Tourism Sault Ste. Marie agreed on Thursday to chip in $100,000 to bolster Soo Greyhounds' bid to host the 2021 Memorial Cup.
The donation was on top of $300,000 committed earlier this week by City Council.
Tourism Sault Ste. Marie also won a promise from Greyhounds president/governor Tim Lukenda that if the 2021 event is cancelled, delayed, or forced by COVID-19 to be held without spectators, the Greyhounds will give the tourism agency its money back.
Thursday's donation by the Sault Ste. Marie tourism board was approved at a socially distanced face-to-face meeting with Lukenda at the Fairfield Inn and Suites on Great Northern Road.
The Greyhounds will be going after additional public money from Northern Ontario Heritage Fund Corp., as well as private-sector donations.
But what happens to those grants and sponsorships if COVID-19 clips the 2021 Memorial Cup and throws it into a face plant?
"Ultimately, the Greyhounds are on the hook, as an organization, for any shortfall in this event," Lukenda told Joe Bisceglia, the tourism board's chair on Thursday, committing to indemnify the board against loss of its contribution.
But earlier in the week, city councillors couldn't get Lukenda to go that far, extracting only a promise that the city's money would be spent slowly and Lukenda would return to the council chambers if there's a problem.
Council voted unanimously to give the Hounds $300,000 for their Memorial Cup bid, but Ward 4 Couns. Marchy Bruni and RIck Niro, and Ward 1's Paul Christian all had questions about what happens in the event of cancellation or significant changes.
Tom Vair, the city's deputy chief administrative officer for community development and enterprise services, said the Greyhounds won't receive the city's $300,000 as a lump sum, but will be required to submit claims for costs incurred, for which they'll be re-imbursed by the city.
"We don't anticipate that there would be significant claims or costs until the event is confirmed to proceed," Vair said.
But at one point, Vair referred to the possibility of "sunk costs" – a term used by financiers to describe money that's already been spent and can't be recovered.
"If there was something last-minute that caused a change to those plans, there could be an opportunity where there would be costs incurred by the Greyhounds and put toward those events that would be effectively sunk costs," Vair said. "We would look to see what avenues there may be in the near future to recover those."
Vair talked about the need for the Greyhounds to sell truckloads of tickets to complete their financial objectives.
"If they're not able to sell out a good portion of the GFL Memorial Gardens due to pandemic issues, that would certainly affect the event."
"The gate, corporate sponsorships and government funding such as this go toward covering the expenses of the event. If that doesn't come together and there's a shortfall, the Greyhounds are on the hook," Vair said.
"So we have to have that discussion with the league to say: "When will we know for a certainty? How do we manage the expenditures, and know when are we pulling the trigger on things so we're not left in a situation where we've got a significant shortfall?"
Speaking to the tourism board on Thursday, Lukenda pointed out that the coronavirus has placed the Canadian Hockey League in a position it's never been in before.
"I don't think they have a ready-made answer for that, but it's part of the dialogue that I'm going to be having with them," he said.
"We need to work out a different type of risk-sharing arrangement and a lower expectation of what they would receive from the event. From my standpoint, all that needs to be negotiated because there is no playbook for this."
"I'm certainly not going to go into it and promise them the moon regardless of what we're capable of doing, if the event or the environment doesn't allow it," Lukenda said.
"It's a dilemma, it really is. Because this hasn't happened before. Anyone that's committed to this has known that the event was going to happen."
"We don't receive any benefit on the upside, financially, but we do have the downside risk."
Lukenda said the Memorial Cup is a lot more than a sports championship.
"It is not just a round-robin hockey tournament. It is first and foremost four teams, eight games. We expect to sell out the GFL arena for every one of those games, or come close to it."
"But it's also a 10-day festival of all things hockey, all things Canada, all things that we value and cherish, that we'll be trying to recognize."
"We anticipate having some indigenous involvement, ideally doing a pow-wow. We want to have a Hockey Hall of Fame exhibit. We're looking at a Ken Danby art exhibit. We're looking at things that will touch all of the community and tourists, to attract them to our community and see what we have to offer."
Taking a backward look, Lukenda talked about Sault Ste. Marie's hosting of the 1993 Memorial Cup.
"In my travels in hockey, it is still talked about as one of the most memorable Memorial Cups that were held. In fact, a great quote from Dave Branch, commissioner of the league then and today, saying that it was the best one that he had ever been to. At that point in '93 he had already been to 14 Memorial Cups. He's still the commissioner today and he said: 'It's important that we continue to find more Sault Ste. Maries in the future to host this event.' It was so well done and so connected to the fabric of the community. In some cities, the larger centres where it's been held, it's been an event going on in a community. Here, it would be a whole-community event."
The Ontario Hockey League season is to begin Dec. 1, playing 64 of the usual 68 games with modified attendance to allow social distancing.
By January, the league is hoping health authorities will allow arenas to open with more significant capacities.
The Memorial Cup is currently scheduled to take place June 17 to 27, 2021.
Sault tourism officials have expressed concern that if the event is further delayed much beyond that, it will compete with the fall foliage tours and hotel rooms won't be available here.