Bentleigh Club

[Bateanator]

Did anyone receive in the mail recently a proxy voting form in regard to the possible merging of the Bentleigh Club and the MFC? Just received a second letter today prefossing the club's stance on it, with Jim Stynes saying he'll be the proxy for any votes for the merger.

It mentioned in the letter the benefits of a merge which all seemed plausible, however it was from the Bentleigh Club itself and they are for the merge, so not sure if I completely trust their view.

Anyone have any more info on this? I know next to nothing about the Bentleigh Club and have never been to the place, so was just wondering if BigFooty had any major objections and/or inside information as to the benefits which may result from us joining with them? Cheers

 

[Chip_]

Check out this MFC article explains it all

 

[Supermercado]

We got $3m back into debt but the gains apparently outweigh it.

 

[Deefolt]

We got $3m back into debt but the gains apparently outweigh it.

And this is where 'good' debt comes in as opposed to what we had in 'bad' debt

 

[Bateanator]

Thanks for the replies, I guess it all makes sense. No reason to doubt this current batch of MFC financiers just yet i suppose. Will be voting in the affirmative.

 

[RandB]

A bit more on this...

Demons get $6m boost

The net improvement on the balance sheet will be at least $6 million.

"It is important to point out that the projections we have done for our gaming operations indicate that the debt assumed under the merger can be repaid from the profits of the venues - not from any other activities of the club," he said.

 

[Demon 86]

Good news to me, anything that grows our previously non-existant asset base is a good thing, despite taking on some relatively small debt.

Good work Jimmy and co!

 

[syl]

It's very good news for the club. I am happy this went through, some real assets for our club, strengthening our future which is great. Better than fund drives every 10 years or something terrible like that...

 

[ThePuppetMaster]

Great news, hopefully these funds can go towards strengthening our facilities and maintaing economic health

 

[AlecDuncan]

It'll be my local soon, so I hope it works out well for both parties.

 

[Demon Revival]

Combine this asset acquisition with the licence that the club got for the poker machines @ $6,000 each (or something like that), the debt will be eroded very quickly, if they want to or just carry some of the debt & invest in other areas...

Can anyone remember what the forcast profit was for the machines MFC got at auction last year???

 

[Timmy Houlihan]

will the assets be hit with the pokie laws that will be brought in by 2014?

 

[Timmy Houlihan]

THE MOST common question I have been asked over the last few months relates to our merger with the Bentleigh Club, and why we would seek to take over a club that has been making a loss in recent years.

Further to Jim’s comments in the press release last week, I think the value of the merger from the MFC’s perspective can be summarised into three main areas:|

- Assets - over $9m are being added to the MFC balance sheet. These assets are offset by $1.8m of debt taken over and $1.2m in gaming machine entitlement obligations - however, in a net sense the improvement in the balance sheet will be over $6m. The Bentleigh Club will represent the first real asset MFC has owned. This strengthening of the balance sheet creates the potential for further strategic investment as we continue to explore all avenues to grow the club;

- Improved profitability - from August 2012 the gaming regime in Victoria changes dramatically, which provides an opportunity to significantly increase profits. Under the new regime, a much greater share of the gaming revenue will flow back to the venue operator (MFC), which is the driver of the increased profitability. It is not a case of backing ourselves to turn the venue around - although we will be working hard to do this also - with no growth in revenue, the club will become substantially more profitable.

- Before the new regime coming in, we believe that we can operate the Bentleigh Club at close to a break-even level. It is important to point out that the projections we have done for our gaming operations indicate that the debt assumed under the merger can be repaid from the profits of the venues and not from any other activities of the club. This was a key criteria in our decision making - the debt taken on had to be able to be repaid from gaming operations, so that the rest of the core operations of the club remain debt free. We believe that not only will this be achieved, but the profits from the venues will allow cash to be injected into key areas like our community programs and the football department; and

- Heritage and relationships - ensure the survival of the Bentleigh Club and continue the long standing relationship between the clubs. As Jim said last week, we believe we have rebuilt the MFC on the basis of inclusivity and respect for heritage.

The key threat to the profitability of the venue in the medium to long term is the debate going on at Federal government level at the moment around high impact machines and the possibility of introducing mandatory pre-commitment for gamblers (i.e. out a cap on their potential losses before they start playing).

Any potential significant changes to the industry were of concern during our negotiations - hence, a clause was included in the transfer deed that provides for the closure of the venue and the sale of the land if a legislative change makes the venue unviable.

We will report in detail in this year’s Annual Report regarding the impact of the merger, but it will certainly have a significant impact on the reported profit figure for the year.

However, as we have done in recent years with other ‘one-offs’, we will strip this out and show the true underlying profitability of the MFC.

One of the key strategic priorities of the MFC over the past couple of years has been to strengthen the financial position of the club.

The highly successful Debt Demolition campaign erased the club’s debt as our first priority.

We were then keen to create opportunities to build assets - assets which are also income generating.

We believe the merger with the Bentleigh Club is a very important step to the achievement of this aim, as it not only significantly strengthens the balance sheet of the club, but also has significant potential to deliver profits that we can reinvest in key parts of the business in the future.

We hope all our members view the merger as a positive step in the continuing growth of the Melbourne Football Club.

from the Melbourne FC Website

 

[d33my]

Any potential significant changes to the industry were of concern during our negotiations - hence, a clause was included in the transfer deed that provides for the closure of the venue and the sale of the land if a legislative change makes the venue unviable.

You answered your own question

 

[Timmy Houlihan]

sure did!