Opinion Financial impact on structure of Port, the AFL and long lasting Covid issues

[Harro59]

So if we end up needing Financial assistance out of this s**t show from the AFL, surely that will give them control over club decisions, I wonder what the game in China will be like for us when it resumes, will it resume?
I see the Crows are going it alone with funding, can i assume we won’t be doing that?

The more control the AFL can’t be a good thing.

No we will need financial assistance but not as much as you would expect or would we have from years past.

The Crows probably would be able to go.it alone, probably based on there last financial report, however they would then find themselves really back to the field in 2021 financially and pretty say bye bye to the North Adelaide move.

I think having a bit more AFL control is generally not a good thing unless they can assist us with the issues with the SMA and the SANFL.

 

[RussellEbertHandball]

The AFL already controlled the board. How much autonomy did we really have before this?

When things are going well we have plenty of autonomy, ie the AFL leave us alone and the members don't complain too much.

When things have turned to s**t and the board makes bad decisions we members have very little as can't change the board who will change their decisions.

 

[Chewy316]

When things are going well we have plenty of autonomy, ie the AFL leave us alone and the members don't complain too much.

When things have turned to s**t and the board makes bad decisions we members have very little as can't change the board who will change their decisions.

Things have hardly been going well at the club the last few years though. Well is subjective. If you compare to the primus years then things have been going spectacularly. But the people running the show on the board are spineless. They have been essentially appointed by the AFL, so even though the AFL might not be directly involved in our day to day operations, the club is still steered indirectly by the league by the people it appointed.

Would you be in favour of taking the club public onto the share market? I'm not sure privatisation is the way to go, but I'm going over this idea and think it has a bit of merit.

 

[GremioPower]

Things have hardly been going well at the club the last few years though. Well is subjective. If you compare to the primus years then things have been going spectacularly. But the people running the show on the board are spineless. They have been essentially appointed by the AFL, so even though the AFL might not be directly involved in our day to day operations, the club is still steered indirectly by the league by the people it appointed.

Would you be in favour of taking the club public onto the share market? I'm not sure privatisation is the way to go, but I'm going over this idea and think it has a bit of merit.

Just return the club to its members.

 

[Joelg]

The AFL already controlled the board. How much autonomy did we really have before this?

Was it better when SANFL appointed half the board? No thanks. We members are often not the best either as we always vote in the ex player who may or may not be the best person.

I keep thinking the people who go on the board have to have money to invest. We do not have private owners like EPL, NBA and NFL.

I will get shouted down here I know. I think like a lot of big charity boards that you should keep your seat if

1 You add value to making us better
2 You are Port through and through
3 You meet the annual investment dollar number
4 Maybe keep 2 spots for specific skills eg football knowledge or global sport like Killer Cahill

Shout me down

 

[GremioPower]

Was it better when SANFL appointed half the board? No thanks. We members are often not the best either as we always vote in the ex player who may or may not be the best person.

I keep thinking the people who go on the board have to have money to invest. We do not have private owners like EPL, NBA and NFL.

I will get shouted down here I know. I think like a lot of big charity boards that you should keep your seat if

1 You add value to making us better
2 You are Port through and through
3 You meet the annual investment dollar number
4 Maybe keep 2 spots for specific skills eg football knowledge or global sport like Killer Cahill

Shout me down

RussellEbertHandball has already written a couple of posts on this subject.

 

[RussellEbertHandball]

The Wookie started a thread on the footy industry board and said - threads about clubs in dire straits and who is and isnt of the big 4...so rather than wade into those discussions I'm going to post a bunch of tables for people to use to their own ends. See

The Big 2019 Season Summary - Attendance, Members, TV Ratings, Finances, Support, Social Media

Ok theres a tonne of threads about clubs in dire straits and who is and isnt of the big 4...so rather than wade into those discussions Im going to post a bunch of tables for people to use to their own ends. At least go into these arguments properly armed. So there go forth and do whatever...

www.bigfooty.com

So it got me to finish off something I started a couple of weeks ago to see who is position to weather the virus storm. A couple of weeks ago I started looking at liquidity position of the clubs. I have separated them into 5 groups based on combo of financial strength and AFL distribution levels as per the 2019 AFL annual report.

3 clubs have sold Pokies and venues that has helped their position. Melbourne in 2018 financial years approx $10m, Collingwood in 2019 approx $17m and Western Bulldogs in November sold 65 machines to as their Note 23 says

On 11 November 2019 the Club executed sale and purchase agreements with the Victorian Amateur Turf
Club (incorporating Melbourne Racing Club) to sell its gaming operations, being Club Leeds and the
Peninsula Club (each, a disposal group held for sale and a discontinued operation at balance date).

