Strategy Should the West Coast Eagles buy the Melbourne FC?

[kranky al]

Maybe just buy a racehorse , it would be much cheaper and easier to manage but knowing our list management and recruiting staff we would probably end up with a donkey.

Call it pr....


Ahhhhhhh nevermind.....

 

[kranky al]

We'd have to change our colours to black and white if that happened

Poty contender..

 

[RookiePick]

What would be the point?

Gee, Glenn Maxwell looks different when he wears his wife's delicates!

 

[paran]

Top idea, but how much would MCG cost?
As for MFC purchase, do it. Clear out the riffraff, get brian cook to run it.

 

[squashface]

I feel strongly about this thread

 

[eagle eyed]

Maybe just buy a racehorse , it would be much cheaper and easier to manage but knowing our list management and recruiting staff we would probably end up with a donkey.

Nah, it would just be injured.

 

[jesterwester]

Nah, it would just be injured.

Or be a late withdrawal to every race.

 

[lmach]

Better off buying greyhounds. I think there's some good trainers who are recently out of work

 

[Obeanie1]

The Facts.
Last year we recorded a profit after tax of $4.68 million, up from $4.4 million the previous year. This is after paying $5.2 million during that same period in royalties. Our revenue increased to over $57 million in a year that was pretty ordinary in terms of on field achievements, ultimately failing to make the finals, again.

The end result of all this is that we have we have around $45 million in cash and equivalents sitting in the bank, not doing a whole lot.*

To make better use of these funds, should we look to acquire smaller football clubs, such as Melbourne FC?

Melboune’s Situation.
With Paul Roos in charge the on field performance improved slightly, with less significant defeats and generally being “more competitive” than in previous years.

They turned a profit of almost $285,000 after a loss of more than $3 million the previous year. Total equity for the club currently sits at about $3.56 million (we have almost $40 million). They have total assets of just over $16 million (we have over $50 million)


The Case For.
It was a very poor year on field for Melbourne last year, albeit better than previous years, yet they still managed to turn a profit. They have a playing list now that has some of the best young talent in the country having traded away some of the worst (Morton….) and a coach that is widely regarded as one of the best. They are, as their fans will no doubt remind you should the opportunity arise, one of the oldest clubs in the competition and have the best ground in the world as their home.

This all combines for significant upside and growth in profitability in the coming years as their notoriously wealthy, but fair weather, supporter base returns form the slopes to support their once great team.

The extra sway this would give our club in terms of voting matters (an increase of 100%) with the AFL could also prove beneficial. There may also be upside in terms of economies of scale, by employing only one lot of recruiters, and one membership department. It may also result in a greater number of Melbourne memberships held by WA residents and West Coast ones held in Vic because of the connections the clubs would share.

The Case Against.
This would likely cause some serious friction throughout the broader sporting community as takeovers are generally not the done thing.

They are Melbourne and they have baggage. Ex-players such as Gary Lyon and the Ox are not the sort of people that we would generally want associated with our club. They bring very little to the table in terms of positive image having been all but found guilty of throwing games for the purpose of a better player to fail to develop. This may have a negative impact on us and drag us down to the level of lesser clubs.

Currently our own on field performance is not up to scratch and it may be best if we focussed on rectifying that before taking on more challenging tasks, which making Melbourne financially successful would no doubt be.

The Cost?
I suggest, in light of a profit of less than $300,000 last year, a price of $5.5 million would be seriously considered by those who currently own Melbourne.

This would represent a significant premium on the net assets (assets less liabilities) of Melbourne of roughly $2 million, or roughly 55% increase.

The price would represent a multiple of about 18.5 of the 2014 earnings, resulting in a return of around 5.4% annually if currently profitability was maintained (higher than we are currently getting on the cash in bank) but with the potentially for significant growth.

This would be funded entirely by idle cash and still leave the club with over $40 million in the bank and in a very strong state financially.

Thoughts?

All infor used has been acquired from the 2014 annual reports: http://footyindustry.com/files/2014 Reports/AFL/Melbourne 2014 annual Report.pdf

http://footyindustry.com/files/2014 Reports/AFL/West Coast Eagles 2014 Annual Report.pdf



*likely to be used when we move training facilities.

You have obviously put a lot of thought into this and presented an interesting scenario.

As with every investment decision you need to ask 'what are you hoping to achieve by taking this path'?

If you believe the Eagles would gain any on field advantage through a joint drafting / trading strategy I am certain the AFL and even the ACCC would squash that in an instant.

If it was for purely financial gain I suggest the club would be better of investing in other areas simply to spread the risk and look for returns from other sectors.

The backlash from the Melbourne traditional supporter base is another unknown. Members may well stop buying memberships and let the Eagles foot the bill whilst still supporting them. Other may just stop supporting an Eagles owned Demons. Big unknown and big risks IMO.

I wonder if the club has a share portfolio?

Buy shares in the four big banks and other blue chip stocks and over the long term you simply don't lose and provide a hedge against inflation whereas interest earning deposits do not.

 

[Johnno22]

You have obviously put a lot of thought into this and presented an interesting scenario.

As with every investment decision you need to ask 'what are you hoping to achieve by taking this path'?

If you believe the Eagles would gain any on field advantage through a joint drafting / trading strategy I am certain the AFL and even the ACCC would squash that in an instant.

If it was for purely financial gain I suggest the club would be better of investing in other areas simply to spread the risk and look for returns from other sectors.

The backlash from the Melbourne traditional supporter base is another unknown. Members may well stop buying memberships and let the Eagles foot the bill whilst still supporting them. Other may just stop supporting an Eagles owned Demons. Big unknown and big risks IMO.

