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Bombers' operating profit up $1 million over 2013, more proof CBA helps teams

Winnipeg Blue Bombers president and CEO Wade Miller says more needs to be done to ensure cyclists and pedestrians heading to and from Investors Group Field are kept as safe as possible at all times.

If anyone needed more proof that the CFL's teams are still making money despite a higher salary cap under the new CBA, the Winnipeg Blue Bombers have supplied some. The Bombers, one of three CFL teams that annually releases their financial statements (the others are Edmonton and Saskatchewan), issued their 2014 annual report (PDF available here) Wednesday, and announced that they made an operating profit of $3.9 million, $1 million over last year. That's despite spending $735,000 more on football operations (which covers player salaries, but also includes coaches, personnel staff, equipment, travel and more). This is largely thanks to a boost of over $2.2 million in league-distributed revenue, much of which comes from the new TV deal. There are still some concerns about the Bombers' long-term financial future and their ability to meet their stadium obligations, as their stadium payment this year ($4.5 million) is above the operating profit they brought in, but the new CBA certainly isn't hurting the team. In fact, they're doing much better despite investing more in football operations.

There are several aspects of this report worth digging into. First, let's look at the CFL revenue. This is largely the TV money, and it comes in at $4,297,056 in 2014, up from $2,054,270 in 2013. That's in line with the around $4 million per team from TV/radio/digital reported when the deal was signed in 2013, and the financial statement includes that "we expect this number to be relatively static in the coming years." However, that increase (of around $2.25 million) is below the reported increase of $2.7 million per team that was a talking point during CBA negotiations; that suggests the comments about the CFL keeping some of the new TV money in the league office were correct (although the distributed increase from TV may not be as low as the $1.9 million per team the league cited). $2.25 million is still a massive increase, though, especially when you look at how little of it is going to the players.

Consider that football operations cost, which went from $10,489,343 in 2013 to $11,284,877 in 2014. Yes, that's the club's biggest single expense, and it's a jump of around $735,000. That money likely isn't all going to players, though. The 2013 cap ceiling was $4.4 million, and it rose to $5 million in 2014. Unless Winnipeg was significantly under the cap in 2013, their player salaries couldn't have risen by much more than $600,000. Keep in mind that only 42 per cent (at most) of that 2013 football operations budget was spent on player salaries, which would be under 19 per cent of their overall 2013 operating revenue ($24 million). Yes, salaries probably were a higher percentage of the increase this year thanks to the cap jump, but even if the Bombers spent right to the $5 million cap, that would still mean that just over 44 per cent of their total football operations budget (and under 19 per cent of their overall operating revenue) went to player salaries.

It's also interesting to consider what this means for the CFL's other teams. During the lead-up to last year's CBA negotiations, the Bombers were estimated to be amongst the wealthiest three teams, so this increase may not be as significant for them as it is for those less likely to make substantial profits (although that changes a bit when you get to their stadium situation, which we'll discuss below). For teams in the bottom or middle groups, this may matter even more.

Keep in mind that the eventual cap ceiling and floor wound up exactly where the league proposed at the end of May last year, a long ways below the $5.8 million ceiling players wanted, so from a purely cap-based perspective, this is pretty much what the CFL wanted (if not quite the $4.8 million ceiling they proposed at first). Each team will have their own unique increases in salary and football operations budgets, but we know that there's a maximum ceiling-to-ceiling increase of $600,000 on salaries (with a minimum increase of $200,000 from ceiling to floor), and we can imagine that the CFL's distributions to each team are pretty similar.

Thus, most teams likely received about $2.25 million more from the league in 2013 to 2014, and they probably spent from $200,000 to $600,000 more on player salaries. That would mean teams are spending 8.9 to 26.7 per cent of the extra money they're receiving on salaries. There shouldn't be any extra costs specifically from that TV deal, so that would mean that each team should have between $1.65 million to $2.05 million extra in league-provided revenue not spent on salaries in 2014 as compared to 2013. That doesn't mean every single team did better in 2014 than 2013, as there are other factors to consider (attendance, sponsorship, merchandise and so on), but they all at least should be in a better starting position.

As per the Bombers and their specific financial situation, their total expenses over revenues were $575,914 after their $4,500,000 payment towards their stadium costs. That shows just how much of their money is going to their stadium (and will be for the forseeable future; they're set to contribute $4,500,000 for the next three years, then $3,500,000 for one year, then $3,885,834 a year until 2058). However, this doesn't necessarily mean the team will be in the hole for the stadium every year; they could always see increases in other revenues, and they'll be set to rake in the money from hosting the Grey Cup in 2015 (Saskatchewan made $25 million in Grey Cup revenues in 2013, and while that's before taking off expenses, there's a lot of money to be found in hosting the title game). The Bombers are also in a much better position to meet their debt obligations going forward under the new CBA than they were under the old one, and that's good for the league.

These financials are an indication of just how little of the CFL's new wealth is going to its players, though, suggesting that they're getting 27 per cent of the new revenue at most and potentially as little as 9 per cent. That's good for the Bombers, and it's particularly good for the CFL's poorer teams. It may provide some more ammunition for the CFLPA as they move towards the 2018 negotiations, though; they really didn't wind up with a lot extra out of this past CBA.