The Saskatchewan Roughriders are going through their worst financial crisis in team history.
On Wednesday during the club’s annual general meeting, the team announced a loss of $7.5 million for the 2020-21 fiscal year, mainly due to the cancelled 2020 football season during the COVID-19 pandemic.
“It’s our biggest financial loss we’ve ever had in the club’s history,” said Roughriders president and CEO Craig Reynolds. “It’s going to be a multi-year challenge and that’s another reason why I think this is the biggest crisis we’ve faced because it will now really affect three years.”
The Roughriders operating revenues took the biggest hit last year due to the fact the team wasn’t able to play games and generate gate admission, which is where most of their revenue comes from. In 2020-21, operating revenues were $10.3 million, down from $39.6 million the year prior. However, the Riders were able to get some government funding to the tune of $3.9 million, or 38 per cent of their revenue.
“(The Canadian Emergency Wage Subsidy) was our single biggest revenue item this year,” said Reynolds. “It allowed us to retain employees we wouldn’t have been able to otherwise retain and I think that would have had a really big impact to our organization.”
Sponsorships, which made up 34 per cent of revenue, were also slashed as the Riders brought in $3.5 million in sponsor revenue last year, compared to $7.3 million the year prior. Merchandise profit also took a big hit in 2020-21, as the team saw it fall 63 per cent, bringing in $2.2 million, down from $6 million in 2019-20.
However with no gameplay during the 2020 season, operating expenses were also down significantly, which helped the bottom line. The Riders’ expenses in 2020-21 were $18.7 million, compared to $39.7 million the year prior.
The football operations department accounted for 26 per cent of the expenses, however, the total cost was significantly lower due to reduced player and staff salary costs.
Last year, the football ops department cost the team just $4.8 million, compared to $13.5 million the year prior. Home game expenses were also slashed to just $94,840 from $2.8 million due to zero games being played. The Riders laid off 30 to 35 per cent of its staff, while the remaining employees also took pay cuts.
“Cost management was absolutely critical,” said Reynolds. “Obviously the impact to our staffing was challenging for sure. It’s a small team to begin with and we had to make drastic adjustments both in terms of the numbers and unfortunately due to our staff’s compensation.
“I think we weathered the storm reasonably well, or as best as you could consider given the circumstances.”
What also helped the Riders through this financial crisis was fans keeping their season ticket money with the team, as more than $10-million in season ticket revenue has been deferred to 2021. However, that means the team will be down a significant portion of revenue this season, since the cash from those tickets is already on the books.
“We heard time and time again from our fans, they stuck with us, they wanted to help in any way possible and we communicated to them that this was the best way to help, to stick with us and keep your funds with the club.”
And while the numbers don’t look good this year, they aren’t expected to get much better next year. The good news is that the Riders didn’t touch the team’s $7.8-million stabilization fund that has built up over several positive-earning seasons. However, the bad news is that the team expects to drain that total in order to play this season.
“The stabilization fund was built over the last several years. When the club had excess revenues, we would move money into our investments and it would sit in our stabilization fund,” said Kent Paul, Roughriders chief financial officer.
“We thought we were going to have to access those funds heading into 2020,” added Reynolds. “Obviously some of the government funding support in terms of the wage subsidy helped us not having to access that, but we will absolutely be accessing that this year.”
Getting back on the field in 2021 is the only way for the team to become green again, even if it means a couple more seasons of continued financial hardship. In fact, early estimates have the club forecasting an operating cash flow loss of $9.8-million for next season.
Still, Reynolds believes better times are ahead.
“Even though we’re extremely excited about having a 14-game season, we still lost a third of our season and we’re going to have a cash flow challenge next year,” said Reynolds. “Having said that, next year we are hosting the Grey Cup and with that comes a lot of excitement and a lot of revenue opportunities for us, so hopefully that’s the year we recover.”