Analysis Collingwoods $1.8 million loss after hit to revenue

[sr36]

This is pretty dire. The club has announced a $1.8 million loss this season. I wonder how we plan to turn this one around? I guess bums in stadiums is a start. But attracting members just as important. Difficult after this seasons balls up. Ed is leaving the new President with a big job ahead of him/her.

Mods: I know you're trigger happy on thread merges but please leave this one as a stand alone topic. It deserves its own discussion.

Collingwood's $1.8 million loss after club takes massive revenue hit

The financial toll of coronavirus on the AFL and its clubs has been laid bare after Collingwood announced a loss of $1.8 million.

www.theage.com.au

So covid had a similar impact to Treloars contract. Not too bad really.

 

[Scodog10]

That’s an alarming set of financials.

A 2021 that mirrors 2020 without outside stimulation would place us on the cusp of a negative cash position. We dropped $4.8m on our cash at bank to sit at a tick over $6.4m and our monthly salary payment would be $1-1.5 minimum across the entire club so you do the math. It would effectively put us in the position of either needing to sell assets or borrow to continue trading.

I also don’t really share the POV re expecting things to be worse. Yes the net margin looks healthy enough, but that includes rent relief and government subsidies totalling $5.5m which may not be forthcoming in 2021. It’s realistically about the result the club had predicted.

 

[Mkcaptain]

That’s an alarming set of financials.

A 2021 that mirrors 2020 without outside stimulation would place us on the cusp of a negative cash position. We dropped $4.8m on our cash at bank to sit at a tick over $6.4m and our monthly salary payment would be $1-1.5 minimum across the entire club so you do the math. It would effectively put us in the position of either needing to sell assets or borrow to continue trading.

I also don’t really share the POV re expecting things to be worse. Yes the net margin looks healthy enough, but that includes rent relief and government subsidies totalling $5.5m which may not be forthcoming in 2021. It’s realistically about the result the club had predicted.

I haven't looked at any financial figures except the numbers in the OP but do you mind explaining how the club could drop $4.8m in their cash or cash equivalents in a year but post a $1m operating profit? Essentially as someone who has never studied accounting, what sort of line items in the annual report would contribute to the operating profit but wouldn't help the cash position?

Edit - not a question just directed to you of course

 

[The Ghost of the KPF]

I haven't looked at any financial figures except the numbers in the OP but do you mind explaining how the club could drop $4.8m in their cash or cash equivalents in a year but post a $1m operating profit? Essentially as someone who has never studied accounting, what sort of line items in the annual report would contribute to the operating profit but wouldn't help the cash position?

Edit - not a question just directed to you of course

The cashflow reduction is due in part to the deferred renewals for 2021.

Normally by now we are holding quite a lot of cash for memberships for the next year. We don't this year, the auto renewal date is 16 November.

If we had received the cash, our cash holdings would be higher, but they would be matched by a liability washing out the profit/loss. This is just one of many reasons we can't draw easy direct comparisons for the 2020 accounts to previous years

The other factor in our reduced cash holding is we bought investment assets.

If we need cash we could take on debt, or access assets. We have for example $1million in a short term fixed interest holding.

 

[Mkcaptain]

The cashflow reduction is due in part to the deferred renewals for 2021.

Normally by now we are holding quite a lot of cash for memberships for the next year. We don't this year, the auto renewal date is 16 November.

If we had received the cash, our cash holdings would be higher, but they would be matched by a liability washing out the profit/loss. This is just one of many reasons we can't draw easy direct comparisons for the 2020 accounts to previous years

The other factor in our reduced cash holding is we bought investment assets.

If we need cash we could take on debt, or access assets. We have for example $1million in a short term fixed interest holding.

Thanks for the explanation. Much appreciated!

 

[Scodog10]

I haven't looked at any financial figures except the numbers in the OP but do you mind explaining how the club could drop $4.8m in their cash or cash equivalents in a year but post a $1m operating profit? Essentially as someone who has never studied accounting, what sort of line items in the annual report would contribute to the operating profit but wouldn't help the cash position?

Edit - not a question just directed to you of course

Unfortunately I’ve got no idea what they are based on how we present our reports because we only post consolidated figures. I don’t keep pace with reporting standards so I’m not even going to bother trying to guess either, but I’m sure there’s a vastly more skilled financial accountant on here that can explain it.

Edit: already answered.

 

[Mkcaptain]

Edit: already answered.

This why I love BigFooty. I post a random question about the club's annual financial statement at 11PM, and by midnight I get a (from what I can tell) decent explanation. I'm sure our bosses would kill for such responsiveness.

 

[cityslick1]

I dare say that there are a dozen other clubs in the league with worse results for 2020, so we'll be fine, all things considered. Its their (other clubs) ability to continue & just how much they'll need from the AFL to stay afloat that is the worry.

