Financial survival of the AFL and its' 18 clubs

[HavUEvaSeenTheRain]

and what is collateral?

It's something the bank can take and sell to make good their money.
If they don't think they can make that much money off it, it wont be accepted.




The property market hasn't crashed YET.

It tends to be slow to move, so that's understandable...but the share market, which reacts much more quickly, has fallen by about 1/3 in the past month...Do you really think that wont flow through into other forms of investment?

As for the AFL making huge profits...they're not THAT big, and they'll almost certainly drop too....the effects of this will echo for years.

They don’t make “huge” profits because they don’t need to, it’s a not for profit organisation.
yes the Share market has dropped about 28% and could drop further but land/real estate is one of the safest assets.
Its pretty bloody good collateral and they would be able to factor in close to a 50% fall in prices. Add to that money in the bank the AFL have they would have absolutely zero problems. It would be about the safest debt they would be holding.

 

[Kwality]

As I said, there are questions if so much is taken that they can't meet obligations (in the short/medium term anyway), but if there are tens of millions sitting around that were intended for a use (Lathlain), but not committed to it, then WAFC would have nothing stopping it from taking them.

Even money that is 'committed' under various contracts can be renegotiated.


I'm not saying this will happen (WAFC wont want to kill the golden goose after all), just that it can, and I wouldn't be surprised if *some* funds were redirected.

Dont disagree, my point being its not as simple as the WAFC/AFL can direct the funds be transferred, full stop. For example if I wass a director (broad brush) I'd want the equivalent of the 2020 membership fees retained just in case it had to be refunded. .

 

[Kwality]

They don’t make “huge” profits because they don’t need to, it’s a not for profit organisation.
yes the Share market has dropped about 28% and could drop further but land/real estate is one of the safest assets.
Its pretty bloody good collateral and they would be able to factor in close to a 50% fall in prices. Add to that money in the bank the AFL have they would have absolutely zero problems. It would be about the safest debt they would be holding.

Looking at the Annual Report of the AFL it has guaranteed $50m to banks on behalf of 10 clubs & associated Leagues. Only 8 clubs did not require an AFL guarantee.
Agreements such as those between the AFL & Pacific Star Network (CrocNedia) over publication og the AFL Record are problematic where the AFL have the money but the income has disappeared.
The stadium agreements to supply games will be discussed, the buck stops somewhere.

 

[HavUEvaSeenTheRain]

Looking at the Annual Report of the AFL it has guaranteed $50m to banks on behalf of 10 clubs & associated Leagues. Only 8 clubs did not require an AFL guarantee.
Agreements such as those between the AFL & Pacific Star Network (CrocNedia) over publication og the AFL Record are problematic where the AFL have the money but the income has disappeared.
The stadium agreements to supply games will be discussed, the buck stops somewhere.

Sounds like the Vic government will be looking after them with any loan they need anyway

 

[Kwality]

Sounds like the Vic government will be looking after them with any loan they need anyway

There's no point the Vic Govt paying both parties in the disagreement over who picks up the tab over no games at the G - the AFL, the clubs or the MCC.


Cant see the Vic Govt funding anything outside Vic.

 

[telsor]

There's no point the Vic Govt paying both parties in the disagreement over who picks up the tab over no games at the G - the AFL, the clubs or the MCC.


Cant see the Vic Govt funding anything outside Vic.

No without some form of quid pro quo.

No idea what they'd want, but past deals (e.g. funding for Docklands) have include extending the GF at the G deal.

 

[NoobPie]

No without some form of quid pro quo.

No idea what they'd want, but past deals (e.g. funding for Docklands) have include extending the GF at the G deal.

The AFL is asking for a line of credit from the state government (I've heard $250million), presumably at sub commercial rate of interest

I would be very surprised if it is not received.

 

[Johnny Bananas]

I think the answer will be quite simple in the end. The AFL has the pockets to step in and save any club, and they will, especially if they're not Victorian. The most I could see happening is the poorest Victorian clubs merging (North and St Kilda), and even then mergers have proven unpopular in the past.

 

[Tasmanian saint]

I think the answer will be quite simple in the end. The AFL has the pockets to step in and save any club, and they will, especially if they're not Victorian. The most I could see happening is the poorest Victorian clubs merging (North and St Kilda), and even then mergers have proven unpopular in the past.

I always thought st kilda had the most debt in the afl buy a fair bit but I was very surprised when I read in the age a week or so ago that Brisbane were 17 million in debt you wonder how that could be true!

 

[telsor]

I think the answer will be quite simple in the end. The AFL has the pockets to step in and save any club, and they will, especially if they're not Victorian. The most I could see happening is the poorest Victorian clubs merging (North and St Kilda), and even then mergers have proven unpopular in the past.

Any, yes...but depending on how things go, their pockets may not be deep enough to save all.

and if they look at the years to come, and the need to pay off those debts, support for some of the larger money sinks, even outside Vic (Such as Bris, GC, GWS) could get 'reviewed'.