Refer to Note 22 for additional information relating to the disposal groups and for details of profits and cash
flows relating to those discontinued operations.

Note 22 shows net cash inflow from these operations were $1,707,127 in 2019 $1,975,238 and in 2018. The_Wookie I couldn't find anything about this sale price but based on Melbourne's and Collingwood's sales it would be approx $100k per machine and something for the venue leasehold/freehold. This combined with the cash built up over the last 6 or 7 years from profitable pokies operations is why Western Bulldogs said they wont need the AFL's help.

AFL base distribution in 2019 was $11,003,114.

I've tried to show why the AFL distribution would be higher for some clubs in each group eg Collingwood's 12,000 AFL Members with club support means they get approx $1.9mil distribution that most clubs don't get.

Those with $7k would get about a $1mil distribution from AFL members as approx $160 per adult members is what AFL transfers to the clubs. Based on historical data after Colling Carlton and Essendon the next biggest AFL members club support would be Richmond, Geelong and Hawthorn with around 4k each.

Refunds of AFL memberships to individuals and the AFL to clubs is an issue totally missed by the media. The other day I wrote about it in season 2020 cancelled thread at

Season 2020 & the money if cancelled

“Kwality”, the figures concerning Fremantle’s wealth are from ‘An extended coronavirus shutdown may change sport as we know it in Australia’. The claims about the WAFL being under threat are less clear I will confess and come from a report its reserves competition was on the verge of being shut...

www.bigfooty.com

Then thought but this doesn't take into account that some clubs recieve sponsorship and members fees in advance. Eg Adelaide in 2016 change membership fees in advance from 17 November to 17 October, so that makes cash look good on 31st October balance of books but it gets used up in November. That's why the crows show a $1 loan as they have $5 million commercial bill facility which they would starte drawing on in December. Port copied them the next year.

Also thought debtors and creditors would be important to look at as well as employee benefits as employees would be paid out these benefits after being stood down. So I widen the scope of what the true cash position might be.

Prepayments is a difficult item to account for. Mainly because clubs don't explain what they are for and if they can get refunds on these. But some clubs have large prepayments. might do a separate post for that.

 

[RussellEbertHandball]

the AFL 2019 Annual Report info on distributions

 

[GremioPower]

the AFL 2019 Annual Report info on distributions

View attachment 856154 View attachment 856155

TV and prize money are not handouts. The handouts fall in the variable category, but wouldn't prize also fall in it?

What are Port's non-football sources of income? Could we use Alberton more often, for events, concerts, etc.?

 

[RussellEbertHandball]

TV and prize money are not handouts. The handouts fall in the variable category, but wouldn't prize also fall in it?

What are Port's non-football sources of income? Could we use Alberton more often, for events, concerts, etc.?

Not much. $7m from 2 venues The Port Club and The Prince Hotel produced $7m from poker machines and food and beverage sales. Poker machines in SA became break even situation for SA compared to rest of Australia except WA which has restricted pokie machines to the casino at Burswood. In SA maximum bet is $2 whereas Queensland you can use $100 note and that's why Brisbane make about $3m profit on $18m turnover.

The 2 venues make about $400k-$500k combined profit. Th Port Club is a great asset to have as a showcase venue for te club but its not a great revenue earner.

That's why we went to China. A new market, unpolluted by other AFL clubs and early stages of professional sports market.

 

[RussellEbertHandball]

Could we use Alberton more often, for events, concerts, etc.?

Big concerts not really viable but I have suggested to the previous manager of the Port club to have Sunday arvo music sessions in summer but I don't know how profitable that would be given probably would only be 300-500 crowd upstairs.

 

[Papa G]

My opinion, taking into account all factors on the "biggest" club rankings goes like this:
West Coast
Collingwood
Essendon
Carlton
Adelaide
Richmond
Sydney
Hawthorn
Geelong
Fremantle
Port
Brisbane
St Kilda
Bulldogs
Melbourne
North
GWS
Gold Coast

 

[AdamMarrett]

Big concerts not really viable but I have suggested to the previous manager of the Port club to have Sunday arvo music sessions in summer but I don't know how profitable that would be given probably would only be 300-500 crowd upstairs.

How would private ownership work in the AFL if we went down that route, and who would be gutsy enough to buy Port Adelaide? I've seen that idea in the media and across here but not all 18 clubs are attractive investments ala what happens in European football, or the American sports. The only issue if that happened in the AFL is the big clubs like West Coast, Collingwood, Richmond & Hawthorn, Essendon and those types would be heavily invested in and the gap between them and the rest would be massive. I give the comp 10 years under private ownership to resemble a 5 horse race each year.

