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Tinkoff-Saxo CEO: ‘Team is fine for 2015’

Tinkoff-Saxo is in solid financial footing — at least through the 2015 season.

That’s what team CEO Stefano Feltrin told VeloNews following comments from Tinkoff-Saxo owner Oleg Tinkov, which went viral over the weekend,  raising doubts about the squad’s financial stability.

Tinkov told Bloomberg TV that sanctions against Russia, coupled with plummeting oil prices and a beleaguered ruble, could spell trouble for the team’s future.

When contacted by VeloNews, Feltrin countered that Tinkov’s comments were in the context of a worst-case scenario, and said the team’s finances are in order, despite worsening economic conditions in Russia.

“What Oleg meant was that this international situation might have an impact, but we are not looking at any major problem for next year. It’s definitely not a problem for 2015. It’s more of a long-term worry,” Feltrin told VeloNews on Sunday. “The team is fine for 2015. We are ready to go. We have everything in place. We are like anybody. We are subject to the global situation, the global economy. Failing something like World War III, the team is safe and sound.”

In an interview conducted in early December, Tinkov raised the issue of the team’s stability when asked by Bloomberg TV about possible economic fallout of stricter economic sanctions against Russia.

A worsening crisis in the Ukraine has upped tensions between Russia and the United States, and Tinkov suggested that the team’s multi-million-euro sponsorship from Tinkoff Bank could be at risk if things spiral out of control.

“If the sanctions will deteriorate the Russian economy, and share prices decline even more … then the Tinkoff bank starts to suffer, then I stop my sponsorship,” he said bluntly. “I don’t know, as owner of the team, if I will be able to find a substitution sponsor in Europe. Most likely, I will not, and I will shut down the team.”

Feltrin pointed out that the comments were only a brief part of a larger conversation with Tinkov, and insisted the team’s finances are in order for upcoming season. Tinkoff-Saxo, like all WorldTour teams, is required to post a bank guarantee with the UCI covering three months of team salaries and expenses.

“If you saw the interview, you notice [Tinkov] was giving an example to describe the potential consequences of sanctions on Russian business. That’s not happening right now,” Feltrin said.

“I would not say there is no problem, because there are problems in the Russian economy,” he continued. “If Tinkoff Bank suffers from a global slowdown, they might have to review their investment in the team. The potential risk is there.”

Tinkov’s comments also raised the question of who really backs the Tinkoff-Saxo team — Oleg Tinkov, or the Tinkoff Bank?

The lines between Tinkov and his bank can be somewhat blurry, but since he took the bank public in an IPO on the London stock exchange in 2013, which raised more than $1 billion, he is no longer calling the shots alone at the bank.

It was reported that Tinkov retained 50.9 percent ownership of Tinkoff Bank, but there are now other important stockholders, including Goldman Sachs and other institutional investors.

“Oleg is the owner of the team, but the team’s main sponsor is the Tinkoff Bank,” Feltrin explained. “We have a sponsorship contract with the bank.”

With such big stars as Alberto Contador and newly signed Peter Sagan, the team budget is estimated to be more than $25 million per season. Feltrin said Tinkoff Bank is the largest contributor, but would not reveal how much the bank currently underwrites the team. Other sponsors, such as Saxo Bank and Specialized, make significant contributions.

Tinkoff Bank operates in rubles, but pays out team salaries and expenses in euros, Feltrin confirmed, which means every day the ruble dips in value, it becomes incrementally more expensive to sponsor the team. On September 1, the ruble was trading at 37 to one US dollar. It dipped as low as 64 rubles per dollar in mid-December before settling at 52 rubles per dollar in trading last week.

Earlier this month, Tinkov, Feltrin, and top riders, such as Contador and Sagan, traveled to Moscow for an official unveiling of the team’s new jersey for 2015.

Tinkov and Feltrin also met with sponsors for reassurances that everything was going to be in place for the upcoming season.

“We went to Russia, and we took our key riders to the headquarters of the bank, to be able to show there is solid support. We are reasonably confident and comfortable with the situation,” Feltrin said.

There is reason for worry, however, at least when looking at the bank’s stock price. A year ago, it was trading at more than $15 per share. It closed on trading last week at less than $3 per share.

“Tinkoff Bank is still profitable, but it’s a 100-percent Russian business,” Feltrin continued. “International sanctions could affect them. With the crisis with the ruble and the financial crisis in Russia, it’s a potential long-term problem. As a team, we will try to make it better for them to see the benefit of sponsoring the team, so they consider it an asset.”

The headlines are just the latest chapter in the story of the flamboyant Tinkov, who made a dramatic return to cycling in 2013. After originally sponsoring his own team, with Tinkoff Credit Systems in 2007 and 2008, the self-styled entrepreneur sold off his license to fellow Russians, for the program that is now Katusha.

In the intervening years, Tinkov focused on building his banking business, investing heavily in promoting credit cards across Russia to everyday consumers. The Wall Street Journal reported that Tinkov pocketed an estimated $200 million during the IPO.

Flush with cash, Tinkov was keen to return to cycling. He linked up with Bjarne Riis during the 2013 season, bringing his Tinkoff Bank along as a co-sponsor that helped stabilize Riis’s team for the season. After some tense months, Riis sold his team license to Tinkov for a reported 6 million euros in late 2013. Tinkoff Bank slotted in as the main sponsor for 2014, and is now entering the final year of a three-year deal with the team.

Tinkov bought out Riis in 2013 with the promise of providing more financial stability to the team. Now it appears that events beyond his control could put the outspoken Russian under tremendous pressure to assure the team’s future.

On Sunday, Tinkov took to Twitter to address the matter, posting, “Shut down the team? Nothing last forever under the moon. But not the next 12 months. I can’t excite Sky that much. Fight until the end.”

Feltrin said, barring major disaster, the team’s future remains on track.

“We are confident that everything is OK. We are going ahead with our plans for 2015, and 2016,” Feltrin said. “Of course, we are carefully monitoring everything that is happening. The team is going to try its best to provide maximum value for its sponsors, to give them reason to continue supporting us. Everything else is out of our control. All we can do is give 100 percent on the bike.”

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