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Author Topic: Alouettes For Sale  (Read 10578 times)
Blue In BC
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« Reply #90 on: June 01, 2019, 01:39:45 PM »

Not a half bad idea, it would give the management team some assets to work with, provide on the job training and put them in a better position when they move to E. coast.  With this announcement I have the sinking feeling the league will be lucky if they can maintain 9 franchises into the future.

I hope they find a way to keep the Als afloat. I can't see that beyond 2019 if a new owner is not found.

Fingers are crossed this is worked out soon otherwise it's a financial drain to the rest of the league.
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Fire101
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« Reply #91 on: June 01, 2019, 03:53:36 PM »

I hope they find a way to keep the Als afloat. I can't see that beyond 2019 if a new owner is not found.

Fingers are crossed this is worked out soon otherwise it's a financial drain to the rest of the league.

It is absolutely imperative that they find an owner and keep the Als franchise alive, this is a watershed moment for commissioner Ambroise.
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66 Chevelle
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« Reply #92 on: June 01, 2019, 05:30:49 PM »

this may be a tough sell... I guess it depends on what the selling price is as well, or the estimated value of the team... I know it's hard to say what it's worth without seeing financials statements, but, I've read the team lost over $12M last year and over $25M over the last 3 years... not to mention there is the suggestion that the team owes money to vendor/suppliers as well...

I'm not really sure what they are doing to lose that kind of money, but that's will have to be addressed some how... if you considered the annual loss, plus the payables, and I would assume that there isn't any cash surplus to go with the team, lol, the asking price has to be pretty low...

I would assume that when they said the CFL now owns the team that this means they got it for free and will begin paying the bills from this point forward... this could also effect the remaining 8 other teams as well... if the league doesn't have the money to cover their expenses the rest of the teams will have to come up with it...

I came across an article where it was reported that a potential buyer group for the BC Lions offered them $14M for the team, which was declined...

maybe the best bet would be to move the team to Halifax...

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Blue In BC
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« Reply #93 on: June 01, 2019, 05:56:55 PM »

We haven't really heard whether the Wettenhalls will be responsible for debt to suppliers. I don't know how they could avoid that and I don't see the CFL absorbing that debt either.

I assume the CFL got the team for a $1 so to speak.

How any team could lose as much in 1 year or 3 as reported seems inconceivable. It has been mentioned that the other 8 teams would be paying to keep the Als in operation.

Selling the team to Atlantic Canada seems a better option that just losing our 9th team. With no stadium or commitment quite yet and no owners group yet, makes that a stretch at the moment.

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TecnoGenius
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« Reply #94 on: June 01, 2019, 11:10:39 PM »

We haven't really heard whether the Wettenhalls will be responsible for debt to suppliers. I don't know how they could avoid that and I don't see the CFL absorbing that debt either.

Well, if the Als organization doesn't officially declare bankruptcy, the debt won't just disappear.  So if the CFL "took over" the Als, then, unless they have something else in writing, the CFL will have to pay all the debt.  The only way to avoid that would be to have it go bankrupt, then instantly restart it as a new shell company.  But then you're looking at redoing every contract, etc.  I doubt that happened.

In that case, the previous owners could make out like bandits (and create a future moral hazard) because they can take big salaries / profits / equity out, while not paying suppliers and racking up debts, then just leave it all for the CFL to clean up and make off scot-free.  Kind of like LBO companies in the states can strip-mine struggling companies before leaving the bagholders with huge unpaid debts.
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Blue In BC
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« Reply #95 on: June 01, 2019, 11:22:19 PM »

Well, if the Als organization doesn't officially declare bankruptcy, the debt won't just disappear.  So if the CFL "took over" the Als, then, unless they have something else in writing, the CFL will have to pay all the debt.  The only way to avoid that would be to have it go bankrupt, then instantly restart it as a new shell company.  But then you're looking at redoing every contract, etc.  I doubt that happened.

In that case, the previous owners could make out like bandits (and create a future moral hazard) because they can take big salaries / profits / equity out, while not paying suppliers and racking up debts, then just leave it all for the CFL to clean up and make off scot-free.  Kind of like LBO companies in the states can strip-mine struggling companies before leaving the bagholders with huge unpaid debts.


We probably won't hear what was in the deal to take over the Als by the CFL. I'd expect the league might be responsible for some portion of the debt while getting the franchise for next to nothing.

OTOH, the Wettenhalls may have surrendered the franchise for nothing just in order to not create additional debt in 2019.

