Why the Canadian government isn’t exactly funding David Braley and the Argos

Grey Cup finances are always a tangled mess, but The Toronto Star's Rick Westhead did an excellent job of unravelling them this week, coming to the conclusion that Toronto Argonauts' (and B.C. Lions') owner Senator David Braley may have pulled in as much as $10 million from the event. However, as Westhead's piece points out, there's plenty of controversy brewing over that, considering that the federal government contributed $5 million towards Grey Cup celebrations and the Ontario government chipped in another $4.5 million. To some, just adding up those numbers would suggest that the government's directly funding Braley and that he should have paid for the whole thing himself. When you look closer, though, there's a little more to the story than that.

That's not to dispute any of the above numbers, or Westhead's piece itself, which seems quite fair; it's just some others' interpretations of it that are problematic. (See Bob McCown's complaints here (mp3) for an example.) It's important to remember that there are several different elements involved in a typical Grey Cup, and this year's 100th edition came with even more than usual. One of the most notable elements was the cross-country train trip with the Grey Cup to promote the league and the big game, and Westhead's piece estimates $3 million of the public funding went to that. That sounds about right, and keep in mind that the CFL paid for part of the train tour and it also received huge amounts from corporate sponsorship, so it's not like the federal government completely funded it. By and large, the train tour seems like a reasonable thing for a federal government to contribute to; although some weren't happy that it didn't hit specific cities, the train (and off-train trips, including ones to Nunavut and Newfoundland) brought the Grey Cup (and a chance to experience more of the history of the CFL and its role in Canadian history) to Canadians from coast to coast. This provided an interesting event that a lot of Canadians across the country were able to experience, and affected many more people than just those who were able to attend the Grey Cup game itself, so from this corner, that doesn't seem like like a terrible cause for the government to fund.

The train tour is a perfect example of something that wouldn't have happened without governmental funding, too; you can't reasonably expect the owner of the Toronto franchise to spend millions on events in Alberta and Saskatchewan, and league funding and corporate sponsorship alone likely would not have been sufficient to do this kind of national tour. When federal funding for the Grey Cup festival was first announced (and it's also worth noting the CFL only received $5 million, not the $12 million they initially asked for), the hope was that they would actually use it for cross-Canada events, not just a bigger party in Toronto. They did (while also expanding the length of the festival in Toronto and the events involved in it), and while that still won't please everyone, that's how governmental funding works.

It's also worth noting that $5 million is a pittance compared to some items in the 2012 budget (PDF summary) that don't exactly affect every Canadian, including "$105 million over two years to support forestry innovation and market development," "$44 million over two years to transition the Canadian Grain Commission to a sustainable funding model," "$105 million in 2012—13 on a cash basis to support VIA Rail Canada's operations and capital projects" and "$50 million over two years to protect wildlife species at risk." That's not to say any of those projects are bad or unnecessary; it's just notable that the federal government spends a lot of money on specific projects, and $5 million on Grey Cup festival programming is minor in the grand context of a $276.1 billion budget.

But back to the crucial question here: is David Braley reaping the benefits of an event that received substantial governmental and league-wide funding? The answer's yes, but it's not as lopsided as it may seem at first glance. First, as pointed out above, that funding went to events both national and in Toronto that wouldn't have happened otherwise. You can argue that Braley should have put them on himself, but from a business standpoint, that doesn't really make sense; extra funding for a festival and for nationwide events wasn't likely to help the Argos' bottom line. However, that funding isn't a lost cause; for one, it promoted travelling to Toronto for the party, and huge numbers of people did that (paying vast amounts in taxes on flights, hotels, meals and the like along the way), and for another, it kept the idea of the Grey Cup as an annual cross-Canada party strong (which is crucial to the future of the CFL, but also gives provincial and federal governments plenty of tax revenue). This isn't exactly just throwing money down the drain.

Moreover, Braley's profit on the Grey Cup has to be seen in the grand context of his ownership of the Argonauts. Finances for the team aren't publicly available, but given that they've been last in the CFL in average attendance for numerous years, they're hardly a license to print money. In fact, Braley's ownership alone says a lot about their finances; those who ask "Why does the CFL let one man own two teams?" miss the key point that no one else particularly wanted to own the Argos. Heck, Braley (secretly) contributed half the money former owners David Cynamon and Howard Sokolowski used to buy the team. In that light, it's arguable that Braley isn't really reaping massive rewards from the Grey Cup at all; whatever he made this year may help offset the likely-substantial annual losses he's taken. (It's possible the profit here overtakes the losses he's seen thus far, but keep in mind that the Argos may not make money next year or in future years despite their championship, and that there isn't likely to be another Grey Cup in either B.C. or Toronto for a while.)

The view from this corner is that a somewhat-stable Argonauts franchise is critically important to maintaining the CFL's national success (with television and sponsorship in particular), and that Braley is currently the best ownership candidate to provide that stability. Having him make some money off a Grey Cup so it isn't just red ink year after year doesn't seem all that terrible from here. Most importantly, though, it's not really the federal or provincial governments or the CFL itself that are funding Braley. They're funding different elements of the Grey Cup festival, and they should see benefits from that both now and in the future. Work like Westhead's piece is critically valuable to providing an understanding of Grey Cup finances, and that's a good thing; the piece itself also includes plenty of context and many of the same qualifications stated here. Some are using it to jump to the conclusion that "government money in + Braley profit = government funding Braley," though, and that conclusion isn't the whole story.