CFL BOSS IS RIDING A SLIPPERY SLOPE
Will Ambrosie’s request for public funds reveal picture of a league not worth saving?
The Canadian Football League’s request for tens of millions of dollars of federal cash was met last week with everything from support to skepticism to outright disdain.
But a near-universal element of the responses was that if commissioner Randy Ambrosie was serious about getting $30 million of taxpayer funds — and up to $150 million if there is no CFL football in 2020 — he would have to do much more than just offer a few sentences about the league’s financial woes amid the coronavirus pandemic.
He would have to prove it. He would have to do something that professional sports leagues never do: Come clean about the financial state of the franchises.
Pro leagues always say that everything is great, unless they want to help a team get public money for a stadium, or unless they are in labour negotiations. Then the business is barely breaking even, and everyone is at pains to point out that it exists mostly for reasons of civic pride. Won’t anyone think of the fans?
The pandemic has introduced a new situation: A league that gets about half its revenues from game-day fans facing the prospect of a season without any game-day fans. Whatever doubts can be had when the CFL is, say, telling its players that it cannot afford expensive medical coverage, there is no reason to think that its teams could earn no money, pay their normal expenses and not lose vast sums. The financial peril is real.
A season that would have started next month is on hold. The lobbying effort in Ottawa continues. But the problem for the CFL might not be in demonstrating the seriousness of its money problems. The problem could be unveiling how serious they really are. Can it truly open its books and still claim to have a healthy long-term future?
The CFL has for a long time had two solitudes. There is the CFL of the Prairies, with four healthy, wealthy franchises supported by deep and loyal fan bases. Then there is everywhere else. Ottawa and Hamilton have watched teams fold or go bankrupt, but each has been successful on and off the field in recent years. The B.C. Lions have usually been as healthy as a Prairie franchise, but that has waned. Montreal had a long CFL renaissance when the Alouettes moved to Mcgill University, but that dissipated, ownership bailed and the team was a ward of the league for the whole of last season. Toronto’s antipathy toward the league has continued despite ownership changes, a lovely new stadium and Grey Cup wins.
This dichotomy has for years now — decades, even — created a CFL conundrum. How does a sports league grow and thrive when its best markets are also its smallest? And can it be a viable business when the teams in its biggest cities cannot make any money?
Ambrosie, who became commissioner in 2017, has so far addressed the problems in the big markets by looking beyond them. He endorsed a proposal to add a new franchise in Halifax, and has spearheaded a global expansion in which the CFL has recruited players from Mexico and Europe in hopes of securing future media-rights deals. When in full salesman mode, the commissioner envisions a bigger global league that increases interest in places like Montreal and Toronto precisely because it has become a bigger global league. It’s a plan that, even before the pandemic hit, would take years to bear significant financial fruit.
In the meantime, the problems in the league’s big cities have only become more evident. David Braley, the Hamilton-based businessman who owns the B.C. Lions, has been looking to sell the team for years, but has not found someone willing to meet his price. He was also, for a time, the owner of the Toronto Argonauts, and oversaw a protracted sale of that franchise that was mostly notable for all the wealthy people and companies in the city who wanted no part of it.
Larry Tanenbaum and Bell Media, two-thirds of Maple Leaf Sports and Entertainment, finally bought the team five years ago, creating the novel arrangement where the CFL’S broadcaster was also a team owner. Two years later they sold the team to themselves, sort of, moving the franchise under the MLSE umbrella.
It has never been clear why Rogers Communications, the other third of MLSE, agreed to that sale other than as a favour to its partners. Despite moving to BMO Field and winning a championship in 2017, the Argos consistently play before seas of empty red seats and cannot make a ripple of interest in a crowded sports market. And in Montreal, efforts by the Wetenhall family, which once returned the Alouettes to glory, to sell the team eventually led to the rest of the league taking the franchise over last year. The subsequent sale carried on for the whole of last season, amid a rotating cast of potential owners, before Sid Spiegel and Gary Stern, two Ontario businessmen, finally closed a deal. Stern had been at a Grey Cup party at the home of Dale Lastman, the new chair of the CFL’S board, who told him that the Als were still for sale. Within weeks Stern and his father-in-law had bought the team on, by all appearances, something of a lark.
The consistent element in the sale, or would-be sale, of the teams in Toronto, Montreal and Vancouver is that the franchises lose millions of dollars annually, which is why the transactions take so long to sort out. Just how much they lose has been a mystery, at least until Ambrosie offered a hint last week when he told a Parliamentary committee that the teams “collectively lose between $10- and $20-million a season.” Six of the league’s nine teams are privately owned, so for now the commissioner’s words are the only evidence of their losses.
But three teams, Edmonton, Saskatchewan and Winnipeg, are owned publicly and must file financial statements. In 2018, the last year for which all three are available, they combined for about $7-million in profit (Winnipeg has since reported an increased profit for 2019, its Grey Cup-winning season). The other six franchises would then, by Ambrosie’s admission, have lost somewhere between $17- and $27-million in that season. Ottawa and Hamilton have consistently sold out their new stadiums, and Calgary is a model franchise, so the bulk of the losses must come from the other three teams. And the combined losses among the Lions, Alouettes and Argonauts could be even steeper if the other three teams are turning modest profits. Are the big-city teams a combined $30 million in the hole? (If Ottawa or Hamilton is losing money with good teams in full stadiums, that’s worrisome on its own).
Does the CFL really want to make these kinds of losses a matter for public scrutiny? More to the point, can the league both show that the financial picture is particularly grim in Canada’s biggest markets, and still claim that a bright future lays ahead? The CFL’S problems in the big cities have long been evident, but they’ve not before been faced with admitting it in this way.
It is a tricky dance that the league must now do: prove that its finances are bad, but not so bad that it is not worth saving.