Rangers Financial Position and Common Related Questions, News (Oakville Rangers Hockey Club)

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Rangers Financial Position and Common Related Questions
Submitted By Melissa Wolk on Monday, February 22, 2021
Among the many issues we are all managing through the pandemic, financial concerns are certainly among them. As such, we thought it might be helpful to provide some high level information on the club’s financial position and approach.

Here are some key points:

1. With over 3,300 players, the Oakville Rangers is one of the largest minor hockey organizations in the country, where our House League represents nearly three quarters of our membership. This affords us economies of scale for the costs of ice, uniforms and other expenses

2. Our club is a non-profit organization. All programming is designed to breakeven financially so none of what members pay is for profit margin. This of course helps keeps the costs down

3. One of the key attributes of the club is its volunteer network. As a community program, the Rangers benefit from hundreds (even thousands) or hours of time donated by people helping the club operate both on and off the ice. Again, this helps keep the costs down

4. The club treats House League and Rep as two separate cost centres where the programming of each one is designed to breakeven on its own. Therefore, we do not subsidize the programming of one stream with the revenues of the other

5. While we do not aim to make profits, we do need to maintain a financial reserve to allow for the timing of money coming in and out and to stabilize the club in times such as these where the costs of operating exceed the revenues. A typical recommendation for a non-profit organization such as ours is to have a reserve around 1.5 times the fixed costs of running the club for one year. This would allow us to survive in a year where we could not offer programming such as we have nearly experienced this season

6. Fortunately, our club reserve was healthy heading into the pandemic, and so we will remain in a good position regardless of whatever lockdowns we may experience in the new year

7. In a typical year, the cost of delivering hockey is around 60% variable (for ice time, referees/timekeepers) 20% for upfront costs at the start of a season (uniforms, OMHA fees, insurance, credit card fees and development clinics) and the final 20% is for the fixed costs of operating the club (office costs, employee salaries, legal, audit, marketing etc.)

 

The above facts should help club members to understand some of the challenges faced this year in particular and help to explain some of the questions that have arisen in this unusual season. For example:

 

“Why have costs risen this year when we have no uniforms and less games?”

This simply comes down to the cost of ice per player. In a typical season, the ice for a House League game would be shared by about 30 players, 15 for each team. If the ice costs $250 on average for an hour, then the cost per player is $250 / 30 or around $8 each. When we were forced to play with cohorts of ten, then a House League game that still costs $250 would be shared by 20 players, 10 on each team. Then the cost per player rose to $250 / 20 or about $12 each. This $4 increase per player per game is a 50% rise!Over a 40-hour season of 20 games and 20 practices, it adds around $160 to the cost to play

 

“Why are rep teams continuing to practice while House League teams are not?”

Sadly, when the provincial mandate further restricted us to having 9 players on ice (and one coach) that $250 cost for one hour now skyrocketed to over $25 per player. Given our mission of delivering fun, affordable hockey, House League sessions are now no longer feasible until we get back to having more kids on the ice.Rep teams, however, are entirely funded by the families of each team, and so where some of those teams opt to continue to practice despite the temporary increase in costs per hour, that is their decision to make. Importantly, club members should rest assured that no club funds are being directed to one program over another

 

“Why do my House League registration fees remain as a credit instead of being applied to the skills clinic?”

As mentioned above, the $240 fee that was paid recently contributes to both practices and league ice time and to upfront and fixed costs. The clinics, on the other hand, are only charged for the incremental cost of the ice and instructors. Once a club member has paid annual registration dues, they have already contributed to the overhead of the club and then can take advantage of this additional program at a more affordable price. But if only some players elect to join the clinic, then we would have the complicated task of providing partial credits to some people and not others. It is more transparent to offer the clinic to those who want it at a separate price that covers our clinic-specific costs and then provide every club member a credit for what they bought in the first place when we can resume play.

 

The pandemic is a challenge for us all but please accept that as a community-based program, the club is continuing to operate in good faith to provide fun, affordable hockey for all.

Withdraws and Refunds
As a Not for Profit Organization, a very clear and purposefully restrictive withdraw and refund policy was specifically put into place for the 2020-2021 season. The reason for this was that in order to operate in these unprecedented times, an inherent level of increased risk had to be taken on by all those involved. As an example, the Town also had to take on risk by making the decision to open their facilities (many regions opted to just not open facilities) and in order to mitigate that risk, opened facilities and allocated ice based on guaranteed numbers from the Rangers. The Rangers then obtained “guaranteed numbers” by taking our final registration numbers and building our programming models and ice requirements based on these numbers. All variable costs such as insurance and uniforms were then also built based on these numbers. Any reductions in these numbers lead to further operational losses above the losses already being incurred for all involved to operate within this current environment. As such, an additional level of risk also had to be taken on by our end users which is why an inflexible withdraw and refund policy was put into place.
 
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Printed from oakvillerangers.ca on Wednesday, February 24, 2021 at 11:23 PM