Resource 2016 Annual Reports Thread - Club Comparisons post #002

Discussion in 'The Footy Industry' started by The_Wookie, Sep 3, 2016.

Put it out there
  1. telsor

    telsor Brownlow Medallist

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    As I say every year, Richmond's concise report is one of the least illuminating reports and hardest to compare to other clubs.

    'note 6', is a case of good timing though...It states that nothing significant has happened since the report was finalised that would effect the coming year (really, a standard/boilerplate declaration seen on most financial reports). A day later that was made however (Nov15), BLK announced they were stuffed.
     

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  2. telsor

    telsor Brownlow Medallist

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    Auditors tend to be a bit like bookies..They weigh their numbers against the chances...If they though the chance of an increased payout due to the Brownlow being handed back/taken was 90% likely, and would cost and estimated that it would cost $1Million, then the provision booked for it would most likely have been around $900k. Same with provisions generally...It's the accumulated best, weighted guess of the anticipated cost. Nobody is saying that will be the number, just that that's the best estimate at what the number will be.

    From memory, EFC's provisions went up by a bit under $4Million. If 'most' is covered by insurance, then the full payout must be enormous, because they wont be declaring provisions for that part.

    Even so, if that $4M is actually $4.1M (which would make it an exceptional estimate under the circumstances), it's still a noticable impact on the 2017 financial report.

    and yes, as Gigantor noted, it could also be $3.9M instead...again, an impact (although probably a less likely one).
     
  3. Muggs

    Muggs Premiership Player

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    You can always take advantage of this...

    The full financial report and auditor’s report will be sent to members on request, free of charge. Please email sgordon@richmondfc.com.au and a copy will be forwarded to you.
     
  4. Muggs

    Muggs Premiership Player

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    Auditors don't write the report or determine the numbers, they just verify what is in the report.

    That is not how accounting standards work, if your estimate is going to be $1million and its a "probable" payout, i,e. greater than 50% chance of payout the full $1 million should be recognised. You call it a provision to show it is uncertain. You don't recognise 500k. You do that kind of weighted guess on recurring payments like employee benefits (see below) not once off payments.

    edit* even if you did what your example suggested the extra 100k Should be disclosed as contingent liability as being a possible additional liability, that's not probable.

    The provision on this is a touch under 2.3mil, the rest of the increase in provisions (900k) was employee benefits, jumped by a lot percentage wise (up from 1.3mil) which to me looks like a bit of a reset while having a bad year to make future adjustments lower. Much the same way that impairment expense is going to reduce future deprecation.
     
  5. telsor

    telsor Brownlow Medallist

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    Damn! Last year they looked bad, but it's getting even worse.

    $1.8M loss. (last year 700K)
    $-10.9 million in net assets. ($-9.1M)
    $16.7M in net AFL distributions. ($15.5M) Even with this, revenue is well down at $48.7M from $51M last year.
    $8.8M in 'trade payables' to the AFL (marginally higher than last year...This is essentially an interest free loan as the AFL refuses to ask for it, knowing that doing so would drive them bankrupt).
     
  6. Muggs

    Muggs Premiership Player

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    May as well call it 14.3 Million, if not 16.8million. The AFL has also guaranteed a 8 Million commercial bill (drawn to 5.5mil) due to be repaid Dec next year, if Westpac does not refinance that is cash the AFL will need to cough up to prevent Brisbane going into liquidation. Heck even if Westpac does refinance Brisbane has no hope of paying it off based on current financial performance so effectively debt to the AFL.
     
  7. telsor

    telsor Brownlow Medallist

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    True, but I point it out more because it's a 'hidden' loan that you only really pick up on if you dig through the notes (particularly the 'going concern' section).
     
  8. Muggs

    Muggs Premiership Player

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    Agree,

    Going from memory on last years reports Brisbane not the only club that remains a going concern through such AFL debt, or due to AFL guarantees on normal debt.

    That guarantee i along with the letter of support from the AFL is also a key factor in being a going concern. Without the AFL guarantee no way could Brisbane get commercially obtained debt and not have it called in due breaching some kind of debt covenant (e.g LVR or Debt Ratio) let alone debt at an average interest of 2.42%.

    Brisbane is only afloat by the good graces of the AFL for a variety of reasons.
     
