Contador struggled in this year's Tour de France with early crashes and abandoned after one week. His last Tour title is from the 2009 edition. However, he took on and beat the British super-team in smaller races and held off Chris Froome to second place in the 2014 Vuelta a España.
"They have more than 35 million euro budget and we are working on that, but it is complicated. It is very difficult to compete in such conditions," Contador told Spain's Marca newspaper.
"They can make two or three high level teams for the Tour. But in the end, we are doing a great job we all come prepared to the highest level the Tour."
Sky's budget for the 2015 season was reported to be £24 million. The 18 WorldTour teams' budgets are unknown, but Sky is believed to be the biggest or one of the biggest money teams ever in cycling.
The governing body does not place budget caps on riders’ contracts or teams’ budgets.
The 33-year-old Spaniard is cycling's most decorated Grand Tour cyclist currently racing with two Tour titles, two from the Giro d'Italia and four from the Vuelta a España.
Watch: The best of the 2016 Tour de France
With Tinkoff folding at the end of the year, Contador jumped ship to American WorldTour team Trek-Segafredo. He already said that the Tour will be goal number one.
"If you've have a great team, it is the key, if not it's impossible. In the past, it could work, but if you don't have a strong team then it is impossible to add up the victories,” he continued.
"There are other teams with more budget and stronger than us, but we will prepare hard for be a strong team and compete with the best. We need to form a great group on and off the road."
Austrian Michael Gogl and Contador's long-time helper Jesús Hernández will make the jump from Tinkoff to Trek-Segafredo, as well. He could also rely on Bauke Mollema, Peter Stetina and Jarlinson Pantano.
Contador finished second in Paris-Nice, second in the Volta a Catalunya and won País Vasco leading to the Tour last year. He said his build up will be similar in 2017.
"I will work hard for the big goal because my goal is to win, always win," he added. "Sometimes the races say otherwise, like with the Vuelta."
He lost time in the opening team time trial and crashed in the Vuelta and placed fourth overall.
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