CSA Elections May 2023

[SF]

4 hours ago, Bigandy said:

To claim the deal is mispriced is very lazy without analysis. Lets look at the numbers 

Sponsorship revenue of CSA prior to CSB deal: 1m annually
Cost to televise games prior to CSB deal: 1m annually  
Net revenues per year from sponsorship prior to the CSB deal: $0

CSB deal revenues paid to CSA: 4m
Cost to televise games post CSB deal: 0$
Cost to create a marketing division: 0$
Profits of CSB: 1.2 million  (see explanation below)
Revenues/profits the CSB has raised from CSA deal: 8.2million MINUS 1) costs to aquire the sponsorship (operating costs, marketing fees, hiring key personal) Lets call this 2million. (10 staff members on 75k a year is is 750k paid to the staff plus around 30% on top of that which is paid for by the employer for CPP, EI etc Therefore its easy to assume 1million in staffing costs. Now add it rents, marketing fees, travel expenses etc. and its reasonable to assume 2million in opertating costs) MINUS 2) The sponsorship deals that only signed on because canada is hosting a WC and the sponsors who only signed on because they also get access to the CPL. Theres no real way to tell this number but sponsorship revenues jumping from 1million to 8.2million clearly are impacted by something. That something is a proper marketing company and a better product offering (WC and CPL added to CSA). Therefore lets assume 1million of revenue is due to the added value of CPL and hosting a WC. MINUS 3) the fee of 4million paid to CSA.  
NOTE: The 8.2 million in sponsorship is during a world cup year where there is unprecedented success. It is highly unlikey that the 8.2 million will drop significantly in 2023-2025. 
8.2 million minus 2 million minus 1 million minus 4 million is 1.2million.   Therefore the CSB is 1.2 million better off because of the CSB deal. The CSA is 4million better off. 


Where exactly is the horrible financials in my analysis. We can pick apart things like the 2million in costs or 1 million in sponsorship that only comes around because of the CPL, but then we can also pick apart the 8.2million in revenue. Its likely that all 3 of these numbers will fall in non world cup years.  

I would love to hear why you think these financials are so horrible. 



 

The CSA is in the middle of a financial crisis. Which, I think, is due to them not anticipating an increase in cost for players and programs in light of success.

Most businesses are spread based - if your revenues are fixed and your costs are flexible, you have an ALM mismatch that can be fatal. Or, to be fair, very lucrative.

In this instance the CSA traded away the floating revenue for a fixed revenue and retained the floating cost base. 

At its essence, this is no different than Silicon Valley Bank - the CSA (like most businesses) has duration risk and they mismanaged it.

That's why the CSB deal was badly mispriced. Its not the absolute amount of revenue they earned in the transaction - it's the relationship of that revenue to the expense side of the business.

[SF]

Think of it as an NHL style salary cap - they set the player compensation as 50% (or whatever the number is) of revenue. You can argue for or against this (reasonably), but the NHL did this because they didn't trust their franchise owners to manage the cost side of their business (I understand this is a simplification)

What the CSA has done is the opposite - they have implicitly said they don't trust themselves to run the revenue side of their business, so they imposed a "cap".  Only problem is that they forgot to attach it to the cost side of their business.

Now, you can get away with it and you can even increase your profits for a period. But, it's not economically sustainable over the longer term. Think of it like a micro asset bubble. They always burst and until they do, they seem pretty good.

I've never run a soccer federation, but have been involved in the running a few businesses and have some sense of what a structural breakdown is - this is one.

[Ansem]

1 hour ago, SF said:

What the CSA has done is the opposite - they have implicitly said they don't trust themselves to run the revenue side of their business, so they imposed a "cap".  Only problem is that they forgot to attach it to the cost side of their business.

It's not that they don't trust themselves - it's that they are fully aware that they don't have the expertise to maximize the revenue of their assets.

