Discussion Let's talk about our debt

[StFly]

That 11.5 mil figure includes the Westpac amount (6.5) that the AFL is guarantor for, right?

Im not an accountant, so feel free to chime in if you have a better idea. Numbers below have been sourced from last years financial report, and I've rounded numbers in calculations.

Looking at the revenue last year we had $20mil from the AFL, $9 mil from members and $7.5 mil in sponserships and events. Assuming sponsership revenue declines by 80%, memberships only decline by 20% and there are no merch sales, non-AFL revenue would become ~$9 mil.

On the other side, total operating costs not including finance costs came to $46 mil. The staff wages and player payments were $30mil. Assuming that the wage bill can be reduced by 30% but everything else can only be reduced by 20%, then the total costs not including finance would be $34 mil.

So as a ballpark figure, we may potentially need somewhere around $25 mil from the AFL. Now it all comes down to how nice the AFL are. Assuming the AFL says they will pay 80% of last years distrbutions as a sign of goodwill (works out to $16 mil), this would mean that the rest ($9 mil) would be an additional loan. So our total debt would increase to $20 mil.

What do others think?

I'm also no accountant, I just look at technical documentation and engineering docs daily on other goods which also include plenty of numbers and similar wordings if more "fire, electrical, chemical" instances.

But yes it does, the 6.7 is the guarantee that we exist, not the 10-12-47 or random bullshit people spout.

Without knowing the bank from basically October last year to now, everyone is guessing, all we have thus far as ironclad is;

Material uncertainty related to going concern
We draw attention to Note 1(b) in the financial statements, which indicates that, as at 31 October 2019, the Group’s current
liabilities exceeded its current assets by $10,452,263. As stated in Note 1(b), these events or conditions, along with other
matters as set forth in Note 1(b), indicate that a material uncertainty exists that may cast significant doubt on the Group’s
ability to continue as a going concern. Our opinion is not modified in respect of this matter

The assumption is that the loan due to depreciation of said assets and downturn is around 800k (770 odd) and our actual loss was around 330k, so puts it at at 1.1 additional if we're talking total likely increase which then is around 11.5 if it had to be here and now. Keep in mind, over the same period the Lions had above 13;

Going concern
The Company has reported a profit of $648,618 for the year ended
31 October 2019 (2018: loss of $230,641). As at 31 October 2019 the
Company has Accumulated Losses of $12,715,877 (2018: accumulated
losses of $13,364,495) and a net current asset deficiency of $13,445,872
(2018: $12,236,104).

Or otherwise were almost 3 million worse off than we are, theirs is also an 8m loan drawn to 7.3 instead of our 6.7 drawn to 6.25, slightly better position overall but greater overall bank required is arguably equal/irrelevant.

The long and short is that if chips were called, we all exist, but if the AFL say "we need X to run a comp" and call for it, we're in the s**t, theyre in the s**t and you'll likely have a comp of about 6 teams who aren't in the s**t and most of them are interstate.

 

[gringo2011]

I don’t get that. Surely in local footy you only pay players if they play. The only expenses should be minimum affiliation fees which would be really small. The southern league only has one or two full time employees. The council will surely shelve local fees. I just don’t get the costs. Maybe I’m missing something

i don’t know, that’s what the club put out.

 

[hoovinha]

I'd believe it.

Firstly, Insurances are expensive. In my organisation, premiums have risen up to 20% this year in some categories.

Rent, permits which need to be maintained, equipment leasing and general maintenance of the grounds would all add up. Fixed costs which can't be avoided.

i don’t know, that’s what the club put out.

 

[plugger66]

I did 7/8ths of the most basic of accounting courses, so its vindicating to see your opinion matches mine. I hope you are right, and I think you are. Things aren't as bad as the media suggest, and our value extends far beyond what we bring through the front door.



The AFL aren't suddenly $600mil in debt. They have a line of credit worth $600 mil. There's a difference. $600 mil is the worst case scenario, and that hasn't played out yet.

Well I would suggest they got that much credit because if we don’t play they will be close to 600 million in debt. The media rights are close to that figure for a start and that gets spent in advance.

 

[plugger66]

i don’t know, that’s what the club put out.

Not doubting it. Just going by my club. We will still have affiliation fees so that’s a loss but I can’t think of any other fees if and when we don’t play. Maybe a little bit of coaching fees for pre season but that won’t be much. It’s certainly not good but hopefully for all clubs it isn’t the end of them.

 

[plugger66]

I'd believe it.

Firstly, Insurances are expensive. In my organisation, premiums have risen up to 20% this year in some categories.

