Tuesday, January 16, 2007

Lots of questions in Winnipeg, not as many answers.

We count on our faithful blogger of the Peg to set us straight on all the facts and fictions of the latest plan to build a football stadium in the Manitoba capital. From the seanincognito blogsite is this extremely informative examination of the plan, the players and the pitfalls.

As Cuba Gooding Junior and Tom Cruise might say, somebody is going to have to show them the money!

Monday, January 15, 2007

Manitoba's Field of Dreams

A few weeks ago our occasional Manitoba contributor at seanincognito, posted a story on the bid the by the well known Asper family to purchase the Blue Bombers and build a new stadium on the site of CanadInn stadium. It's more the dream of David Asper, who is looking to put up 40 million of a needed 120 million to build a new home for the Blue and Gold, providing he gets the keys to the executive washroom.

Sunday that plan was made public with a splashy web page presentation and more than enough press coverage to make sure that every Bomber fan from Kenora to Brandon, Boissevain to Churchill were in the loop.

The link to Asper's Blue and gold presentation is provied here, at the same the current community owned group provided their vision of a new Bombers stadium available here.

Regardless of your preference, one assumes that the one thing in common is the need for a new stadium in Winnipeg and soon, the current home of the Bombers is an aging structure short on amenities (fancy word for washrooms and snack bars).

While Manitobans weigh the choices they can pick up a copy of the Winnipeg Free Press and check out the presentation on the Asper aspirations, for those of us observers from afar a copy is provided below.

Asper proposes a new $120M stadium Bomber board's initial reaction favourable
Sun Jan 14 2007
By Ed Tait

The Winnipeg Blue Bombers have in their hands a $165-million business proposal that could provide the franchise with both long-term financial stability and a new state-of-the-art stadium.

The one caveat is this: the club’s board of directors would have to hand over the keys to the team — for 76 years a community-owned operation — to Winnipeg business mogul David Asper.
The Bomber 11-member board of directors gathered at their Maroons Road offices Sunday afternoon for an hour-long sales pitch from Asper’s team and then deliberated behind closed doors for close to 70 minutes afterward.

And when they emerged it was apparent the first reaction was nothing but positive. While stressing they will examine the proposal closely over the next few weeks and are committed to listening to their fans in the process, Bomber chairman of the board Ken Hildahl was also admittedly impressed.

“It does have some obvious merit from our perspective,” said Hildahl of the Asper proposal. “One of the things we’ve looked at over the last two to three years as we developed our vision, our concept of what we needed to move forward, is contained within that proposal. (The proposal) fits with the vision that our board has worked on over the last three-four-five years and it has some merit.

“We all saw it for what it is: it’s a very spectacular proposal.”

With accountants, architects and consultants at his side, Asper laid out a plan that would see $65 million of his own money — $40 million towards a new $120-million stadium and another $25 million earmarked for an on-site retail/commercial component — contributed to a project estimated to total $165 million.

Under his plan, both the federal and provincial governments would contribute $40 million with that investment, like that of the MTS Centre, paid back in less than seven years from taxes generated by the construction and retail operations.

On Sunday, Asper also launched a website outlining all aspects of his proposal

Interestingly, the Bombers chose Sunday to showcase some of their own architectural designs on their website www.bluebombers.com. Blue Bombers website

And while the potential end result of the proposals are essentially the same — a new facility and revenue streams for a team that has for years struggled to remain in the black financially — the difference is Asper’s does come with a substantial financial commitment.

As a result, the executive vice-president of CanWest Global Communications figures that commitment is vital in the Bomber board of directors’ decision to switch from community to private ownership.

“My view is that with the level of this kind of investment, it’s fair for me to expect a reasonable return on that investment,” Asper said.

“I fully expect people will disagree with the concept of taking it private. That’s fine. Everybody’s entitled to their view. When you see the vision of the community engagement that I see for this football team... I hope people will see I’m serious about this and I’m very serious that this club stay connected to the community. And, in some ways, more than it can be right now because it can be properly capitalized.”

“That’s an issue,” Hildahl said later. “The board has a position that we’re very much supportive of public ownership. But, obviously, when you look at a proposal of this magnitude — and potentially any other offers that come forward — as a board, we have the responsibility to look at those on behalf of the fans that we represent.”

