Lawless: Profit of $3M for Bombers in 2013

[sweep the leg]

gary lawless ‏@garylawless 1m

Saturday column in @WinnipegNews reveals #bombers will announce profit of $3 million for 2013 #cfl

[iso_55]

Is that before or after they pay their $1 million dollar debt payment?

[The Unknown Poster]

That's unbelievable.

[Atomic]

Tom Brodbeck is going to **** a brick

[gbill2004]

This will give the CFLPA lots of leverage in the current CBA negotiations.

[Rich]

When you consider the Bombers are supposed to repay 4.5M every year going forward for the stadium, don't think this will give the CFLPA all that much leverage for this year.  

 

If you take into account the reported 1M for paying off salaries of fired staff and the 2M more they will receive from the TV deal, that gives a potential 6M in profit going forward.

 

Reduced transit prices and drop in ticket revenue may bring that number up or down, probably up if the reported higher sales of corporate seats is true.

 

Will those numbers give the CLFPA leverage?  

 

I really don't think so.  

 

The CFLPA is not a strong union.  The CFL is not the highest attainable level of football.  And because of that, replacement players are plentiful without a huge drop in talent.   In fact, with all the new stadiums being built, and new the TV deal the CFL cannot afford to lose this season. While some may think that gives the CFLPA leverage, I believe it is the opposite.   If they strike, the ratio rules will be waived for the season, and that is the most dangerous thing for Canadian players.  Because once gone there is a danger the NI spots just don't come back.

[Nasty Nate]

When you consider the Bombers are supposed to repay 4.5M every year going forward for the stadium, don't think this will give the CFLPA all that much leverage for this year.  

 

If you take into account the reported 1M for paying off salaries of fired staff and the 2M more they will receive from the TV deal, that gives a potential 6M in profit going forward.

 

Reduced transit prices and drop in ticket revenue may bring that number up or down, probably up if the reported higher sales of corporate seats is true.

 

Will those numbers give the CLFPA leverage?  

 

I really don't think so.  

 

The CFLPA is not a strong union.  The CFL is not the highest attainable level of football.  And because of that, replacement players are plentiful without a huge drop in talent.   In fact, with all the new stadiums being built, and new the TV deal the CFL cannot afford to lose this season. While some may think that gives the CFLPA leverage, I believe it is the opposite.   If they strike, the ratio rules will be waived for the season, and that is the most dangerous thing for Canadian players.  Because once gone there is a danger the NI spots just don't come back.

For the most part I agree. The Bombers are only one team in the CFL. Big profits but big paybacks (liabilities) too. Plus Toronto & Hamilton are pretty marginal operations right now. Ottawa remains to be seen after their year 1 honeymoon. I suspect there will be more rights for CFL players, especially 3+ year veterans, a higher salary cap - perhaps $250k to $350k more, perhaps one extra canadian, one extra import per team. Other thing the league minimum salary might increase by $5 to $6.5k.

[sweep the leg]

http://www.winnipegfreepress.com/sports/football/bombers/down-set-ka-ching-258733511.html

 

 

"Stadium repayment will never reach the mythical number of $4.5 million per year touted by the Bombers board when the project and its financing was originally announced, but that's a red herring where Miller and the Bombers of today are concerned. The negotiated repayment stipulations are quite simple. The Bombers are obligated to pay down their stadium debt of $85 million plus interest after they've paid the entertainment taxes and facility fees, as well as set aside $500,000 to be put in their own operating reserve, which is to be capped at $5 million. Any money left over after these streams are served will then go to repaying the province."

[JuranBoldenRules]

So basically...the Bombers won't be paying for the stadium, as anyone with a working calculator knew when the financing was announced.

 

Guess the NDP thought it would be political suicide to fund a stadium publicly, but they basically just kicked the can down the road as long as they could, at some point it's going to be trouble for them, blatantly lying to make a stadium more politically palatable. 

