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Riders facing 'biggest financial crisis' in team history; project $30M in lost revenue if CFL season cancelled
THE CANADIAN PRESS/Mark Taylor
REGINA -- The Saskatchewan Roughriders revealed the organization lost just over $200,000 in the 2019-20 year.
The annual report for the Green and White was presented at the team’s Annual General Meeting (AGM) on Wednesday evening.
Two unique expenses accounted for a $210,064 loss, making 2019-20 the first time the team has not posted a net revenue since 2016.
The Riders loaned $670,000 to the CFL to cover the management costs of the Montreal Alouettes. The team expects the loan to be repaid in full.
Another $682,000 was spent on the Grey Cup, which the team said can be salvaged.
“The Grey Cup’s an investment and we’re happy to make that investment and none of that will be lost, we’ll just roll that over into 2022 planning,” said Craig Reynolds, the President and CEO of the Saskatchewan Roughriders.
THE FUTURE OF THE FRANCHISE
The financial numbers presented at the AGM ended in March 2020, so there was minimal impact from the COVID-19 pandemic on revenue or expenses for 2019-20. However, the team’s projections for a shortened or potentially non-existent 2020 CFL season are bleak.
“This is the biggest financial crisis the Saskatchewan Roughriders have faced in 110 years,” Roughriders CEO Craig Reynolds said.
“Never in our history have we had a complete loss of revenue and an inability to generate significant revenue to cover costs.”
The Roughriders attribute $17.1 million – or 43 per cent – of its revenue to gate receipts. This makes the prospect of fewer games, or none at all, in a 2020 season a challenge for the franchise.
The Roughriders CFO, Kent Paul, estimates an average loss of around $1.5 million, for each home game not played.
If the season were cancelled, the Roughriders expect a $30 million – or 82 per cent – drop in revenues. This would be offset by a projected $20 million decrease in expenses.
Paul says the club has taken steps to minimize expenses and are also accessing the federal government’s wage subsidy program.
With very little revenue coming in, the team’s cash flow has become a concern. The Riders currently have $7.6 million in reserves and a stabilization fund, but the club is already dipping into it.
“Overall the club’s cash and investment revenues are projected to be depleted by late fall as we continue to cover operating costs, while also refunding Grey Cup and a portion of season ticket monies” said Paul.
“At this time the club will require additional financing or funding to continue operations into 20201 and beyond.”
The club will be working with the CFL to reassess its business model, taking into account expenses, projected revenues, the COVID-19 virus, the economy and the fans ability and want to be a part of large gatherings.
“A lot of it is around realigning our business and making sure we’re managing things appropriately on the cost side to deal with that downside risk,” Reynolds said.
Based purely on the bottom line, Reynolds added that it’s “marginally better” for the Riders to play some games this year, than to not play any at all.
The CFL has yet to make a final decision about whether or not games will be played in the 2020 season.