Hildahl indicated the football club will solicit proposals and expressions of interest from other possible investors but that, to date, no one has stepped forward but Asper.

“There’s been some tire-kickers in the past,” said Hildahl. “At this point we don’t have any firm proposals. But we’re hoping with the expression of interest that may generate some excitement. If it doesn’t, then we certainly have a very interested party and a person who has brought a very exciting proposal to the table.

“We’re going to take the time to make sure the right decision is made. We’re going to move forward. We’re not going to shelve this and put it on the back burner.”

Asper did not say whether his proposal has a deadline, but it’s rumoured he has given the Bombers roughly three months to give the thumbs up or down to the plan. If accepted, he would ask current club president and CEO Lyle Bauer to stay and lead the project while the current board of directors would lead a new ‘Blue Bomber Touchdown Foundation’, a permanent charity to support community projects.

“My concern is and the concern I expressed with the group, irrespective of any timelines, is we would like to try and play in 2008 in a new facility,” said Asper. “In order to do that we’ve got to get going on it. That’s not just a matter of luxury, that’s a matter of costs. Construction costs and the availability of labour is extremely tight. The longer this goes on, the greater the risk of cost escalation. And that’s to the detriment of the tax payer and the view of the private investors.”


* Local business mogul David Asper would gain complete control of the football club in exchange for his $40 million contribution toward a new $120-million facility and on-site retail/commercial component which would begin development in 2008.

* Details of how the public can view the plan will be released Sunday. But Asper's proposal would also call for the Bomber board to reach a decision in an expedited manner rather than have the process dragged out by weeks or months of public consultation so the team can be playing in the new facility by 2008. If accepted, construction on the new facility would begin immediately afterward.

* Asper's proposal would bring to an end 76 years of community ownership and the Bombers -- in addition to the retail/commercial operation -- would then be run by a private corporation.
Currently the Bombers are run by a nine-person board of volunteer directors, which oversees the day-to-day operations handled by president and CEO Lyle Bauer.

New digs
* Football fans would watch Bomber games in a state-of-the-art facility with many of the bells and whistles baseball and hockey supporters already enjoy with CanWest Global Park and MTS Centre.
Canad Inns Stadium, the current home of the team, was built 54 years ago and needs millions of dollars in infrastructure upgrades. Many fans also complain of the cramped spaces between seats in the East and West grandstands.
Financial stability
* The Bombers posted an operating loss of $480,094 in 2005 -- their first loss in five years. The club entered the 2006 season with an accumulated debt of $697,882, down significantly from the $5.4 million in 2000 that drove the franchise to the brink of bankruptcy. The debt is expected to be wiped clean when the team completes its '06 financial statement, including a $2 million to $3 million windfall from playing host to the 2006 Grey Cup.
The retail and commercial development would help provide the team with the outside revenue sources it has been seeking for years and make it less gate-dependent.
Community benefits
* Details are scarce here, but it's believed the plan would see the establishment of a 'Touchdown Foundation' to benefit amateur football in Manitoba as well as a permanent Blue Bomber hall of fame.

* Private ownership, as many CFL fans across the country are painfully aware, has hardly been a panacea for other franchises. Both Ottawa and Montreal have gone long stretches without CFL teams after private owners left those franchises bankrupt.
* The CFL has implemented a new salary management system for this season in a move to level the competitive playing field between private and publicly owned teams. All teams must now adhere to a $4.05 million salary cap or face fines. If it works, that would narrow the gap between public and private. Three of the eight CFL teams -- Winnipeg, Saskatchewan and Edmonton -- are community owned, the other five are private operations.
Winnipeg and Saskatchewan, it's worth noting, are also suffering through the longest championship droughts in the CFL. The Roughriders' last Grey Cup title came in 1989, the Bombers' last title came a year later.