 

I don't understand why Lawless thinks that the current Bomber board and administration shouldn't be accountable for the Bombers debt.  If life worked that way, it would be a lot easier, just imagine, "I'm not responsible for these car payments, my wife and some car dealer who doesn't even work at the dealership anymore negotiated the financing."

[blueandgoldguy]

 

When you consider the Bombers are supposed to repay 4.5M every year going forward for the stadium, don't think this will give the CFLPA all that much leverage for this year.  

 

If you take into account the reported 1M for paying off salaries of fired staff and the 2M more they will receive from the TV deal, that gives a potential 6M in profit going forward.

 

Reduced transit prices and drop in ticket revenue may bring that number up or down, probably up if the reported higher sales of corporate seats is true.

 

Will those numbers give the CLFPA leverage?  

 

I really don't think so.  

 

The CFLPA is not a strong union.  The CFL is not the highest attainable level of football.  And because of that, replacement players are plentiful without a huge drop in talent.   In fact, with all the new stadiums being built, and new the TV deal the CFL cannot afford to lose this season. While some may think that gives the CFLPA leverage, I believe it is the opposite.   If they strike, the ratio rules will be waived for the season, and that is the most dangerous thing for Canadian players.  Because once gone there is a danger the NI spots just don't come back.

For the most part I agree. The Bombers are only one team in the CFL. Big profits but big paybacks (liabilities) too. Plus Toronto & Hamilton are pretty marginal operations right now. Ottawa remains to be seen after their year 1 honeymoon. I suspect there will be more rights for CFL players, especially 3+ year veterans, a higher salary cap - perhaps $250k to $350k more, perhaps one extra canadian, one extra import per team. Other thing the league minimum salary might increase by $5 to $6.5k.

 

I think the players will get a $200,000 or so raise (or 1/5th the annual additional revenue from the tv deal) in the first year and it will culminate in a $1 million raise by the fifth and final year of the tv contract.  So within 5 years the players will receive nearly half the new tv revenue.

[Mr Dee]

Let's face it, a new stadium had to be built.

The Feds had to get involved for money…hence the U of M location.

The City and the Province profit from the sale of the old stadium site.

Bomber/Club get a new stadium funded with taxpayer's $.

The question then becomes…so what?

Does anybody think there was another way?

Another political party might have handled it in a slightly different way…but it would have to have been done..sooner or later.

[iso_55]

Didn't taxpayers pay for Osborne Stadium, Winnipeg Stadium, the Pan Am baseball stadium, MTS Centre & Arena? I don't know why people think that 2014 is different from 1952 or 1934? Put those projects in today's dollars & how much would they be? We got a pretty fricking nice stadium for just over $200 million. Compare what's been built in BC for half a billion, Montreal, Hamilton & Ottawa. I think it's a great deal. 

[blueandgoldguy]

So basically...the Bombers won't be paying for the stadium, as anyone with a working calculator knew when the financing was announced.

 

Guess the NDP thought it would be political suicide to fund a stadium publicly, but they basically just kicked the can down the road as long as they could, at some point it's going to be trouble for them, blatantly lying to make a stadium more politically palatable. 

 

I don't understand why Lawless thinks that the current Bomber board and administration shouldn't be accountable for the Bombers debt.  If life worked that way, it would be a lot easier, just imagine, "I'm not responsible for these car payments, my wife and some car dealer who doesn't even work at the dealership anymore negotiated the financing."

Yet another example that illustrates the difference (business competence) between Bomber management (the BBB) and Jets management.

 

Bomber management

 

-agreeing to pay the $4.5 million debt obligation annually in the first year only to renegotiate to delay first $4.5 million payment by several years...and on top of that adding $10 million in extras late in stadium construction to exacerbate their debt repayments.

 

-Unable to forecast the additional costs associated with transit due to the stadium location which results in the organization negotiating a subsidy with the city after the fact to mitigate costs.

