Lawless: Profit of $3M for Bombers in 2013

[JuranBoldenRules]

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.  

 

Costs and revenue increasing at the same rate would be lucky, more likely costs rise at a rate higher than revenue, than the other way around.  As the stadium ages, the cost of maintaining it will rise, and should rise if it is going to have a long, useful lifespan.

 

That $4.5 million payment is impossible without a bump from a significant special event, Grey Cup, NHL game.  If the Bombers are left to pay off the loan from their operating revenue as the deal was originally conceived (as to our public knowledge), they won't be able to pay for the stadium before they need another one, especially if they can't meet the payment schedule.  It's fairly obvious that at some point the provincial government will have to deal with the issue, guess we'll have to see how far the can will be kicked down the road.

[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.

 

 

 

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.

 

Well for starters, the severance packages aren't a one-time cost.  Do they not have to pay for Burke's, Mack's and Buchko's contracts over a number of years?  Even if they don't, do you believe the organization will never have to pay out the remainder of contracts to coaches and players who are fired prior to the final years of their contracts in the future.  It's the cost of doing business in sports.  I seem to remember the Bombers paying a million plus back in 2009/10 for Mike Kelly  and his assistants offhand...

 

$2 million in additional tv revenues does not mean $2 million in additional profits for the Bombers.  I think by the end of the 5 year tv agreement the Bombers will be paying half of that to the players.

 

Attendance will fall this year mostly due to the decline in season ticket sales and it will not be completely compensated by walkups.  Many people went to check out the new stadium and won't be back..at least as season ticketholders..too time-consuming given the location, too expensive for some.  I could see average attendance decreasing to 28000 per game this year so loss of 2500*$50 per ticket on average * ten games = $1.25 million lost at the gate.  Even the modest price increases of 2 - 3%(with the exception of the 25% increase in the P7 section) won't come close to offsetting that ..maybe a few hundred thousand at most.  And I haven't even begun to account for lost revenues in concessions and merchandise.

 

Labour costs increase as the years go by and so will maintaining the stadium as it ages so that will cut into their increased revenues from tv, gate and advertising revenues.

 

How much do you think the Bombers receive from concert revenues?  Back in 2010 there were 3 concerts at the old stadium - The Eagles, Rock on the Range and Bon Jovi and according to the Bombers' financial report they received an additional $700,000 from those events - a decent number but nothing amazing.  I doubt Bomber revenue from the soccer game is all that significant considering how cheap the tickets were.  Top ticket price was only $50.  For the other concerts the Bombers have to share revenue with True North considering they are the ones bringing in the acts.  As for the NHL Heritage Classic, I'm pretty sure the Bombers are just renting out the facility to the Jets.  True North and the NHL will be the true benefactors of that event.  I agree with you on the Grey Cup although that's once every 8- 10 years

 

Outside of the years hosting the Grey Cup I think this team will struggle to make $4.5 million in profits and thus, meet their annual debt obligations.  Maybe in 5 years if we see another increase in tv revenues similar to the new contract (increase 2-3 times the $40 million current deal) will it become easier for the Bombers to meet their debt obligations.

[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.

 

 

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.

 

They are both professional sports teams.  I don't think they are that different at all.

 

Given the limited parking available on site (5300 spots) and limited parking available within a 25-30 minute walk, yes, the Bombers should have been more thorough with their research for bus transit needs.  The bombers themselves estimated over 10,000 people would be taking the bus to the stadium each game and yet they failed to provide the appropriate transporation for the first few games and thus failed to consider this cost in their initial business plan.  What, did they think they could magically transport 75-100 people per bus given the limited buses they were using and everything would turn out hunky-dory?

 

If they had over-estimated the number of buses needed in the first few games, they could have simply rented fewer for the following games.  Anyways,   a good business plan has contingencies built in for unexpected costs.  Something the Bombers failed to do given they came to the city asking for more subsidies recently.

[Mr Dee]

They are both professional sports teams.  I don't think they are that different at all.

 

 

 

The differences are as enormous as the differences between the two leagues.

