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The fight is here; I need ammunition, not a ride. -
Re: Stormy weather ahead for the club?
There's always a winner. When things are at their absolute worst the scavengers win. The vultures.
Cash Converters would be a blue ribbon sponsor for any club right now.Last edited by Dancin' Douggy; 14-11-2008, 09:38 PM.Comment
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Re: Stormy weather ahead for the club?
A big problem across various sports
Code red: this game is turning ugly
Jacquelin Magnay
November 20, 2008
WE KNOW, because the Herald's economics guru Ross Gittins tells us so, that we are in a crisis. We probably knew this deep down, but it wasn't until someone in respectful authority put things in simple language that the message was hammered home.
And if professional sportsmen haven't realised it yet, they are going to get a pay cut. "Oh sugar," you won't hear them say.
This week the global pharmaceutical giant Johnson & Johnson cut its sponsorship of the International Olympic Committee. The Cronulla Sharks announced they have enough cash flow - courtesy of a $500,000 line of credit - to get through until the new year. Britain's Minister for the Olympics, slashing construction plans, said London would not have bid for the 2012 Games had it known of the coming economic slump. The AFL has deferred the granting of a licence for the 17th team, on the Gold Coast, quaintly explaining the new franchise had to provide "further analysis and financial modelling of the impact of the new club on the existing competition". In real speak, this means the other clubs don't like the dilution of the AFL's dollars as even more troubled times loom.
Rugby league agents are frantically trying to upgrade player contracts and tie up deals, fearing salary cap money may dry up.
Elsewhere, the Federal Government announced a funding package of $18 million for sporting organisations, money to keep clubs ticking over until a funding review is complete.
It is not going to be good news. (However, the federal stamp of approval for $55 million has been given for Football Federation Australia to lobby for the 2018 World Cup. Canberra must just pick an opportune time to announce it. My bet is just before Christmas when no one will notice.)
From the number of junior sporting club registrations - that $100-plus for a child to simply register to run around a paddock - to the squillions paid to clubs by corporate giants in return for comfy box seats at stadiums, the income of sports is being squeezed uncomfortably tight.
Some clubs will merge. Others will die. Yet history shows that in hard times the small thrills count and nationalism intensifies. Support for sporting teams will boom, along with betting and buying lipstick. We will care much more about the Wallabies' need for tight-head props, cricket's spin bowling crisis and the health of AFL bad boy Ben Cousins. As sponsorships are cut, attendance at games and memberships of clubs may rise.
This week Australian league players learnt they will each receive a $30,000 bonus for their dominant display in the World Cup, putting the ARL into the red for this particular competition.
To most people, this defies logic, let alone economic sense.
This one-team Kangaroo contest has had a no-care atmosphere about it all month. Mr Gittins, we need you to explain.The fight is here; I need ammunition, not a ride.Comment
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Re: Stormy weather ahead for the club?
Tigers punt on AFL approving Sportsbet deal
RICHMOND this week will front the AFL seeking approval of a multi-million-dollar three-year sponsorship deal with bookmaking firm Sportsbet.
But the Tigers, fresh from signing Ben Cousins and enjoying an unprecedented pre-season membership boost and merchandising feast, must convince the AFL to overlook a protected sponsor, Tabcorp, whose contract ends at the end of next season.
The Sunday Herald Sun understands the Sportsbet deal could bring $2.4 million into Richmond's coffers, plus a few bonuses, including $100,000 if the club makes the finals.
In final negotiations late last week, Sportsbet added to the Cousins mania by offering to give the club $10,000 for every Brownlow Medal vote he earned next season.
Richmond president Gary March said his club was keen to add a major sponsor to join Dick Smith.
Nissan returned as a secondary sponsor this week.
March said the club had been approached by two bookmaking firms, and it is understood the club's acceptance of Sportsbet included the sponsor's name being on the back of the club jumper.
The AFL's three-year deal with Tabcorp and Betfair expires at the end of next season.
It is understood Betfair has no objection to a corporate bookmaker sponsoring a club.
March said he would urge the AFL to look favourably on the prospective deal.