 

Meanwhile Jets' management (owners)

 

- negotiated to privately finance 2/3 of the MTS Centre before construction began.  Originally they were going to privately finance 100% of the arena across from the Convention Centre.  Would have been a 12,000 seater and 90 miliion or so.  Province and city convinced them to build 15,000 seater on site of the Eaton's building and chipped in the rest.

 

- Negotiated subsidies with the province (VLT revenue and reimbursement of entertainment tax) prior to the puck dropping for the first Jets game in 2011.

 

-Spending millions (private money by the way) to enhance customer experience at the MTS Centre...latest being the expansion of the upper deck concourse with expanded washrooms facilities and concessions.

 

Now you could argue against the subsidies the jets receive, that's certainly fair.  However the Jets' owners drew up a business plan that determined what they needed to make the operation a viable one and negotiated these subsidies with the province and the city..all that prior to the first game of the Jets' inaugural season.  And they have done this with the intention to spend millions each year until 2020 to update the MTS Centre as outlined in their email to season ticketholders - expanded concourse, expanded concessions, expanded washrooms, new scoreboard, improved restaurant facilities at event level plus a few more added benefits.  No coming back to the province hat in hand stating we did not foresee these _____ costs years later.

 

In contrast the Bombers' management, in their infinite wisdom, did not have a very good business plan in place otherwise they would have negotiated beforehand with the city or province to account for the additional transportation costs given the location of the stadium...not come hat in hand asking for subsidies nearly one year after completion of the stadium.  To do so now, show a lack of competence and due diligence on their part.  Further, I doubt any improvements and major repairs to the stadium  over the coming decades will be funded by the Bombers at least in any substantial way..most likely the province will take care of that.

[B-F-F-C]

If I had to guess.  I would say that the salary cap will go up by about $350 - $400 thousand for 2014.  The CFLPA hasn't been stronger and the appointment of Flory shows that the players want a change. 

 

It could get even uglier than we see today before it gets resolved.   

[B-F-F-C]

Come on...are you really try to compare the CFL to the NHL?    Get a grip and come back to the real world.

[iso_55]

One thing you forgot to mention. Canada's richest man owns the Jets. They are a much wealthier organization than the Blue Bombers are. The Bomber Board runs the team as it  is "publicly owned" which is more of a misnomer than truth. There's no rich sugar daddy owning the Bombers with billions backing the team. The Bombers have absolutely no money so they took whatever deal they could get to get a new stadium built after David Asper bailed. Asper put the team in the situation it's in now. I have a real problem with the man being on the Bomber BOD but that's what you get with a publicly owned team. he should have never been allowed tocome back & serve on the Board. However, members like Asper are appointed because he has buddies already there. You already said the Jets owners had $90 million to throw into the MTS Centre. That would wipe the slate clean for the Bombers, wouldn't it? I wish the Bombers would be sold to get rid of this corporate welfare stigma attached to the team. 

[JuranBoldenRules]

 

So basically...the Bombers won't be paying for the stadium, as anyone with a working calculator knew when the financing was announced.

 

Guess the NDP thought it would be political suicide to fund a stadium publicly, but they basically just kicked the can down the road as long as they could, at some point it's going to be trouble for them, blatantly lying to make a stadium more politically palatable. 

 

I don't understand why Lawless thinks that the current Bomber board and administration shouldn't be accountable for the Bombers debt.  If life worked that way, it would be a lot easier, just imagine, "I'm not responsible for these car payments, my wife and some car dealer who doesn't even work at the dealership anymore negotiated the financing."

Yet another example that illustrates the difference (business competence) between Bomber management (the BBB) and Jets management.

 

Bomber management

 

-agreeing to pay the $4.5 million debt obligation annually in the first year only to renegotiate to delay first $4.5 million payment by several years...and on top of that adding $10 million in extras late in stadium construction to exacerbate their debt repayments.

