Quote:
Originally Posted by esquire
For the last 20+ years, the team has had the same owner who has paid the bills and has said he isn't going anywhere. How much more stability do you want?
|
Things would probably seem more stable if that same owner wasn't going to the media talking about how much money the team isn't making and how they need community support to continue operating.
For the majority of those 20+ years the revenues from gates were likely enough to stop most of the operational bleeding of the team. Now that the gates have declined to the lowest levels they've been since the Alouettes returned there's definitely cause for concern. The previous CFL Commissioner (as not great as he was) confirmed that the CFL is by its nature a gate-driven league even after the new TSN deal.
Quote:
|
Originally Posted by Jeffrey Orridge
“We’ve got to analyze at some point whether it’s a data point or a trend,” Orridge said. “It’s really always a balance, we’re still a gate-driven league but the fact that we’ve got such great television coverage is something that we’re aware of, that people often times decide based on weather conditions or anything else, they may actually just stay home and watch the game on TV.
|
[
Source]
Since that interview attendances have continued to decline.
Quote:
Originally Posted by esquire
Exactly that. CFL teams have budgets in the tens of millions of dollars with various revenue streams, and people (OK, one guy) thinks that the Als are on the verge of collapse over the few million dollars worth of empty seats they have had in recent seasons. I'm no Warren Buffett investment guru, but I strongly suspect that the continued existence of the Alouettes franchise suggests that someone is making money from it.
|
The owner is quoted as saying otherwise - that the team was only profitable for the one year they hosted the Grey Cup under the previous GC revenue-sharing platform. Every other year they lose money.
It's not as if i'm the one with a tinfoil hat on thinking about this.
Here's an article from 2014 talking about this issue, along with the previous articles and sources i've already provided.
An aside:
There's nothing inherently unique about sports teams losing money. NBA teams lose money, NFL teams lose money. The difference is in the overall league trending as a whole and the total value of operations derived from those league operations. NBA teams can lose money because they're tied in with league sponsorship as well as increasing franchise valuations. The Florida Panthers can bleed $10M/year because they're tied-in with NHL sponsorship deals and the league has proven it can fetch $600M for expansion teams.
The problem with a CFL team losing money is that none of these economic factors exist to the same degree. CFL teams on the whole aren't exactly increasing in franchise value, overall league revenues aren't increasing at the same pace, and CFL players will need a raise sooner rather than later (potentially as soon as the next few months). The CFL simply isn't in the same league as these other major leagues when it comes to overall revenue and team financing, so the Argonauts losing money is
not the same as the Florida Panthers losing money.
TFC can lose $10M in a season because the team is valued at more than all of the CFL combined at this point. $10M on a $300M valuation isn't a lot in the long run...but if you're a CFL team losing $1M/year on a $10M valuation it doesn't make sense in the long run to continue losing that money unless one genuinely thinks that profits are going to be on the horizon (or increases in franchise valuations). If the rumours of the potential Schooners expansion fee are correct then it effectively shows that CFL expansion fees are flat over a 10-year period, thereby meaning that CFL franchise valuations are more or less flat over a 10-year period. Why would anyone pay $30M for a team when they could get one for $10M? This is an average, of course. Saskatchewan and Winnipeg can be worth more in 2019 than in 2009 because of new stadiums, but does anyone think the Argonauts or Alouettes are worth more in 2019 than in 2009? My rough franchise values are running off of
this cfldb FAQ which takes the presumed value of the league as a whole and subdivides it into teams.
The clearest sign of any of this is the newly instituted salary cap on coaches and operations. One of the runaway expenses for teams like Edmonton and Saskatchewan were football operations...essentially, as general revenues increased, so did these expenses. I can't imagine teams like Montreal or Toronto could ever keep up with this sort of spending on football ops and thus the league comes in to create a cap, thereby stifling investment at the expense of the more profitable teams. Like other major leagues, salary caps on players are introduced to ensure an even playing field and to protect smaller market teams. The CFL has gone a step further and created an additional cap on coaches to protect smaller market (see: less profitable) teams.
There is potential that the new TV deal with TSN (presumably) in 2021 will reap more money for the league and its teams but i've yet to see anything really concrete stand out that says that TSN should be paying more money now than they already are. Ratings are holding steady, more or less, as Grey Cup ratings have declined during TSN's tenure as CFL's broadcaster. The biggest red flag for me, IMO, was CFL extending with TSN after signing the initial contract.
Nothing gets contracts and prices higher than an open bid for a product. Everyone knows that SN and TSN love going at each other for rights bidding, enough so that SN paid an absolutely silly amount for NHL rights in Canada. Why would the CFL not try to bring their rights to open bidding in 2018 and instead tie themselves down for additional years? The original TSN agreement was $40M/year from 2014 to 2018, which the CFL then agreed to extend for an additional three years at the same $40M. Did they not think they could get more out of an open bid contract after 2018?
The only way I see TSN's contract with the CFL substantially increasing is if there is a 10th team added, with those additional games providing enough incentive for the TSN bid contract to increase.
Quote:
|
Originally Posted by osmo
CFL in the past has done a poor job of leveraging other revenue streams. Corporate Sponsorship for example has been spotty and not exploited to its maximum but this should be changing with Ambrose pushing for a new league wide strategy.
|
Adidas stepped away from the jersey contract under Ambrosie's commissionership, to be replaced by New Era...
Anyway, to summarize this essay:
- CFL relies on gate revenues. Montreal's gates have declined;
- CFL franchise valuations are likely flat if Schooners fee matches REDBLACKS;
- TV deal has potential to increase but likely not as much as people assume;
- Operations salary cap stifles ability to hire and shows disparity in team financial health;
- Lost a corporate partner in Adidas (via the original contract signed with Reebok)
Quote:
|
Originally Posted by esquire
I'm not that familiar with the weather in Halifax... is it fall rain that's the issue?
|
According to climate data Halifax gets nearly three times the annual rainfall that Calgary does and about 25% more than Toronto and Hamilton. Usually over 100mm/month. Halifax is expected to annually have two more days of rain a month compared to Toronto in October & November. So, a little bit, but not a world-changing amount.
Quote:
|
Originally Posted by Acajack
Though Vancouver's rainfall numbers do jump incredibly from September to October.
|
Vancouver very wisely has an indoor stadium.
Prev
Linear Mode