  9. Pedantic

    Pedantic Team Captain

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  10. The_Wookie

    The_Wookie Moderator

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    Statements
    Annual Reports
    Consolidated Profit/Loss
    • Hawthorn - $4,660,824
    • Melbourne - $720,218
    • Richmond - ($80,257)
    • Brisbane - ($1,783,506)
    • Essendon - ($9,825,37)
    Revenue
    • Hawthorn - $69,779,234
    • Essendon - $53,499, 545
    • Brisbane - $48,707,494
    • Melbourne - $47,552,639
    • Richmond - $47,538,233
    AFL Revenue
    • Brisbane - $16,753,407
    • Melbourne - $12,758,742
    • Richmond - $10,478,488
    • Essendon - $9,824,470
    • Hawthorn - $9,788,488
    Membership Revenue
    • Hawthorn - $12,422,423
    • Essendon - $10,100,110
    • Melbourne - $7,578,057 (includes fundraising)
    • Brisbane - $5,602,557 (includes Gate reciepts)
    Membership Revenue per Member
    • Brisbane - $240.59 (includes Gate reciepts)
    • Melbourne - $193.58 (includes fundraising)
    • Essendon - $175.67
    • Hawthorn - $164.86
    Sponsorship Revenue
    • Hawthorn - $14,947,662
    • Essendon - $12 ,493 ,197
    • Richmond - $10,575,059
    • Brisbane - $9,599,634
    • Melbourne - $8,916,023
    Pokies and Hospitality Revenue
    • Hawthorn - $18,338,797
    • Brisbane - $15,192,965
    • Essendon - $13,540,006
    • Melbourne - $12,193,285
    • Richmond - $7,217,846
    Pokies and Hospitality Profit
    • Brisbane - $4,207,183
    • Melbourne - $3,620,569
    • Essendon - $2,456,768
    Gate Reciepts and Match Returns
    • Melbourne - $4,592,047
    • Hawthorn - $4,372,640
    • Essendon - $216 , 850
    Merchandise
    • Hawthorn - $4,020,932
    • Essendon - $2,268,964
    • Merchandise - $986,269
    • Brisbane - $817,849
    Football Department Spend
    • Essendon - $22,981,249
    • Richmond - $22,794,109
    • Brisbane - $22,236,384
    • Melbourne - $21,927,456
    • Hawthorn - Not completely defined.
    AFL Equalisation Levy
    • Hawthorn - $1,301,588
    • Essendon - $350,004
    Assets
    • Hawthorn - $62,414,117
    • Essendon - $47, 817, 356
    • Richmond - $29,521,323
    • Melbourne - $17,484,015
    • Brisbane - $8,195,809
    Liabilities
    • Hawthorn - $20,814,863
    • Essendon - $20,363,757
    • Brisbane - $19,067,673
    • Melbourne - $12,644,379
    • Richmond - $5,430,252
    Net Assets
    • Hawthorn - $41,559,254
    • Essendon - $27,453 , 599
    • Richmond - $24,091,071
    • Melbourne - $4,839,636
    • Brisbane - ($10,871,864)
    AFL Guarantees
    • Brisbane - The Company has an $8.0 million commercial bill facility with Westpac which is secured by a guarantee from the AFL. The facility expires 31 December 2017. The facility was drawn to $5.5 million at year end
    • Melbourne - Actually two guarantees of 0.896 million and 4.5 million, the latter of which is currently drawn to 3.7 million and has a maturity date of 31 December 2017
     
    Last edited: Nov 23, 2016
  11. Muggs

    Muggs Premiership Player

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    Only issue I see is in the spin...

    “Two of our other financial priorities over recent years have been increasing the level of investment in our Football Department and reducing debt levels, both in terms of bank debt and gaming machine entitlement debt. Investment in our Football Department grew by $635k during 2016, taking the increased investment since 2013 to $1.9m. Our overall debt position reduced by $561k in 2016, with debt reduction since 2013 totaling $2.7m.


    Agree gaming debt went down (by amount stated), but bank debt went up on a net basis by 6k. Trivial amount.

    Suspect it's just copying last years statement and not realising.

    Otherwise positive.

    One thing I noted is you carrying land at cost unlike EFC at fair value so worth remembering if doing a comparison.
     