 

[chiwigi]

The AFL already controlled the board. How much autonomy did we really have before this?

It’s simply play on from our point of view.

 

[RussellEbertHandball]

How would private ownership work in the AFL if we went down that route, and who would be gutsy enough to buy Port Adelaide? I've seen that idea in the media and across here but not all 18 clubs are attractive investments ala what happens in European football, or the American sports. The only issue if that happened in the AFL is the big clubs like West Coast, Collingwood, Richmond & Hawthorn, Essendon and those types would be heavily invested in and the gap between them and the rest would be massive. I give the comp 10 years under private ownership to resemble a 5 horse race each year.

Nobody would buy Port unless they have some altruistic reason. There is no money to be made out of the smaller AFL clubs

 

[GremioPower]

Nobody would buy Port unless they have some altruistic reason. There is no money to be made out of the smaller AFL clubs

Nobody owns a sport team for the money. Its about prestige, being part of a group, bragging rights, etc.

Even the most profitable ones are not great investments. Actual profit, i.e. more than the money put in, usually comes from selling the team.

The clubs need to be self-sufficient. When so, the owner can enjoy having a team without milking his other businesses.

 

[Muh Village]

It's beyond me why Port even is a small club. SA is a rabid footy state and we only have 2 teams. Surely you'd think we'd be doing well.

On SM-T510 using BigFooty.com mobile app

 

[afl2004]

It's beyond me why Port even is a small club. SA is a rabid footy state and we only have 2 teams. Surely you'd think we'd be doing well.

On SM-T510 using BigFooty.com mobile app

Small population, piss ant leaders

 

[Schulzenfest]

It's beyond me why Port even is a small club. SA is a rabid footy state and we only have 2 teams. Surely you'd think we'd be doing well.

On SM-T510 using BigFooty.com mobile app

We're not a small club. We consistently average 50-60k memberships and 30-40k attendances (despite only having one home game against a year against an opponent in the same state to boost those numbers, unlike the North Melbourne and St Kilda types). We and the Crows are both just hamstrung by the country's worst stadium deal.

The Crows should be another West Coast. Thanks to the SMA, they're barely another Fremantle. It's no wonder that we struggle under those conditions.

 

[PA88]

PORT Adelaide chief executive Keith Thomas admits the future of the club's long-standing state league outfit could be in jeopardy as the sport grapples with the financial crisis caused by the coronavirus pandemic.

The Port Adelaide Magpies are South Australia's most successful Australian Football team with 36 SANFL premierships - a national record across the major state-based competitions.

Grave fears for one of Australian Football's most famous clubs

Port chief Keith Thomas admits the future of the club's long-standing state league outfit could be in jeopardy

www.afl.com.au

Why does Thomas and people at our club slip into ignorant mode and join in with this talk about the Magpies as if it is some separate entity from the past? This isn't about the old time Magpies club not existing in the sanfl but about a former sanfl and now AFL club continuing to play its reserves in the sanfl. Thomas could've turned this right around and made it a headline about 'firstly we have to see how the sanfl survives the crisis'. He partly insinuated it but not strongly enough imo.

REH ... does the sanfl have the funds to bail out a club? History suggests that even if they did they would not bail them out ... examples West Torrens and waiting for Sturt to fold in the 80s.

 

[RussellEbertHandball]

Why does Thomas and people at our club slip into ignorant mode and join in with this talk about the Magpies as if it is some separate entity from the past? This isn't about the old time Magpies club not existing in the sanfl but about a former sanfl and now AFL club continuing to play its reserves in the sanfl. Thomas could've turned this right around and made it a headline about 'firstly we have to see how the sanfl survives the crisis'. He partly insinuated it but not strongly enough imo.

REH ... does the sanfl have the funds to bail out a club? History suggests that even if they did they would not bail them out ... examples West Torrens and waiting for Sturt to fold in the 80s.

When the SANFL get their final payments from the sale of west lakes supposedly the will have enough to set up a $16m Future Fund. Think that is slated for 2024. They have been paying off debt mainly with the proceeds. Think they have given the club $2m each over 4 annual payments out of sales proceeds.

The SANFL cold borrow monies to save any club. Interest rates will be cheap for awhile

Edit from 2018 SANFL annual report - 2019 is on their website yet

* Bank debt was reduced from $14.5m to $7.3m through
dividends from the ongoing redevelopment of Football
Park;
* Further payments of $2.2m were made to the eight
SANFL clubs, the third instalment of the $16 million
being distributed to clubs over seven years from the
Football Park redevelopment. This has helped reduce
combined SANFL club debt to approximately $10
million.

