Salary Cap may be to high for some teams

CFL Talk
1

Something I always find puzzling, is how the finances of a sports franchise really works. Every once in a while you will see a part of an expense but never enough information to piece it all together.

Kind of like what the government does when they pretend to explain the finances of the Country to us.

Except of course, I’m not sure how much of it is really our business when it comes to the expense details of running a sports franchise.

One thing seems certain though, there are teams that lose money.

Brad Waters – says he lost $2 million in 2004. His last year of owing the Renegades.

He broke the finances down thusly,

Expenditures in football $6.3 million
Stadium Expense .8 million
Marketing and Administration 3.4 million

This would indicate that he brought in $8.5 million in revenue.

The first question that rises is why so much in Football expenditures? The salary cap was $2.6 Million (and I doubt very much he went over it). Is it really that much for GMs, coaches, travel etc… or did someone in head office get a big cheque?

Second question, same question as the first except in Marketing and Administration?

Now, I know the team received some money for hosting the 2004 Grey Cup and I would think they would also receive some kind of cheque for TV revenue. For arguments sake lets say they received 1 million for the Grey Cup and 1 million for TV revenue.
This would leave 6.5 million to raised through attendance.

They had 146,700 paying customers in 2004 which would indicate that the Renegades earned $44.31 a seat. To me this seems reasonable. There are a lot of cheap seats, but then there are box seats and expensive centre row seats as well.

The problem here is if you raise the salary cap instead of taking a hard line on the existing $2.6 million. How do the Renegades stay in business? Unless, the CFL is going to divvy out a million more in TV revenue to each team. There isn’t anywhere else for the owners to increase their revenue. Based on their last ticket sale. The fans sure don’t seem in the mood to dig any deeper.

2

I would definetly say that the cap is not too high. It was reported today that the Riders will have to cut down to get to that level.

3

yah. hey billyl have they said anything about getting rid of nealon. or are they gonna give that clown anohter chance

4

........the 2.6 cap was a joke, and event he Rens broke it, as did every other team in the league, and not just a little bit either, the lowest franchise last year doled out 3.4 mil in player salaries......so the cap is now just a more reasonable expectation of what all the teams were kinda doing anyways........as far as making or losing money, it is a fine line to walk and I would think there is no team out there that made more than say a $150K or more.......

.......lets say your numbers are correct and I'll use the stamps for a counter example.......sure, $45 average ticket sounds about right........we averaged 30,000 fans per game (including the PS game), therefore 12.15 million in revenues, add your million for TV and we get 13.15 mil.........less 6.5 in football expense, 1 million in stadium, 3.75 in marketing, 450K in stadium upgrades (turf) and that leaves you with 450 to 500 thou in the black.......rough numbers, but certainly not the millions and millions the owners down south make off their teams......plain and simple, you need paying butts in their seats to make money in this league, regardless of a cap or not......

5

heres an article in Wpg sun about this.

[url=http://winnipegsun.com/Sports/Football/2006/01/19/1401139-sun.html]http://winnipegsun.com/Sports/Football/ ... 9-sun.html[/url]

By PAUL FRIESEN
Cap a little rich for Bombers

That wall Lyle Bauer has been beating his head against finally budged.

So why does the Winnipeg Blue Bomber president/CEO still have a headache?

For years, Bauer has been campaigning for a hard, enforceable CFL salary cap, one that would allow the community owned Bombers and Saskatchewan Roughriders to compete on a level playing field with wealthier teams.

Yesterday, the league unveiled the details of a comprehensive new "salary management system" that should do just that.

"It goes a long way to addressing it," Bauer told the Sun from Scottsdale, Ariz., where league governors were meeting. "It's a very good step for the league. It's almost a hallmark for everybody to get on the same page ... and approve a plan that takes us well into the future."

Then, in the next breath, the Bomber boss took a look at the cold, hard facts: the new, $3.8-million cap for 2006 represents a substantial increase in what Winnipeg spent on players last season.

It was revealed yesterday CFL payrolls in '05 ranged from around $3.4 million to just over $4 million, officially making a mockery of the old $2.6-million cap.

At the low end of that scale, the Bombers are looking at an additional $400,000 -- if they want to keep up. And this is a team that lost money a year ago.

"It's going to be a good chunk," Bauer said. "Our challenge will be to find the revenues ... to be able to continually compete at those levels."

Of course, he could spend less than the limit, although the per-team minimum hasn't been established yet.

"You don't have to spend (the cap)," Bauer acknowledged. "But we'd be fooling ourselves, and fooling everybody else, to think you're not going to have to be pretty close to that. If you're thinking about spending 10-15% less, you're putting yourself at a disadvantage."

Bauer doesn't rule out the possibility of raising ticket prices, but he acknowledged the best way to turn a better bottom line is to build a better team.

Hosting the Grey Cup this year will help, but that's not a long-term fix.

Other changes include expanded rosters and revamped injury lists, part of a clampdown on teams paying players that aren't accounted for.

"It addresses many things that have gone on in the league, and cleans up some things," Bauer said.

6

What I am trying to get at is that the Renegade ticket sales are very low and unless the Gliebermans are willing to lose even more money. They will become even less competitive under a higher salary cap and sell fewer tickets and lose more money etc.... and I am afraid that we may end up with an all western CFL if they are not careful.

I am a big supporter of having a higher salary cap, I would like to see it reach 10 million so that we can still some major talent from the NFL. But it would have to come from TV revenues or another source other than the paying fan. I don't think their are enough fans in the East that are willing to pay the price.

7

Well just maybe this will make the Gliebs sell or be more responsible in running their team. If the fans don’t go then the team should be gone.

8

What do you mean not enough fans in the East? I think if the prices are too high, there won't be enough fans anywhere, not just the East.
Ottawa should be fine, the cap will make things better. The people in Ottawa will just have to see that going to football games in the great outdoors is just as good, if not better, than going to hockey games in an indoor arena. Now the Sens are a very good team no doubt and very worth watching while the Gades have never made the playoffs, which is tough. But the Gades will eventually make the playoffs. And I think the people in Ottawa know that there is nothing better in the summer and fall than taking in a CFL game in the outdoors, I love it here in Hamilton and our stadium is not in as nice a setting as Frank Clair is on the Rideau Canal there, just beautiful.

9

The cap is not too high based upon last years team salaries. It was reported(from TSN i think) that the avg. a team spent on salaries last year was 3.75 million and that the difference from lowest to highest team salary spending was 700,000. If there was a firm cap in place below the current $3.8 million I think we'd see more players moving to the NFL since teams wouldn't be able to offer them respectable deals.

10

I agree how the cap is not high enough. I would have thought that $5M would have been a good round figure. Now, that the league is in prosperity. Plus, the recent 3.8 deals with player salaries only and I believe another $200,000 can be spent to sign own team players. It would not surprise me that most teams were around the $4-$5M figure anyway, when considering all of the player salaries, injuries, medical costs to include each province medical coverages etc.

11

I think its a good workable cap. I think everyone has a more even playing field.

On a somewhat related note. Check out the poll of the week. Seems the fans are in amajority of supporting the cap.

12

…how about the players association…are they on side…can’t see why they wouldn’t. be…especially with the increase in roster size… do they have to vote on it? :arrow:

13

Pappa of course they have to vote and agree to this they are an association wow I am disappointed in you lately!

14

The players will vote on the new CBA on May 20, I believe is the date.