With no revenue, team in dire shape
Team could lose millions if COVID-19 forces CFL to cancel entire 2020 season
The Saskatchewan Roughriders are in dire straits.
That was the key take-away after listening to Riders president and CEO Craig Reynolds discuss the predicament facing the CFL team due to the COVID-19 pandemic.
“This is the biggest financial crisis that the Saskatchewan Roughriders have faced in 110 years and I say that with a deep appreciation of our history,” Reynolds said in advance of Wednesday’s virtual annual general meeting.
“I grew up during the telethon years and I was a big fan of the Roughriders when we had lots of financial challenges. Never in our history have we essentially suffered a complete loss of revenue and an inability to generate significant revenue to cover costs.”
How bad is it? There’s $7.6 million remaining in the Riders’ stabilization fund and that reservoir will be depleted by late fall.
“Our stabilization fund will not sustain us through that and we’re going to need additional sources of funding,” said Reynolds, who recently announced salary cuts to the Riders’ business and football operations staff. “There are some sources available and we’re certainly looking at all of our options.”
Reynolds noted that the pandemic essentially started as the community-owned Riders were concluding the 2019-20 fiscal year, one in which the Green and White recorded a loss of $210,064 based on the team’s annual report. The document was released prior to Wednesday’s AGM, which was conducted remotely for the first time.
Whether there is a 2020 CFL season remains to be determined. CFL commissioner Randy Ambrosie has pushed the start of the season from June to September, but hasn’t ruled out cancelling the 2020 season outright.
If the season is wiped out, the Riders could lose $10 million based on the expenses associated with a traditional 18-game scenario. However, that can’t take place considering the season won’t start until September (if there is a season), leaving the option of an eight-game regular season.
“There are a lot of scenarios and unknowns,” Reynolds said. “Based on our (model) right now, it’s marginally better to play.”
The Riders were scheduled to host the Grey Cup game on Nov. 22 but, due to the coronavirus, the 2020 hosting duties were moved to 2022. Hamilton remains the host city for the 2021 CFL championship game.
Postponing the 2020 Grey Cup game and operating the Montreal Alouettes for the 2019 season were the main reasons cited by the Riders for their financial loss in 2019-20.
A total of $682,122 had already been invested in planning the 2020 Grey Cup, of which the Riders had spent $222,017 based on the CFL’S sharing model. Most of those funds are to be invested in the 2022 Grey Cup game.
Saskatchewan, along with the other seven CFL teams, contributed $676,000 to the management of the Alouettes during the 2019 season while the league searched for new ownership.
Chief financial officer Kent Paul said that Riders could have posted a profit of $682,000 without moving the Grey Cup to 2022 and supporting the Alouettes, who were eventually sold.
“There is an investment on the Grey Cup that was lost, but the bigger impact was the Montreal situation,” Paul said.
The Riders had a solid 2019 season despite a 20-13 loss to the visiting Winnipeg Blue Bombers in the West Division final. The home playoff game generated $1.9 million for the Riders.
The Green and White’s gate receipts for 2019-20 were $17.1 million, just shy of the franchise-record $17.2 million in 2018-19. The total merchandise sold was $6 million, down from $6.8 million last year. Sponsorships increased to $7.3 million, from $6.8 million.
Saskatchewan’s total gross revenues in 2019 were $39.6 million, down from $40.4 million in 2018 due to savings related to football operations, merchandise and community donations.
“Financially (2019) was a good year for the Riders, but it feels like forever ago,” Reynolds said.
Reynolds was then asked about the viability of the CFL beyond the 2020 season given the uncertainty of COVID-19 pandemic.
“We view this as a multi-year problem,” Reynolds said. “We’ll get a good sense of that as we go through season-ticket renewals at the end of 2020 and into 2021. We have the great fortune here of having a very strong season-ticket base. A lot of it is realigning our business and making sure we’re managing things appropriately on the cost side to really deal with that downside risk.”