Financial impacts of COVID-19 sports cancellations in Alberta: ‘Money that can’t come back’
As arenas remain closed and seats sit empty, new numbers released last week from Statistics Canada show just how much money Alberta’s economy is missing out on, as major leagues remain shut down due to COVID-19.
ATB Financial released an analysis of the StatsCan numbers which found in 2018 — the most recent year of data — Alberta revenues from spectator sports and other major events like concerts brought in $1.2 billion. That works out to just over 12 per cent of the Canadian total of $9.7 billion.
Of that $1.2 billion, spectator sports in Alberta generated $538 million in revenue, or about 45 per cent of the provincial total.
“It really is money that can’t come back, and that’s why the NHL and NBA is so loathe to just call off the season,” said Concordia University economics professor Moshe Lander said.
While there has been no concrete decision yet, the NHL has been looking at having teams convene in certain cities to finish the 2019/20 season. The idea would be for multiple games to be played in a day at specifically chosen venues.
However, even if the games do start back up, Lander said it would be hard for the leagues to make a profit.
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“If you’re going to put on the game and pay the players, then you’ve got to have the gate revenue and if you don’t have that gate revenue, then you’re guaranteed to lose money,” he said.
Lander added that other companies that rely on business during and following games, such as restaurants and bars around arenas, will also lose out.
“As long as we’re facing social distancing requirements, you can’t even make that money back in those local businesses as a way to sop up the money that would have been spent on playoffs, so this is clearly a net loss for all of those sports communities,” Lander said.
The CFL was set to begin camps this weekend, but that league remains in limbo and had asked the federal government for $150 million in funding in late April to help it resume operations.
Rogers Place debt adding pressure in Edmonton
The City of Edmonton in an especially tough situation, as it is still paying off Rogers Place.
Events normally held there include a ticket tax, and the Oilers Entertainment Group pays the city nearly $2 million per quarter in revenue from that tax.
The city confirmed the deal is still in place, and that it was in discussions with OEG on possible changes due to the pandemic.
“It’s still early in the process, but there has been good dialogue to date,” OEG senior vice president of communications Tim Shipton said in a statement.
Rogers Place opened in 2016 and came in at a price tag of $614 million. The city contributed $313 million and the Oilers Entertainment Group put forward $166 million, with the remainder set to be paid off by the ticket taxes over a 35 year period.
Most of the city’s part of the bill comes from a community revitalization levy, which sees a portion of downtown property taxes redirected to paying off the arena.
— With files from The Canadian Press
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