Riders could lose $10M if season cancelled
CFL at risk of bankruptcy ‘if they can’t get a season off,’ Regina professor says
REGINA Despite being a CFL powerhouse, the Saskatchewan Roughriders won’t be immune from the economic impact of COVID -19.
Shaun Augustin, a University of Regina professor who teaches the economics of sports, feels the Riders have just as much to lose — perhaps as much as $10 million — as the other eight CFL franchises if the 2020 season is cancelled.
“This was always the risk related to this pandemic for the CFL,” Augustin said.
“If they could get a partial season off, they’ll be OK for a certain extent. If they can’t get a season off, they really are at risk of bankruptcy.”
Discussion of the league’s future reached a fever pitch on Thursday when commissioner Randy Ambrosie appeared before a House of Commons standing committee on finance.
On behalf of the league, Ambrosie is seeking $30 million in immediate aid from the government. The figure could reach $150 million if the 2020 season is cancelled.
Ambrosie acknowledged for the first time that “our most likely scenario is no season at all.”
The commissioner also revealed that the CFL teams collectively lose between $10 million and $20 million per season.
The community-owned teams — the Roughriders ($1.4 million), Edmonton Eskimos ($2.8 million) and Winnipeg Blue Bombers ($2.6 million) — each posted a profit in 2018.
The finances for the other six teams aren’t known because they are privately owned.
Saskatchewan’s 2019-20 annual general report is expected to be released in advance of the team’s annual general meeting in June.
Based on their report from 2018-19, Augustin feels the Riders are in better financial shape than some of the other CFL teams, but that doesn’t mean they’re in an enviable situation.
“Looking at their financials, they’re not so deep-pocketed that they can sit out a whole season and survive that,” Augustin said. “If they’re going to survive, they’ll need help if there’s a full season cancellation.”
The CFL is a gate-driven league and that is evident in the Riders’ 2018-19 report. Forty-three per cent of the team’s revenue came from gate receipts — $17.1 million in 2018.
That’s followed by merchandise sales (17 per cent, $6.8 million) that, with other incidentals, contributed to Riders generating $40,417,128 in total revenue.
The franchise had $40,397,376 in total expenses for 2018-19. Football operations top the list with 35 per cent of expenses for $14.2 million.
The Riders also spent $1.3 million on rent to the City of Regina for Mosaic Stadium.
The postponement or cancellation of the season would reduce some of the Riders’ overall expenses, because there would be fewer games or none at all.
Reducing staff on the football-operations side would also help the team’s bottom line.
The revenue side would also be impacted due to the lack of fans in the seats, with fewer jerseys and hats being sold.
There would be fewer or no concession sales due to a shortened or cancelled season.
“(The Riders) might be able to save on home-game expenses and they could cut back on advertising and public relations,” Augustin said. “They could cut back on their ticket office and their sponsorships so they might be able to cobble together $15 million of savings on the expense side.
“I could see them losing $10 million.”
Saskatchewan’s bottom line could get a boost from the 2020 Grey Cup game, which is to be held on Nov. 22 at Mosaic Stadium.
The 2013 Grey Cup game, in which the Riders beat the Hamilton Tiger-cats 45-23, resulted in a $9.3-million profit for the team and helped it post an overall profit of $10.4 million.
However, the playing of a Grey Cup in Regina this year is far from a certainty.
Based on Ambrosie’s remarks before the finance committee, the government would need to step up with some sort of financial aid for the CFL.
“People are now asking, ‘What should the government do?’” Augustin said.
“In normal times, the straight answer from the script for sports economics is you would not provide subsidies and you let them figure it out on their own.
“We’re in a different time and this is like a Great Depression kind of playbook. So from that perspective, subsidizing some of these things, while it wouldn’t normally pass the smell test, I think the government should be considering it.”