Bombers Post 3.9M Profit

[Rich]

http://www.bluebombers.com/article/wfc-posts-39-million-profit-in-2014

 

 

WINNIPEG, MB –Today the Winnipeg Football Club released its 2014 Annual Report and announced an overall operating profit of $3.9 Million – an increase of $1 Million from 2013.

 

These solid results were due to revenue growth of 10.7%, as almost all of the Club’s significant revenue streams had positive increases in 2014, including double digit growth in corporate partnerships, suites, and concessions.  Season ticket revenue and game day tickets, which make up total game revenue, continue to be the Club’s major revenue source at 37% of total operating revenue.

 

“It is a testament to our season ticket Members, corporate partners and our fans that we continue to make strong gains each year in the financial health of our organization. Our 2014 financials are proof of that unwavering community support,” said Blue Bomber President and CEO, Wade Miller.

 

The increase in operating expenses relates to the focus on Football Operations where there was an increase of $735,000, due primarily to the new five year collective bargaining agreement with an increased salary cap, along with an increased emphasis on scouting and recruiting.

 

In December 2014, the Club made its first scheduled payment of $4.5 Million to Triple B Stadium Inc., as a first payment on Investors Group Field.

“From the first day I began as CEO, it’s been a one of our top priorities of WFC Board and myself to always meet our financial obligations as a Football Club. We are pleased to have made our first scheduled payment to Triple B Stadium Inc.,” said Miller.

 

The Club was able to increase its operating reserve during the year by $500,000 to arrive at a balance of $1.6 Million at December 31, 2014.

“Our fans have shown their support and commitment to us, and we are working hard to give them a product, both on and off the field, that they’ll be happy with and proud to be part of,” said Miller. “Our goal is to win Grey Cups and deliver an incredible fan experience, which is the driving force behind every decision we make.”

[The Unknown Poster]

So is this profit above and beyond the payment made to BBB?  ie. They actually made $8.4 million?  That seems unlikely.  $4.5-$3.9 = $0.6 loss.

[Rich]

Yeah I'm trying to figure that out.  If you look at the actual PDF report, it looks like a half a million loss.  But they also said they were able to increase the reserve fund by 500k

[Noeller]

Penton says they lost money...

 

Kirk Penton @PentonKirk

When you include the loan payment, the #Bombers actually lost $576,000 in 2014. #CFL

[The Unknown Poster]

If my department at my job lost half a million dollars, Im not sure my bosses would be able to spin it as good news.

[Goalie]

Metro said they had 1.6 in the reserve. 3.9 + 1.6 = small profit when you subtract 4.5. Penton quoted wicek who might be wrong

[DR. CFL]

Accounting is the buzz word for corporate fudging numbers so they say what you want them to say.

[Atomic]

If my department at my job lost half a million dollars, Im not sure my bosses would be able to spin it as good news.

 

It's not a department though, it's the whole organization.  And if your organization was accountable to the public like a publicly traded company or community-owned like the Bombers, you better believe they would be spinning it as good news.

[Atomic]

Accounting is the buzz word for corporate fudging numbers so they say what you want them to say.

 

Accounting is a buzz word?  Are you kidding me?  The entire foundation of business is built on accounting.

[The Unknown Poster]

 

If my department at my job lost half a million dollars, Im not sure my bosses would be able to spin it as good news.

 

It's not a department though, it's the whole organization.  And if your organization was accountable to the public like a publicly traded company or community-owned like the Bombers, you better believe they would be spinning it as good news.

 

yeah but when my company releases bad news (it is publicly traded), the media doesnt usually swallow the BS hook, line and sinker

[Atomic]

 

 

If my department at my job lost half a million dollars, Im not sure my bosses would be able to spin it as good news.

 

It's not a department though, it's the whole organization.  And if your organization was accountable to the public like a publicly traded company or community-owned like the Bombers, you better believe they would be spinning it as good news.

 

yeah but when my company releases bad news (it is publicly traded), the media doesnt usually swallow the BS hook, line and sinker

 

 

That's the difference between business reporters and sports reporters who know nothing about how to read financial statements

[The Unknown Poster]

Metro said they had 1.6 in the reserve. 3.9 + 1.6 = small profit when you subtract 4.5. Penton quoted wicek who might be wrong

Isnt the reserve built up over multiple years?  They cant count past contributions to the reserve fund as "profit" this year.

 

Wade had a wonderful quote about wanting the team to fulfill its obligations and whatnot and everyone wants to spin this like Wade the saviour came in and suddenly its raining money.  How about Wade release the real numbers that the team lost money this year and with the on-going debt servicing, unless we host a Grey Cup every year, it is not sustainable for long. 

[The Unknown Poster]

 

 

 

If my department at my job lost half a million dollars, Im not sure my bosses would be able to spin it as good news.

 

It's not a department though, it's the whole organization.  And if your organization was accountable to the public like a publicly traded company or community-owned like the Bombers, you better believe they would be spinning it as good news.

 

yeah but when my company releases bad news (it is publicly traded), the media doesnt usually swallow the BS hook, line and sinker

 

 

That's the difference between business reporters and sports reporters who know nothing about how to read financial statements

 

Im pretty stupid when it comes to numbers but I caught the lie immediately. 

[Atomic]

It's not a lie.  They did post a $3.9 million operating profit.  They actually have to divide it up that way, it is not creative accounting or anything like that.  Read the notes after the numbers and the repayment of the loan isn't quite as simple as it is portrayed in the media.