"The AFL, which is most frustrating to us, don't disclose contractual details to the clubs," he said.
"It is frustrating to us that, in such difficult financial times, we can come to terms with new sponsors and then potentially hit a brick wall with the AFL.
"At a time when companies are pulling out of sports sponsorship, the corporate bookmakers have arrived with money now that deregulation has allowed them to advertise and sponsor in Victoria.
"We need to take advantage of this new pool of funds. We are not privy to the AFL's contract content agreement with Tabcorp. But it has a year to run. We are looking for a three-year deal with another betting outlet, which is the biggest corporate bookmaker in Australia.
"We don't want to have to wait for 12 months. Why should we?"
Sportsbet chief executive Matt Tripp confirmed his Northern Territory bookmaking business had been in negotiations with the Tigers.
"We recently were sponsors of the Australian Masters golf at Huntingdale, and we flagged our intention to sponsor football and promote sport in the Sunday Herald Sun last month," Tripp said.
"We will get heavily into country footy this season. And, yes, we hope to sponsor Richmond, but that must be cleared by the AFL.
"Regardless of the AFL's attitude to this issue, we will fulfil our promise to give the AFL 5 per cent of our gross profit on AFL betting next season, and we will open our books to them for any investigations they desire.
"We are committed to giving football a boost, at AFL and country level, and we only hope it will be this year with the Tigers."
The AFL could not be contacted yesterday, but is unlikely to consider a request by Richmond until after the Christmas break.[COLOR="Red"][B][U][COLOR="Blue"]85, 92, 97, 98, 08, 09, 10... Break the curse![/COLOR][/U][/B][/COLOR]Comment
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Re: Stormy weather ahead for the club?
I thought Sportsbet were keen to sponsor us
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Re: Stormy weather ahead for the club?
The was just people knowing we didnt have a sponsor and putting 2 and 2 together.Comment
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Re: Stormy weather ahead for the club?
I'm just a little too young to remember 73/74, but the years 89/92 wern't exactly a picnic in our part of the world (Victoria). Interest rates up around 18%, Pyramid collapse, Victoria losing its own State Bank, VEDC scandal, high unemployment, public transport unions bullying the govt and consumers into submission. To top it off, at the height of the financial misery, the Filth won the flag and the music charts were still infected with a combination of hair metal and Roxette (thankfully Nirvana came in and helped to cleanse the airwaves a year later, and the Pies have provided much mirth and merriment in the 19 years since that dark October day in 1990)."Look at me mate. Look at me. I'm flyin'"Comment
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Re: Stormy weather ahead for the club?
As a committed "public Transport Unionist"....my memory of that time is a little different, i wouldn't call it bullying....i would call it "stong negotiations". While i see this time as being difficult i remain positive that the downturn will be short and the first positive news will be the Doggies securing a masive major partner in the early new year!!
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Re: Stormy weather ahead for the club?
Some of the membership numbers the Melbourne based clubs are encouraging.
The Tigers are well ahead of the same time last year and the Dees are going very well and on top of that the Hawks are cashing in on their success last year.
HAWTHORN has cashed in on the 2008 premiership with pre-Christmas membership sales soaring almost 57 per cent.
The Hawks have already sold 30,087 memberships for 2009, up from 19,214 at the same time in 2007.
With 22 per cent new members, Hawthorn expect to beat last season’s record membership of 41,686.
Club president Jeff Kennett said he was delighted at the number of new or lapsed members who had signed up and at the growth of membership in Tasmania.
“The team has shown over the last few seasons that there are exciting times ahead for the club and it is encouraging that so many supporters have backed the club as financial members,” said Kennett.
“Tasmanians continue to get behind the club with 3753 members already signed up for the 2009 season of which 29 per cent are new members to the Hawks.”
The Hawks claim to be the first AFL club to sign 30,000 members before Christmas and believe the figure suggests the target of 50,000 can be achieved.
Western Bulldogs Football Club "Where it's cool to drool"Comment
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Re: Stormy weather ahead for the club?
Economic downturn will sink the boot into clubs
Jesse Hogan | January 13, 2009
"It is over 15 years since AFL clubs have had to operate in conditions of a severe economic downturn which appears almost certain in 2009."
