent to 2 average annual wages for Manchester City players and 3 average NBA wages.

    And that is from the richest WT team...a long way to go for cycling it seems.

    Astana is the richest WT team. Unlimited sponsor money :cool :cool :cool
  • ReplyReply
  • RIP Keith

    DB-Coop

    • Road Captain
    • Country: dk
    • Posts: 1825
    • Liked: 1095
    • Awards: Velorooms Vuelta Velogames Winner 2014
    Re: Team Sky Annual Reports
    « Reply #22 on: October 06, 2013, 20:10 »
    Astana is the richest WT team. Unlimited sponsor money :cool :cool :cool

    Not unlimited, but they are surely the only team with a GDP size budget at it's dispossal.
  • ReplyReply

  • Froome's Thoughts

    • Domestic Rider
    • Country: gb
    • Posts: 131
    • Liked: 113
    • Cycling blogger, Team Sky, Chris Froome
      • Froome's Thoughts
    Re: Team Sky Annual Reports
    « Reply #23 on: October 06, 2013, 20:15 »
    Astana is the richest WT team. Unlimited sponsor money :cool :cool :cool

    Oh yeah :D Thanks...have modified
  • ReplyReply

  • Dim

    • Grand Tour Winner
    • *
    • Country: gb
    • Posts: 7870
    • Liked: 2874
      • Velorooms
    • Awards: Best Post 2012
    Re: Team Sky Annual Reports
    « Reply #24 on: October 07, 2013, 23:14 »
    The exception to this is PR & Marketing which I assume covers Communications (Internet & Face-to-Face) and general sponsor entertainment. I assume that Team Sky have hired an expensive outside agency to handle this for them.

    A vast majority is handled in house. For the first year or so, the website, facebook, twitter was pretty much handled by one person. There was a second web guy but he then went on the road and handles all the at race PR. Theres been a few switcharounds, but its still pretty much done in house, 2 guys max working on website and social media, 1 on the road at races.

    They really cranked up in 2011, after JT was pretty much battling through 2010 on his own trying to handle things, 2011 more staff, and a lot more focus on promotion from giving away tens of thousands of hats, t-shirts, drinks bottles. Would be interesting to know if teh Wiggins documentaries were part funded by the team.
  • ReplyReply

  •  

    * Dark Side Chatbox

    Sorry, this shoutbox does not exist.

    Recent Posts

    Recent Topics

    Featured Topics



    Top
    Back to top