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Great Britain's Sophie Capewell at 2022 UCI Track Worlds (copyright Alex Broadway, SWpix.com).JPGBritish Cycling and Shell: How HSBC pulling plug and COVID-19 hit governing body’s finances
This week’s announcement by British Cycling of Shell UK as its new lead partner has been met with a backlash from many members, some taking to social media to say they are cancelling their membership, as well coming under criticism in the media and from environmental organisations.
> "Greenwashing, pure and simple" - fury as Shell UK sponsors British Cycling
But with more than two and a half years elapsing between the revelation that former lead sponsor HSBC was terminating its backing four years early, plus the impact of the coronavirus pandemic that followed immediately afterwards as well as what is likely to have been a limited pool of potential partners, could it be that the governing body felt compelled to take the offer, despite the inevitable reaction?
British Cycling’s latest annual accounts – made available to members ahead of its annual general meeting later this month and a copy of which has been seen by road.cc – show that the combination of that loss of HSBC sponsorship as well as the impact of the pandemic continue to hit its finances hard.
A key financial objective of British Cycling in recent years has been to reduce its reliance on public money, which comes in the form of grants from Sport UK, tied to targets and performance in each four-yearly Olympic cycle, and Sport England – a total of £15.4 million in the past financial year.
In order to achieve that, it has aimed to grow revenue streams that it can generate itself, principally sponsorship and rights fees – reflecting income primarily from the lead sponsor but also from kit and equipment suppliers, as well as from broadcasters – plus income derived from membership fees and events.
HSBC became British Cycling’s lead sponsor at the start of 2017, signing an eight-year deal to replace broadcaster Sky which had decided not to renew its sponsorship after the 2016 Rio Olympic and Paralympic Games.
Sky’s sponsorship was estimated to be worth £10 million in the preceding four-year Olympic cycle, and while estimates of the backing HSBC gave British Cycling vary wildly, it is likely to have been significantly more.
A strong hint of just how much comes from the fact that income from sponsorship and rights fees leapt from £3.2 million in the 12 months to 31 March 2016, the last full financial year when Sky was lead sponsor, to £8.8 million in the year ended 31 March 2018, the first one to include a full 12 months of income from HSBC.
But in February 2020, British Cycling HSBC decided to end its eight-year sponsorship four years early, exercising a break clause due to what it termed “a shift in UK marketing and partnership priorities.”
> Blow to British Cycling as it confirms HSBC UK to end sponsorship four years early
That followed a period of turmoil at the governing body, including a UK Sport-led investigation into its governance following allegations of a culture of bullying and discrimination, a Parliamentary Committee report that was strongly critical of the organisation, a UK Anti-doping investigation into allegations of wrongdoing, and the then ongoing medical tribunal against former Team GB doctor Richard Freeman, who would eventually be struck off the medical register in March 2021.
While none of those was cited as the reason for HSBC’s decision to end its sponsorship early, it would be unsurprising if the succession of negative headlines coverage of those issues received in the mainstream media did not play at least a part in it.
News that HSBC was to terminate its partnership four years early was immediately followed by the onset of the coronavirus pandemic which led to events being postponed and cancelled throughout that year and into 2021, and the impact of both can be seen in British Cycling’s accounts in recent years.
Sponsorship income plummets
From a high point of income from sponsorship and rights fees of £9.1 million in the year to 31 March 2019 – 27.8 per cent of total income – British Cycling’s latest accounts, covering the 12 months to 31 March 2022, show that income stream at £3.2 million, or 11.1 per cent of the total, and a drop of almost two thirds on three years earlier.
While HSBC’s sponsorship had been due to end on 31 December 2020, the bank continued with its partnership throughout 2021, albeit on what are likely to have been much reduced terms, and leaving the governing body without a lead sponsor heading into this year.
The lower sponsorship income coupled with plummeting event revenues in 2020/21 – down from £1.7 million the previous year to just £45,000 due to cancellations enforced by COVID-19 – also led British Cycling to furlough a third of its staff and make a number of employees redundant.
A long search for a new backer
Businesses and organisations around the world have likewise had to face the challenges the pandemic brought with it, taking up a great deal of management time and focus – but the fact that it is only now, more than two and a half years after HSBC announced the ending of its sponsorship that British Cycling has unveiled its new backer suggests that the search has been a far from easy one.
Could that also help explain why it was Shell – which British Cycling surely knew would provoke a backlash – that was named as the new partner? That there was simply no other business around of the required stature able to provide sponsorship that is in any event likely to be well below the levels provided by HSBC between 2017 and 2020, with the times citing a figure of between £1 million and £1.5 million a year?
Meanwhile, for businesses involved in the fossil fuels industry, sport has increasingly become an attractive area of sponsorship, with Shell itself ending its partnership with arts venues such as London’s National Gallery following a longstanding campaign against the sector being involved in the arts.
This week began with Giro d’Italia organisers RCS Sport being strongly criticised for reports that the closing stage of next year’s race will not take place as originally planned in Trieste, but in Rome, requiring a 700km transfer, by air for the riders and by road for the huge caravan that accompanies the race.
