The finances of a cycling team

[Alex76]

Wonder if some of you would care to enlighten me on these questions....

Seems to me that unlike any other professional sport a pro cycling team doesn't appear to get any payments from event organisers etc, so wanted to clarify the below.

Let's assume that my pro cycling team is all lined up and ready for the coming season.

My income is:

- total cash from my title sponsor and 3 supporting sponsors.
- prize money from events my team takes part in.
- merchandise sales cut of replica kit etc.

My PIK ( payment in kind) comes from:

- my bike supplier.
- my kit supplier.
- my legitimate nutritional supplier.

Now my questions....

1. Do I receive anything from race organisers for taking part, a cut of TV deals, or media right payments in return for my teams images to be used to promote the events?
2. Do I get my teams accommodation etc provided free by race organisers at events we race in?
3. Travel... If going to say Beijing are the travel costs for my team, kit, coach, support staff covered by the race organiser?
4. Do I receive a payment based on where my team / riders finish in the pro tour?

5. Are there any other revenues streams I may have missed?

Be interested to hear what u all think about the above.

Thanks all.

 

[MatParker117]

Here's Sky's audited income statement for 2011:

 

[MatParker117]

 

[Alex76]

Sky pay Pinarello for bikes?

 

[willbick]

this might interest you

http://inrng.com/2013/10/finances-team-sky/

 

[Alex76]

thanks guys - if anyone has any info about pro-conti or conti level teams, and budgets that would be v useful.

thx.

 

[Master50]

organizer pays for accommodation and meals. No entry fee.

 

[Armchair Cyclist]

6.5 % of income is spent on PR and Marketing? Why? They aren't selling anything for their own profit. They are an advertising vehicle, not a company that has any product of its own to shift. It can't take £1m + for the odd press conference.

 

[Waterloo Sunrise]

6.5 % of income is spent on PR and Marketing? Why? They aren't selling anything for their own profit. They are an advertising vehicle, not a company that has any product of its own to shift. It can't take £1m + for the odd press conference.

The job of the team is to create positive news stories about Sky, and provide hospitality opportunities for it.

Formula one teams will spend an awful lot more on exactly the same activities.

 

[TomasC]

OP: is that you Fernando?

 

[willbick]

:d :d :d :d :d

 

[42x16ss]

6.5 % of income is spent on PR and Marketing? Why? They aren't selling anything for their own profit. They are an advertising vehicle, not a company that has any product of its own to shift. It can't take £1m + for the odd press conference.

You've got the website development, article contributors,web hosting and maintenance, PR staff, promotional materials/web shop and the resources to run it etc, etc.

The PR and marketing $$ would rack up pretty quick with all of this.

 

[tbonic]

Business model for pro cycling is untenable, hence the fragility of the franchises.

 

[Roude Leiw]

Astana and Radioshack both have a luxemburgish license, the thread got me interested, will see if i am able to find some accounts

 

[Alex76]

Business model for pro cycling is untenable, hence the fragility of the franchises.

My thoughts as well...

Some more questions...

- Eusk will disappear next season, what happens to the PT licence they have and their owners have paid money for..do the UCI buy it back, are the E owners
selling it onto another owner / team, or do they simply lose their investment ?

- Where / how did Sky get their PT licence - had a team folded or were they granted a new spot on the PT?

Thanks

 

[Le Baroudeur]

Business model for pro cycling is untenable, hence the fragility of the franchises.

Untenable in the same way as any organisation that relies on advertising revenue funding their product, of which there are of course many.

 

[CzechBike]

Untenable in the same way as any organisation that relies on advertising revenue funding their product, of which there are of course many.

Including this website

 

[Le Baroudeur]

Including this website

*Fires up iPad and clicks on links in the side bar of main page*

 

[MatParker117]

My thoughts as well...

Some more questions...

- Eusk will disappear next season, what happens to the PT licence they have and their owners have paid money for..do the UCI buy it back, are the E owners
selling it onto another owner / team, or do they simply lose their investment ?

- Where / how did Sky get their PT licence - had a team folded or were they granted a new spot on the PT?

Thanks

Cofidis lost there's due to poor results and Milram folded.

 

[Roude Leiw]

Now Astana accounts are really the way forward, they use every loophole in our accounting law to present accounts which show precisely nothing….

In 2011 salaries amount to roughly EUR 9 million, nothing to be seen in 2012.

Leopard is a bit better:

roughly EUR 12,6 million in rider salaries plus an add on of EUR 1,3 million as "image rights" paid to (undisclosed) riders, but I suppose we are talking here mainly Schleck(s) & Cancellara.

here a link to my dropbox folder with the actual documents

https://www.dropbox.com/sh/qnpgvvnu7wmjcsn/3tZS0HriuK

 

[Christian]

Now Astana accounts are really the way forward, they use every loophole in our accounting law to present accounts which show precisely nothing….

In 2011 salaries amount to roughly EUR 9 million, nothing to be seen in 2012.

Leopard is a bit better:

roughly EUR 12,6 million in rider salaries plus an add on of EUR 1,3 million as "image rights" paid to (undisclosed) riders, but I suppose we are talking here mainly Schleck(s) & Cancellara.

here a link to my dropbox folder with the actual documents

https://www.dropbox.com/sh/qnpgvvnu7wmjcsn/3tZS0HriuK

If I understood correctly Astana got an interest-free loan of 650.000 € from the Kazakhstan federation

I also read Movistar Team wants to move to Luxembourg

 

[Roude Leiw]

If I understood correctly Astana got an interest-free loan of 650.000 € from the Kazakhstan federation

I also read Movistar Team wants to move to Luxembourg

That was what i also understood. On the other hand the Kazakh cycling federation is the sole shareholder, so that does not really shock me. Some details would have been nice. Interestingly though, they consider their riders (and other staff if I am not mistaken) as freelance contractors. I suppose this is some kind of tax optimising set up but I am surprised none the less. Somewhere in these contracts are probably clauses which forbid the riders to hire out to some other team. Would be interesting to see an analysis of this in regards to our labour law.

 

[tbonic]

Untenable in the same way as any organisation that relies on advertising revenue funding their product, of which there are of course many.

And still untenable, nonetheless.

 

[Christian]

Leopard S.A. made a loss of €2.3 million in the business year 2012. In 2011 it had been €7.6 million, which makes a total loss of €9.9 million in two years.

Promobe S.A., a special fund of Becca, lent €5.3 million. These can only be paid back when a further €7 million in other debts are paid back. The clear turnover was €24.8 million. The debts are mainly from sponsoring contracts.

The salaries of riders and staff amounted to €16.4 million last year. After the entry of Radioshack, the marketing side had been turned over to the Texans (CSE Pro Cycling LLC). Leopard paid €3.7 million for contracts with this company. €1.8 million were in traveling expenses, another €1.8 million for Johan Bruyneel Sports Management and €452.000 for corporate identity.

On the 31st of December, Leopard S.A. made bank guarantees to the Luxembourg Cycling Union, the UCI and DKV Euro Service Gmbh & Co. KG that amounted to €4.8 million.

http://www.wort.lu/de/view/leopard-s-a-in-den-miesen-524ed316e4b0127de7dd95ab