Habs News: Groupe CH, Job Cuts, Loss of Revenue, Business Decisions, Montreal Canadiens, Evenko, Geoff Molson, Laval Rocket, Coronavirus, Pandemic
ROCKET SPORTS MEDIA | LAVAL, QC. — It has been nearly three months since there has been major professional team sports in North America. The National Hockey League (NHL), National Basketball Association (NBA), and Major League Soccer (MLS) have announced plans for return to play. To date, plans do not include fans at venues to watch the athletes compete.
The pandemic has impacted the economy globally. Several industries have had to halt their operations while waiting for the green light from local authorities to resume. Millions of people across the world are unemployed as a result.
Job Cuts
Groupe CH isn’t an exception and they have had to deal with the effects of the Coronavirus. In addition to the Canadiens and the Rocket, Groupe CH has ownership stakes in the Evenko and L’Équipe Spectra entertainment companies.
On Tuesday, there was a round of job losses at Groupe CH. Some changes were announced as temporary layoffs, while other cuts will be permanent.
Dominick Saillant and Francois Marchand from the communications staff were let go by the organization permanently. Sylvie Lambert, Senior Coordinator, Hockey Communications lost her job earlier this year. Guillaume Ouimet is the only remaining member, with Canadiens’ communications being controlled by Paul Wilson, Senior Vice President Communications & Public Affairs for Groupe CH.
“Our current structure can’t support such a storm. To that effect, we took difficult decisions today, including restructuring our communications team to adapt to this new reality,” said Wilson via a statement. “In accordance with our internal policies, we do not intend to comment on any other human resource decisions.”
Saillant was in his 24th year as a member of the Canadiens Communications Department, and his 18th as senior director, hockey communications. He was responsible for all aspects of the club’s media relations on a daily basis. He began his career with the Ottawa Senators in 1992, before joining the Canadiens in August 1996. Marchand was a communications manager, and was with the organization for 11 years.
The organization didn’t publicly announce any of the other departures, but according to reports there was at least 20 other affected employees. The impacted staff came from the operations, marketing, and ticketing departments from all the companies of Groupe CH.
On the same day, Molson Coors Beverage Co. announced that they will eliminate about 190 jobs in the province of Quebec by the end of 2021.
Loss of Revenues
Last week’s departures were the second round of layoffs for Groupe CH since the start of pandemic. The layoffs are in addition to restructuring that took place at the end of January.
On January 30th, Lambert of the communications department lost her employment after spending 32 years in the organization, only a couple of months shy from retirement. The restructuring also led to Mark Weightman agreeing to leave his role as Vice-President, Development & Operations, Laval Rocket & Place Bell in February.
On March 30th, the organization temporarily reduced its staff by 60 percent, ensuring that they received 80 percent of base salary for the following eight weeks. The remaining staff took a temporary 20 percent pay cut. This represents all of hockey operations employees with the Habs and the Rocket including Marc Bergevin and Claude Julien.
In December, Forbes Magazine evaluated the Canadiens to be worth $1.34 billion (US), third in the league behind the New York Rangers and Toronto Maple Leafs. The team’s revenue for the 2018-19 season rose to $243 million US (with an operating profit of $106 million), ranking them second in the NHL behind the Rangers.
At the pause, Canadiens had played 37 of their 41 (or 90 percent) regular season home games. Attendance figures tell us that 780,155 Bell Centre fans attending 37 games was 90.4 percent of the attendance in 2018-19. So, all else being equal, the Montreal Canadiens would have earned roughly $220 million (US) in revenue in 2019-20.
The dollar figures for other Groupe CH properties such as the Laval Rocket and L’Équipe Spectra are not available, although the Rocket were having a positive financial season, increasing their per-game average attendance by 12 percent over 2018-19.
All the events organized by Evenko and Équipe Spectra have been postponed or cancelled until further notice. The CEO of Live Nation (company that owns 49 percent of Evenko) reported that 90 percent of fans have held on to their tickets for rescheduled concerts leaving those funds in the hands of Evenko.
A significant portion of Groupe CH’s worth are in the three big venues they own: Bell Centre in Montreal, Complexe Sportif Bell in Brossard, and Place Bell in Laval.
The most recent cuts lead me to believe that the organization isn’t expecting to play in front of 21,302 people at the Bell Centre anytime soon.
During his media tour following the announcement of return to play and the draft lottery process, Gary Bettman said that league has several plans for the 2020-21 season that can begin as late as in January 2021.
I don’t believe that anyone can accurately predict the evolution of the pandemic and anticipate what the world would look like in 2021. There’s a strong possibility that games will be played in empty buildings or with reduced capacity.
In an optimistic scenario where the Bell Centre can host an event at full capacity in January, it would be nine months between any significant revenue. That’s a huge gap for any business to be able to swallow regardless of the industry.
Business Decisions
I have regularly written in previous columns when decisions made more business sense than anything else. Whether it was to change the start time of home games to 7:00 pm from 7:30 pm, or stopping to print media notes at the Bell Centre, these measures were put in place to help the bottom line. Even the refund policy for the cancelled home games was setup in a way that would benefit season ticket holders not to cash out the credit.
I will be curious to observe how the new economic environment will influence the organization’s decisions. Over the last couple of seasons, several experts and fans have asked for Bergevin’s dismissal. Would Geoff Molson consider paying Bergevin between $6 million and $10 million total until the end of the 2021-22 season to stay at home?
The general manager has been criticized for spending significantly below the salary cap. The recent moves makes me wonder if the owner had imposed him a budget that was lower than the maximum.
Last summer, Canadiens presented an offer sheet to Sebastian Aho, a restricted free agent, that the Hurricanes publicly announced within minutes that they would match. Did Montreal really believe that there was a chance that the offer would be sufficient to land the player? Or was it a move by the organization to have its fans believe that they attempted to spend to the cap?
The coach was also under fire by several experts and fans. It would cost the organization $10 million if they terminated Julien at the end of the 2019-20 season.
I haven’t met an entrepreneur that started or bought an existing business with the purpose of not making a profit. It’s safe to say that it’s no different for the Molson family.
By Chris G., Senior Writer
All Habs Hockey Magazine
Copyright © 2020 Rocket Sports
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