How much profit is acceptable ?

[Pessimistic]

A footy club is exactly that... a club. If your club consistently made $1.2Million profit would you mind ?

Obviously we don't want financial losses year after year but what figure is desirable ?

I would say just enough to re-invest to protect income streams or find new ones. One of these includes enough success to keep the club attractive to paying customers. But on-fiels success seems to be very low down on the prioroties when you look at the viable clubs in the competition

 

[Rooboy 96]

This will be interesting Pess...

As a Northboy... I personally don't give a rats if North make a profit or loss... they will always be under the gun... at least it is fun when you are winning Premierships...

Back in the mid 80's I had this feeling that I would never get to appreciate the joy (as an adult) of my team winning a Flag... now I have... and twice...

sso let me have one more think about this 5 million profit or the Flag....

GIVE ME ONE MORE FLAG I SAY....

North Melbourne will be Premiers in 2001

 

[Asgardian]

How much profit is acceptable???????

Ask the banks.

------------------
Chris

 

[sainter]

Pess,

As much as football clubs are a business, their number one is for their team to have on-field success. However to do that the club must be financially viable.

So in answer to your question, I think making large profits are important to a football club, particularly a smaller club who would be able to invest the extra revenue into keeping up with the salary cap and improving team facilties.

You have made a good point though. While some of the higher clubs on the ladder this year were richer clubs, the performances of the kangaroos and bulldogs over the past decade show that there is no direct correlation between profit levels and on-field performances.



------------------
Fortius Quo Fidelius

 

[dees01]

Put it this way, we would all love to be in the finacial position of clubs like Adelaide, West Coast and of the Victorian clubs, the Bombers. Other clubs in the future will have to be around those clubs to survive.

 

[elt]

I would think the club needs to make enough profit to keep up the on-field success. As all costs are seemingly increasing each year the profit will need to rise with it.

No doubt the number one aim of the club should be on-field success but there are many factors required to facilitate this. Healthy profit would be just one.

 

[CJH]

$3.37 billion

------------------
This is a hallucination and these faces are in a dream. A computer generated environment; a fantasy island you can do anything and not have to face the consequences.

 

[Aussie_Roo]

Footy these days is a business, and like with any business - there is never enough profit.

 

[Dan26]

It's pointless to make 2 million dollars profit, if you are going to come last every year.

The priority should be on-field success if this is achieved, the off-field success should follow

I believe it is more important for a footy club to simply be viable, rather than existing to make huge profits. If a footy club breaks even every year, (therefore allowing them to continue year in year out) in addition to having on-field success, then what more could you ask for?

 

[Grendel]

Good topic Pess. Its one thing to have a profit of say a half million for the year and
keep the books healthy. Its another thing to suddenlly have to call upon those reserves after a loss of the same amount.

Id be happy if the Hawks were always able to make a margin large enough to cover coming expenses and have some equity left over to re-invest so that if some unforseen expenditure did come up (as they do) then that cost could be met without any real damage incurring as a result.

The Tiges recent loss is a case in point. Though they have had profits of recent times until this year, how much in real terms will this loss cost them. Sure its officially at the half million, but will they be borrowing at whatever interest rate to cover that loss. Does it mean that future marketing streams might not now be able to be brought to light as they cant afford it?

Its such a hard thing (money) to come by for all clubs (even the bigger ones) that every dollar should be welcome.

Thank god for Ian Dicker!

 

[Rooboy 96]

NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NONO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NONO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO

Dan agrees with me....

North Melbourne will be Premiers in 2001

 

[Westy Boy]

Well look on the bright side Rooboy -according to Dan your levels of intelligence have just sky-rocketed

 

[Tiger_Of_Old]

the tiges are masters at making profits without tasteing succes in the last 20yrs god forbid once we start pulling our finger out on the field.
this years massive loss i can accept as far as i can see we took a step fwd on the field where as in the past we have made a profit but it counts for jack s**t its on the field that it really counts.success on the field=long term security.just ask the kangeroos do u think they would be still here today if not for their success on the field?

 

[ptw]

turn it around...


Roylion (or any other Fitzroy fans)

Would you give up the 1944 flag to still have Fitzroy running around ? - Lets say I offered $10,000,000 for it.

In a way as a Port supporter I think that is what we have done. We start again, as everyone continues to point out, with no flags and no onfield success in the big league....but we are financially succussful and probably will be for some time to come.

