Toronto, ON- By now, it is clear that the COVID-19 pandemic has caused havoc across U SPORTS, cancelling games and championships, ending athletic careers early and turning 2020-21 into a lost season. As the world moves towards (hopefully) the light at the end of the tunnel and ideally a 2021-22 season, athletes at one school now might be thrown for another loop.
On Monday afternoon, several outlets reported that Laurentian University of the Ontario University Athletics conference (OUA) took a very rare and concerning financial step by filing for creditor protection under the federal Companies’ Creditors Arrangement Act.
The Act is designed for any business in Canada that is more than five million dollars in debt to have the opportunity to (under the supervision of the court system) restructure their finances in a way that can help them pay their debts. Meaning whereas the Bankruptcy and Insolvency Act is rigid, and straightforward the CCCA allows for broader rules and allows for more discretion, even if the two acts do much of the same thing.
Looking closely, the shock of this situation comes off. The Toronto Star spoke to insolvency trustee Bryan Gelman. He found that the school went from $69.6 million in net assets in 2015 to $36.7 million in 2020 and that it currently has assets of $33.2 million but liabilities of $43.7 million.
The Challenge to Athletics
With so much uncertainty about Laurentian’s financial future, those who follow U SPORTS certainly will be curious to wonder whether the fate of the Voyegauers Athletic Program may be at stake.
According to reporting from Laurentian’s student paper, The LAMBDA, the budget for athletics sits around approximately $1.7 million. 50% of the funding comes from Laurentian University, 30% from student fees and 20% is fundraised capital. The LAMBDA reported that the average student fee from athletics is $87.67, only around 45% of the fees paid by students at other schools.
This leaves a significant amount of uncertainty on several fronts.
– Will the Budget be there in Fall 2021?
– Where will it come from?
– Will students bear any excess cost?
49 Sports pondered this question early in May 2020 after the announcement of the Lethbridge Pronghorns hockey program’s shuttering. At the time, the numbers showed that the Ontario Government’s 2019 10% cut in tuition fees forced 10.1 million dollars to be cut from Laurentian to balance their budget and wiped out the funding for the Laurentian Track and Field Program.
The Voyageurs Athletic Program already attempted to stem this growing issue. In November 2018, Laurentian held a pair of referendums to add a $50 fee for additional mental health services and a second to add a $50 fee increase for Varsity Athletic costs. The students voted to accept the Mental Health fee 66% to 33% and voted against the Varsity Athletics fee 55% to 45%.
The denial forced Laurentian’s athletics department to shift some of the rising costs onto their student-athletes. “Tier 1” athletes (hockey, basketball) saw an increase from a $149 fee to a $700 fee and “Tier 2” athletes (soccer, cross country) saw their costs rise from $149 to $550.
Now the Voyageurs are left in a genuine financial problem. 50% of their budget comes directly out of the uncertain school finances, 30% comes from student fees, which are not at the rate of inflation for OUA athletics, and 20% comes from donations, which in theory may lower because of the uncertain financial future of the university.
Even in saying all this, there is not much for the Voyageurs athletic program to do but sit tight. Until the university’s affairs are in order, the question of what could happen to them is truly an unknown. All told, though, Laurentian’s drama creates one more question mark in the world of change COVID-19 has done to Canadian university sports.