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Posted Jul 26, 2017, 1:14 AM
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ハルウララ
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Join Date: Jul 2009
Location: Toronto
Posts: 12,853
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Quote:
Originally Posted by elly63
It exists all right, if you don't want to believe it that's your problem.
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Why would I believe something I haven't seen or heard for myself?
So, in my googling, i've stumbled upon a Yahoo Sports article by Andrew Bucholtz which tries to dissect presumed required attendance for breaking even in the CFL. I'm guessing this is more valuable than a potential soundbyte from Madani, anyway.
Below are the relevant bits:
Quote:
Originally Posted by Andrew Bucholtz
Let's take a look at what the Argonauts' finances might be. The team is privately owned (split between Bell and Larry Tanenbaum's Kilmer Group), so their financial reports aren't public, but as we've done in previous years, we can get an estimate of what they're making and spending based on CFL finances that are publicly reported. There are two important numbers that we do know; the salary cap ($5.1 million this year) and the league dispersements to clubs (mostly revenue from the TV/radio/internet rights deal with TSN, but some other things are included in this; this was $4,204,850 per club in 2015, as shown by the Eskimos' financials.) Thus, each team will likely get around $4.2 million (maybe more; it was $4,344,817 in 2014) from the league, and they can pay a maximum of $5.1 million in salaries to players (with some caveats: for example, players on the six-game injured list don't count against the cap). So, even if the Argos spend right up to the cap, the biggest loss they could have from player salaries versus TV revenue would be only $900,000.
What are the Argos' other costs and revenues? Again, the Edmonton example may prove instructive, especially considering that Edmonton has generally been the lowest of the three teams that do report their finances. The Eskimos reported operating expenses of $22.8 million in 2015 (and operating revenues of $24.8 million, giving them a $1.6 million profit). For comparison, the Bombers reported operating revenue of $28.3 million and operating expenses of $23.9 million (a $4.4 million profit), and the Roughriders reported operating revenue of $39.3 million and operating expenses of $42.7 million (a loss of $3.4 million, which expanded to a loss of $4.3 million after adding in donations, rent and investment value changes) It seems likely the Argonauts' expenses aren't much beyond Edmonton's, especially considering that the Eskimos have heavily invested in football operations in recent years.
What about their revenues? Well, we don't have enough information to really understand where they stack up in a few areas, but they may not be that different from teams we do know. Toronto's probably below Edmonton in merchandise sales (the Eskimos had $1,683,445 last year, a substantial rise over 2014), but they're not necessarily as far behind in sponsorships ($4,502,647) or concessions and game-day revenues ($3,993,919; yes, the Argos have had less people at their games than Edmonton, but they also may make some money from pre-game tailgating sales). That's all hypothetical, though. One area where the Eskimos certainly were ahead is in postseason revenue; they hosted the West Final and made $1.7 million off that, while Toronto didn't host a postseason game. Another area we can examine in more detail, and the only one that's directly related to attendance, is gate revenue.
The Eskimos brought in $8,620,735 in pre-season and regular-season gate revenue last year (for comparison, Winnipeg brought in $9.8 million and Saskatchewan brought in $15.7 million), and had a regular season home average attendance of 31,517, which would multiply to a total attendance of around 283,653 across nine home games, plus 11,825 from their preseason "home game" in Fort McMurray for a total attendance of 295,378. That means Edmonton brought in average revenue of $29.19 per ticket sold, which seems reasonable: some seats are cheaper than that, some are more expensive, and season ticket savings affect this. The Argos' season-ticket pricing looks a bit more expensive than the Eskimos', and their single-game tickets also seem a little more expensive, so we can probably assume that they're making at least as much per seat sold as Edmonton and perhaps more. That gives us an opportunity to estimate gate revenues for the Argos under a few conditions, as seen in the following sheet:
There are a few key takeaways from that. Even under the most favourable assumptions here (an average attendance that rises to 18,000 and revenue of $35 per seat), the Argonauts' $6.2 million in gate revenue would still be $2.4 million behind Edmonton, and they'd be $3.6 million behind Winnipeg and $9.5 million behind Saskatchewan. So, poor attendance certainly does hurt them. However, even under the least favourable assumptions here (an average attendance that plummets to 14,660, the current average discounting the home opener, and revenue of $29.19 per seat), Toronto still pulls in $4.3 million from the gate, and while that would put them $4.3 million behind the Eskimos, that isn't necessarily disastrous.
