Winnipeg Free Press - PRINT EDITION
No debtors' blues for Bombers
CEO confident club will make good on $4.5-million payment due this year
The Winnipeg Football Club maintains it's on track to make a $4.5-million stadium-building loan repayment this year, even though the Blue Bombers posted a net profit less than half that size in 2013.
On Monday, football club president and CEO Wade Miller revealed the non-profit organization posted a $2.1-million profit last year, the first the CFL franchise played at Investors Group Field.
He said he's confident the club's profit margin will rise enough to cover the first of 45 expected annual repayments of a pair of loans that helped build Investors Group Field, a $208.9-million facility on the University of Manitoba's Fort Garry campus.
The football club is on the hook for repaying $85 million of a $160-million provincial stadium-building loan and the entirety of a $10-million CIBC loan taken out by BBB Stadium Inc., the non-profit shell company that built Investors Group Field.
The combined principal and interest on these two loans places at least a $180-million burden on the Bombers over the next 45 years, assuming the club sticks to its payment schedule.
Miller said the combined principal-and-interest payments on the two loans are scheduled to be $4.5 million annually for the next three years, $3.5 million in 2017 and no more than $3.9 million in 2018 and every subsequent year.
He said the Bombers are poised to make the first $4.5-million payment this year, citing the prospect of $2 million in additional league revenue, an approximately $600,000 reduction in game-day transportation costs and no additional costs associated with opening the new stadium or any further severance payments for departed club executives.
"You take away the severance costs and transportation and you add the new CFL league revenue coming in, and we're on target for where we need to be," Miller said Monday.
"We need to sell our season tickets and win on the football field. But that's our budget. We're on that target and on that trajectory."
The additional league revenue expected this season is due to a more lucrative broadcasting deal between the Canadian Football League and TSN. The reduced game-day transportation costs -- which totalled $1.3 million in 2013, including transit and policing -- would result from a new Winnipeg Transit deal that faces council approval. Should council decline to approve the deal, the Bombers will operate their own park-and-ride service, Miller said.
The club president also pledged the Bombers will not carry forward any additional stadium-opening costs or severance payments for departed coaches, general managers or CEOs.
"They have all been accounted for," he said. "Those are all in the past."
Miller said the club expects to rake in even more revenue from special events such as this summer's Beyoncé and Jay-Z concert and next year's Grey Cup. Ongoing revenue from luxury suites, loges, premium seats and concessions will continue to allow Investors Group Field to financially outperform Canad Inns Stadium, he added.
"You look at what we're going to be able to do in the years coming up and that will prove it is viable to keep doing this," Miller said. "We have to hit some targets along the way, which we are. We're moving in the right direction."
According to the football club's annual report, if the Bombers do not meet a principal-and-interest payment target in any given year, that year's shortfall will be carried over to the following year. This means it's possible for an underperforming football club to extend the term of the loan beyond its projected 45-year lifespan.
The province, however, is not entertaining the possibility the football club will fail to meet its loan-repayment schedule.
"We fully expect them to live up to their financial targets, and they do as well," Premier Greg Selinger said.
"The taxpayer will be paid back and we're optimistic the Bombers' bottom line will improve going forward," added Ron Lemieux, the minister responsible for sport. "There is a legal, signed deal the Bombers are going to live up to and we're going to make sure they do."
Tory opposition critic Ron Schuler, however, said he feared the repayment schedule could penalize the non-profit football club for decades. The main impetus behind the construction of the new stadium was to provide the Bombers with additional revenue streams.
"We're just concerned that under the NDP this issue has been mismanaged," Schuler said, citing escalating stadium costs and water damage cause by melting snow. "Foisting $80 million on to a CFL club is rich. That is a huge loan. To siphon off money to pay an $80-million loan I think is going to be tough and I suspect at best they'll be making interest payments."
In addition to the loan-repayment schedule, the Bombers plan to sock away $500,000 a year into an operating reserve to cover shortfalls, up to a maximum of $5 million.
The club also intends to sock away $500,000 a year in a capital fund that will allow BBB Stadium Inc. to make improvements to Investors Group Field.
Schuler said it's only natural a sports franchise would place some money in a contingency fund.
"The stadium in 25 years will need repairs. We can't do to this building what we did to the other one -- get it to the point where evidently it was going to fall down on people's heads," he said.
The club's annual report also revealed the Bombers are carrying $7.4 million in long-term debt, including $1.1 million owed to the City of Winnipeg stemming from a 14-year-old bailout package.
-- With files from Murray McNeill
Republished from the Winnipeg Free Press print edition May 13, 2014 A4
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