-- Ed Tait

The stadium
Location: Essentially the same as the current facility, Canad Inns Stadium, although the West side grandstand would now adjunct St. James Avenue with parking and the retail/commercial development on the East side, facing Empress Street.
Seating: 30,000-40,000; partially covered.
Amenities: 24 private suites; 13 concession areas; 'Bomber Fan Fare' transit terminal; main entrance would face north on St. Matthews Avenue; Blue Bomber Hall of Fame Walk to honour players and builders; Blue Bomber interactive sculptures to honour the franchise and its great players; 'True Blue' fan interactive sculptures celebrating the team's diehard supporters; virtual advertising ring outside the stadium; JumboTrons at both north and south ends.
Parking: Plans call for a 2,100-space, two-floor parkade on-site as well as ground-level spaces on the East side between the stadium and proposed retail development.
Traffic flow: The designs call for the construction of an overhead exit ramp that would take traffic over St. James Street west toward Ness Avenue via an extension of St. Matthews Avenue.
The timeline: Phase 1: Construction would begin on the new West side immediately, without interruption to the current facility during 2007 CFL season.
Phase 2: After the '07 season, the existing East side and playing surface would be demolished to make way for the new grandstand. Stadium would then be ready for the opening of the 2008 CFL season.
Phase 3: Commercial and retail development to begin on East side facing Empress Street in 2008.
-- Ed Tait


Background: The community-owned Winnipeg Football Club began operation in 1930 following the amalgamation of the teams in the Manitoba Rugby Union. It has been community-owned in the 76 years since.

In the team's last financial statement (for the year 2005), the Bombers spent $6.6 million on football operations (player/coach salaries, scouting etc.), $2.56 million on marketing and administration and $1.03 million on stadium occupancy.
Those expenses were offset by $3.7 million in ticket revenue; $1.1 million from the Canadian Football League; $4.23 million in revenue generated from corporate sponsorships and $385,436 from stadium management. The team also generated $290,312 from community support and fundraising.
Bottom line: a loss of $480,094.

The revenue from game-day would likely increase from the interest in a new facility; CFL revenues are to boost with increase corporate sponsorship and a new TV deal; other revenue -- corporate sponsorship, merchandising, etc. -- would expected to be at least the same.
The commercial/real estate component could be worth a ton given the traffic that flows through the Polo Park area, but is difficult to put a value on not knowing lease agreements and who the tenants are may be.
-Ed Tait.

Katz feels Asper's plan can become a reality

Winnipeg Mayor Sam Katz says he’s intrigued by David Asper’s plan to build a new $120-million football stadium and develop private team ownership for the Winnipeg Blue Bombers of the CFL.

The plan reportedly calls for an injection of $40 million of Asper’s own money toward a new facility on the existing Canad Inns Stadium site, $40 million from each of the federal and provincial governments and the donation of the land from the City of Winnipeg.

Asper unveils his plan to the Winnipeg Blue Bombers’ board of directors on Sunday afternoon.
“Do I see it being do-able? Obviously, it appears to me that we have someone who very much cares about the community, cares as passionately about the Winnipeg Blue Bombers as anyone in the city and is financially committed and has the wherewithal,” Katz said Sunday.

“When you put those three together, there’s no doubt in my mind it can become a reality ...and it can become a reality very quickly.”

Katz said it’s premature to try and guess exactly what role city hall will play in Asper’s strategy to build a stadium in time for the 2008 season.

“Until there is an agreement between David Asper and the football club — and I assume he would then come to City of Winnipeg — only then would I listen and make decisions on what, if anything, they are looking for and how it might benefit the City of Winnipeg,” he said.
Katz agreed the Bombers need a new home to ensure the club’s long-term survival.
“I don’t think anyone will argue that the Winnipeg football stadium has basically fulfilled its economic lifespan and that for the fans’ sake, a new facility is required,” he said.

Q & A with David Asper

The back-slapping and schoomzing has been completed and he’s made his sales pitch. And now all David Asper can do is sit back and wait for a verdict on his ownership/stadium proposal from the Winnipeg Blue Bomber board of directors.

Asper met with Free Press football writer Ed Tait Sunday after meeting with the Bomber executive to speak of his immediate emotions and his plan.

FREE PRESS: What are you feeling now, some two-three hours after making your proposal? Is there a sense of relief?

ASPER: Yes, I’m very relieved. I was very nervous going in, even though everybody in that board room are friends of mine. This is a major undertaking for the community. This is a major financial undertaking for me personally. It involves a prized and beloved part of our community identity and all of those things together were weighing very heavily on me.