[The Unknown Poster]

It's not a lie.  They did post a $3.9 million operating profit.  They actually have to divide it up that way, it is not creative accounting or anything like that.  Read the notes after the numbers and the repayment of the loan isn't quite as simple as it is portrayed in the media.

Creative accounting aside, $3.9 million in a big pot and out of that pot comes $4.5 million loan payment.  That doesnt leave a big profit in the pot like they are portraying.  But regardless, doesnt it show the debt servicing moving forward is not sustainable?

 

Wade will use some of the reserve fund.  They will make a killing on the Grey Cup that will give them "extra" money to dip into and tout year after year after year of making their loan obligation.  But it's not real profit on a year to year basis.

[Atomic]

 

It's not a lie.  They did post a $3.9 million operating profit.  They actually have to divide it up that way, it is not creative accounting or anything like that.  Read the notes after the numbers and the repayment of the loan isn't quite as simple as it is portrayed in the media.

Creative accounting aside, $3.9 million in a big pot and out of that pot comes $4.5 million loan payment.  That doesnt leave a big profit in the pot like they are portraying.  But regardless, doesnt it show the debt servicing moving forward is not sustainable?

 

Wade will use some of the reserve fund.  They will make a killing on the Grey Cup that will give them "extra" money to dip into and tout year after year after year of making their loan obligation.  But it's not real profit on a year to year basis.

 

 

It doesn't have to be.  If they profit by $5 million (made-up number) in a Grey Cup year, they can easily afford a $500,000 loss for the next 10 years.  Also keep in mind that this was a non-playoff year.  As much as it seems like that will always be the case, it won't be.  The Bombers will be good at some point over the life of the stadium and that will bring more profit.

 

But yeah, it's always going to be close.  They won't be rolling in excess cash anytime soon.

[The Unknown Poster]

They should report it as such then.  That this year we lost money when factoring in everything including our debt servicing obligations.  But we have a reserve fund for such occasions.  It's not truly accurate for Wade to get the pats on the back for "making a profit in 2014" when he didnt, if he had to take from past years reserve fund contributions to pay all the obligations.

 

Taking out of the reserve fund after a Grey Cup year to break even is fine but it's not accurate to paint that as a year to year profit.  It's BIG PROFIT - loss - loss - loss - loss - loss - loss - loss -  BIG PROFIT - loss - loss -loss - loss.  If the business plan is to attract the grey Cup regularly to beef up the reserve fund to cover every other year, so be it, but that's not exactly what they are portraying today.

[IC Khari]

This is exactly like many Canadians debt servicing approach ... "Yeah, I made enough money to pay on some of my credit cards!"

[Atomic]

Also keep in mind when you make a mortgage payment of $1000, that is not a $1000 loss.

[gbill2004]

With inflation like ticket prices always going up, and TV deals likely to increase, having a fixed mortgage cost is a good thing. Paying down the stadium debt will become easier every year. A $4 million mortgage payment in 10 years will be the equivalent of $3 million.

Bombers are in very good financial shape going forward.

[The Unknown Poster]

Also keep in mind when you make a mortgage payment of $1000, that is not a $1000 loss.

Well true because Im buying equity in my house (and paying interest).  But the Bombers are making payments on a mortage for a property they dont own.  I get your reasoning and the Bombers should live up to their obligations.  I just dont think a public team should be spinning this in this way.  Just give us the numbers.  I think if they came and said we made X amount of revenue and even with making our full debt payment, we still only lost half a million which comes out of a strong reserve fund and we feel we are set up well for the future...you cant give me gravy and tell me it's jelly cause jelly isnt sweet.

[Rich]

I'm guessing they don't technically own the land the stadium is on (UofM retained the rights to that?)   But the stadium itself and all the equipment in it is an asset that they are getting equity in.

 

Without the land, I'm not sure it will ever be worth similar to what they got when they sold the old stadium off, but they own the structure and all the assets inside.

 

The Bombers, as an entity, don't need to post a profit.  They need to break even / make enough money to have a rainy day fund and be sustainable long term.

 

As was mentioned, the mortgage payments are a fixed cost every year and are only going to get "cheaper" as inflation increases their revenue over time.    So many people have claimed that they would never make a payment and the loan would be forgiven.  They came awfully close to making enough money to pay the whole thing in the first year (technically second since they deferred last year).   It should only get easier here on out. 

 

Add in playoff and Grey Cup revenues and they are looking to be in decent shape.   The challenge will be if they continue to do poorly in the standings and attendance dips, but with the new TV deal,  gate revenue isn't as big a percentage of their pie as it used to be, so that risk is mitigated a little bit.

[TrueBlue]

 

Also keep in mind when you make a mortgage payment of $1000, that is not a $1000 loss.

Well true because Im buying equity in my house (and paying interest).  But the Bombers are making payments on a mortage for a property they dont own.  I get your reasoning and the Bombers should live up to their obligations.  I just dont think a public team should be spinning this in this way.  Just give us the numbers.  I think if they came and said we made X amount of revenue and even with making our full debt payment, we still only lost half a million which comes out of a strong reserve fund and we feel we are set up well for the future...you cant give me gravy and tell me it's jelly cause jelly isnt sweet.

 

 

The Fan forum is tonight. Feel free to come and share your thoughts.   

[pigseye]

$6.8 M in deferred revenue, I'd say they are just fine.

[tacklewasher]

Found a screwup.

 

Note 9 (a)

As at XXXX,2015

 

 

And yes, I'm a ******* accountant.