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Tuesday, January 21, 2014


Reading the article in the Globe and Mail that detailed that Saskatchewan had to cough up almost $1M to hold up its end of the bargain when it did not meet the $3.5M financial guarantee the Memorial Cup gave me a sense of deja vu in it came to the bid proceedings. 

You can find the article:  HERE

Canadian Interuniversity Sport's bidding process for the CIS Men's Basketball Championship used the notion of financial guarantees as one of its determining  factors for host cities and basically have "financially guaranteed" themselves into a corner as there are only a small handful of venues willing to meet the steep financial guarantees.  Using this sort of financial threshold as currency in the bidding process is a nice little cash cow for the league, but it really limits those who have the financial wherewithal to be able to take a tax dollar bath should the guarantee not be met. 

Call it "if you guarantee it, they will come"   

The CIS has really been limited to Halifax, and more recently Ottawa for their Final 8 Basketball Tournament the past 30 years.  Others have kicked the tires and made a bid (Hamilton comes to mind), but without knowing what the financial guarantee is from the other side makes for a game of financial blind man's buff.  You don't know the other side's financial guarantee, you just put your blind faith that your number is greater than that of your competitor. Again, it is a chance few are willing to take when it comes to tax payer dollars having to shore up the difference.  The good news for the CIS is that Ryerson, with the new Mattamy Centre and UBC will host the next two years before the bid processing starts again.  Expect Halifax to get back into the mix.  The self-proclaimed "Basketball Capital of Canada" maintained a pretty good stranglehold on the tournament for upwards of three decades. 

Similarly, like CIS basketball the Canadian Hockey League is running the risk of limiting its options when it comes to the bid processes.  Few can afford to play a high stakes game with tax payer money.  Should you reach the guarantee, no problem.  Pay the bills and count the money. If not, expect a hefty bill in the mail for your city or province, much like the one that Saskatchewan got when it fell $668 000 short, on top of their $250 000 investment in rink board improvements.  What does that mean?   Smaller communities who likely could do an outstanding job of hosting a Memorial Cup are likely to squeezed out of the equation.    A franchise like Niagara who will have a brand new arena next year might make an ideal host, should they enter the bid process.  However tax payers in the city were not pleased to see some of their dollars go to a new arena considering that the 2 000 capacity Seymour Hannah Complex  is fairly new, and would likely be reluctant to see more potential tax dollars go if an exorbitant financial guarantee is not met. 

So expect to see a lot of London, Kitchener, Barrie and maybe Windsor or Oshawa from an OHL perspective, but not the Owen Sounds, or likely Sarnia's of the world.   All could likely host a great tournament, but not at the prices set by the CHL.   

Financial guarantees are nothing new in the world of big event planning, and from a macro perspective it is very good business to know what is going into your pocket at the end of the tournament.   You cannot fault the CHL for looking out for their own best interests.   The hope is that they do not paint themselves into a corner with few cities part of the bidding process.  Essentially, that will create a tier system some already say may exist in Canadian major junior hockey already.  

A fair shot at the hosting the biggest tournament of the year should be available to all.    After all that is the true spirit of competition. 

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