 

 

 

Given the limited parking available on site (5300 spots) and limited parking available within a 25-30 minute walk, yes, the Bombers should have been more thorough with their research for bus transit needs.  The bombers themselves estimated over 10,000 people would be taking the bus to the stadium each game and yet they failed to provide the appropriate transporation for the first few games and thus failed to consider this cost in their initial business plan.  What, did they think they could magically transport 75-100 people per bus given the limited buses they were using and everything would turn out hunky-dory?

 

If they had over-estimated the number of buses needed in the first few games, they could have simply rented fewer for the following games.  Anyways,   a good business plan has contingencies built in for unexpected costs.  Something the Bombers failed to do given they came to the city asking for more subsidies recently.

 

 

If that 10000 estimate comes from the Bombers, then that's the figure the Bombers and Wpg. Transit would have negotiated on to begin with.

Obviously, both parties under estimated, due partly to the severity of traffic situations.

The City and Wpg. Transit has to share blame in the overall planning of exiting traffic from an obviously flawed traffic flow guesstimate.

 

Winnipeg Transit has experience at providing rides for thousands and thousands of people but this was something no party had experience with.

I can tell you that when the Pan-Am Games were held in Winnipeg, there was a gross overestimation as to how many buses had to service every site.

Dozens of buses every hour ran empty and the taxpayers paid for that…with little knowledge.

The overall success of the games and surrounding benefits didn't deter the games from being a success.

 

Better planning going forward will help, but thus far I've heard no dedicated exits for buses only, and that alone would alleviate some of the problems.

[Logan007]

You should stop talking about the NHL and the Jets. The Jets weren't here when they built the True North center, the Moose were.

Just saying.

[blueandgoldguy]

You should stop talking about the NHL and the Jets. The Jets weren't here when they built the True North center, the Moose were.

Just saying.

no but their owners, True North, were here..the ones who financed most of the arena and who subsequently negotiated a deal with the province and the city upon the Jets arrival..a deal that made sense.  No coming back to the city saying hey our business plan didn't work and was completely unrealistic, we didn't foresee these extra costs due to the location of our facility so we're gonna need more subsidies.

[iso_55]

Apples & oranges. What's next comparing the business plan of the Brooklyn Nets to the Bombers because they built themselves a new arena? 

[gbill2004]

You should stop talking about the NHL and the Jets. The Jets weren't here when they built the True North center, the Moose were.

Just saying.

no but their owners, True North, were here..the ones who financed most of the arena and who subsequently negotiated a deal with the province and the city upon the Jets arrival..a deal that made sense. No coming back to the city saying hey our business plan didn't work and was completely unrealistic, we didn't foresee these extra costs due to the location of our facility so we're gonna need more subsidies.

Bombers didn't choose the location of the stadium. Location was dictated by the Feds on a condition of funding.

[iso_55]

Also, the Bombers weren't looking ast having to fund 45% of the cost of the stadium until Asper bailed. He put the team in  a financial bind. This was going to be Asper's baby, the city, province & feds. Not the team. So, the talk about the Bombers not having a business plan to finance the stadium? Well, they didn't think they needed one.

[blueandgoldguy]

 

 

You should stop talking about the NHL and the Jets. The Jets weren't here when they built the True North center, the Moose were.

Just saying.

no but their owners, True North, were here..the ones who financed most of the arena and who subsequently negotiated a deal with the province and the city upon the Jets arrival..a deal that made sense. No coming back to the city saying hey our business plan didn't work and was completely unrealistic, we didn't foresee these extra costs due to the location of our facility so we're gonna need more subsidies.

Bombers didn't choose the location of the stadium. Location was dictated by the Feds on a condition of funding.

 

The Bombers did have a choice though.  They and the province could have said no to the feds and and picked a better spot.  As it is the transport subsidies the Bombers are getting from the the city will end up being more than the $15 million they received from the feds.   

[iso_55]

How do you know the Bombers had a choice? The feds could easily have said no like they did to the Riders & QC with their arena. They built the stadium on the campus so the feds could say they're not funding pro sports but university instead. Harper's not into funding pro sports teams, doncha know? All total bullshit. I hate politicians. Most of them are cheaters, crooks & liars. 