That news threw a spotlight on the supposed environmental credentials of the sport, with teams and riders criss-crossing the world by plane to take part in events and given the convoy of vehicles that accompany races – not to mention the presence of team sponsors including companies such as Ineos and Total Energies, as well as oil-rich states such as the United Arab Emirates and Bahrain.
The announcement of Shell as British Cycling’s official sponsor has added fuel, as it were, to that fire, as well as to the wider issue of companies or regimes using team sponsorship, or the hosting of events, to try and enhance their reputation – something that will come into even sharper focus in the next few weeks as Qatar hosts the FIFA World Cup, which begins on 20 November.
NB Following publication of this article, British Cycling contacted us "to clarify that Shell have joined as an Official Partner rather than a Lead Partner, so the relationship isn't an equivalent of where we were with Sky/HSBC, which is why the agreement is more limited (both in scope of activity and the finances)."
Simon joined road.cc as news editor in 2009 and is now the site’s community editor, acting as a link between the team producing the content and our readers. A law and languages graduate, published translator and former retail analyst, he has reported on issues as diverse as cycling-related court cases, anti-doping investigations, the latest developments in the bike industry and the sport’s biggest races. Now back in London full-time after 15 years living in Oxford and Cambridge, he loves cycling along the Thames but misses having his former riding buddy, Elodie the miniature schnauzer, in the basket in front of him.
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23 comments
Petro chemical companies are perfectly accepatable as sponsors. From the tarmac to skinsuit, most of our kit benefits from the petro chemical industry. The pro teams travel by jet, bus, or train, powered by fuel extracted and processed by Shell. Be grateful that someone is willing to do the dirty dangerous job of providing such useful stuff to us all.
Maybe these ladies have got it right:
"Australian netball team refusing to accept sponsorship from a climate denier."
https://www.theguardian.com/sport/2022/oct/15/diamonds-pressure-netball-...
I'd guess that netball needs much less money than a cycling team, so they have more freedom to choose their sponsors. It does seem a common theme that companies attempt to clean their image through sports sponsorship.
It says in that article that they rejected a sponsorship of $15 million (AUS), which is about £8.5 million (at the time of writing, by Wednesday it will probably be at parity), for three years, so they actually turned down a rather higher sum than Shell is offering British Cycling.
ETA looked it up (slow workday and I was curious) and Netball Australia pays each of its professional clubs around $700,000 a year, plus payment for internationals (as far as I'm aware BC cover travel and logistics for competitors but they don't pay them a wage, do they?), so they are probably actually more in need of the money than British Cycling.
Another I stole:
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Well-written article. Just the facts, no judgement.
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A nice change.
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And in the nick of time, someone's started a petition;
https://actionnetwork.org/petitions/british-cycling-tell-shell-on-yer-bi...
BC should rewrite their charter, remove any references to encouraging more 'utility' (paraphrasing here) cycling and double down on their medal factory.
I don't care if a professional sporting entity is sponsored by an organisation I find distasteful, but I do if that entity claims to speak for me.
I logged on to say the same thing. BC should stop pretending to represent utility cyclists and stick to what they know; competition.
for me that doesnt necessarily fix this particular schism though, they only get funding for competition at elite level, because nearly 30 years ago now it became standing government policy to fund elite sport to create that successful "medal factory" (even though I dont like that term) because that reflected success then inspired people to take up sports themselves or push them to excel in other walks of life, which results in better health outcomes and all that good stuff.
the boom in utility cycling around the early 2010s was acknowledged to be down to TeamGB cycling success largely on the track.
So they are inexorably linked, whilst they receive the majority of their funding from government bodies to support their elite competition side, they always will be representing utility cyclists.
While medal sucesses have had some effect in increasing cycling, I would suggest that most of that increase is in sport events, not utility cycling. It has been clear over the years that BC are the national sporting body, they don't really have much idea about utility cyling, e.g. helmet rules, instructing cyclists not to ride on the day of the queen's funeral, and now that St Chris has moved on, they have even less idea.
There are three seperate organisations that the media think represent utility cyclists, BC, CUK and Sustrans, which is confusing and reduces the impact of all of them. It would help if they decided to stick to defined areas; BC - sport, CUK - utility cycling, Sustrans - routes.
And what about simple leisure cycling - going out just for the pleasure of cycling, a day out, perhaps also with a view to one's daily exercise, but definitely not sport or transport? Where do you see their interests represented?
