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Author Topic: Bombers post $5.1 million operating profit in 2017  (Read 1165 times)
TBURGESS
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« Reply #75 on: April 21, 2018, 03:27:31 PM »

I'd guess that 90-95% of the general public doesn't know that Operating Profit isn't net profit or that it doesn't include mortgage/loan payments.

Ed Tait calls it a 5.1 Million dollar profit without using the word Operating and a ' juicy profit total' in his latest article. Maybe he doesn't understand the difference.

The CFL article calls it a 5.1 Million dollar profit without using Operating. 3rd down nation makes the same 'mistake'.

Gotta assume that the CFL PA will quote the Bombers 5.1 Million dollar profit when they ask for more money in the SMS. I can see it now... "The SMS should go up. Teams like the Bombers make 5.1 Million dollar profit. At least a million of that should go directly to the players".
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New_Earth_Mud
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« Reply #76 on: April 21, 2018, 03:27:41 PM »

Wonder if True North would just buy IGF......  LOL
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the paw
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« Reply #77 on: April 21, 2018, 04:00:46 PM »

Either way, it's misleading.  An expense is an expense no matter how you structure it.  And yes I understand the accounting principles. 

I don't think you do.  Earlier you said "My point is it is pretty ridiculous to not count an obvious expense when calculating profit."

If the Bombers had the actual mortgage (which they don't) and they wanted to count the "obvious expense", they would only be allowed to expense the interest portion of the mortgage.  Payments against principal would not be an expense, but would be a negative cashflow item that increased equity on the balance sheet.  The cash to make that principal payment would come from - wait for it -  operating profit. 

Your point that the general public might not get all this is valid, and I agree with TBurg's point that the journalists should really point out that the WBB need a $4 million operating profit to make their stadium payments.  But I would stop short of calling it misleading. 
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gbill2004
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« Reply #78 on: April 21, 2018, 06:20:37 PM »

I don't think you do.  Earlier you said "My point is it is pretty ridiculous to not count an obvious expense when calculating profit."

If the Bombers had the actual mortgage (which they don't) and they wanted to count the "obvious expense", they would only be allowed to expense the interest portion of the mortgage.  Payments against principal would not be an expense, but would be a negative cashflow item that increased equity on the balance sheet.  The cash to make that principal payment would come from - wait for it -  operating profit. 

Your point that the general public might not get all this is valid, and I agree with TBurg's point that the journalists should really point out that the WBB need a $4 million operating profit to make their stadium payments.  But I would stop short of calling it misleading. 
Through a somewhat complex structure, technically the Bombers don?t have a mortgage; it?s a shell company that the Bombers pay the loan to who has the mortgage/loan with the Province.  So you can call it whatever you want; but I fully understand the structure. The reality is the Bombers have re-payment obligations on IGF and you can call it whatever you want, loan, mortgage, whatever. It?s an expense and the convoluted structure isn?t fooling anyone and in my opinion is misleading. As pointed out by another poster earlier in this thread, it appears the Bombers own Ed Tait doesn?t even understand. At the end of the day, after all expenses are paid and financial obligations are met, the Bombers have $300k left over, not $5.1 million.
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66 Chevelle
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« Reply #79 on: April 21, 2018, 06:57:26 PM »

at the end of the day you can't really tell anything from the information they gave you other than they currently make more than they spend. Without the Income Statement and the Balance Sheet laying side by side it near impossible to know what shape financially the overall entity is in. It's not uncommon for a business to show a gross profit yet operate at a net loss for a fiscal year, sometimes multiple years in a row. I don't doubt that the Bombers can already tell you, at least pretty close, what the gross and net profit will be for next year as most expenditures that impact your bottom line are decided upon in the prior year and based upon projections.

What you don't see is how much cash they have available, whether they still owe money for other expenditures, other than mortgage, and money owed to them, prepaid assets that are paid for future periods already, expenditure or revenues that may have been deferred, etc... The $300K that was left over per this discussion was expected as they already had a good idea of what revenues that should have been available to them and then planned and made expenditures accordingly. They could have just as easily had that number be $1M or $1. The good news from the press release is that the Bombers product makes more money than it cost to put on the field, thus giving them the ability to make other expenditures has wanted, needed, or deemed appropriate...  other than that, it's just another feel good story...
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the paw
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« Reply #80 on: April 21, 2018, 07:25:42 PM »

at the end of the day you can't really tell anything from the information they gave you other than they currently make more than they spend. Without the Income Statement and the Balance Sheet laying side by side it near impossible to know what shape financially the overall entity is in. It's not uncommon for a business to show a gross profit yet operate at a net loss for a fiscal year, sometimes multiple years in a row. I don't doubt that the Bombers can already tell you, at least pretty close, what the gross and net profit will be for next year as most expenditures that impact your bottom line are decided upon in the prior year and based upon projections.