If the "cap" revenue is higher but you opt to keep all the rights instead, which is very likely to end up getting you way less revenue than the cap, that's a terrible business decision and you shouldn't be running that company

A good leader knows what he doesn't know and surround himself with people who are experts in what he isn't to better the company under his vision. Unfortunately, that come at a cost and the CSA can't afford to bring that expertise in-house and run it themselves. When they tried - it went seriously wrong (Nike deal, paying broadcasters)

Outsourcing to "experts" that will end up bringing you more money is a no brainer.* Now, what you do with that extra cash is up to you - exclusively run your business OR run your business and reinvest a part of it to develop that in-house expertise so you won't need to outsource in the future. NOW you can call the CSA incompetent if they don't use that extra cash to grow their organization and bring in "experts"

 

Just a side comment

*That's why the McKinsey consulting scandal matters. The Government of Canada is outsourcing at a very high cost an expertise it already possesses within the public service that it also is paying for (politicians don't like the public service disagreeing with them so they hire at premium consulting/management firms that will help them implement bad ideas). Now that's bad management  😉

Edited May 5, 2023 by Ansem

[SF]

Well, if you’re central argument is that the CSA is incompetent, I think we’re on the same page. 
 

Seriously, I’m all for outsourcing when it makes sense. Done correctly it can provide efficiency in scaling. 
 

But, that isn’t my point - my point is that the CSA mismanaged their business model. Probably they just didn’t really understand it. 

[red card]

2 hours ago, SF said:

The CSA is in the middle of a financial crisis. Which, I think, is due to them not anticipating an increase in cost for players and programs in light of success.

Most businesses are spread based - if your revenues are fixed and your costs are flexible, you have an ALM mismatch that can be fatal. Or, to be fair, very lucrative.

In this instance the CSA traded away the floating revenue for a fixed revenue and retained the floating cost base. 

At its essence, this is no different than Silicon Valley Bank - the CSA (like most businesses) has duration risk and they mismanaged it.

That's why the CSB deal was badly mispriced. Its not the absolute amount of revenue they earned in the transaction - it's the relationship of that revenue to the expense side of the business.

Outside of CSB, CSA still has about 10 floating revenue levers it can pull. But covid killed off or dampened about 3 of them for a couple of years and they continue to sub optimally manage about another 4 levers. CSA not being competent business wise is a long running issue. So for Montagliani, the CSB deal was also a way to outsource expertise without direct outlays that the CSA couldn't afford anyway.

CSA also assumed the World Cup prize monies would more than offset the WCQ & Celebration Tour expenses. Given typical player World Cup allocations in other major Feds, this view wasn't totally offside. But this plan was totally upended when US Soccer signed the equal pay deal last spring. 

In terms of a Canadian women's league, it has to be said that pre-2018, there was only 1 fully professional league in the world at that time. The NWSL was America's third attempt and just became the first league to play more than 3 seasons. 

England's WSL was still semi-pro. So, CSA funding a portion of 10+ player salaries was viewed as the best way to support a women's league. The only other talk was Whitecaps having a NWSL team since they had a USL W league team. Instead, the Caps decided to fund Herdman's rollout of the REX program as the best way to support the national team player development. After the CPL launch, talks of a women domestic league picked up but most national team followers were still pinning for a Canadian NWSL franchise. 

 

Edited May 5, 2023 by red card

[narduch]

Like sands through the hour glass....

 

 

[Ansem]

I mean... what the actual fuck is going on here

 

[BearcatSA]

😟

[gigi riva]

What the Fuck is going on for Crying out loud . The Old regime is gone lets just move forward please

[Unnamed Trialist]

9 hours ago, red card said:

In terms of a Canadian women's league, it has to be said that pre-2018, there was only 1 fully professional league in the world at that time. The NWSL was America's third attempt and just became the first league to play more than 3 seasons. 

England's WSL was still semi-pro. So, CSA funding a portion of 10+ player salaries was viewed as the best way to support a women's league. The only other talk was Whitecaps having a NWSL team since they had a USL W league team. Instead, the Caps decided to fund Herdman's rollout of the REX program as the best way to support the national team player development. After the CPL launch, talks of a women domestic league picked up but most national team followers were still pinning for a Canadian NWSL franchise. 