"In summary, 2009 will be a most challenging year financially for the club."
"We expect the hospitality market to also be tough in 2009 … It reinforces how critical the support of our members will be in 2009."
SUPPORTERS of the poorest Victorian clubs — Melbourne, North Melbourne and the Western Bulldogs — would be well accustomed to being fed such gloomy sentiments in recent years. But when the club making these predictions is Essendon, far and away the richest of all of them, it should be sending a shockwave through all club administrations.
As the sporting spotlight has shifted to cricket in the past two months, most AFL clubs — St Kilda, Richmond and Fremantle being the exceptions — released their 2008 financial results without the usual scrutiny afforded to footy during winter.
Melbourne appears to be in the most dire financial position. Of the 13 teams to report, the Demons are the club whose debts outweigh their assets — a deficit of $3.8 million — which explains the urgency of new club president Jim Stynes' "Debt Demolition" campaign.
Only three of the 13 clubs reported an increase in profit for the year to October 31 compared to a year earlier: Hawthorn, North Melbourne and the Bulldogs. Furthermore, five of the others — Brisbane Lions, Collingwood, Melbourne, Port Adelaide and Sydney — lost money in 2008.
Little wonder that the Geelong Football Club has changed its website address from gfc.com.au to geelong cats.com.au, when the GFC on most people's minds at present is the Global Financial Crisis.
So what has gone wrong? Like most businesses, the financial crisis had an indirect impact on trading, but it also had a direct impact on two clubs that had invested their surplus cash in shares: Brisbane and Essendon.
The plunging local sharemarket forced Brisbane to write down the value of its share portfolio by $2 million, while Essendon had to cull the valuation of its shares by just over $250,000. While the loss is only a "paper loss", because the shares have not been sold and could regain value in coming years, Essendon chief operating officer Travis Auld denied the club had invested its money recklessly.
"We had some money in managed funds and it was a reasonably low-risk portfolio, but given the downturn in the market it didn't matter how low-risk you were — everybody got hit," he said. "If you look at our accounts over the past three or four years you'll see there's been some significant gains in there, so, at worst, we'd actually be break-even."
Similarly, Lions chairman Tony Kelly said the club remained hopeful "the value of our shares will return over the longer term".
The inclusion of Collingwood in the "loss" category for 2008 would surprise most, although that is also because of unwise investments. The Magpies should have posted a profit of $2.5 million for the year but instead ended with a loss of $3.28 million because of bad pub investments in the Beach Hotel in Albert Park and the Diamond Creek Tavern.
Unlike the Bombers and Lions, Collingwood's writedown cannot be rectified because it elected to sell the hotels at a loss of $5.77 million, rather than keeping them in the hope they would eventually regain value.
Collingwood president Eddie McGuire, whose board approved the pub deals, told supporters he would "totally dedicate myself and I'll get that money back for the Collingwood Football Club and you can take that to the bank".
A crucial indirect effect of the crisis — and one that is expected to worsen in 2009 — was corporate hospitality. Although not all clubs provide specific figures on how much they earned from selling corporate packages, Essendon confirmed its profit from that area sank 18.8 per cent to $3.25 million. Chief executive Peter Jackson said the trend of companies curbing spending became evident in the second half of last season.
"By mid-year we were tracking on target, however, the sudden and enormous drop in business and consumer confidence during January-June started impacting on those areas of our business most sensitive to declines in discretionary spending," Jackson said in Essendon's annual report to members.
"The outlook for 2009 for business operations remains uncertain at best. The second-tier sponsor market remains tough. We expect the hospitality market to also be tough in 2009. These are discretionary spending items for businesses and we expect the financial results in 2009 to reflect this fact."
That negative trend was, unsurprisingly, amplified for last season's worst-performing club, Melbourne.
"Through 2008, the club's core operations traded very poorly," the Demons' directors declared in their annual report. "The club's revenue generation fell well short of management's expectations at the start of the year, particularly in corporate partnerships, sponsorships, game-day hospitality and retail. Our match-day attendances were down, perhaps reflecting our struggling on-field performance."
