Clubs racking up the $$$$ losses

[MoffOnTou]

NRL gives 2.5 million to every club each year.

Apart from that, its up to the clubs themselves to fund their operations. As u say, a lot of it comes from their leagues clubs. Clubs such as Canterbury earn huge revenues from their league clubs operations. The money is prohibitive, the leagues club at Canterbury are planning $900m worth of buildings out at Liverpool as we speak. Apart from West Tigers, the NRL clubs in Sydney are pretty well off financially. Even Manly have improved as of late. But as u say, they are all backed by leagues clubs.

It is sad . Id much prefer our RL teams to survive off TV revenue, gate takings and merchandise sales. But its not a realistic possibility. And thats where AFL clubs are going to struggle. They are not 'underwritten' (if u will). Half of the NRL clubs will never ever go broke, as they are swimming in funds.

I dont know how AFL clubs will make this money. Clubs will perish and no doubt fans will be angry. The AFL need to act on it now. Continuing on this trend, as someone said b4, they are living on borrowed time. Clubs such as the Kangaroos and Bulldogs have a very limited future, going off those numbers.

Moffo.

 

[MarkT]

Originally posted by Porthos
Interesting to note that of the six profitable sides, all of them enjoy draw fixing.

As opposed to some the unprofitable ones who get more home games at their home ground than most of the profitable ones? All clubs have rigged draws and all submitted wish lists to the AFL. If you think Collingwood, for instance, made money because they have Friday nights then I would say you are wrong. If you say they made more money because of their Frday night games then I would say yes and all clubs did/will in the same proportion because the TV rights money goes to all clubs. The draw is undoubtedly rigged. The figures in Collinwood's case show they made less than last year without a draw as "favorable".

The truth is that the profitable clubs are well managed with big supporter bases. Some of the loss making clubs are well managed and some have large supporter bases. None have both.

 

[Danny Chook Fan Club]

It's not just the gross figures either. Collingwood and Hawthorn both made $1 million last year, both are significantly down on that. Essendon by rights should be making Hardwick-loads of money, but the figures say only a $400K profit this year.

I realise these organisations are supposed to be non-profit, but in this artificial AFL world where cycles of good and bad runs are pre-ordained, a club needs to try to build up cash reserves during its good times to help live off in the bad.

 

[Rohan_]

Reason why so many clubs face losses is because they live beyond their means. The Salary Cap and the 95% figure plays a part in this and other costs such as too many/or highly paid football staff also effect the bottom line.

 

[McAlmanac]

Good to see SA footy travelling nicely.

 

[moomba]

Originally posted by Rohan_
Reason why so many clubs face losses is because they live beyond their means. The Salary Cap and the 95% figure plays a part in this and other costs such as too many/or highly paid football staff also effect the bottom line.

The problem being that clubs have to do this to remain competitive with the top end of the market, which in the long run is the only way to ensure survival. If all clubs were given a one off payment of $5 million, the likes of North and the Bulldogs would have to spend most of it to remain competitive with the clubs that can afford to throw it straight into the football department.

North, to an extent are in the situation where they are forced to spend less on players, less on coaching staff, less on training facilities etc, and while at the moment it is not putting as at an enormous disadvantage it is making it harder and harder to compete. You could argue that we need to rein in costs to stay alive but there becomes a point where it affects your performances on the field, and having a consistently crap team is a luxury that North can't afford.

Moomba

 

[Roylion]

Originally posted by Rohan_
The Salary Cap and the 95% figure plays a part in this and other costs such as too many/or highly paid football staff also effect the bottom line.

The minimum of the salary cap that a club has to pay its player list is 92.5%.

It's an equalisation process, just like the salary cap upper limit and the draft, among others.

However this is one rule that should either be dispensed with, or the figure lowered significantly - to say 75-80%.

At least then clubs have the choice to reduce costs significantly, if they need to. However they may have difficulty competing on field with clubs that choose to pay the full salary cap, which in turn affect the bottom line in any case.

 

[Rohan_]

Originally posted by moomba


The problem being that clubs have to do this to remain competitive with the top end of the market, which in the long run is the only way to ensure survival.

The salary cap is a way of making football a "level playing field". Quite simply however it is forcing clubs to spend money they don't have to "keep up" with the rest of the field.

Its not a sustainable method IMO. As the years pass by, the salary cap will disband and market forces will determine who is successful.

 

[moomba]

Originally posted by Rohan_


The salary cap is a way of making football a "level playing field". Quite simply however it is forcing clubs to spend money they don't have to "keep up" with the rest of the field.

Its not a sustainable method IMO. As the years pass by, the salary cap will disband and market forces will determine who is successful.

True, but a salary cap has got to be set at a level fully affordable to all clubs if it is to be a true equalising policy. No salary cap would mean the death of half a dozen clubs IMO because not only will the poorer clubs lose the players that will keep them competitive they will be forced to pay the ones that stay more to match offers from the richer sides.

