It’s official, UK petrochemicals firm Ineos will take over from Sky as the new team sponsor and the newly branded kit will be unveiled on 1 May at the Tour of Yorkshire. Here’s a look at a few related things, from changing kit mid-season to budget talk.
It’s official but there’s only
a holding statement for now. The story seems to have leaked out recently, going from the speculative to the certain in the last week. It was announced today but Ineos also announced it’s bought
a US chemicals firm for $700 million today which is obviously a big deal but that’s what Ineos does. Taking over Team Sky is newsworthy to the point of being visible on the home pages of various British news websites from the BBC and the Financial Times, where the cycling team gets covered rather than the US deal.
The formal launch will be at the Tour of Yorkshire in May. It’ll make a useful starting point as it’ll assemble the British media and the cycling media in one place, and Chris Froome is due to ride. It’ll be interesting to see if Ineos’s founder Jim Ratcliffe is involved publicly with the team or keeps his distance in the media, like James Murdoch did with Team Sky when he might have sat in the team car but he didn’t go in front of the microphones. We’ll learn more then, for example are Ineos interested in track cycling like Sky used to be (Anglo-Asian bank HSBC has the deal with British cycling)? Could there finally be a women’s team?
A chemicals company opens up all sorts of headlines, from the obvious, to talk of “Ineos hoping for right chemistry between Froome and Thomas in July” et cetera. The news has been greeted by variations on the dislike of chemicals, but probably not from people typing their disapproval on bamboo keyboards, and whose weekend sport involves glass bidons, raw latex tires and riding exclusively in wool shorts. Unlikely, eh? Admit it, we’re all complicit in using plastics, it’s just the extent of our consumption that varies, as well how we dispose and recycling afterwards. Even if recycling sounds green, for some time it’s meant shipping it across the planet to China for
rudimentary treatment , a practice that the Chinese finally got fed up with. Cycling’s already got complicated sponsors like the Kazakh, UAE and Bahrain states and an oligarch on
a US watchlist. What’s true here is that the sponsor could have been different, so perhaps the outcry is that of hopes being deflated, a very public puncture.
The Murdoch media empire certainly has its detractors but it also has millions of consumers; perhaps it’s possible to be both? But the brand of Sky is a consumer-facing one while Ineos isn’t, nobody can go and buy some Ineos unless you’re in the market for tonnes of liquid polymers. So it’ll be interesting to see if the company attracts as much popular support come July from British fans. Presumably part of the sponsorship is to win over the public and if rooting for a petrochemicals producer sounds hard, remember that mining chemicals company Orica managed just that. To attend the Tour de France is to see hundreds of thousands standing beside the road in Cofidis t-shirts, and so presumably Ineos will be adopted in time too.
Going into detail, Team Sky is Tour Racing Limited, the British corporate entity that has been owned by Sky and 21st Century Fox. Ineos isn’t a new sponsor, it will be the new owner. It’s possible it’s paid Sky because it is acquiring a World Tour licence but equally Sky may have sold it for a proverbial pound just to become free of the sponsorship liabilities and hand over in a friendly manner. It doesn’t matter much, and wouldn’t tell much of the value of a World Tour team licence as these depend on the circumstances. Dariusz Miłek got CCC reasonably cheap, Oleg Tinkov – remember? – paid millions to get his in a rush off Bjarne Riis.
This change of ownership isn’t a problem under the UCI rules, part of which are shared with the Professional Cycling Council, a group of pro cycling stakeholders. FDJ last year went from becoming a wholly-owned subsidiary of the French state lottery to a 50-50 joint venture with Groupama. They also changed their kit sans problème too, the rules and precedent allow for mid-season changes like this, see Belkin, Blanco, Highroad and more. Or note that Direct Energie is going to become Team Total before Ineos arrives in pro cycling, with the French oil major having taken over Direct Energie in 2018 and opening the possibility of an even bigger team in the future but that’s another story.
The big question is what the budget will be. Or even if there is one. Sky seemed to supply an open credit line rather than a pre-set amount of money. Several articles commenting on the news have seen Team Sky’s headline budget of £34.5 million – the last reported figure, for the 2017 season – and made the mistake of equating this with the sum needed for replacement sponsorship. But remember that number is the total budget, it’s Sky’s spending plus that of Ford, Pinarello, Castelli and other sponsors, plus income from race appearance fees, prize money and more.
We know from the accounts that the “title sponsors revenue” was £25.3m for 2017, this is the component of the budget that Ineos is filling. At a guess the money is going to be as big, Ineos is unlikely to come on board only to suffer stories of decline and cutbacks.
The deal comes at the right time, the rider market starts to come alive now. There’s a UCI rule that says riders can’t sign a contract with a rival team until 1 August and the intention is to stop a free-for-all but it’s part ignored, part worked-around. Vincenzo Nibali apparently talked to Trek-Segafredo the other day and teams are busy on their marquee riders who will cost them millions and define further recruitment, ie hire a grand tour contender and you’ll want mountain lieutenants who are handy in a team time trial and so on, preferably those who speak your leader’s language too. So there’s unlikely to be an exodus from Team Sky. Finally Ineos is a British company but with operations around the world so the cycling team is likely to keep its British flag but without having to recruit any target riders for nationality-based marketing ideas.
ConclusionFarewell Sky and hello Ineos, or rather INEOS as apparently they prefer capitals. Sky is leaving just short of a decade in the sport but the team rides on with an interruption that’s as brief as a bike change. It’s the same structure and under the same management with Dave Brailsford at the helm so it could just be a change in branding. That matters in a small way because like or not Sky is a consumer brand with millions of customers and Ineos isn’t, it’s hard for the public to have a relationship to it. There will be new kit to unveil and it’s unlikely to be that different. The big question is the budget, will this be as big as ever?