Pandemic wipes 26% off British Cycling revenue

British Cycling has revealed the bruising cost the first year of the coronavirus has had on its finances.

In its accounts for the year to March 31 2021 the national governing body reported its total income fell 26% from £33.5m in the 2019-2020 financial year to £24.6m last year.

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The organisation saw its income from all its revenue streams decrease. The most costly was a 39% drop in sponsorship income that saw it get £3.4m less from sponsors in the year to March 31 2021. That was driven largely by a “reprofiling” of the income from principal sponsor HSBC UK due to the delay in the Tokyo Olympics and the subsequent extension of its partnership for one year.

Its event income, which pre-pandemic accounted for just under 5% of revenue, all but disappeared, falling 97%. Likewise there were precipitous drops in the federation’s income from partnerships (73%) and coaching (63%).

However, the grant funding, which is by far the organisation’s biggest income stream accounting for around half its income, held up well falling just 13% to £12.7m in 2021. That was in large part due to £1.4m from the government's coronavirus job retention scheme that helped to prop up the income stream. 

Membership income is now the organisation’s second-biggest earner and that too held up well, dropping just 4% despite British Cycling applying a 50% discount to race licence fees in the year due to the lack of racing opportunities.

In response to the fall in income British Cycling cut its expenditure meaning that it still finished the year with an operating surplus of £767,917.

Its biggest cut was on commercial expenditure which fell 37% from £11.7m to £7.3m. The expenditure included £1m on major events that included “sunk costs” on cancelled events such as the 2020 National Championships.

It also cut 31% from its spend on cycling delivery, which covers regional competitions, support for clubs, cycling education and its regional structure of programmes. Spending here fell from £7.6m to £5.2m.

BC also made 38 roles redundant in July 2020 as part of its cost-cutting measures.

In their report BC chief executive Brian Facer and chair Frank Slevin warned that there were now a series of pressures on the finances of British Cycling in the year to March 31 2022. Principal among these is insurance costs which cost the organisation £2.7m in 2021.

“There has been an 8.6% increase in premiums in 2020-21 which represents a 32.5% increase over the last four years. The insurance market has continued to harden in 2021-22 with further increases in 2021-22 that puts further pressures on budgets against the reduced event income,” they wrote in the accounts.

They added that insurance costs represented 45% of membership and event income in 2021.

In June this year British Cycling’s board approved the “suspension” of the organisation's reserves policy which had been a key driver of the organisation amassing reserves of £4.5m. The organisation’s bosses said they forecast that continued pressure from rising costs such as insurance would mean that reserves pot will need to be used, at least in part, to meet its expenditure in 2022.