Club Mgmt. 2016 Essendon Financials Statements

[ezard15]

Just another question. What are people's thoughts on how the opposition clubs view the compensation payment with regard to the salary cap?

In essence werent we able to retain most of our good players by paying outside the salary cap?

Doesn't this go against the spirit of having a salary cap?

 

[Old Campaigner]

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

Because we have over $10mil in current liabilities. That means debt that needs to be paid off within 12 months. Which means we need to have at least $10 million in cash at some point over the next year that hopefully doesn't come from cost cutting in areas that affect the club's performance. We go to the AFL if we can't come up with that $10 million

 

[Old Campaigner]

Just another question. What are people's thoughts on how the opposition clubs view the compensation payment with regard to the salary cap?

In essence werent we able to retain most of our good players by paying outside the salary cap?

Doesn't this go against the spirit of having a salary cap?

* em

 

[Doss]

**** em

This, but also, if we weren't paying the players compensation we would be rightly dragged over the coals. We got the players into the mess.

Anyway, not really the thread for in-depth discussion on that aspect of it.

 

[EnolaGay]

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

We don't and we don't.

Ideally we want to start to pay down some of the debt next year and more in the following years, that's all. $53M in turnover in a tough year is nothing to sneeze about. Increase that by $2M next year in what should be a positive season and keep ordinary operating costs stable with 2016 and we will make inroads - assuming no massive abnormal hits.

 

[pepsi]

I don't want anyone to ever count how much it has cost the club to pay out Knights contract, get hird and Thompson into the club, the legal fees associated with all the hearings, tribunals and court costs and lastly the compensation to the players and extra money for top ups. A truly horrible thought.

 

[ezard15]

This, but also, if we weren't paying the players compensation we would be rightly dragged over the coals. We got the players into the mess.

Anyway, not really the thread for in-depth discussion on that aspect of it.

Just to clarify, I wasn't at all suggesting we shouldn't have been compensating the players. I agree, **** em.

I was more curious whether anyone could explain how it works with the salary cap. And if we have received an advantage then I am glad - at least there's a positive given all we keep receiving is bad news i.e. with the financials.

 

[Doss]

Just to clarify, I wasn't at all suggesting we shouldn't have been compensating the players. I agree, **** em.

I was more curious whether anyone could explain how it works with the salary cap. And if we have received an advantage then I am glad - at least there's a positive given all we keep receiving is bad news i.e. with the financials.

I imagine it's considered completely separate to the cap.

 

[Mercurial89]

Because we have over $10mil in current liabilities. That means debt that needs to be paid off within 12 months. Which means we need to have at least $10 million in cash at some point over the next year that hopefully doesn't come from cost cutting in areas that affect the club's performance. We go to the AFL if we can't come up with that $10 million

We would just carry the debt forward, just as we did with the Solar Centre. No reason to go to the AFL at all. It doesn't have to be paid back in 12 months.

 

[boncer34]

We don't and we don't.

Ideally we want to start to pay down some of the debt next year and more in the following years, that's all. $53M in turnover in a tough year is nothing to sneeze about. Increase that by $2M next year in what should be a positive season and keep ordinary operating costs stable with 2016 and we will make inroads - assuming no massive abnormal hits.

We would just carry the debt forward, just as we did with the Solar Centre. No reason to go to the AFL at all. It doesn't have to be paid back in 12 months.

Well actually with current liabilities being $10m technically he's right.

But I don't think he quite understands how it works.

 

[ezard15]

I imagine it's considered completely separate to the cap.

I understand that mate and I know you don't think it's the right thread but the point I am making is that there is an aspect of the compensation payments that could be seen as a major positive that will assist us on field for the very reason that they are being considered completely separately from the cap i.e. maybe we would have had to have paid Hurley an extra $100K inside the cap had it not been for his compensation payment. Would we then have the money to go after a big name player next year and retain other players etc etc.....