What you don't see is how much cash they have available, whether they still owe money for other expenditures, other than mortgage, and money owed to them, prepaid assets that are paid for future periods already, expenditure or revenues that may have been deferred, etc... The $300K that was left over per this discussion was expected as they already had a good idea of what revenues that should have been available to them and then planned and made expenditures accordingly. They could have just as easily had that number be $1M or $1. The good news from the press release is that the Bombers product makes more money than it cost to put on the field, thus giving them the ability to make other expenditures has wanted, needed, or deemed appropriate...  other than that, it's just another feel good story...

I can't find the 2017 Annual Report on-line yet, but here is a link to the 2016 version.

http://d3ham790trbkqy.cloudfront.net/wp-content/uploads/sites/6/2017/04/Annual-Report-2016-Lower-Res.pdf

Lots of detail, lots of transparency, and lots of evidence that this is a football club run on sound business principles. 
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66 Chevelle
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« Reply #81 on: April 21, 2018, 09:12:52 PM »

I don't think you do.  Earlier you said "My point is it is pretty ridiculous to not count an obvious expense when calculating profit."

If the Bombers had the actual mortgage (which they don't) and they wanted to count the "obvious expense", they would only be allowed to expense the interest portion of the mortgage.  Payments against principal would not be an expense, but would be a negative cashflow item that increased equity on the balance sheet.  The cash to make that principal payment would come from - wait for it -  operating profit. 

Your point that the general public might not get all this is valid, and I agree with TBurg's point that the journalists should really point out that the WBB need a $4 million operating profit to make their stadium payments.  But I would stop short of calling it misleading. 

actually, according to the link you provided above for the 2016 financials, only $3M was due to be paid to Triple B, not $4M... Moving forward it's unclear to me how much is required each year to satisfy the Stadium Management Agreement between the club and Triple B as only 2016 and 2017 required payments are available from that financial document. Though one could assume from other remarks made in the document that payments of unspecified amounts, at least not in the 2016 Financial document, are required through 2058.

it's interesting that though WFC is a member of Triple B, as well as the City of Winnipeg and The University of Manitoba, yet upon dissolution of Triple B the WFC has no claim to any of Triple B's assets, i.e. the stadium. So, if Triple be were to dissolve who would own the stadium? As of now the WFC has a management arrangement with Triple B to have primary access to the use and over sight of the stadium, nothing else. Triple B  apparently owes the stadium as well as the entity on the hook for the actual mortgage...
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the paw
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« Reply #82 on: April 21, 2018, 10:32:07 PM »

actually, according to the link you provided above for the 2016 financials, only $3M was due to be paid to Triple B, not $4M... Moving forward it's unclear to me how much is required each year to satisfy the Stadium Management Agreement between the club and Triple B as only 2016 and 2017 required payments are available from that financial document. Though one could assume from other remarks made in the document that payments of unspecified amounts, at least not in the 2016 Financial document, are required through 2058.

it's interesting that though WFC is a member of Triple B, as well as the City of Winnipeg and The University of Manitoba, yet upon dissolution of Triple B the WFC has no claim to any of Triple B's assets, i.e. the stadium. So, if Triple be were to dissolve who would own the stadium? As of now the WFC has a management arrangement with Triple B to have primary access to the use and over sight of the stadium, nothing else. Triple B  apparently owes the stadium as well as the entity on the hook for the actual mortgage...

You have to go to Note 7 for the detail.  This year, They had to pay 3m to Triple B, 500k to the reserve, and the also had a one time balloon pmt of 1.2m to the City of Wpg.

Next year, the have to pay 3.88m to Triple B plus 500k to the reserve, so they need an operating profit of 4.38m to cover it.
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New_Earth_Mud
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« Reply #83 on: April 21, 2018, 10:37:15 PM »

Still hoping fpr a Peal Jam Show    Grin
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66 Chevelle
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« Reply #84 on: April 21, 2018, 11:59:02 PM »

Still hoping fpr a Peal Jam Show    Grin

ideally the Bombers could play a home game on a Friday night and then a Pearl Jam concert the very next night at IGF... 2 birds, 1 stone for me, lol... my favorite song to date is still Yellow Ledbetter....
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Chris1982
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« Reply #85 on: Today at 09:04:18 AM »


Wouldnt be to suprised to see Pearl Jam this summer.

Highly doubt it.  Their 2018 tour is already scheduled.  No Canadian dates at all are set.  Most of the tour is in Europe and South America, with limited US dates.
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