Moomba

 

[cjwalkley]

Abolish the Salary Cap and you would have a league consisting of Essendon, Collingwood, Carlton, Hawthorn and the SA and WA sides. So there is no way known the salary cap will be taken away. What should happen is that the salary cap should only rise by the CPI each year, so if the cost of living goes up 2.3%, well then so does the salary cap. Enough of the 5-10% rises that have occurred.

For god's sake footballers are very good at what they do, but who else gets paid those exorbitant $$$$'s to put in 4-5hrs worth of work and hone your Playstation skills for the other 10? It will be the greediness of the players that causes any downfalls.....maybe with some very shoddy administration.

 

[CJH]

Originally posted by The Ewok

...

RICHMOND $600,000

...

The figure quoted here for Richmond is a little mischievous.

Clinton Casey publicly noted a few weeks back that gate receipts were about $600,000 below budget but also said that other areas such as sponsorship, reserved seat sales and non-football revenue (gaming and social facilities) had exceeded their budget forecasts. On a pure operational basis, we would have made a modest loss of about $100,000.

This is where some rubbery figures kick in!

We are currently building a new $4.5 million player facility at Punt Road. This is being funded with $900K from the Government and $3.6 million from the Club. Of this $3.6 million, $2m comes from our portion of the sale of Waverley. The remaining $1.6million is coming from sponsorships and donations to the Jack Dyer Foundation.

Apparently they have gone mad with raising funds for this endeavour and ended up receiving more that what they expected. It is this surplus money that will be consolidated into the general revenue, meaning that we will instead make a modest profity ($100 - 200,000).

 

[The Spornstar]

Originally posted by The Phat Side
Carlton will post a loss of somewhere between $200 and $500 thou. Now thats mismanagement for you. Too bad jacks staying. What was that he said about Sainters being a rabble??? I know who the rabble is.

Go Blues.

I realise we are being mismanaged, but is there any reason why you have a go at Carlton and clubs with far bigger losses such as Brisbane, Freo, St Kilda, Kangas, Richmond and Bulldogs are spared?

 

[FreoRules]

Fremantle's figures are also slightly misleading. Like the SCUM we also have to pay money into the WAFC whether we make a profit or a loss so in effect we have made a profit. We actually made a profit in our first 2 years and it was expected that we would make a loss.

We are still paying money for the AFL licence as well as paying for our new clubrooms which were essential not to mention help paying off the Subiaco Oval $32m debt. So whilst it will look as though we are not travelling all that well, and there is little doubt that we could be doing better, we will be profitable over the next few years even after paying out the subsidies to the various bodies.

 

[SupaCat]

Originally posted by MoffOnTou
Apart from that, its up to the clubs themselves to fund their operations. As u say, a lot of it comes from their leagues clubs. Clubs such as Canterbury earn huge revenues from their league clubs operations. The money is prohibitive, the leagues club at Canterbury are planning $900m worth of buildings out at Liverpool as we speak. Apart from West Tigers, the NRL clubs in Sydney are pretty well off financially. Even Manly have improved as of late. But as u say, they are all backed by leagues clubs.

Do the Sydney Swans have their own gambling den?(I was going to say Leagues Club, but it sort of doesn't fit!) Under AFL rules are they allowed to?

 

[MarkT]

Originally posted by cjwalkley
Abolish the Salary Cap and you would have a league consisting of Essendon, Collingwood, Carlton, Hawthorn and the SA and WA sides. So there is no way known the salary cap will be taken away. What should happen is that the salary cap should only rise by the CPI each year, so if the cost of living goes up 2.3%, well then so does the salary cap. Enough of the 5-10% rises that have occurred.

That is the theory always quoted. It wasn't the case before the salary cap so why would it be the case now. The fact is that it was the "rich" clubs that had the worst financial performances and not the "rich" clubs which won premierships.

Essendon have been a power for much of the salary cap era, not because they are "rich" but because they are well run. North did not have a great decade in the 90's because they were helped by the salary cap and/or draft, they were well run. They are now in financial difficulty because they made some mistakes but more importantly because they lack marking appeal and have a small supporter base.

The bigger questionis whether the competition is sustainable. In it's current form it is impossible to see how it is IMO.

Originally posted by cjwalkley
For god's sake footballers are very good at what they do, but who else gets paid those exorbitant $$$$'s to put in 4-5hrs worth of work and hone your Playstation skills for the other 10?

Almost every entertainment/sporting elite in the world.

 

[CJH]

Originally posted by DCFC


...

With revenues from football operations at or near maximisation for most clubs, the two answers are to find alternate sources of revenue or control costs. Simply, the clubs aren't allowed to control costs, because where their major cost is concerned, the AFL makes them pay a minimum amount that is in excess of the maximum amount of only a few years ago.

...

Originally posted by Shinboners


...

I'm not sure that giving clubs the money will solve any problems. They'll just go and spend all of it and then a little bit more and they will all still be in debt. … The AFL cannot underwrite clubs or spending will go out of control as the clubs know they can always run to the AFL kitty for money.

