BC Lions 'free' rent deal

Grover posted this on the Ti-Cats message board. Interesting arrangement that the Lions have with BC Place. It seems pretty favourable to me which may help explain why there are supposedly multiple people interested in buying the team.

[url=http://thetyee.ca/News/2015/04/23/BC-Lions-Rent-Contract/]http://thetyee.ca/News/2015/04/23/BC-Li ... -Contract/[/url]
The BC Lions pay no rent on the first $9 million of net ticket sales to play at BC Place Stadium, according to their contract with BC Pavilion Corporation that was released under freedom of information on April 21.

The contract was inked in fall 2011, after the stadium reopened from a $514-million renovation that included a new retractable roof. In 2013-2014, the public-owned stadium reported its latest annual loss, $13.3 million.

The public release ends a nearly four-year quest for the document that went through two inquiries with the Office of the Information and Privacy Commissioner. An adjudicator dismissed both PavCo and the Lions' fears of financial harm, should the contract be released, as speculative.

Since 2013, the threshold of $9 million in net ticket sales has been tied to inflation and is the first of a six-step rent calculation for the 10 scheduled Canadian Football League home games. After the rent-free $9 million, the Lions are charged 10 per cent on the next million, 12.5 per cent on the next million, 15 per cent on the next million, 17.5 per cent on the next million and 20 per cent on all amounts over $13 million.

According to figures released separately via FOI, the Lions paid $192,910 rent to host their last home playoff game, the 2012 West Final. Playoff game rental is based on a $50,000 flat fee, plus $25,000 for reaching $750,000 in net ticket sales, an additional $25,000 for reaching $1 million, and 15 per cent on net amounts over $1.5 million.

Lions president Dennis Skulsky declined to give revenue and expense details, but told The Tyee that the club is "in the black" and its payments to PavCo in 2014 for all goods and services totalled just under $700,000. That included rent, food and beverage costs, and the annual fee to use level 3 suites. The contract includes a $200,000 flat fee for suites that the Lions rent or sell to the public, clients and sponsors.

Under the contract, PavCo retains food and beverage revenue. On game days, the Lions can sell merchandise at their concourse souvenir stands and advertising within the inner bowl. PavCo charges each game-goer a $3 per ticket facility fee, while Ticketmaster levies $6 in fees and service charges per ticket.

"We're not thrilled about that, because that's our customer and they make buying decisions on the total price," Skulsky said.

The Lions' other major source of revenue is a share of the reported $40-million-a-year Bell Media broadcast and internet rights deal with the nine-team league. The club operated under a $5 million salary cap for its 56-player roster last year. The Lions organization hosted the Grey Cup in 2014, which PavCo paid $2.7 million to the CFL for hosting rights. Skulsky said the host committee paid PavCo nearly $400,000 for goods and services, including rent.

Hamilton, Ont. auto parts magnate David Braley bought the Lions in 1997. The Conservative senator from 2010 to 2013 also owns the Toronto Argonauts. Since 2005, Braley has donated $82,750 to the BC Liberals.

actually, the Lions rental fees are approx. $600,000 per season and does not include any concessions, while the Riders pay only $200,000 per at Mosaic...

[b]CFL News @CFL_News #BCLions rent of $600,000 similar to other CFL teams [url=http://www.theprovince.com/sports/football/bc-lions/Lions+rent+similar+other+teams/10995590/story.html]http://www.theprovince.com/sports/footb ... story.html[/url] … #CFL via @FifthQtr

CFL News @CFL_News
#BCLions don’t profit from concessions, as had been reported, and pass along to ticket buyers a $3 facility fee... #CFL via @FifthQtr

CFL News @CFL_News
#Riders charged the lesser of 25 per cent of net profits or $200,000 annually for rent at Mosaic Stadium. #CFL via @FifthQtr[/b]

Yup... But many millions in improvements to Mosaic have been partially paid for by the Riders (government's also chipped in for some as well). Some of these improvements have been: video boards (4 over the past few years), extra seating capacity (to be distributed to Sask Communities after the new stadium is done), renovations to various areas of the stadium, etc.

So yes... The annual rent is definitely a good deal, but as the fortunes of the Riders improved, they've put some cash back into the old girl too.

So NOW the Lions are a great team to own and make a nice profit, but just go back a few months on here and look at people posting how the Lions are in trouble and lose money. too funny, as I said in the past, the only team to lose money in the CFL now is the Argos. Move them to BMO with even a descent lease and the Argos make money and potential new owners for the Argos will come out of the woodwork to buy them

Knowing cheapskate Braley and Numbnuts Skulsky, the Lions probablly purposely try to keep their revenues under 9 million so that they don't have to pay any rent at all.

I love it when Dr. Bungle (our resident PhD in International Business and Management) chimes in with yet another insight of his business acumen.

The deal is actually 25% of profits to a maximum of 200K. Going back a few years it was common for the team to end up paying nothing or essentially nothing. To put it in perspective, that means 8 Mil in profit before they pay max, and that has only been happening for a few seasons. The stadium, meanwhile, costs about 500k per year in maintenance off the city's back. The city however realizes that arts and entertainment are more than a source to make income, and that those things are part of a location's culture. The added benefit of encouraging arts and entertainment is that it causes both an influx of population and tourism, which in the long run will outway the costs of supporting said events.

But yes, like you said...the club has also put millions into the facility.

Small correction... 800k in profits will result in the Max rent, not 8 million.

lol…thanks…had no java in me yet.
I have heard they never paid max until post 2010 though, 1 year asside. Seems like what has been a nice deal that is probably due to be elevated to 250-300K based upon recent numbers. The present deal expires after this coming season, I believe.

The words "Mr. Bungle" and "insight" don't belong in the same sentence.

... After the rent-free $9 million, the Lions are charged 10 per cent on the next million, 12.5 per cent on the next million, 15 per cent on the next million, 17.5 per cent on the next million and 20 per cent on all amounts over $13 million.

So a "cheapskate" is going to throw away AT LEAST 80 cents of every dollar over $9 million?

Makes sense ... Bungle sense ... not real world sense.

you are talking about a guy who fired his entire marketing staff last year in Toronto… Yeah, it makes no sense… But David Braley is a cheepskate!!!
I dont attend Lions games because he does not open all of the available concessions in the stadium because he is to cheap… It takes an entire quarter of action to get a beer and a hotdog. You have no idea how frusterating it is to wait in a line for half an hour while other concessions around you are closed…

It is not him who decides not to open the concessions, it is facility management. He has little say in that. This is also a factor in why the closed down the one level for this season...it makes no sense to keep it open and staff up to open that level...there is no return on doing so unless there is a significant rise in attendance. We generally do a game a year in BC and have found that the concessions move pretty quickly. I have never missed more than a couple of minutes of action, and that has on occasion included taking the kids to the bathroom and such when we bring them.

The details of the deal illustrate just why the Lions really little incentive to lower ticket prices to get more people down to the stadium; and that's a shame. As was pointed out in the article, the surcharges built into the ticket price do not move so only the Lions share of revenues from ticket sales would go down with any price reduction. The usual philosophy in lowering prices to draw in more fans to the venue is that those extra fans will make up for the lost ticket revenue by in other areas such as driving up concession revenues, which in this case is clearly of no benefit for the Lions. Unfortunate

As a side note to those keeping score at home regarding such matters, Braley was against the release of this document.

This guy has to go.. I seriously am starting to hate the entire CFL because of this guy.