 

-Unable to forecast the additional costs associated with transit due to the stadium location which results in the organization negotiating a subsidy with the city after the fact to mitigate costs.

 

Meanwhile Jets' management (owners)

 

- negotiated to privately finance 2/3 of the MTS Centre before construction began.  Originally they were going to privately finance 100% of the arena across from the Convention Centre.  Would have been a 12,000 seater and 90 miliion or so.  Province and city convinced them to build 15,000 seater on site of the Eaton's building and chipped in the rest.

 

- Negotiated subsidies with the province (VLT revenue and reimbursement of entertainment tax) prior to the puck dropping for the first Jets game in 2011.

 

-Spending millions (private money by the way) to enhance customer experience at the MTS Centre...latest being the expansion of the upper deck concourse with expanded washrooms facilities and concessions.

 

Now you could argue against the subsidies the jets receive, that's certainly fair.  However the Jets' owners drew up a business plan that determined what they needed to make the operation a viable one and negotiated these subsidies with the province and the city..all that prior to the first game of the Jets' inaugural season.  And they have done this with the intention to spend millions each year until 2020 to update the MTS Centre as outlined in their email to season ticketholders - expanded concourse, expanded concessions, expanded washrooms, new scoreboard, improved restaurant facilities at event level plus a few more added benefits.  No coming back to the province hat in hand stating we did not foresee these _____ costs years later.

 

In contrast the Bombers' management, in their infinite wisdom, did not have a very good business plan in place otherwise they would have negotiated beforehand with the city or province to account for the additional transportation costs given the location of the stadium...not come hat in hand asking for subsidies nearly one year after completion of the stadium.  To do so now, show a lack of competence and due diligence on their part.  Further, I doubt any improvements and major repairs to the stadium  over the coming decades will be funded by the Bombers at least in any substantial way..most likely the province will take care of that.

 

 

Good points.

 

I don't even care that the government subsidizes pro sports teams (they subsidize damn near every other industry, many times with no mechanism to recover the subsidy).  I care that they try to lie about it, and that some people just accept it.  I'd have no problem with the government saying we're going to finance $200 million to build a stadium, without the illusion of the Bombers making any significant payments on that debt.

[blueandgoldguy]

Let's face it, a new stadium had to be built.

The Feds had to get involved for money…hence the U of M location.

The City and the Province profit from the sale of the old stadium site.

Bomber/Club get a new stadium funded with taxpayer's $.

The question then becomes…so what?

Does anybody think there was another way?

Another political party might have handled it in a slightly different way…but it would have to have been done..sooner or later.

When you factor in the yearly subsidies for the bus transportation alone that will nullify the money they received from the feds within a decade or so.  Then there is the issue of extra costs associated with using the plans of an architect (Ray Wan) who has never designed a stadium in his life...already seen a few million wasted because of design flaws and who knows how many more millions in the coming decades.  Would have been better off hiring a firm with experience in stadium construction

[Mr Dee]

 

When you factor in the yearly subsidies for the bus transportation alone that will nullify the money they received from the feds within a decade or so.  Then there is the issue of extra costs associated with using the plans of an architect (Ray Wan) who has never designed a stadium in his life...already seen a few million wasted because of design flaws and who knows how many more millions in the coming decades.  Would have been better off hiring a firm with experience in stadium construction

 

 

It all comes back to having to start and build that stadium when they did. 

Any further delays would have resulted in further expenditure at the old stadium….and now you're talking wasting money.

 

If everybody agrees that a new stadium had to be built, then it was a matter of where and when.

We may have short-sighted the location, but I'll tell you right now…the way these politicians work and the process to acquire another location (never mind agree on another location) would have taken years….if at all.

 

But I'll surely agree the money to acquire a proper stadium design and build should have been spent.

[blueandgoldguy]

Come on...are you really try to compare the CFL to the NHL?    Get a grip and come back to the real world.