...

Originally posted by Roylion


..
However this is one rule that should either be dispensed with, or the figure lowered significantly - to say 75-80%.

...

Exactly!

All the main revenue streams utilized by the clubs have now matured and in many cases, have declined. Most clubs now will find it harder to earn any additional revenue because there aren’t too many other options available.

Sadly, revenue has lost parity with the one things that is killing clubs - inflation. In particular, the hyper-inflationary aspect of the clubs Football Operations.

The salary cap was brought in a means to quell a similar kind of hyper-inflation with players salaries and to a certain degree, it has been successful. Only 2 changes need to be made to it in order for it to actually work for all clubs again.

1. As suggested by Roylion, relax lower limit to around 80% or so. This is still high enough to prevent another ‘Fitzroy’ happening, but low enough to enable clubs to pay players what they are truly worth (and hallo to you David Bourke!)
2. Freeze the increases on the cap for a year or two, then index it to CPI. This is to firstly offset some of the excessive increases granted in recent times and secondly to allow it to grow at a similar rate to everything else – something that should be sustainable.

What should also be proposed is a similar mechanism – let’s call it a Football Operations Cap – which seeks to reign in spending that really has gotten out of hand over the past few years.

The AFL are already implementing a form of this with their insistence on the Kangaroos trimming spending before they qualify for financial assistance. However, this arbitrary application of the policy cannot help the competition in the long run.

It needs to be applied globally and equally to all clubs – much as the salary cap is (notwithstanding the extra room that Brisbane and Sydney get)

This way we may be able to control this beast that threatens to tear us apart.

 

[BrisGirl]

Originally posted by Eagle_Fan

UNPROFITABLE IN 2002

*BRISBANE $1 million

NOTES

* Subject to renegotiation of Gabba Trust deal.

Most of Lions money has gone into building the stands at the Gabba, and every year Lions have to pay the Gabba Trust and Queensland Cricket, close to 2M a year in rent.

 

[CJH]

Originally posted by Shinboners


And that is summed up by the salary getting paid to David Bourke - reportedly $180,000. So here is my offer to the Roos - for $180,000, I'll skip all the training sessions, but I'll run around like a headless chook for the Magoos on the weekend, and at the end of the year, I'll donate $120,000 back to the club.



...

And would that be $120,000 back to the Richmond Football Club!

 

[hotpie]

Originally posted by BrisGirl


Most of Lions money has gone into building the stands at the Gabba, and every year Lions have to pay the Gabba Trust and Queensland Cricket, close to 2M a year in rent.

Move to Carrara.

 

[MarkT]

Originally posted by The Spornstar
I realise we are being mismanaged, but is there any reason why you have a go at Carlton and clubs with far bigger losses such as Brisbane, Freo, St Kilda, Kangas, Richmond and Bulldogs are spared?

In all honesty for Carlton (and it happened at Collingwood too) to lose that kind of money is a serious problem. I find it hard to believe there are not more serious problem than recruiting and an outspoken president. The board on a larger level and the finance dept. should be held accountable by the members. Of course these figures could be wrong but if not I know how I would react (because I did).

 

[Macca19]

a simple question - why cant brisbane make any money???

 

[The Spornstar]

Originally posted by MarkT

In all honesty for Carlton (and it happened at Collingwood too) to lose that kind of money is a serious problem. I find it hard to believe there are not more serious problem than recruiting and an outspoken president. The board on a larger level and the finance dept. should be held accountable by the members. Of course these figures could be wrong but if not I know how I would react (because I did).

Of course it's a disgrace. Not surprising though. One thing though, is it due to paying off the legends stand, or is it a loss that has occured despite that. To think that some Carlton members think that the board is doing ok and that it's just a bad year due to injuries.

 

[TigerCraig]

The Swans don't have a 'leagues' club. There is a club up the Cross called the Aussie Rules club, but it has nothing to do with them.

When you are a Swans member you get reciprocal rights to the Eastern Suburbs Leagues Club, and the Swans have held their after match functions at a number of different venues - Moore Park Bowling Club was one. Currently they use the Fox & Hounds Hotel at Fox Studios, and the Homebush Brewery at the Olympic Stadium Novotel.

I don't think there is anything stopping them from buying a gaming licence and setting up a licenced club.

 

[hotpie]

Originally posted by Macca19
a simple question - why cant brisbane make any money???

Similar reason as why the Preliminary Final has to be at the MCG and why you need a crowd of 35,000 at Colonial to break even.

Somebody has to fund the developments at these grounds.

(Same also applies to Carlton who owe 9 mil on the Legends Stand which at the time they were warned it may become a white elephant).

 

[Dr Zaius]

Originally posted by Macca19
a simple question - why cant brisbane make any money???

They are a joke of a side and will continue to make losses.

They have always needed a prop up from the AFL (or charge $200 a ticket).