Winning it all actually cost Redblacks dearly

The Ottawa Redblacks’ ownership group wants the Canadian Football League to change its financial scheme for teams that advance to the Grey Cup after the club took a $1.1-million hit for winning the CFL championship.

Roger Greenberg, the managing partner of the Ottawa Sports and Entertainment Group, said that before winning the Grey Cup last season, the company wasn’t aware of a “long-standing problem” with the CFL when it comes to achieving the ultimate prize.

Greenberg, who is also the alternate governor for the Redblacks, told city council’s finance and economic development committee on Tuesday that the CFL has given the exact same amount of money to the two Grey Cup teams for decades.

“As costs go up, the attendees who are going actually lose money by participating in the Grey Cup game. It’s something which the league is now addressing and what it really means is all nine teams, which get a distribution from the Grey Cup, will take a lower amount and the two teams that are going to the Grey Cup will get a larger distribution.”

Greenberg said the league’s formula will change in 2018 “and I’ll be pressing to do a little bit more.”

Bizarrely, if the Redblacks had lost the Eastern Conference final against the Edmonton Eskimos, the OSEG would have been $1 million ahead, Greenberg said.

Bernie Ashe, CEO of the OSEG, explained how the costs pile up for successful playoff teams in the CFL.

“Every player has a built-in bonus the further they advance in the playoffs and for the Grey Cup. Similarly, our coaches and all of our football staff have bonuses to win a Grey Cup. That’s the major element of the additional compensation that’s incurred,” Ashe said.

“In terms of travel costs, we’re responsible as the host of the Eastern final to cover the visiting team’s travel costs.”

That meant paying for Edmonton players and staff to stay in Ottawa for several days. The OSEG then had to pay the Redblacks’ travel costs for the Grey Cup in Toronto.

“These are traditional models that were built decades ago that constitute how people are compensated, paid and the amount you get to reclaim from the league, and the net (cost) is working out to about $1 million,” Ashe said. “Previous winners of Grey Cups have posted exactly those kinds of numbers.”

Merchandise sales go up, but those sales have been coming in 2017, Ashe said. Winning a championship has also improved ticket sales for the 2017 Redblacks season and for the Grey Cup game that will be hosted at TD Place in November, he added.

As for the larger Lansdowne Park operation and the 30-year partnership with the City of Ottawa, the group says that it’s still in a startup phase.

Greenberg warned against reading too much into the $14.4-million net loss reported in the OSEG’s 2016 financial results. The figure includes a substantial non-cash line item for depreciation that weighs down the net loss, he said.

The OSEG’s focus is on the operating income, which was $2.7 million in the black in 2016 and a huge improvement from the previous year, when it was $985,000 in the red.

Greenberg said the group wants to increase the number of major events on the property, partly by hosting at least two major concerts each year.

The OSEG-run retail and office components are at about 95-percent occupancy. Greenberg said the company didn’t expect the rate to be higher. Businesses have left but others are eager to sign leases, he said.

Mayor Jim Watson said there needs to be an infusion of people on the site to help restaurants during the lunch hour.

The probable solution is increasing the number of office workers at Lansdowne. The office building, which is not operated by the OSEG, is only 52 per cent leased and Minto Group is optimistic it can fill the tower by mid-2018. Greenberg, who’s also the executive chairman of Minto, said he senses the local economy is growing.