Clubs are already pushing the AFL hard to help gain improved stadium deals, which is seen as one of the most important issue confronting the game.
While Melbourne's accounts did not specify the performance of gate receipts, among the falls in proceeds from fans who buy tickets for individual matches, Essendon suffered a 21.1 per cent decline in home match receipts.
North Melbourne's home gate receipts were down 12.1 per cent and Geelong's 48 per cent, due to not playing a home match at the MCG. Port Adelaide lost $310,000 from its home games at AAMI Stadium, prompting intense post-season discussions with the South Australian National Football League to amend the ground-hire terms.
"It would mean looking at all elements of it and trying to reduce the costs — variable and fixed costs — associated with playing our games at the stadium, but also all the good things we can do to make the experience for a lot better than what it has been at the stadium," Port chief Mark Haysman said.
What makes the situation worse for the Power it does not believe falling behind its "break-even" point of 26,000 to 27,000 spectators last season was a blip that can be easily remedied.
"We've had our lowest-ever crowd numbers but we're forecasting that same level of crowd numbers next year, despite all the things we're doing to try and improve in that area," Haysman said.
Frustration with stadium hire deals is not confined to Adelaide. The AFL last month launched legal action against Telstra Dome in an attempt to get access to the stadium's contract with Melbourne Victory, because it suspects the soccer team has a better deal than AFL clubs such as the Bulldogs and Kangaroos.
"There'd be no doubt that when Melbourne Victory's able to put on a game for 20,000 people they must be at least breaking even," Kangaroos chief executive Eugene Arocca told SEN last weekend. "We know for a fact that we can't break even for much less than 31,000-32,000."
One area with almost universally positive results involved profit from membership. The biggest increases from clubs that disclosed membership on its own was North Melbourne (up 81.8 per cent to $2.55 million) and Collingwood (up 11.8 per cent to $5.84 million).
Rising profit from membership is important to cover the rising football department costs — predominantly player wage increases — that clubs are faced with this year.
In 2008, only Essendon was able to cut its football costs, down 0.6 per cent to $12.7 million, while Collingwood spent the most with $16.3 million.
All AFL club accounts must be verified by auditors and, because the auditors are independent, they are compelled to detail any concerns they have about the finances, as they would have to do for any public company.
An example of this can be found in North Melbourne's annual results, courtesy of its audit firm Grant Thornton.
"The company currently has a net asset deficiency, excluding cash set aside for the redevelopment of Arden Street," Grant Thornton said.
"As a result of the matters described … there is significant uncertainty whether North Melbourne Football Club Ltd will be able to continue as a going concern and therefore whether it will realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in the financial report."
Similar sentiments are
expressed by the directors or auditors of Carlton, Melbourne and the Western Bulldogs, although each also cited the main reason why such issues are not fatal: a benefactor called the AFL.
"The Melbourne Football Club Limited is economically dependent on the ongoing support of the Australian Football League through receipt of distributions and dividends," said the Demons' report.
And the Bulldogs: "The company's directors consider the going concern assumption to be appropriate … as the AFL has committed to continued support."
And North Melbourne: "The company's directors consider the going concern assumption to be appropriate based on future operating performance and the Australian Football League's commitment to continued support."
In terms of the season ahead, Essendon predicts it is "over 15 years since AFL clubs have had to operate in conditions of a severe economic downturn which appears almost certain in 2009".
Auld's only comfort is that the Bombers "can suffer a little bit before we're in trouble and part of that's because of our revenue levels, part because we've got a healthy balance sheet".
"If your balance sheet's not strong you're going to be more susceptible in times like this," he said.Western Bulldogs Football Club "Where it's cool to drool"Comment
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Re: Stormy weather ahead for the club?
I am still worried about the massive loan we took out during 2008. There is no explanation in the financial accounts.FFC: Established 1883
Premierships: AFL 1954, 2016 VFA - 1898,99,1900, 1908, 1913, 1919-20, 1923-24, VFL: 2014, 2016 . Champions of Victoria 1924. AFLW - 2018.Comment
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Re: Stormy weather ahead for the club?
And pies.Bring back the biffComment
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