New numbers, same problems for Petes

There is an old saying: “The figures lie, and liars figure.”

That might seem to apply to a new, lower figure for the Peterborough Petes’ financial losses over the past five seasons that has just come out.

When Petes officials were looking for a better deal on their Memorial Centre lease late last year they told the city the team had lost $685,000 in that five-year period – $222,000 last season alone.

Without a reworking of its lease the team could be broke within four years, the city was told.

City council ultimately-agreed to a generous new package that will leave the Petes with an average of $343,000 a year more over the final seven years of their lease.

However, a review of the financial records of all OHL and WHL teams over the past five years has now become public. It was done by the the KPMG accounting firm during a lawsuit filed by current and former players looking to be paid a minimum wage.

By KPMG’s reckoning, the Petes were not so badly off. Losses amounted to just $402,690 over those five years.

The difference lies is in the way investment income is looked at.

Petes officials didn’t include income from more than $700,000 in investments when they made their initial pitch to the city. KPMG says five years of investment income totalling more than $280,000 should have been applied.

It’s a bit of a grey area, but the Petes did shade the numbers to make their position look as dire as possible.

However, team president Dave Pogue did refer to the team’s pool of investment cash when he appeared before city council in November.

He noted the team was dipping into reserves to cover annual losses. If those losses continued to pile up as they did during the 2015-16 season the reserves (investments) would soon disappear.

Shortly after that the Petes opened their books to the city. Details of the investment income were included so from that point on the city had all the information that was in the KPMG report.

Pogue has now offered a reasonable explanation of why the numbers were handled that way: Add in the investment income and the losses don’t look so bad, but as investments are cashed in to cover losses that income stream dries up. It’s something of a Catch-22.

And the income is drying up. The Petes now hold about $300,000 less in investments than they had five years ago.

Given all that, it’s fair to say that not including investment income in the first place added some angst to public concern over the Pete’s future but didn’t affect the deal the city ultimately struck.