1996 All Over Again

With the dire situation in Ottawa, the CFL is about to take a 10 year step back after clawing back to respectability.

You may have heard about the situation in Ottawa coming to a head this week. By the bits and pieces I can pick up from various media reports in print and television the Renegades majority owner Bernie Glieberman will cease paying expenses at the end of March. The other owner, Bill Smith, has not covered any losses since ownership was restructured. Facing a deficit of $4-8 million in 2006 with no owner willing to cover losses has basically left the franchise insolvent. After talks with the parties this week the CFL will decide within the next 3-4 weeks whether a serious prospective buyer is out there. If not the other options are to suspend the franchise for a year while an owner is found (redoing the 2006 schedule as an eight team league), the league operating the team until an owner can be found, folding the franchise or moving the franchise to another location. Unfortunately the odds are on the team folding (50%) or it being suspended for a year (30%). I would say the chance of the league operating the team like it has in the past for so many franchises is slim, perhaps 10%. The chances an owner will be found are slim as well, perhaps 9%, while moving the franchise is a long shot at a 1% probability.

I have been sitting on writing a post on the CFL’s salary management system introduced this year and unfortunately I have to address it with this post about the Renegades. The Ottawa situation comes as a surprise since the losses they incurred last year (reportedly $3.8 million) were not known until recently, and word from Lonie Glieberman last fall was that the franchise was in good shape with their newly implemented business model to cut off-field expenditures. It is not a surprise considering the salary cap introduced this year, the departure of Lonie Glieberman a few weeks ago and the lack of season ticket subscriptions (around 2000) due to the streamlined front office (or the owners?).

The salary management system was meant to bring actual competitive balance to the league and was accepted by the 6 of the poorest franchises to pass 7-2 in favour. Either the reports on what was being spent by these poorer clubs under the previous system was false, or they would have to increase their player and coaching salary costs by about $1 million to remain competitive. Media reports around the Ottawa situation point to this new salary cap as one reason for Ottawa ownership issues. Going back to the original owners, it certainly is the case that they bought a franchise with a business plan made based on the previous salary cap of $2.8 million. They soon found that to compete for players in order to be successful, they would have to exceed this cap, destroying their business plan. After 3 years this led to the departure of half of the ownership group and the re-introduction of Bernie Glieberman as an Ottawa franchise owner. Even Mr. Glieberman was buying in under the impression of a then $2.8 million salary cap. In one year he was quickly shown this was a mirage, and a still uncompetitive team along with bad front office decisions left the franchise sliding in attendance.

However these media reports point to the objectors to the salary management system, David Braley (B.C.) and Robert Wetenhall (Montreal), also vocal opponents to Commissioner Tom Wright, as having an “I told you so moment” on the salary cap. However by all media reports these owners were against the salary cap not because they thought it should be reduced, but because they thought it should be higher or eliminated altogether. It was David Braley who started the salary cap discussions when reports of teams exceeding the existing cap became a media focused. He stated that the system was a floor, not a ceiling, and franchises were not breaking any CFL rules by exceeding it. By basically destroying any faith fans may have in a level playing field, he made it necessary for a new system to be put in place. My guess would be that the $3.8 million cap was chosen in large part to accommodate the rich franchises who were already exceeding the cap in an effort to get unanimous approval.

So in my mind the blame for the current Ottawa situation lies not only with Tom Wright, but with every franchise owner or board representative and very much on the rich franchise owners whose free spending has exceeded the growth of the league, jeopardizing the smaller market franchises. If the CFL struggles for a few years, or even comes to its demise, they won’t skip a beat, but the CFL fans will have years of suffering and anguish to deal with.

2 Responses to “1996 All Over Again”

  1. jim Says:

    The richer franchises always end up being the problem in every league unless you can somehow control it (which obviously is tough to do).

    But didn’t I read awhile back something about Windsor getting an expansion franchise? What happened with that?

  2. Jon Says:

    What you remember is Windsor (the mayor) saying they were interested when the Super Bowl was in Detroit and they were getting a lot of spillover attention. No matter where you go, you need someone with money and a stadium. Neither is easy to find.

    It’s a problem in every league, it’s just unfortunate that at the CFL’s level it is fatal to the league when it gets out of hand.

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