[DR. CFL]

Has there been any mention here that any payments pending the debt to the government have been deferred pending repayment of a 10 million dollar loan by CIBC for the upgrades of the jumbo torn and ribbon board not included in the initial loan?

[Jpan85]

Remember the complaining, panic there was going to there no room along the sidelines in the end zones and all the career ending injuries that would be result. Things tend too get blown up around here.

[Atomic]

Remember the complaining, panic there was going to there no room along the sidelines in the end zones and all the career ending injuries that would be result. Things tend too get blown up around here.

Yep that was great... my favourite ones were the people who tried to tell us that the builders accidentally designed the stadium for an NFL field. God people can be stupid sometimes.

[iso_55]

I was concerned with the corners, I'll admit I was one of those guys. But I  didn't buy into the NFL field size though.

[ALuCsRED]

 

 

 

You should stop talking about the NHL and the Jets. The Jets weren't here when they built the True North center, the Moose were.

Just saying.

no but their owners, True North, were here..the ones who financed most of the arena and who subsequently negotiated a deal with the province and the city upon the Jets arrival..a deal that made sense. No coming back to the city saying hey our business plan didn't work and was completely unrealistic, we didn't foresee these extra costs due to the location of our facility so we're gonna need more subsidies.

Bombers didn't choose the location of the stadium. Location was dictated by the Feds on a condition of funding.

 

The Bombers did have a choice though.  They and the province could have said no to the feds and and picked a better spot.  As it is the transport subsidies the Bombers are getting from the the city will end up being more than the $15 million they received from the feds.   

 

 

 

From http://www.winnipegfreepress.com/local/millions-to-aid-true-north-141154603.html

 

 

"WINNIPEGGERS aren't just cheering for the Jets, they're also funnelling $6.9 million to True North Sports & Entertainment this year through city and provincial subsidies for pro sports teams.

And public support for the NHL club will climb to almost $11 million a year, once the province completes the transfer of 90 VLTs to the vicinity of the MTS Centre."

"Support systems

PUBLIC funding mechanisms that support True North Sports & Entertainment:

City entertainment tax refund: $5.8 million in 2012

Provincial gaming revenue: Up to $4 million a year, for 19 more years

City-provincial property-tax break: $816,140 annually, based on current assessment

City business-tax refund: $250,000 annually"

 

Are these tax breaks even for both teams?

 

[iso_55]

I still think comparing the CFL to the NHL is not fair. The NHL is major league while the CFL may be major league in Canada it isn't a consideration in the US or around the world. 

[Mr Dee]

Did not know that the Bombers did not offset any costs to Winnipeg Transit in the past, only last year were they put in a position where they had to pay a subsidy.

 

- Wade Miller explained the reasons for the 2.9 million number, not higher because of Moving costs, transit overages and severances (no more on the books)

- They have 1 million in reserve and still plan on making payments. (that's what he said)

- they will concentrate on football operations

- premium seating will offset less seating (they took out some seats for premier seating)

- they will allow people to go in and out of the stadium before the start of the games.

 

- *CJOB audio on demand May 12 9 AM

[Armchair GM]

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.  

 

Gawd, I so agree with this post. 

 

What I don't get are all the people posting on here with God complexes that think they and everyone with half a brain saw this coming.  Check the numbers... the severances are somewhat of an extraordinary expense.  Certainly not expected to the tune of $1M every year.  The Bombers STILL made $3M.  And the new TV deal should funnel in an additional $2M a year.  Get your calculators... 3+2+1...

 

Even if we average 22,000 season tix (low end projection), and put a half decent product on the field that competes for even a playoff spot annually... we'll have no problem averaging 28,000 fans/game, and that's with the pre-Banjo Bowl sellouts balancing off the cold November games.  And that's about where we were this year, and we would have been able to meet the debt payment with the new TV deal figured in.  To me, that sounds like a pretty realistic projection.

 

Remember that the premise of the new stadium was to open up new revenue streams to make the operation itself more profitable.  The results on paper, in a year that many people decided to stay home late in the year, show it doing just that.