How Could the Coronavirus affect the Argos and the CFL

[Mightygoose]

Accoridng to Trudeu today, discussions are going on between the government and league.'

https://www.tsn.ca/justin-trudeau-di...-cfl-1.1471050

It's not a hard or fast 'no' right now.

[1971GreyCup]

How about taking the $150m ask from the $9b set aside for students emergency income plan? That’s 1.5% reduction of the fund, or only 122 days of support versus 123 days planned.

A corporation looking to find capital often brings in business line managers and directs them to find the money. Radical, I know.

[1971GreyCup]

None of that seems congruent with the online interest calculation (which did take into account nine teams). And amortization of 10 or 25 years.

When I find a business line I don’t use a mortgage calculator.

[ArgoZ]

Accoridng to Trudeu today, discussions are going on between the government and league.'

https://www.tsn.ca/justin-trudeau-di...-cfl-1.1471050

It's not a hard or fast 'no' right now.

I can see $150 million in lost revenue, but not true combined losses. Asking for $30 million before the season has even started is premature. If it’s negotiations, might as well start high. Giving only what the league needs to survive is the answer, which still includes all teams experiencing financial hardship.

[AngeloV]

Personally, I think it's a big ask. If there is no season, I can't see costs for the season being greater than 10MM per team, unless they decide to honour all contracts (which I don't believe they wouid). I just can't see where the 150MM number comes from. Operating costs on a regular year are in the 20MM range per team, so the 150MM would indicate that all players would be paid in full. I just don't believe that will happen.

[AngeloV]

I can see $150 million in lost revenue, but not true combined losses. Asking for $30 million before the season has even started is premature. If it’s negotiations, might as well start high. Giving only what the league needs to survive is the answer, which still includes all teams experiencing financial hardship.

Exactly. I can't see any team losing more than 5MM if there is no season. Seeing as how many teams have already laid off a lot of staff, I can't even see it being that high. For the Argos, that might actually be less in losses than 2019. Sad to say, but true.

[Mightygoose]

Personally, I think it's a big ask. If there is no season, I can't see costs for the season being greater than 10MM per team, unless they decide to honour all contracts (which I don't believe they wouid). I just can't see where the 150MM number comes from. Operating costs on a regular year are in the 20MM range per team, so the 150MM would indicate that all players would be paid in full. I just don't believe that will happen.

I've thought of that too. If it's an average 25 million per team, then we're looking at 225 million plus the cost of the league office. More likely the league is not asking the government to fund 100% of their costs. They're asking for assistance in doing so, it would be the difference of what's needed and what the collective owners can do. I wouldn't be surprised if some player compensation is being factored in which can settle their dispute in what suspension means in relation to players being let out of their contracts.

If the government does help, I would like to think an option to refund season tickets will be offered. Other option being credit plus (say 10-20%) for next year as an incentive to keep some funds on the books for 2021.

[AngeloV]

I've thought of that too. If it's an average 25 million per team, then we're looking at 225 million plus the cost of the league office. More likely the league is not asking the government to fund 100% of their costs. They're asking for assistance in doing so, it would be the difference of what's needed and what the collective owners can do. I wouldn't be surprised if some player compensation is being factored in which can settle their dispute in what suspension means in relation to players being let out of their contracts.

If the government does help, I would like to think an option to refund season tickets will be offered. Other option being credit plus (say 10-20%) for next year as an incentive to keep some funds on the books for 2021.

Wouldn't 20 per team be 160 + cost of league office?

[Mightygoose]

Wouldn't 20 per team be 160 + cost of league office?

Just updated my math above....lol

[paulwoods13]

When I find a business line I don’t use a mortgage calculator.

That's fine, but what period would your $500,000-per-team payback cover? Seems to me it would have to be something on the order of 25 years (if not longer) if $150M were procured. If not, I'd love to see the math.

[Antwon]

I’m on the fence with this one. It appears like proper due diligence to approach the gov.t for financial help. The CFL is unlike other rich sports leagues, as they generate a large portion of revenue from people in the stands. So they are like many other businesses that opening under restrictions is not financially viable. Restaurants are a good example as many have stated opening at half capacity is not an option. So is the government subsidizing them so they can open?


The other big factor is where we will be in July and August. Are borders going to be open? And what restrictions will be in place for gatherings?
There’s been a lot of chatter about the NHL using hubs for multiple teams to play games (like Toronto). So if there are still restrictions, are exceptions going to be made for players to cross borders? And two teams plus coaches, trainers and tv crew for each game, are exceptions to the restrictions of the day made?


If there’s no financial help for the CFL, and no exceptions made to cater to the NHL, NBA, MLB, then I’m fine with that. If exceptions are made, then they should apply to all.

[argolio]

I don't fault the league for asking. If the other leagues start up in front of no fans (and I think they'll try), the CFL wouldn't be able to do the same without financial help. If not the government or Bell, the only other option is the NFL.

[paulwoods13]

So they are like many other businesses that opening under restrictions is not financially viable. Restaurants are a good example as many have stated opening at half capacity is not an option. So is the government subsidizing them so they can open?

Precisely the question. If the Keg (for instance) were to announce it needs govt money or it will go out of business, would govts/taxpayers say Yes? A small local mom-and-pop restaurant? The Ontario Hockey League? The Calgary Stampede?

What type of private enterprise would qualify for direct financial assistance? What are the criteria for approval? What strings should be attached to any handout? What payback should be expected? All reasonable questions for taxpayers to be asking IMO, since we ultimately are going to be paying for all of the extraordinary spending govts have committed to of late (and with what will no doubt be a reduced base of tax revenue due to job losses and the temporary closing of so many retail ops and services).

