News $320k profit for financial year ending 31 October 2018

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#51
So with $60k members and an average of 38k attendances, which I would call the "good times" we fail to regularly clear at least $1m profit, instead we barely break-even or post a loss.

When we cycle to a downturn in membership and attendances, we'll post bigger losses and we won't have any buffer to see us through as we're already in millions of dollars of debt.

If nothing changes, we're ******. We need revenue streams that aren't gouged by the SMA/SANFL trough.
We are a classic cyclical club just like about 9 or 10 others of the other 15 older clubs.

History repeats its self. See 2001-04 years or even 2001-07 years followed by the next 5 or 6 years.

Its why we need 3 or 4 years of continuous top 4 results where at least AO lets us bank something ($300k per 50k crowd final) compared to Footy Park and we need China to take off. That's why Lockhart Road has cracked the shits at the club. The club is dawdling and its on field performance is making things even worse to get that big fish out of China over an above the opportunity Mr Gui has given us.

There has to be a mass clean out at the end of 2020 if we dont make a GF at least. Koch and 5 or 6 of his board members can go, can't get rid of all of them at once. Hinkley can go bugger paying him out, as there should have been a 2+1 contract put in place when we rushed to sign him for 3 years when he still had 2018 to go. Davies can go, lets go get Josh Mahoney who is doing very good things at Melbourne. KT can go, Cripps and Parker can go, several of our older players will be gone by then.

Trouble with mass clean out is that if you dont have the right people taking over, you slump to the bottom very quickly.
 

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#53
We should really change the thread title to reflect the fact that we posted a loss. People at the club read this board and they should know that we don’t buy the bullshit.
Mickey Mouse pre depreciation profit, hides a real loss - might be appropriate tittle.
 

Pappagallo

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#54
We are a classic cyclical club just like about 9 or 10 others of the other 15 older clubs.

History repeats its self. See 2001-04 years or even 2001-07 years followed by the next 5 or 6 years.

Its why we need 3 or 4 years of continuous top 4 results where at least AO lets us bank something ($300k per 50k crowd final) compared to Footy Park and we need China to take off. That's why Lockhart Road has cracked the shits at the club. The club is dawdling and its on field performance is making things even worse to get that big fish out of China over an above the opportunity Mr Gui has given us.

There has to be a mass clean out at the end of 2020 if we dont make a GF at least. Koch and 5 or 6 of his board members can go, can't get rid of all of them at once. Hinkley can go bugger paying him out, as there should have been a 2+1 contract put in place when we rushed to sign him for 3 years when he still had 2018 to go. Davies can go, lets go get Josh Mahoney who is doing very good things at Melbourne. KT can go, Cripps and Parker can go, several of our older players will be gone by then.

Trouble with mass clean out is that if you dont have the right people taking over, you slump to the bottom very quickly.
I feel like a lot of this would already be happening had it not been for the 150th anniversary coming up. Koch especially seems to be the type that’d be keen to etch his name in history and short of winning a flag this is the next best thing.
 

Lockhart Road

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#55
We should really change the thread title to reflect the fact that we posted a loss. People at the club read this board and they should know that we don’t buy the bullshit.
KOCH ANNOUNCES BULLSHIT PROFIT (?)
 
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#57
I If our membership dips and our crowds drop off, we are back to 2012 and borrowing back all the debt we've paid off.

We're going nowhere fast and sponsors know it. All it takes is one look at our financials year in year out and they walk away.
See that's the problem, we've never paid off our real debt because between 2008-2014 we were getting grants from the AFL and SANFL that didn't have to be paid back. Our interest bearing debt was about $4 million each year before the re-unification with the Magpies between 2008-2010, and between 2011-14 it was about $5 million as the Prince Hotel has about $1 million loan against it.

In 2015 we went out and borrowed net about $2 million and ploughed half that into increasing general expenditure across the club and the other million into buying plant and equipment
 
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#59
So we need to find a sponsor that will give us 700k a year + play 1 home final to break even in 2019?
Depends what that $310k restructuring write off really was. Was it truly a one off event? If so a $700k JMS should see us go close to breaking even and if we play 1 home final, it should see us with a small profit, maybe in the $100k-$200k range.
 
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Lockhart Road

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#62
THIS IS HOW MUCH MONEY PORT ADELAIDE’S CHINA GAME WILL MAKE NEXT YEAR
Nov 1, 2018

Port Adelaide chairman David Koch says next year’s Shanghai game will make the club “half a million dollars”.

This is just between you and me,” (wink wink nod nod) Kochie told FIVEaa’s Rowey and Bicks on Wednesday. “Our budget for China next financial year, our financial year starts tomorrow -- we’re going to make half a million dollars out of it.

“Remember, we are only doing this because we want to make sure our football department is fully funded every single year.

“To do that you’ve got to build different income streams into the club. We think having pubs and pokies is a thing of the past. You’ve got to do something differently that also gets you away from the competition of 17 other AFL clubs.