Sky actually commissioned the LSE back in 2011 to try and quantify the increase and value of utility cycling, possibly to help justify their ongoing/increased commitment at the time with BC & Team Sky, but it cited British successes at elite level acts as a key motivator to people taking up cycling both at the sport level but also utility too. (and I doubt we'll see Shell produce such a report) https://www.britishcycling.org.uk/zuvvi/media/bc_files/corporate/The_Bri...
so I wouldnt disagree BC dont really get utility cycling, arguably theres quite abit of the sport side they dont get either, and I suspect their recent mishaps might have to do with having lost staff during Covid who did get things a bit better, that theyve yet to properly replace, its quite frankly ridiculous they havent updated their website to remove HSBC as a lead partner yet, 10months after their deal finished, and a week after they announced a new partner.
but whilst BCs annual budget is roughly 55% made up of government funding, which almost exclusively funds their elite sport activity, theyve got no choice but to represent utility cycling as well, imo.
now maybe as part of that funding arrangement, they need to be reminded of that obligation more, certainly I think people need to be reminded of that more and that just because the team wear kit with corporate logos, that corporate sponsor is not funding them to their successes.
and I know of at least one company (who I applaud & support for doing this) now who have withdrawn from their formal association with BC, directly as a result of this partnership with Shell
https://www.velovixen.com/blogs/inspiration/british-cycling-and-shell-ou...
I don't see an issue with the sponsership. People are far too sensitive these days, and so ready to have a moan. What about Ineos sponsoring what was Team Sky?
HSBC are not exactly ethical are they?
Unless people want Team GB to be sponsored by, say, Greenpeace, if they want success they need sponsorship from a company who can afford it.
I think you'll find there was, and still is, a huge amount of disquiet amongst cycling fans about the team being sponsored by a petrochemical giant advertising its massive 4x4, did you miss this?
No I didn't miss it. But they still sponsor them, don't they?
Whether we like it or not, if we want success, we must allow those with the funds to help that success to be able to do just that.
Just think where we would be in sport if it wasn't for the national lottery.
Like it or not, we need these companies in our lives. Unless we want to go back to the dark ages. Even those who travelled down from Scotland to glue themselves to the road outside Buckingham Palace must have travelled down using transport which uses fossil fuels.
Where do you draw the line with that? Or is the bottom line the only line for you?
Ineos is a private cycling team though, not a national body professing to represent all cyclists.
Ineos don't also receive public funding or funding from members & clubs and also don't hold a license issuing monopoly as the sports UK governing body.
Very very different scenario.
Do the accounts say where BC currently spend their cash? How much is spend on developing the sport and how much on vanity projects?
Ineos sponsor a privately owned pro tour cycling team, the owners of that team are completely on their own consciences who they bring on board to pay their bills for them, their only goals are to win as many races as possible and get their sponsor the most amount of exposure.
British Cycling are a national governing body of cycle sport in Great Britain, whose role is to administer sporting calendars in all domestic cycle sport and oversee cycling’s development across all disciplines, encourage millions of people to ride their bikes through recreational programmes, to inspire the next generation of cyclists and direct quote from them "...to lobby local and national government to make a sustained and resolute commitment to improving conditions for cyclists in order to ensure that Britain becomes a true cycling nation." They also oversee the Great British Cycling Team.
more than 50% of BCs funding comes direct from SportEngland/UK Sport which are government bodies, or bodies appointed by government, whose goals are to promote sport and physical activity,and to inspire people to enable extraordinary moments that enrich lives from success at elite level sports.
whilst GBCT may become the most visible public facing outcome of Shell sponsorship with logos on kit, that sponsorship money in no way impacts or influences the success that team has, because they are funded almost exclusively via SportEngland and UK Sport.
Which is precisely why Shell/BCs announcement in no way conflates the sponsorship with securing GBCT status or continued success at elite level sport, and simply states the commitment is to support net zero targets and disability inclusivity and enablement programmes.
if you cant see the difference, theres not much more I can say to help you
I'd guess that a lot of sports teams have some association with sponsors who are 'iffy'.
I don't like Shell being the new backers of British Cycling, but who do people want? If Shell pulled their money, and BC had to make some cutbacks, pull race series, etc the same people would still complain.
Unfortunately it is the world we live in. We have so many large companies sponsoring sport, I would say that a lot are unethical, or 'iffy', lets, be honest, many companies don't amass ludicrous wealth by being squeaky clean.
But, if we complain every time a sponsor comes up who we don't approve of, there wouldnt be many sports in rude health.
If everyone who thinks Shells sponsorship should not be in cycling, I would hope that they will refrain from using their car and buying fuel from Shell, or any other petroloeum company. Because, like it or not, we need companies such as Shell, it would be lovely to live in a green world where the planet is in rude health. But whilst we continue to build houses, produce more humans, want to heat our homes, have a smartphone and TV, drive our cars etc, we need these companies.
As I said, it is the world we live in.
the HSBC deal was rumoured to be worth 20million in total over the 8 years, so it was on a par with Sky IMO, and I think thats borne out more so because it felt BC had less money in the HSBC period than with Sky, but had rising costs to deal with.
I dont believe Shell were the only deal on the table, Id also argue its worse if Shell then paid for a cut price deal, because not only do BC get the predictable backlash which costs them both short term and long term financial pain, they sold themselves short at the same time.
Whilst at no stage was GBCT funding under threat, thats a key detail for me the sponsor may get the logos associated with GBCT as part of the deal, but they arent funding that team to success.
and there are several respectable bluechip FTSE100 companies with marketing budgets they spend that are worth more than 2-3million a year on sport, but you as always in sponsorship have to find the sweet spot where its mutually beneficial to both sides.