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  12. Muggs

    Muggs Premiership Player

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    If you lisiting these Wookie from the Melb report note 13

    The facility maturity date is 31 December 2017 and is supported by a $0.896m guarantee by the Australian Football League. The facility is also secured by a fixed and floating charge over all existing and future assets of the Club.

    And

    The facility provides the Club to draw funds up to a limit of $4.500m (comprising $0.400m overdraft and a $4.100m commercial bill facility). The commercial bill facility was drawn to $3.700m (FY15: $3.100m) as at 31 October 2016 (overdraft undrawn).The maturity date is 31 December 2017 and the amount drawn at 31 October 2016 is classified as a non-current liability. This facility can be used as either an overdraft facility or a commercial bill facility. This facility is supported by a $4.500m guarantee provided by the Australian Football League.

    Wouldn't be surprised to find most clubs this arrangement to get a lower interest rate.
     
  13. Pedantic

    Pedantic Team Captain

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    Yep, true. It's explained better in the directors' report:

    "Overall debt comprised of bank debt and gaming machine entitlement debt, and this has reduced by $561k in 2016, which is completely attributable to gaming machine entitlement debt. Reducing debt has been a focus of the Club over the last three years, with total debt having reduced by $2.658m since 2013, comprising of a $1.680m reduction in gaming machine entitlement debt and a $0.978m reduction in bank debt."
     
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  14. Rob

    Rob Brownlow Medallist

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    Yeah that's pretty common amongst (a growing number of) cash strapped clubs. It would significantly lower the interest bill on such loans.
     
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  15. Kwality

    Kwality Brownlow Medallist

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    Not unique to the Lions, just not understood by many, just look back ..
    How are the Tiges ...
     
  16. telsor

    telsor Brownlow Medallist

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    St Kilda does similar, but I'm not sure about any other clubs doing so. (nb. ALL clubs would have some debts to the AFL...it's inherent in the relationship, I'm talking about significant trading debts to the AFL not being paid )

    Feel free to point out any other clubs that have $5M+ owing to the AFL in such a way.
     
  17. telsor

    telsor Brownlow Medallist

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    You don't need to be cash strapped to take advantage of the lower interest rate such a guarantee would provide.
     
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  18. Rob

    Rob Brownlow Medallist

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    If you've got the cash then you don't need to take out bank loans in the first place.
     
  19. Kwality

    Kwality Brownlow Medallist

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    You do need an AFL guarantee if you are unable to meet your debts as and when they fall due - that's why the Bombers need the guarantee last year for the first time in the clubs history, that's why Benny Gale was smiling (only last year) when able to announce the Tiges no longer needed an AFL guarantee, its why the Pies don't have an AFL guarantee.
     
  20. The_Wookie

    The_Wookie Moderator

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    The Geelong Football Club has announced a net profit of $2.3 million for the 2016 financial year.

    The club’s net asset position improved by 28.6% to $9.9 million and revenue increased by 10% to $54.6 million.

    The major factors in the financial outcome include:

    * The club's continued investment in the football department, with total outlay rising by $1 million to $23.2 million.

    * An increase in profit from the club's commercial operations, with profit rising by 3% to $20.1 million. This is largely due to increases in sponsorship and membership. The club achieved a 13% rise in membership to 52,195.

    * Home attendance (including home games at the MCG and Etihad Stadium) increased from 29,127 to 30,497.

    * The “Our Ambition’ fundraising campaign was a success, generating significant funds that will be applied now and into the future.

    http://www.geelongcats.com.au/news/2016-11-28/cats-post-profit

    annual report is here
    http://s.afl.com.au/staticfile/AFL ...olidated Financial Statements - Signed_V2.pdf
     