I wonder if the club has a share portfolio?

Buy shares in the four big banks and other blue chip stocks and over the long term you simply don't lose and provide a hedge against inflation whereas interest earning deposits do not.

Maybe we should just buy Greece, going cheap I believe.

 

[Stereophonic]

Even if, well.. even if.. its a massive conflict of interest. I would rather buy Eddie McGuire.

 

[crazywildhorse]

So the Google app on my phone for some reasob suggested I might be interested in this thread. I don't know how the algorithms came up with that. Anyway as far as I am concerned, this is an early contender for thread of the year. But to throw fuel on the fire may be, I think this illustrates what I've always theorised. Your side is run more like a north American franchise, whereas the rest of the AFL tends to pretend it is community/traditionally based.

 

[mulehoops]

Buy the MCG, and refuse to let anyone play there. All matches at the MCG get moved to Subi, and we get 18 odd home games a year.

Yes, because we are a force to be reckoned with at Subi.

 

[bkozican]

we could just buy better players...

 

[Johnno22]

Yes, because we are a force to be reckoned with at Subi.

Let's put in an offer at least and go to the bargaining table, at worst we will end up with the pie franchise at the MCG

 

[pantskyle]

I prefer we buy a solid gold house and a rocket car.

 

[ziad]

Let's put in an offer at least and go to the bargaining table, at worst we will end up with the pie franchise at the MCG

We could benefit from a reserves team in Melbourne and gain reciprocal seating rights for MCG games.

 

[bombard]

I prefer we buy a solid gold house and a rocket car.

 

[pantskyle]

 

[bombard]

We can afford to do this:

 

[Adzam]

we could just buy better players...

Oh come on that's just silly

 

[Dan]

The Facts.
Last year we recorded a profit after tax of $4.68 million, up from $4.4 million the previous year. This is after paying $5.2 million during that same period in royalties. Our revenue increased to over $57 million in a year that was pretty ordinary in terms of on field achievements, ultimately failing to make the finals, again.

The end result of all this is that we have we have around $45 million in cash and equivalents sitting in the bank, not doing a whole lot.*

To make better use of these funds, should we look to acquire smaller football clubs, such as Melbourne FC?

Melboune’s Situation.
With Paul Roos in charge the on field performance improved slightly, with less significant defeats and generally being “more competitive” than in previous years.

They turned a profit of almost $285,000 after a loss of more than $3 million the previous year. Total equity for the club currently sits at about $3.56 million (we have almost $40 million). They have total assets of just over $16 million (we have over $50 million)


The Case For.
It was a very poor year on field for Melbourne last year, albeit better than previous years, yet they still managed to turn a profit. They have a playing list now that has some of the best young talent in the country having traded away some of the worst (Morton….) and a coach that is widely regarded as one of the best. They are, as their fans will no doubt remind you should the opportunity arise, one of the oldest clubs in the competition and have the best ground in the world as their home.

This all combines for significant upside and growth in profitability in the coming years as their notoriously wealthy, but fair weather, supporter base returns form the slopes to support their once great team.

The extra sway this would give our club in terms of voting matters (an increase of 100%) with the AFL could also prove beneficial. There may also be upside in terms of economies of scale, by employing only one lot of recruiters, and one membership department. It may also result in a greater number of Melbourne memberships held by WA residents and West Coast ones held in Vic because of the connections the clubs would share.

The Case Against.
This would likely cause some serious friction throughout the broader sporting community as takeovers are generally not the done thing.

They are Melbourne and they have baggage. Ex-players such as Gary Lyon and the Ox are not the sort of people that we would generally want associated with our club. They bring very little to the table in terms of positive image having been all but found guilty of throwing games for the purpose of a better player to fail to develop. This may have a negative impact on us and drag us down to the level of lesser clubs.

Currently our own on field performance is not up to scratch and it may be best if we focussed on rectifying that before taking on more challenging tasks, which making Melbourne financially successful would no doubt be.

The Cost?
I suggest, in light of a profit of less than $300,000 last year, a price of $5.5 million would be seriously considered by those who currently own Melbourne.

This would represent a significant premium on the net assets (assets less liabilities) of Melbourne of roughly $2 million, or roughly 55% increase.

The price would represent a multiple of about 18.5 of the 2014 earnings, resulting in a return of around 5.4% annually if currently profitability was maintained (higher than we are currently getting on the cash in bank) but with the potentially for significant growth.

This would be funded entirely by idle cash and still leave the club with over $40 million in the bank and in a very strong state financially.

Thoughts?

All infor used has been acquired from the 2014 annual reports: http://footyindustry.com/files/2014 Reports/AFL/Melbourne 2014 annual Report.pdf

http://footyindustry.com/files/2014 Reports/AFL/West Coast Eagles 2014 Annual Report.pdf



*likely to be used when we move training facilities.

 

[Calcium Man]

Can't wait till Melbourne fans find this thread

 

[bombard]

Can't wait till Melbourne fans find this thread

Yeah but there's only like three of them. There's a lot of internet for them to cover.

 

[Euro Star]

So the Google app on my phone for some reasob suggested I might be interested in this thread. I don't know how the algorithms came up with that. Anyway as far as I am concerned, this is an early contender for thread of the year. But to throw fuel on the fire may be, I think this illustrates what I've always theorised. Your side is run more like a north American franchise, whereas the rest of the AFL tends to pretend it is community/traditionally based.

Is that because we're financially successful or because a random supporter on a forum started a thread?