FREE PRESS: Wait a minute here... you’ve defended David Milgaard, worked on some other high-profile cases and closed some big-time business deals... and you were nervous for this? What made this different?

ASPER: This is more than just a business deal. This is really about the heart of our community and if I’m successful, a lot of people will be relying on me and the organization to make it a bigger heart. That makes it different.

FREE PRESS: It wouldn’t be wrong to suggest part of that nervousness is because this team is also your passion, right?

ASPER: But I can buy tickets and be a fan. This is a much bigger commitment. There’s a promise you make to the community. It’s a huge promise.

FREE PRESS: Tell us how you thought the presentation went.

ASPER: We had a good presentation and good discussion. (The Bomber board) asked some important questions. It’s hard to gauge people’s reactions. I think they understand the importance and the enormity of the situation. I wouldn’t want to try and predict their reaction, but it was a very open and positive environment.

FREE PRESS: Do you take a step back now or do you still have a sell job on your hands? How do things play out from here?

ASPER: All along this was about getting the information to the board of directors. They have to look at it and apply their best judgment to it. But I’ve also got to go back to work. I’ve got a job and when they respond we’ll deal with things at that point.

This is an idea, it’s my vision. But I’m not taking the ball and going home if they say no. When the team’s bad I still go to the games. Either you’re a fan or you’re not.

FREE PRESS: There are a lot of people out there who don’t care if the team is privately-run or community-owned. But what would you say to those who are insistent the team remain under the community-ownership model?

ASPER: I hope that what I’ve shown in the proposal is, yes it’s private ownership but it’s very community-minded private ownership. The fans can look to my personal track record in this community as well as the track record of our businesses as to how our core ethic is community-minded. Irrespective of who ultimately owns the shares of the corporation, the community in many ways will have enhanced benefits of having this proposal accepted.

It’s also always brought up that there have been all these bad owners in the CFL. I would say this: I’m not some out-of-towner, some carpet bagger who showed up and tried to pick off a sports franchise cheap. This is my hometown and I think my bona fides with my commitment to the team are there. Plus, in any business there are successes and failures. And you don’t say that because there is a failure that all private owners are failures. There’s been lots of examples of great private owners in the CFL. Look at the B.C. Lions. It’s a phenomenal turnaround in Vancouver. Same with Montreal. Toronto is building the same thing...

My commitment to the community as part of the proposal is an extension of the commitment my family has made to this community for a long time now.

FREE PRESS: This deal would seem to provide the Bombers with everything they currently seek for long-term viability: a new stadium, the outside revenue sources... why would they say, ‘No thanks’?

ASPER: They might get a better offer. But I’m in the advocacy position here. So, I guess my answer is, ‘I don’t think they should say no thanks.’

FREE PRESS: What would happen if your deal was accepted, but you decided to walk away in the next few years. Doesn’t that leave the franchise in a lurch?

ASPER: That’s the doomsday scenario. The stadium gets built, the retail gets built but then it all goes bad. Or I go broke. Or I go crazy. Or I get kidnapped. What’s the worst case? The worst case is the community has a new stadium, it has a new development at Polo Park and if I’m gone and you want to have a community-owned team, go back to the old model.

FREE PRESS: We know you’re a fan, but what it this for you financially? Obviously, this isn’t just a $40 million donation to the new stadium and $25 toward the retail development...

ASPER: We will be constructing this business to receive a fair return on the investment. That will be derived from the construction of the retail. But I do believe the integrated business model of the retail, the parking, the stadium and the football club can be a successful business on to its own.

FREE PRESS: It was suggested today that if this proposal was to be accepted, the Bombers could go from a hand-to-mouth operation forever struggling to stay in the black to becoming the New York Yankees of the CFL. What’s your reaction to that?

ASPER: (Laughing) That would make me George Steinbrenner (the Yankees’ volatile owner) and I don’t want to go there.

This is a still a business. There is a salary management system in the CFL in place. You’ve got be sane. You’ve got to have a budget and run the team like a business. But in my vision there is no doubt that will the increased capital and resources available to the football team the image and the identity and the pride that comes with being part of the Bombers is going to be something we hope is charismatic in the community and everywhere. We will create Blue Bomber Nation.