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  21. The_Wookie

    The_Wookie Moderator

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    Statements
    Annual Reports
    Consolidated Profit/Loss
    • Hawthorn - $4,660,824
    • Geelong - $2,255,116
    • Melbourne - $720,218
    • Richmond - ($80,257)
    • Brisbane - ($1,783,506)
    • Essendon - ($9,825,37)
    Revenue
    • Hawthorn - $69,779,234
    • Geelong - $54,650,813
    • Essendon - $53,499, 545
    • Brisbane - $48,707,494
    • Melbourne - $47,552,639
    • Richmond - $47,538,233
    AFL Revenue
    • Brisbane - $16,753,407
    • Melbourne - $12,758,742
    • Richmond - $10,478,488
    • Essendon - $9,824,470
    • Hawthorn - $9,788,488
    • Geelong - $9,512,533
    Membership Revenue
    • Geelong - $14,341,800 (includes gate reciepts)
    • Hawthorn - $12,422,423
    • Essendon - $10,100,110
    • Melbourne - $7,578,057 (includes fundraising)
    • Brisbane - $5,602,557 (includes Gate reciepts)
    Membership Revenue per Member
    • Geelong - $274.77 (includes gate reciepts)
    • Brisbane - $240.59 (includes gate reciepts)
    • Melbourne - $193.58 (includes fundraising)
    • Essendon - $175.67
    • Hawthorn - $164.86
    Sponsorship Revenue
    • Geelong - $16,079,494 (includes fundraising)
    • Hawthorn - $14,947,662
    • Essendon - $12 ,493 ,197
    • Richmond - $10,575,059
    • Brisbane - $9,599,634
    • Melbourne - $8,916,023
    Pokies and Hospitality Revenue
    • Hawthorn - $18,338,797
    • Brisbane - $15,192,965
    • Essendon - $13,540,006
    • Melbourne - $12,193,285
    • Geelong - $9,060,375
    • Richmond - $7,217,846
    Pokies and Hospitality Profit
    • Brisbane - $4,207,183
    • Melbourne - $3,620,569
    • Essendon - $2,456,768
    Gate Reciepts and Match Returns
    • Melbourne - $4,592,047
    • Hawthorn - $4,372,640
    • Essendon - $216 , 850
    Merchandise
    • Hawthorn - $4,020,932
    • Essendon - $2,268,964
    • Geelong - $1,742,436
    • Merchandise - $986,269
    • Brisbane - $817,849
    Football Department Spend
    • Geelong - $23,172,565
    • Essendon - $22,981,249
    • Richmond - $22,794,109
    • Brisbane - $22,236,384
    • Melbourne - $21,927,456
    • Hawthorn - Not completely defined.
    AFL Equalisation Levy
    • Hawthorn - $1,301,588
    • Geelong - $390,000
    • Essendon - $350,004
    Assets
    • Hawthorn - $62,414,117
    • Essendon - $47, 817, 356
    • Geelong - $35,036,809
    • Richmond - $29,521,323
    • Melbourne - $17,484,015
    • Brisbane - $8,195,809
    Liabilities
    • Geelong - $25,105,827
    • Hawthorn - $20,814,863
    • Essendon - $20,363,757
    • Brisbane - $19,067,673
    • Melbourne - $12,644,379
    • Richmond - $5,430,252
    Equity
    • Hawthorn - $41,559,254
    • Essendon - $27,453 , 599
    • Richmond - $24,091,071
    • Geelong - $9,930,982
    • Melbourne - $4,839,636
    • Brisbane - ($10,871,864)
     
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  22. Muggs

    Muggs Premiership Player

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    That is why you need one, without this guarantee you cant obtain finance. .

    However if you can also get one that results in a lower interest rate why not? Guarantees in the business world are often used between related parties,
    (Parent company and subsidiaries, subsidiaries cross guaranteeing, Joint ventures etc) providing additional security to lower the cost of capital.

    Looking at last years AFL report, they provided guarantees to 11 of the 18 clubs, and all clubs in respect of player payments.

    Even if not a formal guarantee suspect the other 7 clubs all have letters of support from the AFL indicating the AFL is willing to provide cash if needed.
     
  23. Muggs

    Muggs Premiership Player

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    That is a nice turnaround for Geelong.
     
  24. telsor

    telsor Brownlow Medallist

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    Clubs were getting finance long before the AFL started guaranteeing loans.

    The difference is if the loan is far more likely to be about if the loan is at 6% or 3%.

    Benny Gale was smiling because the club was debt free...Removing the guarantee was an incidental consequence of that, not least because, in effect, it's still there...As it is for all clubs. If a financially strong club like WCE went to the bank to help finance their new training facility, the AFL would guarantee it, and WCE would probably receive better terms as a result.
     
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  25. telsor

    telsor Brownlow Medallist

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    So if you have a loan you're 'cash strapped'?

    I suppose that means most large companies in the world are struggling....BHP must be practically at deaths door.