Losing is winning
Eskimos didn't make playoffs, but they did make a major profit
By JONATHAN HUNTINGTON, SUN MEDIA
The Edmonton Eskimos were $850,000 over the $3.8 million salary cap last year - but still showed a major profit.
In the unique financial world of the CFL, the Green and Gold have posted a $610,168 profit from last year partly because the club missed the playoffs for the first time in 35 years.
"There is a whole financial sensitivity in the CFL of: the farther you go on the field, the more it costs you in dollars," said Edmonton Eskimos president Rick LeLacheur.
Case in point came in 2005 when the Esks had to spend almost $365,000 on Grey Cup costs - from travel to championship rings.
As a result, the club only posted a $163,839 profit in 2005. But also helping the bottom line is the Esks massive $8.72 million stabilization fund.
By being able to draw a bottom line number of $456,634 in investment income off that fund, it greatly helped offset the ballooning player salary costs.
Of the $850,000 over the cap, $460,000 was signing bonus money for 13 veteran players.
Taking advantage of a salary cap loophole only available until Grey Cup Sunday last year, the Esks signed 13 players to new bonus-laden contracts.
The bonus money doesn't count toward the 2007 salary cap of $4.05 million.
BONUS CLAUSES
The bonus clauses also allowed teams to sign players to lower base salary long-term contracts to help get under the enforced cap this season.
"It made some sense," said Eskimos head coach Danny Maciocia.
"These are some guys that were going to be free agents or were entering their option year."
Key veterans like Mookie Mitchell, Robert Brown and Joe McGrath are on the list.
So is rising star Adam Braidwood.
But contrary to public reports, the Esks didn't file a ridiculously low $52,000 base salary contract for Mitchell with the league office.
BASE SALARY
The Sun has learned Mitchell's base salary is closer to $65,000. Regardless, Mitchell should be making a base-salary contract near $100,000 - but with a significant signing bonus, he still gets the total money he wants.
While player salaries are rarely revealed, the Sun has also learned the Esks handed out bonuses ranging from $2,000-$35,000, with the high end bonus clauses coming with several conditions.
But LeLacheur strongly pointed out last night at the club's annual general meeting that he didn't dip into the stabilization fund for any player contract money.
SHORT HIT: As usual, the Esks led the league in total attendance with 368,700 people filing through the stadium.
But that was down from 414,644 in 2005 because of the 7-11 regular season record and suspect weather conditions.
FINISH LINES: Sponsorship dollars continue to rise. The club pulled in $2.7 million in sponsorship sales, up almost $300,000 from 2005.
"We are now getting to a point when we are running out of inventory," remarked LeLacheur.
In the CFL, a strong gate and sponsorship department make all the difference in the world.
"The biggest difference between the CFL and NFL: 85% of our revenues come from bums in the seats and sponsorship and 15% from the league," said LeLacheur.
"It is about the opposite in the NFL because of the TV contracts."
[b]LUCKY 13
The Eskimos signed 13 veteran players last fall to bonus-laden new contracts to help get under the 2007 CFL salary cap.
They included RB Mike Bradley, FB Mike Maurer, SB Mookie Mitchell, OL Patrick Kabongo, DE Antico Dalton, SB Pat Woodcock, SB Andrew Nowacki, DT Robert Brown, LB A.J. Gass, DE Adam Braidwood, FB Deitan Dubuc, OL Joe McGrath and LB Mike Botterill. [/b]