No I'm comparing the business people in charge of these respective pro teams and how they negotiate with the province and city.   I'm not sure how the business people on the board would fail to account for the extra costs associated with bus transport and negotiate accordingly.  Did they not realize more people would have to take the bus to get to the Bomber games and thus they would have to rent more buses and pay more drivers to accomodate those people?  Apparently not, as they came to the province nearly one year later asking for a discount on bus transportation.

[Rich]

Let's discuss a few things from people claiming the Bombers will never pay a dime back to the taxpayers.

 

There was a 3M profit this year.

 

There was 1M paid for severance packages.

 

When the new TSN deal kicks in, the Bombers are estimated to make an additional 2M from that.

 

So far we are up to 6M profit, lets use that as revenue / profit streams going forward.  

 

Lets not even factor in reduce transit costs next year, and lets assume also that the sale of the new corporate seats of whatever they are that Lawless is talking about offsets any reduction in season tickets.  Lets also ignore any one time costs we paid last year for the moving and opening of the new Stadium.

 

So, based on what we know, the Bombes are allowed to sock away 500k before making their mortgage payments.  That leaves 5.5M that they can use to payoff a 4.5M payment. So thats an additional 1M that can be used for increased operating expenses (more coaches, cap going up, etc).  Lets also not factor in revenue from events like the soccer game that was just played, concerts (this would offset year to year from what they made on them last year), NHL outdoor games, Grey Cups, etc.  Lets consider those gravy and to be used to stabilize income year to year when they team has good years and bad.

 

Even if we had to make a payment this year, while we wouldn't be able to make the 4.5M payment ,we would still be able to pay 2.5M.

 

In 10 years from now, assuming season tickets and concessions revenue continue to rise year to year, that 4.5M a year payment isn't going to look too bad at all.

 

Did the Bombers get a sweetheart deal to get the stadium built?   Yes, absolutely.

 

Are they going to be able to make payments towards it?  Yes, absolutely.  Maybe not as fast as some people would like, but payments will be made.  

[blueandgoldguy]

 

 

When you factor in the yearly subsidies for the bus transportation alone that will nullify the money they received from the feds within a decade or so.  Then there is the issue of extra costs associated with using the plans of an architect (Ray Wan) who has never designed a stadium in his life...already seen a few million wasted because of design flaws and who knows how many more millions in the coming decades.  Would have been better off hiring a firm with experience in stadium construction

 

 

It all comes back to having to start and build that stadium when they did. 

Any further delays would have resulted in further expenditure at the old stadium….and now you're talking wasting money.

 

If everybody agrees that a new stadium had to be built, then it was a matter of where and when.

We may have short-sighted the location, but I'll tell you right now…the way these politicians work and the process to acquire another location (never mind agree on another location) would have taken years….if at all.

 

But I'll surely agree the money to acquire a proper stadium design and build should have been spent.

 

At the very least there would have been a major refurbishment at the old stadium.  If not, the new stadium would have been constructed eventually.  Canad Inns probably had at most a decade left in it's lifespan before being condemned (One of Landowne's grandstands was condemned and torn down a few years ago and it wasn't as old as Canad Inns grandstands).  No politician (conservative or NDP) would have suffered the embarrassment of being in charge while a CFL team became homeless.

 

Do agree with you that the proper stadium design and build should have been pursued as well as a better location (preferably old stadium site and possibly at the downs).

[blueandgoldguy]

Let's discuss a few things from people claiming the Bombers will never pay a dime back to the taxpayers.

 

There was a 3M profit this year.

 

There was 1M paid for severance packages.

 

When the new TSN deal kicks in, the Bombers are estimated to make an additional 2M from that.

 

So far we are up to 6M profit, lets use that as revenue / profit streams going forward.  

 

Lets not even factor in reduce transit costs next year, and lets assume also that the sale of the new corporate seats of whatever they are that Lawless is talking about offsets any reduction in season tickets.  Lets also ignore any one time costs we paid last year for the moving and opening of the new Stadium.