[AngeloV]

I just took a look at some twitter responses to the Sportsnet tweet of this. As I suspected, the league is getting roasted by many for this ask. I get that these people hate the league to begin with and wish death upon it, but it sure can do nothing but hurt their chances. I still think asking for 150 is a ridiculous ask though. I guess they would be looking to play in empty stadiums which is why they are asking for so much.

[Mightygoose]

What type of private enterprise would qualify for direct financial assistance? What are the criteria for approval? What strings should be attached to any handout? What payback should be expected? All reasonable questions for taxpayers to be asking IMO, since we ultimately are going to be paying for all of the extraordinary spending govts have committed to of late (and with what will no doubt be a reduced base of tax revenue due to job losses and the temporary closing of so many retail ops and services).

I think the consultations dating back to April 2 (per the Midani Article today) would be going over the criteria needed to qualify for funding. When our company applied for both CEWB and workshare (which can be part of the 150 mil), we had to entail a business plan and basically show Covid-19 is leading to the drop in business and not other factors. My understating the drop needs to be 30% or more. The ban on large gatherings until September at the earliest would be enough to cause that drop.

https://www.sportsnet.ca/football/cf...tance-april-2/

Every business will have different challenges. Many restaurants are operating take-out delivery and/or drive through service only. They are still hurting for sure and some will not make it, but they have a model where they can partially operate. Many stores have increased their online platforms. It's not optimal but they have a revenue stream. The CFL is not in a position and they won't be for a while as sporting events and concerts will be among the last to open. Something the government will weigh in with their decision.

[1971GreyCup]

I guess I’d add that the 2020 CFL facility and game day stadium rent will still need to be paid. Most small businesses that have permanently closed had unmanageable rents, with zero revenues to cover these as a result of mandated government closures. The trickle up effect is landlords unable to make interest and principal on their building investments.

[Rich]

Why is it a reasonable ask? Because the league won't survive without govt assistance? If so, how is that different from every restaurant (or any other type of business) that is going to go out of business?

maybe when a restaurant can draw 6M viewers to its signature event — one that has been celebrating and affirming Canadian culture and identity for over 100 years — maybe then they can also be justified in applying for a $30M govt loan.

[Argo57]

The league will undoubtedly have been pursuing a number of avenues of support. These would probably have included discussions with government officials, as to the possibility and feasibility of different levels of support. The support could be grant(s), forgivable loan(s), no interest loan(s), future tax relief and possible combinations of some or all of those. The league might also have approached Bell, to see what considerations might be provided, such as a premium payment, if games are played in closed stadiums.

If the CFL suspended play this season, it is well within the realm of possibility that most Western division teams could bounce back in 2021 but that is less certain for some Eastern teams, especially the Argos. It becomes even more difficult if the CFL is the only league not to continue to play this season. I suspect we will hear more about the CFL's plans in the near future. These are challenging times for all but even more challenging for organizations that rely on mass gatherings for revenue. The CFL has overcome difficulties in the past, so hopefully the league will overcome this latest challenge,

I would argue that the Argos maybe better off than most with MLSE ownership.

[doubleblue]

Accoridng to Trudeu today, discussions are going on between the government and league.'

https://www.tsn.ca/justin-trudeau-di...-cfl-1.1471050

It's not a hard or fast 'no' right now.

Well the fact the they are talking about some kind of assistance is somewhat encouraging. Wouldn't be surprised the Gov't asked the League to make a public ask to gage the reaction. Then they can say we won't be giving them that much and make all the nay sayers feel better. Meanwhile the League can probably do alright with less.
There must be many people on here who have a better idea of how much money it takes beside the players salaries to run a team. So right now the salary cap is covered pretty well by the TV dollars. A 12 game pro-rated salary cap and TV dollars should balance off. So roughly what would be the cost for Coaches, Management, administration, travel, equipment, stadium rent, off season cost. What else is there?
150M comes out to about 17M per club which doesn't sound so bad IMO. Maybe the Provinces could look after the Stadium rent etc. be creative.
I believe they're going to come up with some agreement to keep the lights on so to speak. I am sure there have been discussions going on before this public ask came out. But I did my part. I brought a season ticket and paid my taxes.

[stuntdog]

The Globe reports that the CFLPA is unhappy with the league's bailout request.

The union representing CFL players blasted the league’s request for a multimillion-dollar bailout from the federal government on Wednesday, saying it wasn’t consulted on the proposal and that the focus should be on “all the workers” who keep the game running, from the players to the parking lot attendants, rather than on a select group of club owners.
“We were not privy to the package,” Brian Ramsay, the executive director of the CFL Players’ Association, said in an interview with The Globe and Mail, referring to the proposal by CFL commissioner Randy Ambrosie for an immediate $30-million in federal assistance, with up to a total of $150-million in relief if the entire 2020 season is scrapped.

An individual familiar with the business operations of the CFL – whom The Globe is not identifying because they are not authorized to speak about league operations – said in an interview on Wednesday that the league would not likely be required to pay players, most of whom would be eligible for employment insurance and the Canadian Emergency Response Benefit. The league would also not have in-game management or officiating costs. The clubs would likely be able to renegotiate their lease agreements, as commercial tenants are doing across the country.

“In my mind, $150-million is ridiculous,” Richard Powers, an associate professor at the University of Toronto’s Rotman School of Management, told The Canadian Press. “Without any transparency, we have no idea what that money would be used for.”