By Jeff D’Andrea

Can Raiders afford to pay its players? Pres. McFee doesn’t think so

Jul 8, 2016 | 5:19 PM

Ever since Oct. 20, 2014, the Canadian Hockey League has faced legal pressure from former players in order to pay its players minimum wage — in large part because they feel teams can afford to do so.

The latest update in the case came on Wednesday afternoon on TSN.ca when Rick Westhead reported a recently released lawyer-funded study suggests teams are worth millions.

But in the case of small market teams like the Prince Albert Raiders, the numbers don’t seem to add up.

The study was conducted by Kevin Mongeon, an assistant professor of sports management at Brock University. He estimated that if players were paid at Ontario’s minimum wage ($11.25 an hour) for 40 hours a week, over 25 weeks, it would cost teams $281,250 annually to pay a roster full of 24 players.

Although Saskatchewan’s minimum wage is 75 cents lower per hour, it would still be a huge expense to the Saskatchewan small market teams like the Prince Albert Raiders — who have lost more money than they’ve gained in recent years.

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In their past five annual general meetings dating back to 2010, the Raiders have lost money in each of those years except one. In the 2013 AGM, they reported a $78,986 profit only to show a significant $262,680 deficit in the following meeting. They reported a paper loss of $124,612 for 2015, mostly due to changes in their accounting practices with regards to the team’s WHL education fund.

Raiders president Dale McFee believes his team has stabilized itself financially and estimates that the team could report a profit in the tune of $30,000 in this year’s annual general meeting in the fall.

Although that profit is encouraging, it is still well below what they’d need to cover minimum wage costs should they arise.

“If you’re paying $280,000 and we’re a break even hockey club, that comes right off your bottom line,” McFee said. “Certainly, it’s pretty hard for a junior hockey team to survive, and certainly as a player when I used to play.

“Looking at it from a business perspective, it would be pretty difficult obviously — very difficult.”

The Raiders certainly aren’t alone. The Swift Current Broncos made a profit of $133,465 in their past AGM, a year after a paper loss of $135,000.

Although the Kootenay Ice don’t release their financial statements publicly, it’s no surprise that they would have trouble paying the fee.

The Ice averaged a minuscule attendance of 1,957, which would hardly cover the increasing expenses for what a team has to take care of. Even WHL commissioner Ron Robison has said the Ice are in a “critical stage” with a possible relocation if ticket numbers fail to improve.

Another troubling development in the story according to McFee were the team evaluations. In the list, the Raiders are listed as being worth $2.21 million.

“There’s been no contact with us from somebody trying to set that number,” McFee said. “We’ve had no evaluation done and certainly our team, at this point in time, it doesn’t really matter because it’s not for sale. It’s not a point that we need to evaluate anything.”

Even if the Raiders were to do an evaluation, McFee figures the value would exceed the $2.21 million figure, especially considering the Prince George Cougars were sold for close to $7 million in 2014 and the Saskatoon Blades were sold for $9 million in 2013 as some examples.

“If you look at the teams that have sold in the last few years, you’d think that number is low,” McFee said. “If you look at it through a business formula, we’re a community-owned team and certainly, we’re in a unique circumstance where we don’t have to make large amounts of money, we just need to make sure the team turns a profit.”

“But for me to say what that number is without knowing how they based that number — it doesn’t make a lot of sense,” he said.

But those numbers provided in the study seem to be quite flawed. Westhead himself some of the numbers “can be far off,” in the video portion of his piece. WHL blogger Gregg Drinnan tore the evaluations to shreds.

These numbers will be used in court for a $180 million suit filed against the CHL. So far, none of the allegations have been heard in court.

jdandrea@jpbg.ca

On Twitter: @jeff_dandrea