Remember, Edmonton made a profit of $1.6 million in 2015 and had $8.6 million in gate revenues; they also made $1.7 million from hosting the West Final, but spent $2.6 million on hosting and playing in the West Final and playing in the Grey Cup. Thus, if all other factors are held even, a CFL team that doesn't compete in the postseason would only need would need about $6.1 million at the regular-season gate to break even. Under the least favourable conditions here (presuming other areas of revenue and expenses are similar), the Argonauts would lose $1.8 million on the season. Under the most favourable conditions here, they'd make $100,000. Of course, this comes with caveats; we're presuming that the attendance figures are accurate, that the numbers of free tickets given out aren't significant enough to really tank the per-seat revenue, and that Toronto's other revenues and costs are in line with Edmonton's. Still, there's a way this team could even be profitable if they manage to boost their average attendance to just 18,000 and their revenue per seat to $35.
That's also before you consider that the Argos are hosting the 2016 Grey Cup, which is a big money-maker. Hosting the Grey Cup gave the Riders $9.3 million in profit in 2013 and the Bombers $7.1 million in profit last year. Thus, the Argos' losses this year should be more than covered by Grey Cup profits. Those profits should also provide enough money to hopefully cover losses for several years. Now, those profits certainly won't cover the team's losses indefinitely, and the league can't just keep handing Grey Cups to Toronto (which will have had two in five years now) to prop up the franchise, so the team does need to improve its attendance in order to become stable.
The Argos have deep-pocketed owners who appear to be in this for the long haul, though, and the attendance really isn't calamitous. It's well below other cities, sure, but it's a big gain over last year's 12,430 (affected by moving home games thanks to the Blue Jays playoff run), it's not far below their 17,791 in 2014, and it's not necessarily far from what the team would need to become at least revenue-neutral. There's reason to believe they may be able to get there some day, especially if they start winning at home. Someone who might help there is...
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He had an additional section on Montreal & BC:
Quote:
Originally Posted by Andrew Bucholtz
3. Attendance in Montreal and B.C.? The CFL's other biggest cities have also come under fire for poor attendance, placing second- and third-worst respectively with average attendances of 20,191 and 20,715 respectively so far this year. However, estimating their gate revenue according to the process above (taking the average attendance, multiplying by nine home games, adding the preseason attendance, and multiplying by the average of $29.19 Edmonton made per ticket) gives $5.7 million for Montreal and $6.0 million for B.C. That's below the estimated $6.1 million gate needed to be revenue-neutral (excluding playoff revenue and costs), but it's also not disastrous, and it's much better than the situation in Toronto. The actual situation might be better for them too, as their per-ticket profits could be above $29.19. Those attendances could still be improved, of course, but it's worth pointing out that this is becoming less and less of a gate-driven league thanks to the new TV deal.
Yes, gate revenues are still the biggest source of revenue (and even bad ones are above the estimated $4.2 million the league's handing out to each club annually), but the amount of TV money coming in makes it possible to be close to revenue-neutral even with lower gates. For reference, an average attendance of 20,997 per regular-season game plus 20,000 at a preseason game, at an average of $29.19 per ticket, would produce the $6.1 million needed to hit revenue-neutral under these assumptions. An attendance of less than 21,000 seems like an achievable target. Something to consider here, though, is that this only works because the 2014 CBA gives players only an estimated 18.5 to 22.7 per cent of league revenues, a staggeringly low percentage by professional sports standards. If the reorganized CFLPA puts up more of a fight in the next bargaining war and gains a higher percentage of revenues, the attendance needed for profitability would rise. Speaking of the CFLPA, they made some waves this week with a submission to an Alberta government panel investigating...
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Bucholtz' conclusion seems to be somewhere in the ballpark of between 20K-21K necessary to break even under current revenue dispersion with the TSN TV contract. The Argos are theoretically breakeven at 18K if their per-seat revenue is somewhere around $35 (including something like Monday night's seat sales is tough to say, which didn't get them to 16K).
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