Some Vic clubs would also be in the firing line of course, but the AFL would be mindful of the revenue they would lose from losing games at their ground (Docklands) and drops in AFL memberships from having fewer Vic clubs, so some close calls might fall in favor of the Vic club(s).

 

[Kwality]

I think the answer will be quite simple in the end. The AFL has the pockets to step in and save any club, and they will, especially if they're not Victorian. The most I could see happening is the poorest Victorian clubs merging (North and St Kilda), and even then mergers have proven unpopular in the past.

Very optimistic view, the AFL guarantees ( e.g stadium agreements).
No chance the Vic taxpayer will fund the game outside Vic, nor should they.

 

[quotemokc]

The government has forced the halt of games and revenue therefore the government has to stump up for lost money. (this applies to all other businesses affected by government rules)

 

[Prince Imperial]

Any, yes...but depending on how things go, their pockets may not be deep enough to save all.

and if they look at the years to come, and the need to pay off those debts, support for some of the larger money sinks, even outside Vic (Such as Bris, GC, GWS) could get 'reviewed'.

Some Vic clubs would also be in the firing line of course, but the AFL would be mindful of the revenue they would lose from losing games at their ground (Docklands) and drops in AFL memberships from having fewer Vic clubs, so some close calls might fall in favor of the Vic club(s).

Indeed. If the only lifeline for the AFL and all the clubs is a large line of credit from the Victorian government, then that government is going to insist that the credit be directed to save Victorian clubs rather than interstate clubs.

 

[Kwality]

The government has forced the halt of games and revenue therefore the government has to stump up for lost money. (this applies to all other businesses affected by government rules)

Interesting that wasnt the case in WW2 ... I'm no lawyer but maybe those asking for Government just arent going to get it, we owe $heaps & are currently printing money:

The RBA is set to expand Australia's money supply, implementing quantitative easing for the first time ever as the coronavirus bites

Quantitative easing, or QE, is set to be implemented in Australia for the first time. Desperate to stimulate the economy, the RBA has flagged it will buy up government bonds to inject more money into the economy, amid the coronavirus outbreak. It follows the decision by the US Federal Reserve […]

www.businessinsider.com.au

 

[theyellowsash]

Only silly people. The virus can survive for up to three days on plastic. All those buttons...

Only losers and the mentally ill go to the pokies anyway. They should be removed from society entirely both to fix the scourge of the pokies and to prevent them spreading the virus as you say. But given crown was allowed to stay open while the gov was pretty much forcefully closing small businesses, I'm sure they will be the first thing to be reopened.

 

[Kwality]

Only losers and the mentally ill go to the pokies anyway. They should be removed from society entirely both to fix the scourge of the pokies and to prevent them spreading the virus as you say. But given crown was allowed to stay open while the gov was pretty much forcefully closing small businesses, I'm sure they will be the first thing to be reopened.

Have you borrowed Issys pulpit, the unhinged one !!! Bet it fits you perfectly.

 

[Rob]

Be interesting to see if the AFL have contemplated selling Docklands now that they basically own the freehold.

Wouldn't be a bad thing for the competition long term IMO.

 

[wild side]

Be interesting to see if the AFL have contemplated selling Docklands now that they basically own the freehold.

Wouldn't be a bad thing for the competition long term IMO.

Who would buy it?? The fed govt, coz they've got a bit on their plate.
No way should you sell in this market

 

[Kwality]

Who would buy it?? The fed govt, coz they've got a bit on their plate.
No way should you sell in this market

At the right price i.e land value less demo costs, tip there would be a buyer.

 

[Rob]

Who would buy it?? The fed govt, coz they've got a bit on their plate.
No way should you sell in this market

Ideally not of course. I'd expect commercial property prices aren't exactly going to go gangbusters in the next year.

But they might not have a choice.

 

[Dusty0004]

Be interesting to see if the AFL have contemplated selling Docklands now that they basically own the freehold.

Wouldn't be a bad thing for the competition long term IMO.

Collateral

 

[sumavich]

Interesting that wasnt the case in WW2 ... I'm no lawyer but maybe those asking for Government just arent going to get it, we owe $heaps & are currently printing money:

The RBA is set to expand Australia's money supply, implementing quantitative easing for the first time ever as the coronavirus bites

Quantitative easing, or QE, is set to be implemented in Australia for the first time. Desperate to stimulate the economy, the RBA has flagged it will buy up government bonds to inject more money into the economy, amid the coronavirus outbreak. It follows the decision by the US Federal Reserve […]

www.businessinsider.com.au

The US printed money, admittedly a much bigger economy, and that went ok.
More debt is our only choice under these circumstances

 

[Kwality]

The US printed money, admittedly a much bigger economy, and that went ok.
More debt is our only choice under these circumstances

Indeed, but we face the problem of paying back the debt with pesos not real dollars unless China pulls us out of trouble AGAIN.

 

[sumavich]

Yes China and maybe India but we got pesos for a while I fear

 

[FrakturedHalo]

So it begins.

Lol you do realise it was only switching off every second machine