AFL clubs displaying financial incompetence, but who will pay??

[blue harvest]

 

[Craze]

Welcome to the world of Moral Hazard, AFL style. There are no cosequences for screwing up, just go with the begging bowl. You will be rewarded for constant high risk/high reward play with no downside, and penalised for being conservative, so everyone will do it, which in turn will reduce the rewards still further while ratcheting up the risk. From the ridiculous bonfire of the vanities at Essendon, to the endless subsidisation of GCS and GWS fiscally and in leg-ups to ensure there are no consequences for being s**t for years, to the deep pile of crap that was Melbourne and the endless 2 year coach merry-go-round supported by AFL handouts. If there are no ultimate consequences for failure at a club level, you undermine the whole structure instead.

We stand as a competition in the same place the financial system stood at the start of the CDO binge that brought on the GFC. And there is a long way worse to come.

Brilliant post mate

 

[SterlingArcher]

The whole idea of signing coaches up long-term is to give them the security they need to develop a premiership team, rather than chase wins and finish 6th a couple of times and then fall again. By signing up coaches long-term (i.e. Scott at North) you give them the opportunity to give the club the best chance at a flag. It's not about headhunting from other clubs, it's about not having your job on the line and having incessant media build-up.

 

[SterlingArcher]

The whole idea of signing coaches up long-term is to give them the security they need to develop a premiership team, rather than chase wins and finish 6th a couple of times and then fall again. By signing up coaches long-term (i.e. Scott at North) you give them the opportunity to give the club the best chance at a flag. It's not about headhunting from other clubs, it's about not having your job on the line and having incessant media build-up.

 

[Bluelegs]

is that before or after the AFL subsidy !!

You should keep in mind that we paid close to $1.5m to Paul Roos this year as well.

 

[Iron]

Most clubs are in a financially secure enough position that they can pay for themselves. Financial incompetence shouldn't be confused with risk.

 

[Bluelegs]

peter jackson set Essendon up in the late 90s, & was head hunted by the AFL to set melbourne financial & administration in order

Yep. He's very good at what he does. Big fan.

 

[pinot]

Adelaide have fired their coach, incurring a $mil plus payout. More to come as they try to repair the damage. Hope they are not counting on Adelaide Oval to replenish the bank account (no news is not good news)
Essendon have just lost a court case including having costs awarded against them, $mil plus.
Saga ongoing, $cost plus.
Gold Coast appear to be readying to jettison their coach, which would cost say $0.5mil

Who takes the responsibility, who pays? The Bulldogs are rumbling about their coach.

At least we can be sure Eddie will be asking questions because he will tell us.

Welcome to communism AFL style where mediocrity is rewarded.

 

[Crawb]

Totally thought this thread would be about some particular legal bills.

 

[Pessimistic]

Thats the thing, we have a few clubs which are very prudent and avoid payouts (eg kennett easing the way for robson to go to essendon ) yet are taxed, then theres others who waste money on chemicals, lawyers, payouts, years off on pay.

Yet thers no talk of taxing them because while this was footy dept spending, it was wasted and didnt take the club to the top of the ladder ?

Only the sensible over spending gets taxed ?

 

[underthestars]

Interestingly you could have put Melbourne in that list a year ago. But one year after a $1.5m allowance from the AFL we're in the black again. Peter Jackson deserves a lot of Kudos.

You've been naughty and it's actually made you worse. Pay this $400k fine! Oh, and as you're so bad, have $1.5 mil, and here's a coach as well, anything else we can do? Another priority pick you say? Let me think.

 

[The_Wookie]

http://www.heraldsun.com.au/sport/a...e-just-four-wins/story-fni5f91a-1227057031219

 

[Bluelegs]

Doesn't even make sense.

 

[TheFVK]

Interestingly you could have put Melbourne in that list a year ago. But one year after a $1.5m allowance from the AFL we're in the black again. Peter Jackson deserves a lot of Kudos.

Amazing that Melbourne can be churning out a profit with 25K average crowds, while Crows and Port deliver $2million losses with crowds and membership figures double that #SAGreat

 

[Rimmer]

meh the SANFL can afford it and I am sure the costs were considered .. and hopefully Mr Little will pay Essendon's and James Hirds huge legal bills before he leaves ...

 

[Demonic Ascent]

to the deep pile of crap that was Melbourne and the endless 2 year coach merry-go-round supported by AFL handouts.

Northey - 1987-1992
Balme - 1993-1997
Daniher - 1998-2007
Bailey - 2008-2011
Neeld - 2012-2013

Yeah a real succession of new coaches every two years.

 

[bombersfan4000]

The Fairfax Press:
Having paid the banned Hird for his season in purgatory and signed the coach for a further two seasons in an overall cost of at least $2.5 million, Little's legal strategy has further placed the club in financial peril with lawyers bills now estimated at $2 million before Friday's court costs, albeit before insurance claims.