 

[TeeKray]

We're not a small club, we're not a big club. We're a middle of the road, medium sized club with a small, poor club balance sheet due to our overlords bleeding us dry for 25 years and counting.

 

[RussellEbertHandball]

PA88 SANFL could accelerate their payments of $2m+ per year to the clubs over 7 installments.

Here is how the SANFL have/will allocate the $71m from West lakes land sale

2014 Annual Report
In November 2014, the SA Football Commission formally
signed a contract with developer Commercial & General
for the sale and 20+ year redevelopment of the AAMI
Stadium precinct.
As part of the agreement, the SANFL received an upfront
payment of $10 million which was transferred to
the AFL to retire debt, money borrowed as part of the
$16.25m provided to Port Adelaide to keep the club viable
ahead of the move to Adelaide Oval.

Commencing in 2016, the SANFL will start to receive
payments totalling a further $61 million by 2027 as part of
a staged redevelopment of the precinct.
The existing oval will be retained for training by the
Adelaide Football Club, which has a lease over the site
until 2048.
[debt was $34.01mil]

2015
Revenues from operations at Adelaide Oval and AAMI
Stadium sale proceeds enabled SANFL to lower its debt
profile by more than $11 million in 2015, with the interest
savings and other cost reductions funding attendance
incentives of $1.9 million to the two AFL clubs. [ ie stadium review $2 per attendee payment]

SANFL as part of its debt reduction strategy applied the $10m received from the sale of the first parcel of land at AAMI Stadium in November 2014 to reducing debt. Debt is expected to be fully amortised within seven years.
[debt was $22.90mil after $10m paid in Nov 2014]

2016
Secured debt was reduced from $22.53 million to $18.0
million due to debt repayment from the proceeds on land
divestment and operations.

The Commission reaffirmed its commitment to ensure the
future financial stability of SANFL member clubs by:
• Accelerating payments from the development of
West Lakes to $250,000 per club (up from a
planned $125,000 in 2016 as the first instalment
of $16m over seven years);

• Collecting and providing financial and football
department benchmarking;
• Investing $50,000 to undertake a full review
of clubs’ licenced venues food and beverage
offerings; and
• Funding and providing a Finance Manager shared
across three SANFL member clubs.
[debt $18.67m]

2017
Secured debt reduced from $18.00m to $14.50m,
inclusive of proceeds from the sale of further
parcels of land at Football Park. The land
sale proceeds were allocated to both SANFL
and SANFL club debt reduction. Clubs were
distributed a total of $2.16m as the second
instalment of $16m over seven years. In total,
$4m has now been made available to clubs. The
statutory accounts also include a provision of
$1.31m for future payment.
[debt $15.21mil]

2018
SANFL remains in a sound financial position. Highlights of
our 2018 Financial Results include:
* Cash earnings remained stable at $689,000;
* Bank debt was reduced from $14.5m to $7.3m through
dividends from the ongoing redevelopment of Football
Park;
* Further payments of $2.2m were made to the eight
SANFL clubs, the third instalment of the $16 million
being distributed to clubs over seven years from the
Football Park redevelopment. This has helped reduce
combined SANFL club debt to approximately $10
million.
[debt $8.09mil]


2019 no SANFL Annual Report online yet but Advertiser story

No Cookies | The Advertiser

No Cookies

www.adelaidenow.com.au

New SA Football Commission chairman Rob Kerin has taken over the role with the SANFL in an extremely healthy financial position.Just hours after being named as the replacement for another former Liberal premier, John Olsen, Kerin told the league’s annual meeting on Tuesday night that debt was now only $2.8 million – its lowest since 1992. It is a staggering $34.2 million down from its position in 2013 – following another $4.5 million in repayments from land sales at Football Park – and is on track to retire all debt by 2021.

The debt of the eight member clubs has also dropped by $10 million in that period to $8 million after payments totalling another $2.5 million. It is the fourth instalment of the $16 million being distributed to the clubs over seven years from the Football Park residential development.

 

[VineValerian]

The local clubs need to be told in no uncertain terms that any nail out monies will only be given to clubs that concentrate on juniors and not on buying in truckloads of EX-AFL players and the like.

Try to buy a flag by recruiting and poaching from financially poorer clubs and you go it alone. No money from the overlords at all.

 

[Muh Village]

Nearly 2 mill people in sa. Crows are loaded. We've been around way longer and have built a rock solid culture. Yet as soon as we joined the AFL we went broke. Doenst make sense to me.

On SM-J530Y using BigFooty.com mobile app