 

I've posted this a few times, but Mediapro were important in helping professionalize the Spanish women's league, recently as you indicate, and Atletico de Madrid is a key player in Spanish women's football. They potentially bring massive expertise, historically they are a top 3-4 women's club. And Atletico Ottawa has always expressed interest in a women's team and league.

The fact that they haven't joined the Matheson project probably has to do with her total lack of experience and likely the antagonist postures they see. But if they saw viability they'd go for it, as long as CPL teams weren't being vetoed.

[SF]

Well, this is not great on a few levels. Confirmation the CSA is being fiscally run into the ground. Giving one vote to the women’s league where the men’s league carries 14. People placing their personal agendas above the greater good. Looking to change the bylaws so a new and conflicted Director (for the record Rossi sounds like a good guy, but he has a massive conflict of interest if he becomes a Director, let alone President). Key stakeholders not trusting the proposed new leadership. 

Installing a high school student council would be a step up. 

[Ansem]

23 minutes ago, SF said:

Well, this is not great on a few levels. Confirmation the CSA is being fiscally run into the ground. Giving one vote to the women’s league where the men’s league carries 14. People placing their personal agendas above the greater good. Looking to change the bylaws so a new and conflicted Director (for the record Rossi sounds like a good guy, but he has a massive conflict of interest if he becomes a Director, let alone President). Key stakeholders not trusting the proposed new leadership. 

Installing a high school student council would be a step up. 

Oh I'm sorry, It's news to me that the women's league has kicked a ball, have 8 teams, signed players, has a structure, and everything 

We gave a "concept" 1 vote.

I'm getting sick and tired of the crying and complaining and entitlement. Crying and calling someone a liar in a middle of a speech... really?

As for Dino Rossi, pretty sure he'd leave his position as League 1 Canada president. Very few has done as much for this sport in this country than Rossi and actually understand the landscape from coast to coast. Questioning his integrity because some conspiracy theorists views CSB as an evil secret society wanting to take over this sport is laughable, ridiculous and disturbing.

Can we just move the F on? 

Edited May 6, 2023 by Ansem

[SF]

Didn't question his integrity - quite the opposite and said so quite clearly.  If he resigns League 1 after assuming a Board seat, then problem solved. Hopefully this is contemplated in his proposal for the Board role. 

So, sure the 1 vote vs. 14 votes is maybe fair in the context of how long each has been around. My point is how it will be perceived by key stakeholders.  Ask yourself if sponsors, when they're made aware (I promise you they will be), will be OK with it?

Whether she should have been called a liar in the middle of a speech isn't the point. The point is that there are key stakeholders in the Canadian soccer community who don't trust the CSA and have been hurt by its administration of the game.

Absent a real change in governance, this will not go away.

And, with all due respect, the "stop crying and complaining and being entitled" approach is the one the CSA has been using for decades.  It ain't working.

[Ansem]

20 minutes ago, SF said:

So, sure the 1 vote vs. 14 votes is maybe fair in the context of how long each has been around. My point is how it will be perceived by key stakeholders.  Ask yourself if sponsors, when they're made aware (I promise you they will be), will be OK with it?

Project 8 is a concept, not a league. The fact that they were already given a vote is actually surprising. The concept of "fairness" can be revisited once it's an "actual" league.

21 minutes ago, SF said:

Whether she should have been called a liar in the middle of a speech isn't the point. The point is that there are key stakeholders in the Canadian soccer community who don't trust the CSA and have been hurt by its administration of the game.

It actually is the point. It's not like other sports don't have their share of scandals - this is not "how" to handle your business. They had a parliamentary hearing that gave them the floor, the media and all sorts of avenue to voice their grievance. Someone representing the Whitecaps acting this way and calling someone a liar publicly in tears in the middle of a speech is inappropriate. This doesn't help making this sport be taken seriously in this country.

 

24 minutes ago, SF said:

And, with all due respect, the "stop crying and complaining and being entitled" approach is the one the CSA has been using for decades.  It ain't working.

