‘Biggest financial crisis’ in team history: Roughriders brace for economic impact of COVID-19

The Saskatchewan Roughriders are preparing for a $10-million deficit this year due to COVID-19.

During its annual general meeting Wednesday evening, the CFL team announced that if no games are played in 2020, the Roughriders will see a $30-million loss in revenue and a $20-million decrease in expenses leading to a $10-million deficit.

“This is the biggest financial crisis the Saskatchewan Roughriders have faced in 110 years and I say that with a deep appreciation of our history. I grew up through the telethon years and was a big fan of the Saskatchewan Roughriders when we had lots of financial challenges,” Roughriders president and CEO Craig Reynolds said during a media call before the meeting.

“Never in our history have we had an essentially complete loss of revenue and an inability to generate significant revenue to cover costs.”

While sports leagues around the world begin to come up with return-to-play plans during the COVID-19 pandemic, there is still no word on what the CFL’s plan is. Commissioner Randy Ambrosie has asked the federal government for funding during the pandemic but there is no word yet on if the league will get its wish.

The Roughriders have already been massively affected by the pandemic, with the 2020 Grey Cup no longer being hosted in Regina. The event now is set to take place in the Queen City in 2022.

The team is also planning for its stabilization fund — a reserve of $7,618,228 — to be completely depleted by late fall.

“The club has taken steps to minimize its expenses while also currently accessing the federal government’s wage subsidy program to help offset staff salary costs,” said chief financial officer Kent Paul. “With very little revenues coming in, the club’s cash flows have become a primary concern.

“At this time, the club will require additional financing and funding to continue operations into 2021 and beyond.”

The club has taken into account the refunding of season tickets and Grey Cup packages already sold.

Paul said all options for additional financing are being considered, including working with the CFL and continuing to work with the team’s partners.

For every home game the Roughriders don’t play this season, they would lose out on $1.5 million.

If games are played, COVID-19 restrictions in Saskatchewan may result in the Roughriders playing games without spectators in the stands. Reynolds says work is continuing on determining what a shortened season without fans would look like.

“It’s economically challenging to make that happen,” he said. “When you play games without fans, you have the television revenue but you have substantial costs without the gate receipts and that’s 43 per cent of our revenue base.

“I would say based on our modelling right now, it’s marginally better to play.”

Reynolds said the majority of efforts is currently being focused on playing in 2020.

The affects of the COVID-19 pandemic could also be felt in years past 2021.

“We view this as a multi-year problem,” Reynolds said.

Riders see loss due to Grey Cup, Montreal Alouettes payments

During the Roughriders’ 2019-20 financial year, the team incurred a deficit of $210,064.

In 2018-19, the club had a total gross revenue of $40.4 million, while last year it had a gross revenue of $39.6 million.

In the annual report, the club said the main reasons for the deficit were expenses due to planning and preparations surrounding the 2020 Grey Cup (about $200,000) and contributions to the league’s operation of the Montreal Alouettes (about $700,000).

According to the Roughriders, there would have been a $682,113 profit last year without those expenses.

The average attendance per game last year was 26,140 and there was a slight decrease in gate revenue (down from $17.2 million to $17.1 million).

Merchandise revenue dropped by $800,000. The Roughriders have closed the Northgate store in Regina and the Circle and Lawson stores in Saskatoon.