It's a bit like Carlton finding Judd sponsorship deals worth millions so they can free up cap space (except I agree we are doing nothing wrong)

I'm not in any way suggesting the club is doing anything wrong, and if it helps us get some on field success then you little ripper.

 

[Doss]

I understand that mate and I know you don't think it's the right thread but the point I am making is that there is an aspect of the compensation payments that could be seen as a major positive that will assist us on field for the very reason that they are being considered completely separately from the cap i.e. maybe we would have had to have paid Hurley an extra $100K inside the cap had it not been for his compensation payment. Would we then have the money to go after a big name player next year and retain other players etc etc.....

It's a bit like Carlton finding Judd sponsorship deals worth millions so they can free up cap space (except I agree we are doing nothing wrong)

I'm not in any way suggesting the club is doing anything wrong, and if it helps us get some on field success then you little ripper.

It may have helped us retain the players, but it also hurts our bottom line significantly so there's a negative too.

At the end of the day, we have to compensate the players. To not do so would be an infinitely greater wrong.

 

[ezard15]

It may have helped us retain the players, but it also hurts our bottom line significantly so there's a negative too.

At the end of the day, we have to compensate the players. To not do so would be an infinitely greater wrong.

Agreed.

 

[Doss]

And it's worth remembering, it's not just the ten players remaining at Essendon who will be compensated, the other 24 will be too.

So opposition types who cynically put it down to player retention are well off the mark.

 

[Rack Watts]

Just another question. What are people's thoughts on how the opposition clubs view the compensation payment with regard to the salary cap?

In essence werent we able to retain most of our good players by paying outside the salary cap?

Doesn't this go against the spirit of having a salary cap?

They will only care, once we start succeeding.

 

[Philzsay]

We paid $350,004 for the AFL Equalisation Levy. Despite our losses we are still propping up about half the league.....

 

[owen87]

I'd imagine they'll want to take up all possible losses between the 15-16 Financial Year and the 16-17 one, so quite likely we'll have another poor result next year and have clear air following that.

 

[scatman john]

Ideally Uncle Pauly leaves us a blank cheque under the Christmas tree next month

 

[Saint]

Salary Cap is around $9 mil and we were paying a list and a half, plus compo, plus the loss of corporate and membership cash.

Entirely expected. Hopefully it is the last of it and we can start some positive momentum early next year. 20% of turnover as net debt is hardly the end of the world, but it's not a great starting point for our next chapter.

We're a strong club and I trust our membership will hit records this season and next and the debt will be paid off within a few seasons.

 

[Falcon27]

Ideally Uncle Pauly leaves us a blank cheque under the Christmas tree next month

At a guess, I would think he's already been doing that!

 

[ezard15]

They will only care, once we start succeeding.

The next scandal!

 

[rumply]

Because we have over $10mil in current liabilities. That means debt that needs to be paid off within 12 months. Which means we need to have at least $10 million in cash at some point over the next year that hopefully doesn't come from cost cutting in areas that affect the club's performance. We go to the AFL if we can't come up with that $10 million

not necessarily, the debt can be restructured at some point which almost certainly will happen if it becomes an issue. It's not as if that all of a sudden the club is no good for it, far from it.

 

[Whispering_Jack]

not necessarily, the debt can be restructured at some point which almost certainly will happen if it becomes an issue. It's not as if that all of a sudden the club is no good for it, far from it.

40% of the $10m of current liabilities is the provision for the players' compo don't forget.

 

[rumply]

40% of the $10m of current liabilities is the provision for the players' compo don't forget.

It's a non issue afaiac. If the compo payments need to be financed, so be it.

 

[Bombermania]

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)

Thanks I didn't notice the big jump is current liabilities from the previous year, but I agree the club doesn't look like its going insolvent, it would need a prolonged period of fans not joining and turning up plus the sponsors walking, I don't see either happening now that the playing group looks settled and the club has over the last year or so pulled together surprisingly well.