Advertisement 1

Pandemic crisis magnifies Canadian Football League's financial weaknesses

Article content

Think bigger, he said.

Advertisement 2
Story continues below
Article content

The new mantra had its charms as Canadian Football League commissioner Randy Ambrosie first went through the country talking to fans; and then the globe collecting international federation partners and Mexican draft picks.

Ambrosie was determined to push a brash new boldness through his CFL 2.0 initiative, and if it developed even one or two bona fide international players and a single significant stream of revenue that otherwise wouldn’t flow, it seemed worth his time and the minimal financial investment necessary. Indeed, a couple of global players contributed modestly on the field in 2019, and the CFL signed a broadcast deal with MVS, a Mexican media conglomerate.

Article content

Think bigger bottom line, he said.

Early in his tenure, Ambrosie went public with an intention to double league revenues. Though he never copped to the number, the CFL was reportedly a $200 million business. There has been some progress, as a renegotiated and extended rights deal with TSN last year bumped annual revenue, but attendance problems continue to affect the bottom line and the CFL is not anywhere close to a $400-million enterprise yet.

Advertisement 3
Story continues below
Article content

Think bigger national footprint, he said.

The league that has been home to as few as eight franchises, as many as 13 and most often and recently nine, desperately wants a tenth in Atlantic Canada. Ambrosie and the governors found solid ownership in Anthony LeBlanc, Bruce Bowser and Gary Drummond, and the welcome mat came out in Halifax. But substantive stadium issues — location and financing chief among them — slowed progress and the Schooners are not much closer to launch than they were two years ago.

It was all a modest work in progress as Ambrosie presided over his third Grey Cup as commissioner in Calgary last November. And then the COVID-19 pandemic struck, killing hundreds of thousands of people and knee-capping the global economy.

Advertisement 4
Story continues below
Article content

On Wednesday we learned that the CFL is on pause for at least another three months. If the season is wiped out entirely, league-wide financial losses could top $100 million and send the CFL reeling into an uncertain 2021.

Its financial recovery strategy has included staff pay cuts, some job losses, and the controversial pursuit of up to $150 million in financial aid from the federal government. That’s a much-needed bandaid.

But it also seems increasingly obvious the CFL’s business model has to change dramatically, because the little league has a big financial problem, entirely unrelated to the pandemic. As Ambrosie made his pitch for aid May 7, he went public with the sobering news that the league loses $10 million to $20 million, in a good year.

Advertisement 5
Story continues below
Article content

It is literally public knowledge that the community-owned franchises in Edmonton, Winnipeg and Saskatchewan routinely make healthy profits, even when they do not host the Grey Cup game. In 2018, for instance, they combined to go $7 million into the black. If the league came close to a $20 million loss that year, the remaining six teams went $27 million into the red.

In a good year. And this is the worst year ever.

“A crisis doesn’t make you stronger,” Ambrosie said Wednesday, when asked what he has learned during this process. “It makes you weaker. It amplifies your weaknesses.”

Half-empty buildings in Toronto and Vancouver were the CFL’s most overt weaknesses until Ambrosie broadcast their financial reality, and the focus shifted to the business model. In a nine-team loop with such disparate financial wherewithal and bottom lines, perhaps a salary cap that accommodates an active roster of 45 players and several more on a practice roster, a $725,000 franchise quarterback, or a $225,000 wide receiver or $200,000 offensive tackle is too large a luxury. So, too, a football operations cap that allows for 11 coaches and can pay a head coach $450,000. And how about having a look at compensation for GMs and presidents.

Advertisement 6
Story continues below
Article content

Unless and until they deliver on Ambrosie’s pledge to double league revenues, which isn’t happening rapidly enough for anyone’s liking, perhaps thinking modestly, not bigger, is a better policy.

“Any good business is mindful of driving the top line and managing expenses and I think we have to do both,” Ambrosie said Wednesday. “One of the things we’ve got to do is just look at our model. How does it work? What can we afford? Where do we have opportunities to reshape our league? Let’s look at everything and figure out how to drive this league to a better future. We’ll get through this but we’ll be going into a weaker economy. We need to look at our footprint.”

That’s a big job, one that will test the league’s partnership with the CFL Players Association, who are in the business of getting more, not less, for their membership.

dbarnes@postmedia.com

Twitter.com/sportsdanbarnes

Article content
Comments
You must be logged in to join the discussion or read more comments.
Join the Conversation

Postmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. You will receive an email if there is a reply to your comment, an update to a thread you follow or if a user you follow comments. Visit our Community Guidelines for more information.

Latest National Stories
    News Near Tillsonburg
      This Week in Flyers