The Calgary Stampede won’t be short on funding to see it through the pandemic if city council approves a change to the credit agreement.
Following a 2020 season that saw $26.5 million in losses, the Stampede organization anticipates an $11-million loss in 2021.
With no 10-day event in 2020, revenues for the Stampede were down by 84 per cent and forecast revenues down by 40 per cent for this year compared to 2019.
That puts the Stampede at risk of defaulting on its debts.
“The city does guarantee some of their debt in order for them to get lower rates and more access to funds,” Mayor Naheed Nenshi said. “This is just a matter of the city stepping out and saying, ‘Yeah, we’re still here for them.’
“If that wasn’t there and some of the debt became due and they’d have to negotiate with the banks, that could be an ugly situation.”
Tuesday afternoon, the city’s priorities and finance committee agreed with a request from the Stampede to amend credit agreements the city has with the Stampede, keeping it in good standing with the city and allowing it to stay in good standing with private banks.
“There’s certain requirements (the Stampede) has to meet to be in good credit with their bank and with the city,” Nenshi said. “So what we did is we just forgave them those requirements for a year.
“They’re a solid organization with good financials, and they’ll be able to get back to normal next year — we’re confident of that.”
If city council approves the change, the not-for-profit organization can secure another $10-million loan from an unnamed bank.
“The additional $10-million (debt) facility that we are contemplating at the moment is for working capital reasons and is to be used on a short-term basis through the pandemic and then for a time after,” Graeme Ryder, the Stampede’s CFO, told the committee. “We are not looking to draw on further long-term debt facilities.”
The Stampede did receive support from the provincial and federal governments, with grants totaling nearly $16 million in 2020 and nearly $9 million in 2021.
Interim CEO Dana Peers told the committee that the Stampede has had conversations with both orders of government for more funding, receiving promises for more money, but without a timeline.
Being a not-for-profit group, the Calgary Exhibition and Stampede is unable to keep “cash reserves of any real quantity” on hand, Peers told the committee.
The interim CEO said there have been internal conversations about how the Stampede could build up those reserves to be able to withstand closures following the COVID-19 pandemic and the near-closure of the 2013 floods.
“In my time when I was a board member for 10 years, certainly we’ve had these discussions,” Peers said. “I’ll certainly undertake to talk to Graeme (Ryder) further about what might be allowable through CRA.
“I know it has been a challenge.”
City officials said allowing the Stampede to make amendments to its loans does not add any risk to adding debt or negatively affecting the city’s credit rating as a result.
With the annual celebration of cowboy and western lifestyle generating $540 million in economic activity in 2019, the hope is this year’s festivities will help the city get back on its feet as vaccinations push back the pandemic.
Peers said Stampede 2021 hopes to be part of the economic recovery in the region.
“The annual event is a significant part of the economy here in Calgary and southern Alberta,” the Stampede CEO said. “And of course, we do this not only as the Calgary Stampede, but we do it for our community.
“It is our intent to provide the safest possible Stampede experience that we can.”
Peers said Stampede has been working closely with Alberta Health to make the annual event pandemic-safe.
Nenshi, who also sits on the Stampede board, said guidance from the province has been lacking.
“(The Calgary Stampede) wants to put on a safe show, but, quite frankly, the government of Alberta is not giving a lot of guidance. They’re just like, ‘Yee-haw,’” Nenshi told reporters, adding, “as everyone knows, it’s not ‘Yee-haw,’ it’s ‘Yahoo.’
“The Stampede executive and staff and board are really working hard on crafting their own safety framework. And so we should have some information on that in the next week or so.”
The mayor said this year’s exhibition will not be like previous years.
“There’s a lot of conversations being held right now about things that are traditionally indoors moving outdoors. There’s a lot of conversations around how you move people around to avoid crowding.
“Of course the evening show is going to look very different, but there’s a lot of unanswered questions.”
Nenshi said questions of park capacity and how it’s calculated remain unanswered.
At her COVID-19 briefing on Tuesday, chief medical officer of health Dr. Deena Hinshaw said the reopening plan that allows the Stampede and other events to be held is based on the protections vaccines offer.
“We have been working with the Calgary Stampede organizers for several months to make sure that we’re thinking through ways of mitigating the risk of significant spread in that venue,” Hinshaw said.
“It’s not going to be the Stampede as typically would happen.”
Alberta’s top doctor didn’t see the Stampede as a big threat in spreading COVID-19 in the province.
“The Stampede is not going to be the kind of biggest risk as we’re looking at people travelling,” Hinshaw said.
“One of the things that people have said they miss the most is seeing their friends and family members. And so I think this summer we’re going to see a lot of people travelling across multiple provinces.”
“The summer is going to continue to be a time for us in the transition between responding to the significant threats that COVID-19 has posed into a time where we have a level of protection that allows us to manage that risk, as we do the risks of many other things in our lives,” Hinshaw said.