Best-case scenario, the Oilers Entertainment Group believed it was going to make $900,000 on the Canadian Finals Rodeo in 2017.
Their in-house budget projections had CFR expenses pegged at $6.1 million and revenue at $7 million, provided they maxed out on ticket sales, sponsorship and television advertising for the six performances at Rogers Place.
Worst-case scenario, the OEG believed the event could cost them $400,000 in the first year, and might not make a profit until Year 3.
The OEG was prepared to accept the downside risk because they envisioned long-term upside through the five-year deal and into a second five-year term, if they exercised that option to renew what they envisioned as a partnership with the Canadian Professional Rodeo Association.
As we all know now, the cowboys tipped their hats, said thanks but no thanks, pardner, and moseyed along in March. Edmontonians who care about rodeo and the CFR’s decades-long relationship with the city were aghast.
We had been conditioned to believe that Edmonton must hang onto the CFR by all means necessary, lest some other venue — we’re looking at you, Calgary — rustle away a goodly percentage of our rather flimsy western heritage, and all those pickup truck sales. And now we were letting it happen. Heck, OEG and the City of Edmonton was letting it happen.
That wasn’t exactly a fair representation. In mid-February, facing a March 1 deadline for cessation of exclusive negotiations with the CPRA, the city threw in another $200,000 for prize money, on top of the $2.75 million being offered by OEG.
At that point, the city estimated its exposure at about $950,000, when the cash was added to its in-kind marketing and hosting contributions.
That’s beyond the city’s comfort zone, but it was a strategic injection. With the cowboys insistent upon a purse of at least $3 million, the city’s loot got them to $2.95 million. OEG said the cowboys could divert some or all of the $300,000 hosting fee toward prize money, for a pot as large as $3.25 million. That didn’t work for the CPRA.
“As previously discussed at our board meeting the CPRA requires this money to facilitate a CFR and retain some benefit monetarily for the association,” general manager Dan Eddy said in an e-mail to directors.
There were other problems with the final offer.
“One key road block was that OEG could not offer an escalating purse over time,” Eddy said in the e-mail.
Indeed. The prize money was going to be capped for the first five years as the OEG did what it could to grow TV and sponsorship revenues.
The cowboys also weren’t happy with aspects of the sponsorship package, which OEG proposed to lead exclusively. So the CPRA’s six-person negotiating committee rejected the deal, without first showing it to their entire board of directors. At least one CPRA director didn’t see the OEG offer until the second week of May.
By then, the CPRA’s May 5 deadline for new proposals had come and gone, and there wasn’t a single bid.
Calgary took a pass. Winnipeg Tourism didn’t bid but said it might have an interest in 2019, once the event proved it could work outside Edmonton. Tourism Saskatoon CEO Todd Brandt also sent the CPRA a letter rather than a bid.
“It is very clear that the multiple scenarios you propose would be an unacceptable risk for our city,” he wrote.
Mayor Don Iveson said Edmonton city council came to the same conclusion and a look at the request for proposal explains why. The CPRA claims all revenue from tickets, advertising and sponsorship and any profits realized by the event are the “sole property of the CPRA.”
No partnership. And no takers.
However, a member of the CPRA’s negotiating team told the association’s annual general meeting in Airdrie on Saturday that they are still talking CFR with Saskatoon and Northlands.
Brandt said Monday that his organization is considering a visit to the 2016 CFR, and would like to find a way to make the event work for their city, but they aren’t in active negotiations.
The CPRA did reach out to Northlands and were told to speak to the mayor’s office. That hasn’t happened and council hasn’t changed its collective mind to allow for another year at Northlands.
“The short answer is no, the mayor’s office has not had discussions with CPRA about hosting the CFR at Northlands in 2017,” media relations manager Cheryl Oxford wrote in an e-mail on Tuesday.
So the CPRA doesn’t have a home for its championship event after 2016. They sustained a $169,233 loss in 2015, after posting a $148,042 profit in 2014. And Eddy has been suspended with pay, following complaints from office staff. An outside HR firm will conduct an investigation.
The organization is facing serious challenges and has to take its next steps while the general manager is under suspension. A Monday request for comment on how they move forward had not borne fruit by Tuesday afternoon.