“It is a long, hard road and we have thrown everything at it and it has put the off field part of the club under enormous strain, particularly KT [Keith Thomas, CEO] and his executives.

“But we’ve got this dream and after two really hard years to get it up and going I think the commitment for another three years, a Melbourne team, corporate Australia is now starting to show some interest… Chinese corporates have supported us for the last two years, so the game is now completely underwritten.

“There’s no downside for us whatsoever and its only upside. We’re pretty excited.

It was a big plan, it was a bold plan -- we’re determined to pull it off. Next year it looks as though will be the real turning point for us.”
 
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#63
Do we save much money by no longer having a magpies reserves side?

I assume our salary cap spend is down?

We just need to pay kenny less and everything will be fine!
A bit but if you are paying 21 guys $100 a game and 18 games or even 21 if they make finals that's only around $40k. No idea what coaching wages would be and other costs for the team, but if they are cranking up the academies most of those non player wages cost could be transferred to the academies.
 
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#64
THIS IS HOW MUCH MONEY PORT ADELAIDE’S CHINA GAME WILL MAKE NEXT YEAR
Nov 1, 2018

Port Adelaide chairman David Koch says next year’s Shanghai game will make the club “half a million dollars”.

This is just between you and me,” (wink wink nod nod) Kochie told FIVEaa’s Rowey and Bicks on Wednesday. “Our budget for China next financial year, our financial year starts tomorrow -- we’re going to make half a million dollars out of it.

“Remember, we are only doing this because we want to make sure our football department is fully funded every single year.

“To do that you’ve got to build different income streams into the club. We think having pubs and pokies is a thing of the past. You’ve got to do something differently that also gets you away from the competition of 17 other AFL clubs.

“It is a long, hard road and we have thrown everything at it and it has put the off field part of the club under enormous strain, particularly KT [Keith Thomas, CEO] and his executives.

“But we’ve got this dream and after two really hard years to get it up and going I think the commitment for another three years, a Melbourne team, corporate Australia is now starting to show some interest… Chinese corporates have supported us for the last two years, so the game is now completely underwritten.

“There’s no downside for us whatsoever and its only upside. We’re pretty excited.

It was a big plan, it was a bold plan -- we’re determined to pull it off. Next year it looks as though will be the real turning point for us.”
I remember that interview and my immediate thought at the time was, if you dont have a big sponsorship that has nothing to do with the Power Footy programs, or if it did, there was a big general PAFC sponsorship component to go with the Power Footy program, locked in now, then you are setting yourself up for a failed statement.
 

*PAF

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#65
THIS IS HOW MUCH MONEY PORT ADELAIDE’S CHINA GAME WILL MAKE NEXT YEAR
Nov 1, 2018

Port Adelaide chairman David Koch says next year’s Shanghai game will make the club “half a million dollars”.

This is just between you and me,” (wink wink nod nod) Kochie told FIVEaa’s Rowey and Bicks on Wednesday. “Our budget for China next financial year, our financial year starts tomorrow -- we’re going to make half a million dollars out of it.

“Remember, we are only doing this because we want to make sure our football department is fully funded every single year.

“To do that you’ve got to build different income streams into the club. We think having pubs and pokies is a thing of the past. You’ve got to do something differently that also gets you away from the competition of 17 other AFL clubs.

“It is a long, hard road and we have thrown everything at it and it has put the off field part of the club under enormous strain, particularly KT [Keith Thomas, CEO] and his executives.

“But we’ve got this dream and after two really hard years to get it up and going I think the commitment for another three years, a Melbourne team, corporate Australia is now starting to show some interest… Chinese corporates have supported us for the last two years, so the game is now completely underwritten.

“There’s no downside for us whatsoever and its only upside. We’re pretty excited.

It was a big plan, it was a bold plan -- we’re determined to pull it off. Next year it looks as though will be the real turning point for us.”
Personally I have issues with those sort of statements. It was very much the same when we played games in the NT.

The statement is all about me and nothing in there about what benefits China/NT will receive by us playing there.

Sponsorship works both ways. Make it happen and it will be there for years.
 

GremioPower

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#66
THIS IS HOW MUCH MONEY PORT ADELAIDE’S CHINA GAME WILL MAKE NEXT YEAR
Nov 1, 2018

Port Adelaide chairman David Koch says next year’s Shanghai game will make the club “half a million dollars”.

This is just between you and me,” (wink wink nod nod) Kochie told FIVEaa’s Rowey and Bicks on Wednesday. “Our budget for China next financial year, our financial year starts tomorrow -- we’re going to make half a million dollars out of it.

“Remember, we are only doing this because we want to make sure our football department is fully funded every single year.

“To do that you’ve got to build different income streams into the club. We think having pubs and pokies is a thing of the past. You’ve got to do something differently that also gets you away from the competition of 17 other AFL clubs.

“It is a long, hard road and we have thrown everything at it and it has put the off field part of the club under enormous strain, particularly KT [Keith Thomas, CEO] and his executives.

