Club Mgmt. 2016 Essendon Financials Statements

[DonsRule]

2016 Financial result
November 15, 2016 7:55 PM

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Essendon Football Club has recorded an operating loss of $9.8 million for the 2016 financial year.

The Court of Arbitration for Sport decision had a number of direct and indirect financial impacts on the Club’s bottom line, including;

• The net additional cost of player compensation claims and legal fees - $4.5 million
• The associated costs of the short-term contracted player program - $1.5 million
• A reduction in consumer and commercial revenues, and match receipts - $3.1 million

In addition, there was a non cash cost of $806,000 in writing off certain assets at Windy Hill, which are no longer in use, per accounting standards.

CEO, Xavier Campbell, said the abnormal costs to the business in the 2016 financial year were disappointing but not unexpected given the circumstances.

“Our club has experienced a unique set of challenges this season, and while we’ve been stringent in our financial operations, a number of one-off costs severely impacted the financial result,” Campbell said.

“Shortly after the CAS decisions, the Board and administration implemented serious measures to respond to these challenges, including a range of cost cutting measures and identifying greater efficiencies across the business.

“With the abnormal costs to our business now largely behind us, we are confident that our underlying business model, debt reduction plan and strategic priorities, will return Essendon to a position of strength in the coming years.

“Our debt position currently stands at $9,006,603. We expect debt levels to peak during 2017 and our strong cash flows from normal operations will then allow us to begin paying down the debt.

“Despite these issues, we have taken a number of important steps to ensure a positive future for our club both on and off the field and I am confident we can now transition into a new era with a strong sense of optimism and purpose.

“The executive team, with the support of the Board, has laid the foundation for our comeback as a football club in line with our vision to be the most respected, inclusive and successful sporting club in Australia.”

“The unwavering support of our passionate members, new and existing commercial partners, and other key stakeholders continue to be a great strength of our club.”

Key points of 2016 Financial Result:

• Net assets - $27,453,599
• Total Revenue - $53,499,545
• Membership Tally – 57,494
• Total debt position - $9,006,603
• Cash at bank - $2,904,392

2016 Annual Report

http://www.essendonfc.com.au/news/2016-11-15/2016-financial-result

 

[Barry Roundhouse]

9.8 mil.. yikes.

4.5 mil in player compensation is nice to see tho. they deserve it.

 

[tesla1962]

2016 Financial result
November 15, 2016 7:55 PM

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Essendon Football Club has recorded an operating loss of $9.8 million for the 2016 financial year.

The Court of Arbitration for Sport decision had a number of direct and indirect financial impacts on the Club’s bottom line, including;

• The net additional cost of player compensation claims and legal fees - $4.5 million
• The associated costs of the short-term contracted player program - $1.5 million
• A reduction in consumer and commercial revenues, and match receipts - $3.1 million

In addition, there was a non cash cost of $806,000 in writing off certain assets at Windy Hill, which are no longer in use, per accounting standards.

CEO, Xavier Campbell, said the abnormal costs to the business in the 2016 financial year were disappointing but not unexpected given the circumstances.

“Our club has experienced a unique set of challenges this season, and while we’ve been stringent in our financial operations, a number of one-off costs severely impacted the financial result,” Campbell said.

“Shortly after the CAS decisions, the Board and administration implemented serious measures to respond to these challenges, including a range of cost cutting measures and identifying greater efficiencies across the business.

“With the abnormal costs to our business now largely behind us, we are confident that our underlying business model, debt reduction plan and strategic priorities, will return Essendon to a position of strength in the coming years.

“Our debt position currently stands at $9,006,603. We expect debt levels to peak during 2017 and our strong cash flows from normal operations will then allow us to begin paying down the debt.

“Despite these issues, we have taken a number of important steps to ensure a positive future for our club both on and off the field and I am confident we can now transition into a new era with a strong sense of optimism and purpose.

“The executive team, with the support of the Board, has laid the foundation for our comeback as a football club in line with our vision to be the most respected, inclusive and successful sporting club in Australia.”

“The unwavering support of our passionate members, new and existing commercial partners, and other key stakeholders continue to be a great strength of our club.”

Key points of 2016 Financial Result:

• Net assets - $27,453,599
• Total Revenue - $53,499,545
• Membership Tally – 57,494
• Total debt position - $9,006,603
• Cash at bank - $2,904,392

2016 Annual Report

http://www.essendonfc.com.au/news/2016-11-15/2016-financial-result

Has the BF financial guru laughflog verified this?

 

[Eleven 38]

4.5mill doesn't seem a lot for compensation of 34players.

Surely there has to be more than that.

1 player had to give his brownlow to Sam Mitchell that's worth 2mill atleast.

 

[EnolaGay]

4.5mill doesn't seem a lot for compensation of 34players.

Surely there has to be more than that.

1 player had to give his brownlow to Sam Mitchell that's worth 2mill atleast.

I don't think all compensation has been completed, I heard somewhere in the media that Jobe and Dyson's hadn't been done, for example.

 

[Lore]

4.5mill doesn't seem a lot for compensation of 34players.

Surely there has to be more than that.

1 player had to give his brownlow to Sam Mitchell that's worth 2mill atleast.

I imagine they're probably not finished settling all claims yet. Guys that have only lost a year's wages in a bush league (+ health/reputation) probably don't get much in the way of compensation anyway, relatively speaking. It's more the ones that are still playing and lost their wages, lost their match fees (in Crameri's case, the Grand Final prize money had he played), other bonuses and sponsorship money, or guys that have lost opportunities working for AFL clubs (such as Spike at GWS or Fletch's game day role).

 

[TheGreatBarryB]

9.8 mil.. yikes.

4.5 mil in player compensation is nice to see tho. they deserve it.