Read more: http://www.theage.com.au/afl/afl-news/essendon-pays-for-misguided-approach-20140919-10jkma.html#ixzz3DkvlleD9

The Bombers needed a $5.5 mil AFL guarantee last year for the first time ever, ever, as in never before ...

no they didnt. the bank oked the loan the AFL had nothing to do with it.
the only reason debt was not from mismanagement was building the new high performance center, to the tune of some 30 million
thats where all of the clubs money went. all of the law suits and fines didnt help. it was the first time in the clubs 140 year history that they went in to debt.

carlton, for the last 15 years have been living off the prat family
collingwood where bankrupt in the 90s (Eddie often talks about it)
hawthorn had debt in the late 90s & early 2000s, hence all of the merger talk & selling games to tassie
all of those cases are of bad management
richmond for years has had a tiger fighting fund for debt.

no other club club can have a claim to be better its financial matters managed better in their history then Essendon

 

[Reykjavik]

Northey - 1987-1992
Balme - 1993-1997
Daniher - 1998-2007
Bailey - 2008-2011
Neeld - 2012-2013

Yeah a real succession of new coaches every two years.

Actrually wasnt referring to Melbourne specifically with the 2 years...more the recent trent we've seen with short terms across the board eg Sanderson.

But by all means get your hackles up if you want.

 

[Matt Stevic]

View attachment 81127

Why no adblock?

 

[Demonic Ascent]

is that before or after the AFL subsidy !!

What subsidy is that?

 

[dave10]

The Fairfax Press:
Having paid the banned Hird for his season in purgatory and signed the coach for a further two seasons in an overall cost of at least $2.5 million, Little's legal strategy has further placed the club in financial peril with lawyers bills now estimated at $2 million before Friday's court costs, albeit before insurance claims.

Read more: http://www.theage.com.au/afl/afl-news/essendon-pays-for-misguided-approach-20140919-10jkma.html#ixzz3DkvlleD9

The Bombers needed a $5.5 mil AFL guarantee last year for the first time ever, ever, as in never before ...

I have been informed that Paul Little has in recent weeks donated millions to the club and wiped out the debt that was carried on the True Value Solar Centre. This will be revealefed at the end of the year. I'm not sure Essendons financial plight is as concerning as the media are suggesting at present.

 

[The_Wookie]

no they didnt. the bank oked the loan the AFL had nothing to do with it.
the only reason debt was not from mismanagement was building the new high performance center, to the tune of some 30 million
thats where all of the clubs money went. all of the law suits and fines didnt help. it was the first time in the clubs 140 year history that they went in to debt.

carlton, for the last 15 years have been living off the prat family
collingwood where bankrupt in the 90s (Eddie often talks about it)
hawthorn had debt in the late 90s & early 2000s, hence all of the merger talk & selling games to tassie
all of those cases are of bad management
richmond for years has had a tiger fighting fund for debt.

no other club club can have a claim to be better its financial matters managed better in their history then Essendon

What utter tripe.

Almost every victorian club has benefactors. In fact any club with a decent history will.

Carlton has had the Pratts, Matthiesons, and others, Hawthorn had Dicker, Essendon had Evans, and now Little, Melbourne had Joe Gutnick and later the debt demolition under Stynes, Port Adelaide had Allan Scott, North and the Pies have had a few people chip in over the years.

 

[TheFVK]

meh the SANFL can afford it and I am sure the costs were considered .. and hopefully Mr Little will pay Essendon's and James Hirds huge legal bills before he leaves ...

Crows have their own license now so it's all on them now.

And even if they didn't, any money the SANFL dole out to them is only what they would have sucked out of Adelaide in the first place. Even with their Trigg penalties and drop off in sponsorship there's no way known they should have lost $2mill with an average crowd of 33K (and 6th highest membership).

SANFL has been hemorrhaging cash for years now.

 

[Kwality]

I have been informed that Paul Little has in recent weeks donated millions to the club and wiped out the debt that was carried on the True Value Solar Centre. This will be revealefed at the end of the year. I'm not sure Essendons financial plight is as concerning as the media are suggesting at present.

Did Mr Little assume David Evans contribution ($4.8 mil as I recall)?

Are you suggesting the AFL guarantee will no longer be required?

 

[dave10]

Did Mr Little assume David Evans contribution ($4.8 mil as I recall)?

Are you suggesting the AFL guarantee will no longer be required?

No I'm not. All I'm saying is that I'm told Little has provided significant funding and I believe the debt has been eliminated. I was told a few months ago the club was on track to ached an operating profit of circa $750K abd the club was trading well on the back if revenue growth in membership and sponsorship.

Extending thus further, the club has taken out insurance on the legal activities which mitigate against a substantial amount of the legal bills. Unless this change to a large degree, the year end result will be basically debt free, an operating profit and most likely balancing off the donations with all the one off expenses to exit in a strong financial shape, all be it with uncertainty and contingent liabilities and volatility in what to expect for 2015.