This could go any number of ways but none of the possibilities sound great for the CFL IMO.
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66 Chevelle
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« Reply #96 on: June 02, 2019, 01:51:19 AM »

there would be a huge upside for Halifax/owner group if they were to buy the Alouettes and move them instead of starting from scratch.... they would save the $7M-$10M franchise fee that the league would charge them for an expansion franchise...

depending on what kind of financial shape the team is actually in, it could be a bargain for them...
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DM83
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« Reply #97 on: June 02, 2019, 05:17:16 AM »

-$ 22 million and counting to start.
Who's in?
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buckzumhoff
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« Reply #98 on: June 02, 2019, 02:04:01 PM »

Looks like the owners paid themselves a salary and left the team on the hook. Every CFL team has the same costs but privately owned teams charged fees or salaries. It looks like they are in the hole but its the previous owners who have the money. Or is it for stadium renovations. It should be a total write off. Write off the loan . yhats the problem with private ownership. No accountability.
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66 Chevelle
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« Reply #99 on: June 02, 2019, 07:01:02 PM »

I should clarify... I didn't mean to imply that the Wettenhalls hadn't paid their bills and have left their business 'partners' holding the bag...

I have no reason to believe they would do so... what I meant is that given the types of losses the team has incurred over the last few seasons that it would indicate that the team has little or no working capital and or cash reserves to support the day to day operations of the team...

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BLUEBOMBER
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« Reply #100 on: June 03, 2019, 05:02:56 AM »

It's clear that unless good ownership is found, the CFL should not just hand over the Al's to anyone.
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66 Chevelle
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« Reply #101 on: June 03, 2019, 06:18:52 AM »

It's clear that unless good ownership is found, the CFL should not just hand over the Al's to anyone.

true... I know that Montreal struggles with attendance, but when you compare that to the Bombers you really have to wonder what the heck was going on in Montreal... for instance, Montreal was still able to average almost 20,000 fans per game, Winnipeg almost 24,000 per game... Montreal loses $12M last year, Bombers make almost $3M if I remember correctly...

I can't imagine that 4,000 more paying fans per game over the 9 home games during the year would make a $15M dollar difference in the bottom line, lol... maybe they should require potential buyers to pass some sort of test before allowing them to buy the team...  Grin
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the paw
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« Reply #102 on: June 03, 2019, 01:57:03 PM »

true... I know that Montreal struggles with attendance, but when you compare that to the Bombers you really have to wonder what the heck was going on in Montreal... for instance, Montreal was still able to average almost 20,000 fans per game, Winnipeg almost 24,000 per game... Montreal loses $12M last year, Bombers make almost $3M if I remember correctly...

I can't imagine that 4,000 more paying fans per game over the 9 home games during the year would make a $15M dollar difference in the bottom line, lol... maybe they should require potential buyers to pass some sort of test before allowing them to buy the team...  Grin

2018, Als averaged 17,000 per game.  Bombers averages just under 27,000.  Assuming comparable ticket prices, that's about a $3.5 million revenue difference.  Another $2.5 m can be attributed to lack of sponsorship and merchandise sales, which might do better under local ownership.

The stories say that about $6 million was attributable to falling revenues.  Another $6 million was put down to rising costs, and while I have no evidence, the buyout package for Popp and several coaches probably contributed heavily to this.   
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theaardvark
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« Reply #103 on: June 03, 2019, 02:43:39 PM »

How much of the $22 mil is held by the Wettenhalls and armsreach organizations?  That should be written off immediately...

Maybe floating the idea of moving the franchise to Halifax might energize the base into supporting the team.  And bring in a savy business person to turn around the finances...
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the paw
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« Reply #104 on: June 03, 2019, 03:01:10 PM »

How much of the $22 mil is held by the Wettenhalls and armsreach organizations?  That should be written off immediately...

Maybe floating the idea of moving the franchise to Halifax might energize the base into supporting the team.  And bring in a savy business person to turn around the finances...

The cumulative losses may or may not be represented by existing debt.  It is entirely possible that those losses were financed by cash injections by the Wetenhalls, which they have gotten tired of making.  It is unlikely that many lenders would have advanced that kind of cash without security, and given that they don't own their stadium, any existing debt is likely in the form of accounts payable with various suppliers. 

Moving to Halifax is exactly the wrong move.  They don't have a stadium, they don't have a demonstrated demand for attendance higher than the 17,000 the Als did last year in Montreal, and floating the idea of moving will send 2019 attendance into the tank. 
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