We could have stayed where we were, continued to have onfield success, but perhaps not have been around in 50 years time.

Long term profitability is all that matters. The more the better.

A big risk for clubs is the attitudes expressed above. Football is a business. If you don't treat it that way then ultimately you will go down, and part of running a business is making a profit.

ptw

 

[Pessimistic]

Thanks for the responses but I did want to focus on how much profit is acceptable rather than is profit or success more desirable.

It remember from recent Hawthorn discussions that the drop in membership is largely waverley-related but a ggod proportion is from the 'leafy' suburbs Kew Hawthorn Camberwell etc by people who signed up to support the club financially after 1996. The clob solicited reasons and quite a few said three years of good profits means you don't really need us as much now. ie they tended to think the hawks were making enough profit and as they probably didn't attend games they did not re-sign. (perhaps as crowds have gone up slightly this might kill off the 'cats and dogs' myth forever)

Take Adelaide and West Coast. Hugely financial and you have to be a member to get into games. This will apply to all Interstate clubs soon and possibly even Carlton and Essendon due to limited capacity grounds.
But look at web forums and a lot of fans of these clubs think they are taken for granted. Look at the huge spaces at the 'showpiece' Gabba for the final last year where the reason was exorbitant prices for tickets.

Clubs need to be run on business lines but they are not businesses. There are no shareholders and the members do not expect financial returns. They do expect value for money and that means not being 'milked' and a fair measure of success.

 

[CJH]

Posted by Grendel:

The Tiges recent loss is a case in point. Though they have had profits of recent times until this year, how much in real terms will this loss cost them. Sure its officially at the half million, but will they be borrowing at whatever interest rate to cover that loss. Does it mean that future marketing streams might not now be able to be brought to light as they cant afford it?

Grendel,

I will post more on this topic once I get hold of the Richmond financial statement, but in the interim although Richmond did post a large loss of $639,667 we have profited by about $1.4 - $1.5 million over the preceding 3 – 4 seasons. More crucially we are debt free and do not have to borrow to cover any short fall.

What is most important for clubs is viability. If a club was successful on the field and traded at $1 profit every year then everybody would be happy. Unfortunately this consistency cannot always be maintained and if you had a bad year and lost – say - $639,667 dollars then it would be a long wait before you were back in the black again!

Richmond have traded well over the preceding years but at the cost of mediocrity. Season 2000 saw the first time in a long time that we had a coaching panel that rivalled the top clubs. In previous years the panel came from the coaching bargain basement which did reflect on the field.

The ideal situation would be to make enough profit to have a bit of fat that enables the bumps to be ridden out but without sacrificing anything to do with the football department. It is this balancing act that Richmond has to master.

------------------
This is a hallucination and these faces are in a dream. A computer generated environment; a fantasy island you can do anything and not have to face the consequences.

 

[Grendel]

CJH i wasnt having a go at the tiges (unusal for me i know) rather just using them as an example of how recent profits can be erroded very quickly by even one bad season or worse two or three.

I only used the tiges as they were the most recent to declare their finacial situation for the year. Im know how their previous couple of years have given them a 'kitty' so that they can cover this year. But dont tell me that a half million profit (99) cancels a half million loss (00). Sure its handy to have the reserves (wish the AFL still had reserves) but it still costs in real terms to cover the debt.

Put it this way, personally i hope every club from now until the next millenium makes a profit every year. That way the AFL cant get rid of ANY club. Now id like to see that!

 

[Grendel]

Pess, i follow your reasoning re the drop of in membership etc. To be honest i dont really think it holds to the subject. All clubs this year lost members, for whatever reason (Olympics,early start to season etc) probably in our (Hawks) case there was some backlash to Waverlys loss and also some of the fair weather fans thinking that after two seasons (98/99) of promise and not delivering
they decided that with the underwrite they werent needed.

I honestly think that most people dont really care about how large the profit is, so long as there IS a profit. We all complain that the clubs ripping us of again (the new $25 net membership page at the Hawks being a prime example) but we all know that the reality is the clubs are all fighting for the ever shrinking dollar.

If they can make bigger profits without losing the fans with blatant rip offs or other marketing ideas that drive a wedge between the fans and the clubs, then id hope we could make the total maximum profit available every year.

 

[Danni]

Grendel, I think we would all like to see that!!!!

