CFL needs to get financial house in order

Hey there, time traveller!
This article was published 21/05/2020 (1952 days ago), so information in it may no longer be current.

One of the many consequences coming out of the COVID-19 pandemic is that businesses, across all industries, have had to re-examine their status quo. For many, what used to work prior to the current global health crisis may no longer pass under what will most likely be a new version of ‘normal’ once the coronavirus subsides.

When it comes to the Canadian Football League, any reconsideration on how to do business will likely involve some drastic steps. That’s because before the pandemic swept across all corners of the globe, the CFL was already reeling, at least collectively, to make ends meet.

As many of you already know, CFL commissioner Randy Ambrosie, in a public hearing with the House of Commons earlier this month, in which he was lobbying the federal government for as much as $150 million in financial aid, told a panel of MPs that the league loses $10 million to $20 million each season.

Just last year, Ambrosie said, total losses came in at $20 million.

Those outside of league circles — and even a number of people inside the CFL, including players — had little idea just how much was lost each year. So, on Wednesday afternoon, during a 30-minute virtual town hall meeting aimed at answering questions from season-ticket holders, the most newsworthy part of the Q-and-A session was mostly overshadowed by pressing updates, most notably another delayed start to the 2020 season, which was moved back to September.

Instead, the most important part, the part that will most likely mean saving the CFL for years to come, was an answer to a question about how the league does business. Thanks to Jeff from Winnipeg — no, it wasn’t me, though I’ve been pondering the same thing for some time — Ambrosie was asked, in part, how the CFL would ultimately survive when nearly half its teams lose money?

“One of the things we are talking about is how do we restructure our business model? What changes can we make to make our league stronger?” Ambrosie asked.

“I think if anything, I have heard repeatedly over these past weeks is this tremendous outpouring of support and passion from our fans… they want to see us not just survive but they want to see us succeed and thrive into the future.”

Ambrosie added: “So, we are looking at our business models, we’re looking at our cost models, we’re in conversations and I’m happy to say we’re having really good discussions with the players’ association. We’re going to be talking with our coaches and football operations partners because obviously they play such a vital role in our game.”

Ambrosie has never spoken truer words since taking over as commissioner weeks into the 2017 campaign. They were especially refreshing considering the first step to solving a problem is the difficult task of admitting you have one.

Just months ago, Ambrosie stood in front of a room full of reporters for his state-of-the-league address during Grey Cup week in November and boldly proclaimed the CFL was on the up-and-up. It’s not worth reliving the speech, but its conclusion consisted of Ambrosie saying he wasn’t going to apologize for dreaming big and wanting to dream bigger, that he always felt “we’ve punched below our weight.”

Not exactly a great look now that Ambrosie is on his knees praying for a big bailout. Which brings us back to his recent comments about changes to the way the league does business.

As I’ve said before, count me in as one of the people who believe the league doesn’t only warrant some kind of cash injection, but has earned government support. I don’t agree with the outlandish ask of $150 million, but I do value the role the CFL plays within our communities, especially its ability to bring Canadians together. There are a lot of great people that run and support the three-down game.

The issue, of course, is that if the CFL is going to survive this pandemic, some drastic changes must happen and, like Ambrosie alluded to, it’s going to take an effort from all levels of the CFL.

I’m probably not going to make many friends with this next statement, but it’s become abundantly clear that the price tag for many within a team’s football operations is far too high.

That includes the CFL’s front office, with Ambrosie raking in, according to multiple sources, at least $750,000 — and upwards of close to $1 million with bonuses — per year. Perhaps Ambrosie should take the lead and slash his salary in half (to be fair, many across the league, including Ambrosie, have taken modest pay cuts already, though that’s become common place during the pandemic).

At the very least, perhaps flying around the world trying to unearth players that under normal circumstances wouldn’t crack a CFL roster should be temporarily delayed. I don’t hate CFL 2.0 and unlike most, I’d argue, understand its merits. Part of that understanding is that revenue streams for the CFL have been mostly tapped out in their own backyard. But instead of trying to find global ways of raising revenue — especially initiatives such as CFL 2.0, that will take years to reap the benefits, if they ever come — the league has to take a hard look at expenditures.

Ambrosie is just at the top. For a league where even the most prosperous teams turn a modest profit — the Winnipeg Blue Bombers, for instance, cleared just shy of $600,000 in 2019 after making their stadium loan payment, in a year where they set a league record for Grey Cup merchandise sales — should team presidents, general managers and head coaches be making massive salaries?

Not everyone is paid the same across the league but a conservative mark for all these positions is in the hundreds of thousands of dollars per year. How much should they be paid if there is no season at all?

After all, the current plan for players, at least for the majority that didn’t receive off-season bonuses, is they won’t receive a dime if games aren’t played. Instead, they’re being asked to apply for government assistance, so long as they’re eligible.

Players won’t likely be immune to drastic changes, either. Another possibility to curb expenses is to lower the salary cap, or rethink the way players are paid. It makes little sense for me to suggest where those savings should come from but I have a hard time believing the B.C. Lions are feeling all that great after paying quarterback Mike Reilly $725,000 last season for just five wins.

If you think it’s unfair to single out one person, imagine how Reilly’s teammates must have felt when the salary cap rose by $50,000 in 2019, only for Reilly to earn a $200,000 bump in his pay from what he made the previous year. This is nothing personal against Reilly, who is considered among the best players in the CFL. It’s just clearly bad business in a salary-cap system.

The sad reality is many teams have already spent millions this season, including 20 per cent of player salaries in off-season bonuses. That number will only go up with each passing day, until a decision is made as to whether there will be a season.

For those hoping for a truncated campaign starting in September, or one that also includes playing out of two “hub” cities, for that to happen the CFL will either need a massive inflow of public cash or access to a secret money tree. The expenses that will be accrued over time to ensure everyone is safe from the pandemic will be outlandish and the losses significant, especially with little to no fans permitted to attend.

There is, however, one way to fix all these issues. That would be for each team to cover whatever losses they amass from this season with their own cash, whether they play or not.

That’s going to be a tougher sell for the community-run teams but each one has a rainy-day account for such emergencies. If this isn’t considered to be a major storm, then I don’t know what is.

The private teams that don’t require a rainy-day fund — and instead pocket the profits or cover the losses — are essentially using money earned from season-ticket sales to cover their current costs. It certainly helps that people or corporations collectively worth upward of billions of dollars own each one of those clubs.

Without the use of government money, who cares what team owners and presidents decide to do with their cash. If they want to pay someone an outlandish salary for a cancelled season, go ahead. If they want to dig even deeper into their pockets to ensure everyone is safe to play an eight-game campaign, right on.

Like many who enjoy the CFL, I’ll see it as a sad day if the lights are turned out on the 2020 season. But it’s even sadder if the CFL expects taxpayers to run their gravy train.

jeff.hamilton@freepress.mb.ca

Twitter: @jeffkhamilton