Jobe himself deserves that amount. Surely that's not all the compo payments?

 

[Old Campaigner]

Better get a big boost to the memberships and ticket sales or it mightn't be pretty this time next year

 

[Falcon27]

4.5mill doesn't seem a lot for compensation of 34players.

Surely there has to be more than that.

1 player had to give his brownlow to Sam Mitchell that's worth 2mill atleast.

It says 'net additional compensation', which would mean what the club had paid over and above other sources such as insurance and the AFL. I would say the AFL has footed a lot more of the compensation to ensure it did not drag on.

 

[Old Campaigner]

It says 'net additional compensation', which would mean what the club had paid over and above other sources such as insurance and the AFL. I would say the AFL has footed a lot more of the compensation to ensure it did not drag on.

It's probably a good thing for someone to ask about at the AGM

 

[JayJ20]

If ever you see a club self-implode in dramatic fashion, this is it.

They better hope that things dramatically improve on-field in the next few years. I think most of us expect it to happen and rightfully so, but if the club just expects this, then it is in serious trouble. If they remain in mediocrity, I think many members will have enough and turn their attention elsewhere. Critical next 3 years.

 

[Barry Roundhouse]

I thought all the current players got their contracts paid for this year (minus 1 dollar or what ever they had to withhold) and i assumed this was above that?

 

[boncer34]

Jesus christ the negativity in this places exhausts me.

 

[Lore]

If ever you see a club self-implode in dramatic fashion, this is it.

They better hope that things dramatically improve on-field in the next few years. I think most of us expect it to happen and rightfully so, but if the club just expects this, then it is in serious trouble. If they remain in mediocrity, I think many members will have enough and turn their attention elsewhere. Critical next 3 years.

Did you read the quotes from XC in the article that DonsRule linked and quoted? Talking about the changes they've made, when they expect the debt to peak, and how manageable it is with our cashflow. It doesn't sound like they have their heads in the sand about it. There's also a link to the annual report if you don't want to take his word for it.

 

[Bunk Moreland]

$4.5m is the cost net of insurance. Players would have received a lot more.

No doubt some players would have received over the odds in terms of compensation and that wouldn't be covered by insurance.

We had to retain Hurley and Hooker etc and it was a way of giving them more money outside the cap.

 

[BomberTime]

"I'm just going over our annual report...boy did we take it on the chin last year".

 

[Doss]

Those figures ain't pretty.

The only positive is that the club's adopted a 'rip the bandaid off' approach in copping the losses that were inevitably going to come, so things will begin to head in the right direction again next year.

 

[yaco55]

Bunk is right about the 4.5m as the rest was covered by insurance - Though as posted yesterday in the Watson thread about half the claims have been settled with a few still being negotiated - My guess is the club has factored that into their projections for the 2016 financial statements - Club will need three strong years to wipe out that debt - Maybe even four years.

 

[Sammymoite]

**** sake it feels like we can't get away from this whole saga. Shit.

Stephen dank can suck a fat one

Paul little is a billionaire, surely he can just chuck in 10 million and erase it immediately? Would only be like 5 bucks to him wishful thinking!

 

[Bombermania]

I once heard you receive something like a million dollars for winning a premiership, if that is right then a few flags would do wonders.

The results are okay, the club will need to better manage its finances in future, besides the player payments and looking after the players that recommitted to the club, our financial management has been a bit like the way we've been playing.

After the release of last years financials, I commented that if we could get through 2016 without losing the plot, we would start to see some improvement, its only a small part of the financials but having $2m sitting in the bank is a positive, and despite the fall off in crowds and memberships, we still had healthy revenues.

We just have to learn not to waste money on BS like we have at times in recent years.

 

[Old Campaigner]

After the release of last years financials, I commented that if we could get through 2016 without losing the plot, we would start to see some improvement, its only a small part of the financials but having $2m sitting in the bank is a positive, and despite the fall off in crowds and memberships, we still had healthy revenues.

The problem is twofold. 1) We've borrowed what cash we do have, and 2) we have about $10 million in debt to pay off in the next 12 months which means we'll need to have a bumper season for memberships and gate takings or we're going cap in hand to the AFL

I'd say next year will make or break us from a financial point of view, this year looks bad but next year may actually be bad if things don't fall into place.

(by bad I mean forced to cut into footy department spending and other programs that keep the club competitive in order to save enough money to pay off those debts - I doubt we'd ever go insolvent)

 

[rumply]

not as bad as I was expecting tbh. Still seeing red after yesterdays goings on, at least the club looks to be managing the bottom line best they can & got some cash so live to fight another day.

I think some might be worrying unnecessarily about these things. If worse came to worst, a bit of a fund raising drive including a phone call to Uncle Pauly would solve any issues fairly quickly.

 

[Harlequin]

Whilst 9.8m isn't pretty I was expecting a bigger loss.

It's onwards and upwards from here

 

[ezard15]

This and the Brownlow being awarded to players that didn't actually win it has be in full sooky bub mode again.

Probably the less I say the better.

Anyone got a genuinely informed view about what the financials will actually mean long term? (as opposed to just guess work)

I'm guessing those figures have already factored Paul Little donating as much as if not more than he was prepared to

 

[Mercurial89]

The problem is twofold. 1) We've borrowed what cash we do have, and 2) we have about $10 million in debt to pay off in the next 12 months which means we'll need to have a bumper season for memberships and gate takings or we're going cap in hand to the AFL

I'd say next year will make or break us from a financial point of view, this year looks bad but next year may actually be bad if things don't fall into place.

(by bad I mean forced to cut into footy department spending and other programs that keep the club competitive in order to save enough money to pay off those debts - I doubt we'd ever go insolvent)

Why do we have to pay the debt back next year? Why would we go to the AFL?