'The worst crisis we've seen': Riders forecasting 'multi-year' financial recovery from COVID-19 pandemic
After a season with no games played in the Canadian Football League, the Saskatchewan Roughriders are projecting a multi-year financial recovery from the losses caused by the COVID-19 pandemic.
“It’s been the worst crisis we’ve seen, but I think we’ve weathered it as best as you could expect,” Roughriders President and CEO Craig Reynolds said.
At the Riders’ Annual General Meeting (AGM) on Wednesday night, the team reported excess expenses over revenues for a loss of $7,455,705 in the 2020-21 fiscal year.
The team attributes these losses to the cancellation of the season and other pandemic related impacts, such as the closure of retail stores.
“It was challenging,” Riders’ Chief Financial Officer Kent Paul said. “We were projecting to see upwards of a $10 million loss. While it wasn’t that bad, the club endured the COVID-19 pandemic resulting in the cancellation of the 2020 season.”
The team expects its financial difficulties will extend beyond the 2020-21 fiscal year.
“The impact the COVID-19 cancellation of the 2020 season, and a shortened 2021 season, will have a multi-year impact on the club’s financials,” Paul said. “The club’s cash flows are going to be impacted worse in 2021 compared to 2020, and will take multiple years to recover.”
Reynolds said the team expects to be dealing with the financial struggles caused by the pandemic for the next three years.
“Our cash flows will be extremely challenged because of the rollover of money into 2021 and then we’re going to rollover further dollars into 2022,” Reynolds said.
At last year’s AGM, the Riders projected the club would have to dip into its financial stabilization fund by the fall of 2020. The team said it was able to get out of 2020 without having to touch its rainy day fund, but that will not last.
The Riders expect to begin using money from the fund to keep the day-to-day operations going through the start of the shortened 2021 season.
“We would have to dip into the stabilization fund when we start to incur significant expenses,” Reynolds said. “So obviously the flights and the cost of getting everybody here, the cost of meals, the cost of accommodation, those are all going to start here quite quickly, so we’ll be draining the existing cash balances fairly quick.”
The Government of Canada’s Emergency Wage Subsidy gave the club enough revenue to maintain operations, with a reduced work force and operating costs.
The team’s staff was cut back by approximately 30 per cent. Members of the organization also took “significant” pay cuts.
“Without those federal programs, the club’s revenue decreased 84 per cent from the prior year,” Paul said. “The club’s normal revenue streams were all but eliminated this past year.”
The team’s total operating revenues were $10.3 million in 2020-21, compared to $39.6 million the previous year. Of the revenues this year, $3.9 million came from government funding programs.
Operating expenses also dropped in 2020-21, decreasing from $39.7 million in 2019-20 to $18.7 million.
In 2019-20, gate receipts accounted for $17 million in revenue for the team. But with no fans in the stands at Mosaic Stadium in 2020, the club had to find different revenue streams.
In 2020-21, sponsorships and government funding brought in 72 per cent of the team’s revenue.
THE 2021 SEASON
The club is forecasting it will need to access the Stabilization Fund over the course of 2021 to cover the costs of the season, while continuing to manage cash flow challenges created by the pandemic.
The Riders stabilization fund currently has $7.8 million in it. Reynolds anticipates the team will begin to access that money around the start of training camp.
Due to the uncertainty surrounding fan capacity at games, Reynolds could not project how long the team’s rainy day fund would last into 2021.
“Obviously July 5 when [tickets] go on sale, we’ll get a good indication of demand, because that’s the other thing that we’re not certain around is the level of the demand that’s there coming out of COVID-19,” Reynolds said.
The hope is that the team could return to profitability by 2023 – following a revenue boost from hosting the Grey Cup in 2022.
CTVNews.ca Top Stories
BREAKING Alice Munro, Nobel literature winner revered as short story master, dead at 92
Nobel laureate Alice Munro, the Canadian literary giant who became one of the world's most esteemed contemporary authors and one of history's most honoured short story writers, has died at age 92.
Latest updates on air quality alerts, and when the smoke may reach Ontario and Quebec
Wildfires have led Environment Canada to issue air quality advisories for parts of B.C., Alberta, Manitoba, Saskatchewan and the Northwest Territories, as forecasters warn the smoke could drift farther east.
Are these Canada's best restaurants? Annual top 100 list revealed
The annual list of Canada's top restaurants in the country was just released and here are the places that made the 2024 cut.
Attack on prison van in France kills 2 officers, inmate escapes
Armed assailants killed two French prison officers and seriously wounded three others in an attack on a convoy in Normandy on Tuesday and an inmate escaped, officials said.
Maximum payout for LifeLabs class-action drops from $150 estimate to $7.86
Canadian LifeLabs customers who filed an application for a class-action settlement began receiving their payments this week, though at a much lower amount than initially expected.
Steal a car, lose your driver's licence for 10 years under new Ontario proposal
Repeat car thieves may face lengthy licence bans under proposed changes to Ontario’s Highway Traffic Act.
$1.6B parts plant for Honda electric vehicle batteries coming to Niagara Region
A Japanese company has announced it will build an approximately $1.6-billion plant in Ontario's Niagara Region that will make a key electric vehicle battery component as part of Honda's supply chain in the province.
B.C. brings in law on name changes on day that child killer's new identity revealed
The BC NDP have tabled legislation aimed at stopping people who have committed certain heinous acts from changing their names.
Manitoba premier to visit areas impacted by wildfire
Manitoba Premier Wab Kinew will get a close-up look at the devastation from a large wildfire burning in northern Manitoba Tuesday.