Along with the fact that we're hit with the same club caps to stay under, due to their lacks of funds... so good club people have lost their jobs. & if we are carrying any inflated employee salaries attached to individuals who arent justifying them, they should also be reviewed and adjusted down

 

[Linda_Lovelace]

This is a nothing outcome really. Last time I looked at the financials the club had about $10m in cash reserves. Club also runs 'fat' lot of cost can be cut out quickly. All clubs will make losses this year, nothing they could do, major source of revenue, crowds, collapsed.

 

[Linda_Lovelace]

A bit everywhere, and misleading.

Both Carlton and Essendon look ok on the top line, but both received large grants for works along with donations to same. Take away those one offs and both lost more like 4 million plus.

StKilda, Geelong, Melbourne haven't reported yet from Victoria.

Carlton numbers are odd as they were reliant upon poker machines and the venues were closed.

 

[Leviathan Pie]

This is pretty dire. The club has announced a $1.8 million loss this season. I wonder how we plan to turn this one around? I guess bums in stadiums is a start. But attracting members just as important. Difficult after this seasons balls up. Ed is leaving the new President with a big job ahead of him/her.

Mods: I know you're trigger happy on thread merges but please leave this one as a stand alone topic. It deserves its own discussion.

Collingwood's $1.8 million loss after club takes massive revenue hit

The financial toll of coronavirus on the AFL and its clubs has been laid bare after Collingwood announced a loss of $1.8 million.

www.theage.com.au

Actually not the worst result considering the circumstances of the season.

Club still has a strong balance book, cash reserves etc.

 

[Quicky]

Are we just overlooking that the club had an actual operating profit of $1m? The loss only comes in to play with depreciation and amortisation. I think under the circumstances of 2020 that’s a pretty bloody good result. It’s not like we’ve had to go and borrow $1.8m.

It could be worse but we are the worst performed Victorian team with the exeption of Hawthorn. Hawthorn have been a bottom 8 team. We've been in finals the last 3 years.

 

[Quicky]

Most here wanted us to get out of pokies.

They were closed during lockdown too... but having them run for 4-6 of the last 12 months in Melbourne would’ve alleviated the revenue loss

Money doesn’t matter. What matters most is that we are PC and feel virtuous

I'm still happy we gave up pokies, irrespective of the result.

 

[Iskender Time]

Most here wanted us to get out of pokies.

They were closed during lockdown too... but having them run for 4-6 of the last 12 months in Melbourne would’ve alleviated the revenue loss

Money doesn’t matter. What matters most is that we are PC and feel virtuous

If only heroin was legal. We could set aside the need to be PC and feel virtuous while turning a profit.

 

[TradeDraft]

What did they lie about? If everyone cancelled their memberships then we would have gone in to an operating loss. Is that what you want to happen?

Not Really but Talked to some would be Happy for that just to make Changes that is Needed

 

[Apex36]

Not Really but Talked to some would be Happy for that just to make Changes that is Needed

That’s a seperate issue. Can we agree that they didn’t lie about needing the continued support of the membership base?

 

[Apex36]

It could be worse but we are the worst performed Victorian team with the exeption of Hawthorn. Hawthorn have been a bottom 8 team. We've been in finals the last 3 years.

Id suggest you look in to the reasons some of those Victorian teams allegedly performed better than we did. I’d argue that receiving handouts doesn’t = a good performance, regardless of what the numbers tell us.

 

[MagpieJoel]

What's the bet that people that complain about the loss, are the same people that have threatened not to renew their memberships.

 

[TradeDraft]

That’s a seperate issue. Can we agree that they didn’t lie about needing the continued support of the membership base?

Yes but still did not treat Members as well as other Clubs and we suppose to be the Biggest Club in the League/Australia

 

[Quicky]

Id suggest you look in to the reasons some of those Victorian teams allegedly performed better than we did. I’d argue that receiving handouts doesn’t = a good performance, regardless of what the numbers tell us.

How much has AFL assistance helped those teams financial position this year?

 

[AndrewShawble]

We will recover, and now Eddie is going I think memberships won’t drop off as much.

 

[Apex36]

How much has AFL assistance helped those teams financial position this year?

It’s not just AFL assistance I’m talking about.

 

[rand corp]

Be interesting to hear the results of other clubs, a few will need a hand out and some friendly bankers you'd think.

How much can we expect people, revenue to bounce back next season -without the vaccine having a major impact in the early parts of the season, (maybe even the majority)? 60%, 75%, 80%?

 

[The Ghost of the KPF]

How much has AFL assistance helped those teams financial position this year?

Both Carlton and Essendon received large grants for capital works and donations from coteries towards those works. Without those one-off amounts they lost 4 and 5 million respectively on underlying business. That is even with Jobkeeper, AFL equalisation etc.

 

[YouBeauty]

Oh bUT eDdiE iS thE sAviOUR