I am waiting to see how the Lions will go with there finances over the last fiscal year. You would think that with an increased membership base of a couple of thousand on the previous year they should go well. Tho, the Social Club operation was restructured a few months ago, with the bar and catering being contracted out, and one of the staff members of the time said they were told it was due to a $750K loss in turnover due the the redevelopment of the ground(ie made the trading decline for a number of months due to poor access and limited trading facilities). If there is any truth in that waits to be seen, but if it is true then I can't see any 'profit' of any significance for the Lions this year. Imagine being able to wear a $750k loss in one area, but still come out on top! Wouldn't that be wonderful!!

Oh I am almost at the stage of holding my breath to find out! Though it can't be too bad I suppose, as when memberships came out, if you take off the GST component, there is only about an increase of 50c per game, on what we paid per game previously. (oh yeah and considering we now get the ansett cup game and Melbournes 'home' game included, I am counting them too in averaging the price rise)

 

[Pessimistic]

Grendel, the reasoning I gave was from a survey taken by Hawthorn. I'm not sure if it was in the national papers but it was in the Progress Press.

Perhaps it highlights that most of our clubs are still community based, but with TV deals, Player wage inflation (why ?) we could be at a crossroads. Once you give in to player wage spirals the sky's the limit, with no going back.

Here's another couple of examples:

Shane Crawford was criticised for relfecting on TV that they were having trouble raising money for an end of season trip. Ina ctual fact I don't think he went on the trip but perhaps supporters don't think that money needs to be raised for this any more, given the size od some wage packets.

Another one was Wayne Carey being interviewed on TV, explaining why they would wear orange jumpers. He said all the things like 'we all want our footy club to survive' and it was OK. But at the end they discussed Koutas new salary and Wayne, half joking said 'I'll have to talk to the roos about my wage' It was probably a Joke but might not have sat tooo well with supporters not happy about the orange thing - the sponsorship money for the game would have covered a handful of Wayne's pay packets.

 

[Pessimistic]

Also the Hawks Hawthorn social club had a trading loss this year. Put down to the fact there is no more thursday night training which was the 'big' night in the social club.

I think the cancelling of thursday nights was as a result of an AFL agreement with the players union.

It's OK for the AFL to allow wages to spiral (and note the AFL had a trading loss themselves this year, but surely the clubs are right when they say the AFL must find new income to fund it)

You can't sell a waverley park every year, to cover bad management.

 

[Tiger_Of_Old]

al lthe victorian clubs have to put their resources into membership drives etc and each year the bar goes up for what a club needs as far as membership goes just to keep them afloat.the interstate sides expecially wa and sa can sit back and not put $1 towards membership drives etc a/c they dont have to and we all know syd and bris are getting help and always will from the afl.
each year the vic clubs will continue to find ways of getting money into the club by the way wearing a sponsers jumper for one match etc we may not like it however if its a choice between survival or death then so be it.but a time will have to come where ALL sides will have to get together and say enuff is enuff as far as players wagers are concerned put it simply australia as a whole isnt big enuff for these wages given to players no matter what code[just look at rugby].
cheers!

 

[Pessimistic]

A very good point TigerOO. Even if they moved or got rid of several melbourne clubs this would not change. The remaining clubs would probably have to work harder to get members as a lot of them would be disiilusioned.

I have never understood how getting rid of clubs would benefit the remaining ones. And it's been the so-called 'struggling' clubs which have come up with innovations to take things forward.

 

[elt]

Exactly right Pess. It's like people saying we need the corporate dollars in the game. Due to large costs, sponsorship is important but they are not just sponsoring to get a free GF ticket

They are using it as advertising. Us, the fans are the ones they are advertising to. If we lose clubs and fans through becoming disillusioned, I hardly think advertisers are going to be willing to pay the big money.

 

[Tiger_Of_Old]

id like to know how many fitzroy supporters have stayed and continued too follow the lions or supported another side or simply and rightly so just abandoned footy altogether?
id say a fair amount were lost to possibly other codes.
so how the hell can clubs fold be good for the other sides apart from the short term player purge as we have seen in brisbane of the original ex fitzroy players how many are still there? johnson and lynch i think.
fair enuff more money would be distributed but with the spiraling costs of just running a club gets higher every year the xtra money is quickly eroded and yep once again back to square one with another vic club fighting off the vultures.
cheers!