“But we’ve got this dream and after two really hard years to get it up and going I think the commitment for another three years, a Melbourne team, corporate Australia is now starting to show some interest… Chinese corporates have supported us for the last two years, so the game is now completely underwritten.

“There’s no downside for us whatsoever and its only upside. We’re pretty excited.

It was a big plan, it was a bold plan -- we’re determined to pull it off. Next year it looks as though will be the real turning point for us.”
 

Burningleviathan

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#71
Depreciation is a decrease in value on land, equipment, buildings, yes? So we claim an end of year depreciation as a liability for tax minimization in our profit and loss yet at the same time the land value has increased substantially.

Depreciation is a bit of a paper expense and does not normally result in money going out unless you are replacing things like gym equipment but that's listed as a different liability (i think)
 

TeeKray

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Moderator #72
Depreciation is a decrease in value on land, equipment, buildings, yes? So we claim an end of year depreciation as a liability for tax minimization in our profit and loss yet at the same time the land value has increased substantially.

Depreciation is a bit of a paper expense and does not normally result in money going out unless you are replacing things like gym equipment but that's listed as a different liability (i think)
Depreciation is usually spread out as an expense across the useful life of an asset. It's definitely not a paper expense.
 
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#73
Depreciation is a decrease in value on land, equipment, buildings, yes? So we claim an end of year depreciation as a liability for tax minimization in our profit and loss yet at the same time the land value has increased substantially.

Depreciation is a bit of a paper expense and does not normally result in money going out unless you are replacing things like gym equipment but that's listed as a different liability (i think)
You don't depreciate land holdings. It usually appreciates or holds its value. Its that appreciation over time that organisations adjust their balance sheet to reflect that increase in equity/net assets position like we have obviously done this year.

Deprecation represents the wear and tear of an asset over its useful life. Those major capital assets usually have to have major repairs and at some point or be replaced. That has to be financed somehow with real cash. We dont pay tax so we don't claim depreciation at the end of the year to minimize taxable income like a normal business does.

If you have borrowed money to build or buy a major capital asset, depreciation expense should be reflective of the normal loan repayments you have made. You are correct to say depreciation isn't a cash expense and is a book or paper expense, but repaying a loan doesn't go thru your profit and loss as its a balance sheet item. But you have to come up with the cash to pay off that loan.

I recently wrote the following on the footy industry board thread about 2018 financials. The whole - what is the true net operating profit of an AFL football club has become a bit of a farce since the mid 2000's when clubs started building major training facilities that cost between $10m and $30m and they had to write off those buildings over 20-40 years and an annual hit to the bottom line of depreciation of between $500k and $1m suddenly appeared.

The clubs then started spinning the results to the public removing this normal business expense from their normal operating results for PR spin purposes when they release it to their members. When depreciation is between $1m and $2m because clubs are now buying a lot of software and hi-tech equipment that they write off over 2 or 3 years as well have large building depreciation, removing that from "operating results" to look better. Hawthorn, WCE and Freo don't do this. Adelaide do, Collingwood have started doing it the last few years as their profits have dropped off with their purchase and upgrade of the Glasshouse. Carlton have been doing it. Port didn't do it but because the Adelaide media is too stupid to understand this, we in 2017 reported pre depreciation operating result so that Adelaide and Port results in the media were reported more apples vs apples comparison.

When Geelong had to destroy a stand and write that off from its books, it was reasonable that the $1.8m depreciation and write off of that stand was recorded below the line as an abnormal item and not part of normal operating activities/profit and loss, as it was a one off.

Large government grants to build these new facilities tend to be removed from normal operating profits, but those under $1m tend to be reported in normal operating profits.

Add to that that some clubs have over the last 10-15 years started to make significant large investments in separate legal entities, to drive new revenue, that they have now by law, had to produce consolidated accounts for the group results, that can add confusion to the average punter.

That's why a Cash Flow Statement is more useful than a profit and loss for a non profit entity like a football club. The health of any club can really be seen in the Cash Flow statement where you have 3 components and you look at the football club result for;

1. Net Cash from Operating Activities - ie non cash items eliminated but timing issues can affect it

2. Net Cash from Investing Activities - ie cash from buying and selling - land and buildings, property plant and equipment, and buying and selling other investments like shares and bonds. government grants and large donations to build those training facilities sits here.

3. Net Cash from Financing Activities - ie cash in from taking out loans and borrowing monies, cash out from paying off loans and borrowings plus cash out re those borrowing expenses.

Unfortunately we haven't been given the 2018 Cash Flow Statement but I suspect that it will be like 2015, 2016 and 2017, showing a minimal amount of improvement in cash holdings - apart from that $4m grant for the Aboriginal Centre of excellence and in 2015 we increased our debt by $2m and have only paid off a bit of those borrowings.
 

Iwish

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#75
I like that at least koch in the club statement admitted the inabilty to secure a second major sponsor was part of negatives of 2018. i am still hearing one for 2019 is close. So maybe he came out and admitted the failure knowing we are going to get one soon so he can sell that as a big positive to members for the upcoming year.
 
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