Don't do that crap the way Labbé is doing. Sinclair used the parliamentary hearing and it was reported by the media. That's the right way to do it, you don't see Christine doing that nor would she.

[CanadaFan123]

Stephanie Labbe strikes again. Absolutely unhinged to call someone out in the middle of a speech for something you have no first hand knowledge of and that is completely irrelevant to the receiver. 
 

Labbe wants to hold Crooks accountable because she was allegedly on a call where someone else used a poor choice of words? Grow up. This women’s league is going to crash and burn with the current leadership in charge. 

[Ivan]

Thank you to the posters on here that have saved me so much typing!

This election and preamble really is a comedy skit, right?

Edited May 6, 2023 by Ivan
added context

[Ansem]

[Ozzie_the_parrot]

 

[narduch]

 

 

[blueseeka]

Shocking

[Club Linesman]

Excellent can we get back to playing some games now.  Give her a chance to get the house in order and if she can’t it’s 1 years.  In the meantime get the players some games and prep for the 2 coming WC and get a contract signed that makes sense for all. 

[Ottawafan]

20 hours ago, SF said:

Think of it as an NHL style salary cap - they set the player compensation as 50% (or whatever the number is) of revenue. You can argue for or against this (reasonably), but the NHL did this because they didn't trust their franchise owners to manage the cost side of their business (I understand this is a simplification)

What the CSA has done is the opposite - they have implicitly said they don't trust themselves to run the revenue side of their business, so they imposed a "cap".  Only problem is that they forgot to attach it to the cost side of their business.

Now, you can get away with it and you can even increase your profits for a period. But, it's not economically sustainable over the longer term. Think of it like a micro asset bubble. They always burst and until they do, they seem pretty good.

I've never run a soccer federation, but have been involved in the running a few businesses and have some sense of what a structural breakdown is - this is one.

Unfortunately Canada does not have a soccer federation, it is an association.  Can't see the provinces giving up their control. 

[Ottawafan]

19 hours ago, Ansem said:

It's not that they don't trust themselves - it's that they are fully aware that they don't have the expertise to maximize the revenue of their assets.

If the "cap" revenue is higher but you opt to keep all the rights instead, which is very likely to end up getting you way less revenue than the cap, that's a terrible business decision and you shouldn't be running that company

A good leader knows what he doesn't know and surround himself with people who are experts in what he isn't to better the company under his vision. Unfortunately, that come at a cost and the CSA can't afford to bring that expertise in-house and run it themselves. When they tried - it went seriously wrong (Nike deal, paying broadcasters)

Outsourcing to "experts" that will end up bringing you more money is a no brainer.* Now, what you do with that extra cash is up to you - exclusively run your business OR run your business and reinvest a part of it to develop that in-house expertise so you won't need to outsource in the future. NOW you can call the CSA incompetent if they don't use that extra cash to grow their organization and bring in "experts"

 

Just a side comment

*That's why the McKinsey consulting scandal matters. The Government of Canada is outsourcing at a very high cost an expertise it already possesses within the public service that it also is paying for (politicians don't like the public service disagreeing with them so they hire at premium consulting/management firms that will help them implement bad ideas). Now that's bad management  😉

If you ( the CSA ) don't trust yourself to do the job or hire the right personnel, how would the players be able to have confidence in your direction or decisions?

 

[Ottawafan]

6 hours ago, SF said:

Well, this is not great on a few levels. Confirmation the CSA is being fiscally run into the ground. Giving one vote to the women’s league where the men’s league carries 14. People placing their personal agendas above the greater good. Looking to change the bylaws so a new and conflicted Director (for the record Rossi sounds like a good guy, but he has a massive conflict of interest if he becomes a Director, let alone President). Key stakeholders not trusting the proposed new leadership. 

Installing a high school student council would be a step up. 

Welcome to all levels of soccer in this country.  Funny how some are just starting to see while others continue to look away pretending it's not an issue.

[Ozzie_the_parrot]

Doubt this ends happily ever after any time soon: