Riders sacked for $7.5M loss by COVID; pandemic seen as multi-year problem

“It’s our biggest financial loss we’ve ever had in the club’s history and it’s going to be a multi-year challenge,” said Roughriders president-CEO Craig Reynolds.

And with the team expected to return to the field in a shortened 2021 season, those losses are expected to continue.

“The one thing I’ll say is that the projection (for 2021) is that it’s going to have a negative in front of it, I’ll commit to that for sure,” said chief financial officer Kent Paul. “You look at the $7.5-million loss this year. I think (a loss in 2021) could be potentially half of that, just a rough idea.”

A year ago, Reynolds referred to the COVID-19 pandemic as the greatest financial crisis the team has ever faced, predicting a loss of $10 million for 2020.

“Tons of tremendous sacrifices and adjustments (were) made and looking at different opportunities and avenues to help the club recover. It has been the worst crisis we’ve seen but I think we’ve weathered it as best you could expect,” Reynolds said.

The team did not have to access the $7,823,323 in the stabilization fund in 2020 but Reynolds expects that to be a different story in 2021.

“That’s due to a good chunk of our revenue that will be recognized this year not being in the form of cash flow because it’s rolled-over funds from the year before, yet we have the large expenditures that we’re going to have to put on a season,” Reynolds said. “So we will access that and we will access it fairly quickly here.”

The club did refund $2.6 million in season tickets. But more than $10.6 million in season-ticket sales was carried over to 2021.

Reynolds said it could be a few years before the team will stop seeing cash flow issues but there is some excitement around the 2022 year, with Saskatchewan set to host the Grey Cup.

“Hopefully that’s the year we recover and then we can start to build as we get past 2022 and into 2023 and beyond,” he said.

The publicly owned team was able to keep losses down through pay cuts to the entire staff in the business office and football operations.

The club also temporarily and permanently laid off 35 per cent of its workforce. That resulted in a $2.4-million reduction to its staff salaries.

Reynolds said the Roughriders have started to rehire for some positions but a few were permanently cut.

Club revenues decreased by $29 million from the prior year to $10,092,645 but the organization was able to recognize $21 million in savings from operating expenses, concluding 2020 with an operating expense of $18,653,091.

“On the expense side, we took pretty drastic measures,” Reynolds said. “If it wasn’t required to keep the lights on or keep our business running, we didn’t spend it.”

Without games, the Roughriders were without their largest revenue provider – gate receipts. In a normal year, fans in the stands would provide about $17,099,400. That number was reduced to zero in 2020.

Because of that, the federal government was the club’s largest revenue stream with the Canadian Emergency Wage Subsidy and Canadian Emergency rent subsidy. Combined, they provided the club with $3,910,795.

“(That government funding) was really critical,” Reynolds said. “It allowed us to retain employees that we otherwise wouldn’t have been able to retain and I think that would have had a further impact to our organization in terms of what we were able to accomplish. Certainly as we’re getting ready to relaunch our 2021 season, it would have impacted our ability to do that successfully.”

The team’s sponsorship revenue was only $3,532,052 last year, compared to $7,287,831 in the prior year.

Merchandise sales were also affected, with no season and stores being closed for months during the pandemic. Overall, the club reported $2,219,713 in retail sales — a decrease from $6,045,495 in 2019.

Reynolds said the team closed three retail stores in the province.

But now the Roughriders’ road to financial recovery will take the first steps on Aug. 6, with the Riders expected to host the B.C. Lions. As of now, there aren’t any restrictions expected on capacity limits, meaning 33,000 fans could make their way into Mosaic Stadium.

“It’s a bit surreal,” Reynolds said. “It’s very, very exciting and that was our goal since Day 1, to be able to offer and host as many fans as we could in a safe and responsible manner in Mosaic Stadium.”

Reynolds said the fans have shown excitement, with the phones constantly ringing at ticket offices ahead of the game.

“It’s the first step on the path to recovery,” he said.

by Britton Gray/ CJME News

Riders sacked for $7.5M loss by COVID; pandemic seen as multi-year problem

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