 

So, based on what we know, the Bombes are allowed to sock away 500k before making their mortgage payments.  That leaves 5.5M that they can use to payoff a 4.5M payment. So thats an additional 1M that can be used for increased operating expenses (more coaches, cap going up, etc).  Lets also not factor in revenue from events like the soccer game that was just played, concerts (this would offset year to year from what they made on them last year), NHL outdoor games, Grey Cups, etc.

 

Even if we had to make a payment this year, while we wouldn't be able to make the 4.5M payment ,we would still be able to pay 2.5M.

 

In 10 years from now, assuming season tickets and concessions revenue continue to rise year to year, that 4.5M a year payment isn't going to look too bad at all.

 

Did the Bombers get a sweetheart deal to get the stadium built?   Yes, absolutely.

 

Are they going to be able to make payments towards it?  Yes, absolutely.  Maybe not as fast as some people would like, but payments will be made.  

Your projections are overly optimistic.

[Rich]

 

Let's discuss a few things from people claiming the Bombers will never pay a dime back to the taxpayers.

 

There was a 3M profit this year.

 

There was 1M paid for severance packages.

 

When the new TSN deal kicks in, the Bombers are estimated to make an additional 2M from that.

 

So far we are up to 6M profit, lets use that as revenue / profit streams going forward.  

 

Lets not even factor in reduce transit costs next year, and lets assume also that the sale of the new corporate seats of whatever they are that Lawless is talking about offsets any reduction in season tickets.  Lets also ignore any one time costs we paid last year for the moving and opening of the new Stadium.

 

So, based on what we know, the Bombes are allowed to sock away 500k before making their mortgage payments.  That leaves 5.5M that they can use to payoff a 4.5M payment. So thats an additional 1M that can be used for increased operating expenses (more coaches, cap going up, etc).  Lets also not factor in revenue from events like the soccer game that was just played, concerts (this would offset year to year from what they made on them last year), NHL outdoor games, Grey Cups, etc.

 

Even if we had to make a payment this year, while we wouldn't be able to make the 4.5M payment ,we would still be able to pay 2.5M.

 

In 10 years from now, assuming season tickets and concessions revenue continue to rise year to year, that 4.5M a year payment isn't going to look too bad at all.

 

Did the Bombers get a sweetheart deal to get the stadium built?   Yes, absolutely.

 

Are they going to be able to make payments towards it?  Yes, absolutely.  Maybe not as fast as some people would like, but payments will be made.  

Your projections are overly optimistic.

 

 

 

How so?   Are you disputing the reported numbers?

 

We made a $3M profit in a year where we had transition costs to a new stadium, severance packages to pay, increased transit costs.  It is a fact TV revenues are going up.  We also had a horrible on field product.  And while season ticket numbers were up, I believe we only had 2 sellouts last year.

 

When is the last time this team made $3M in a year where we didn't host the Grey Cup?

 

Show me your math.

[Mr Dee]

 

Come on...are you really try to compare the CFL to the NHL?    Get a grip and come back to the real world.

No I'm comparing the business people in charge of these respective pro teams and how they negotiate with the province and city.   I'm not sure how the business people on the board would fail to account for the extra costs associated with bus transport and negotiate accordingly.  Did they not realize more people would have to take the bus to get to the Bomber games and thus they would have to rent more buses and pay more drivers to accomodate those people?  Apparently not, as they came to the province nearly one year later asking for a discount on bus transportation.

 

 

It doesn't matter. 

You're comparing two different entities that have no common bond and entirely different issues.

Can't be done.

 

And you say the Bomber mgmt. could have foreseen something happening when it had never been tried before?

I find that interesting.

The sheer volume of traffic and tie-ups?

It is only then that the solution to charter more and more buses was brought in…and of course, at the going rate.

Why would they have committed to dozens and dozens of buses if they might have gone unused?

This year, they are doing what is necessary to negotiate a better deal, something everybody wants.