Runners predict ‘multi-year’ financial recovery after COVID-19 pandemic
REGINA – After a game-less season in the Canadian Football League, the Saskatchewan Roughriders expect a multi-year financial recovery from losses caused by the COVID-19 pandemic.
“It was the worst crisis we’ve seen, but I think we weathered it as best you could expect,” said Craig Reynolds, president and CEO of Roughriders.
At the Annual General Meeting (AGM) of runners on Wednesday night, the team reported spending excess over revenue for a loss of $ 7,455,705 in fiscal year 2020-2021.
The team attributes these losses to the cancellation of the season and other impacts related to the pandemic, such as the closure of retail stores.
“It was tough,” said Riders CFO Kent Paul. “We expected a loss of over $ 10 million. Even though it wasn’t that bad, the club endured the COVID-19 pandemic which resulted in the cancellation of the 2020 season. “
The team expects its financial difficulties to extend beyond the 2020-21 fiscal year.
“The impact of the COVID-19 cancellation of the 2020 season and a shortened 2021 season will have a multi-year impact on the club’s finances,” said Paul. “The club’s cash flow is going to be more impacted in 2021 compared to 2020, and it will take several years to recover. “
Reynolds said the team expects to face the financial hardships caused by the pandemic over the next three years.
“Our cash flow will be extremely tough because of the carryover of money into 2021, and then we will carry over more dollars into 2022,” Reynolds said.
At last year’s AGM, the Riders predicted that the club would have to dip into their financial stabilization fund by fall 2020. The team said they were able to get out of 2020 without having to touch your fund for the rainy days, but it won’t last. .
The Riders expect to start using the money from the fund to continue day-to-day operations until the start of the shortened 2021 season.
“We’ll have to dip into the stabilization fund when we start to incur significant spending,” Reynolds said. “So obviously the flights and the cost of getting everyone here, the cost of meals, the cost of accommodation, it’s all going to start here pretty quickly, so we’re going to be draining the existing cash balances pretty quickly. “
The Government of Canada’s Emergency Wage Subsidy has given the club enough income to maintain operations, with reduced manpower and operating costs.
The staff of the team has been reduced by about 30 percent. Members of the organization also suffered “significant” pay cuts.
“Without these federal programs, the club’s revenues were down 84 percent from the previous year,” said Paul. “The club’s normal sources of income were all but wiped out last year.”
The team’s total operating revenue was $ 10.3 million in 2020-21, compared to $ 39.6 million the year before. Of this year’s revenue, $ 3.9 million came from government funding programs.
Operating expenses also decreased in 2020-2021, from $ 39.7 million in 2019-2020 to $ 18.7 million.
In 2019-2020, Gates revenue accounted for $ 17 million in revenue for the team. But without fans in the stands at Mosaic Stadium in 2020, the club had to find different sources of income.
In 2020-2021, sponsorship and government funding brought in 72% of the team’s revenue.
THE SEASON 2021
The club anticipate that they will need to access the Stabilization Fund during 2021 to cover the costs of the season, while continuing to manage the cash flow challenges created by the pandemic.
The Riders stabilization fund currently has $ 7.8 million. Reynolds predicts the team will start accessing that money towards the start of training camp.
Due to the uncertainty surrounding fans’ ability in games, Reynolds couldn’t predict how long the team’s rainy day fund would last until 2021.
“Obviously on July 5, when [tickets] put up for sale, we’ll get a good indication of the demand because that’s the other thing we’re not sure about is the level of demand that’s coming from COVID-19, ”Reynolds said.
The hope is that the team can become profitable again by 2023 – after an increase in income resulting from hosting the Gray Cup in 2022.