OSEG posts $14M net loss for 2016 Lansdowne operations
Who knew that winning the Grey Cup could contribute to a multi-million loss?
It's a lesson learned in 2016 by the Ottawa Sports and Entertainment Group, which operates the stadium and commercial district of Lansdowne and owns the RedBlacks and Fury.
OSEG posted a whopping $14.4 million net loss in 2016, even worse than its 2015 loss of $12.6 million.
There are a few reasons for the "unfavourable" results, according to a city report made public Tuesday evening.
Primarily, OSEG was paying a full year of interest on a retail loan in 2016. But the RedBlacks' CFL victory also added to OSEG's financial woes.
"Winning the Grey Cup proved to be expensive," the report states.
Attendance at Lansdowne jumped 41 per cent year-over-year to 3.4 million people, according to the 2016 annual report.
The report states "Lansdowne has become a go to destination and not just on event nights," but it gives no breakdown for attendance on event days versus non-event days, nor does the report give year-over-year attendance comparisons for non-event days.
Operating results better, but not where hoped to be
The financial returns for Lansdowne operations are improving. In 2016, revenue increased 17 per cent to $50 million. The biggest chunk of the jump came from more retailers paying rent for a full year. Operating income was $2.7 million, a big improvement over the 2015 operating loss of $985,000.
Still, OSEG admits that financially, it's not where it was hoping to be three years after opening.
The operating results may "reflect improvement, but are not yet at the level of site activity or profitability that had originally been established," according to the report.
The annual report will be presented and discussed at next Tuesday's finance committee meeting.