Rent, permits which need to be maintained, equipment leasing and general maintenance of the grounds would all add up. Fixed costs which can't be avoided.

Council won’t charge ground fees. It’s bugger all anyway. Insurance is paid yearly with subs. There is no games so no need for insurance.

 

[hoovinha]

There would still be a need for insurances on things like the buildings and equipment. They would also have a PL policy as per council requirements I would assume. Possibly other insurances to like D&O is they are a going concern (possibly).

 

[Remboy]

There’s a good article in the Age today comparing the AFLs ability to withstand this compared to the NRL. Sounds like they are in all sorts.

Ex-AFL and NRL powerbroker: why the AFL is so much better off

Graeme Samuel, the only man to have been both an AFL and rugby league commissioner, has drawn a sharp contrast between a professional AFL and less professional NRL as the codes confront financial crises.

www.theage.com.au

 

[plugger66]

There would still be a need for insurances on things like the buildings and equipment. They would also have a PL policy as per council requirements I would assume. Possibly other insurances to like D&O is they are a going concern (possibly).

Councils pay insurance on buildings. They own it. I don’t think we would bother insuring equipment in a local footy club. Nothing worth insuring. No idea what d and o are.

 

[Keg on legs]

Pat McAfee is a former NFL player who now has a media profile in the states. He has fallen in love with AFL during lockdown and is giving it huge air time.

We need to get in on this with him- sign him up as a member and use him to push our team into the States. There are already the New Orleans Saints so we could get them on board too. When the borders open up we can get him out here to do a show from RSEA park

Let's get Rooie onto it with his USA links. With the world in a tailspin right now the results won't be immediate, but could be great long term

 

[Stewart66]

In terms of our debt all this has hit us at just about the worst possible time this millennia. We're still smarting from the Seaford debacle and that awful stadium deal that got shoved down our throats, we've had some unsuccessful years after the Pelican's grand strategy went kerplunk and we've just sunk however much into redeveloping Moorabbin and the AFLW team.

Look at the clubs that don't have to worry about debt. Richmond, Collingwood, Hawthorn and West Coast. Three of the last four grand finalists with strong supporter bases and Hawthorn is still riding their success over the last decade. West Coast's management in particular has been brilliant, they've posted profits without pokies and redeveloped their training base over the last few years. Notice none of the clubs who play home games at Marvel are among the financially secure four either.

It's also worth looking at how the Saints fortunes have compared with our former co-tenants at Waverley. This article sums up just how the Hawks have become profitable while the Saints have become indebted.

A lot of things have to happen for us to become profitable. We've got to find a way to capitalise profits from smaller games (this is where the Hawks taking such teams to Tassie has been genius). We need MCG home games to get in crowds. We need to get sponsorship dollars up. We need to sell merch. We need matches at times that capitalise crowds (none of this Sunday twilight ****). For any and all of the above to happen, we need onfield success.

Just a little perspective about the so called rich clubs it’s because of people with power saved them not so
long ago ...

Kennett takes all the credit for Hawthorn these days ..Ian Dicker saved Hawthorn.
When everybody was rushing for the Telstra Dome , Melbourne & Hawthorn were a centimetre from being
One club , Dicker secured Waverley for $1. formed a coterie of the richest most powerful supporters to bail
them out , politics got them Pokies venues that generated multi million dollars for stuff all investment ,
Politics got them Tasmania they would have not been there without it millions given to bottom line every year.

Collingwood were broke , Brumby gave the Lexus Centre for nothing .
Again given a beautiful deal at the MCG ...and rich & powerful business people ensured their survival
even so some of money came from dubious sources, give McGuire some credit for coordinating things
relative to their supporter base .

Richmond again were broke during this period saved by people with influence.

West Coast is a suit & tie club , was given entire state at a time when the WAFL was a very powerful
league and a mining industry that exploded with cash supporting them.

Stkilda were playing in a Grand Final during this period , unfortunately our Admin was poor and succeeded
to commit club to the worst stadium deal that was ever created included catering .
Club is a very very different beast these days Admin , Medical & Training facility is as good as any one
and I mean any team.

Winning games & Flags is all the Saints need at this time , sport never changes everyone loves a winner.


Interesting thing for me is Essendon one of the richest clubs not mentioned ...might have something to do
their administrative strength or lack of these days.

 

[gringo2011]

Just a little perspective about the so called rich clubs it’s because of people with power saved them not so
long ago ...

Kennett takes all the credit for Hawthorn these days ..Ian Dicker saved Hawthorn.
When everybody was rushing for the Telstra Dome , Melbourne & Hawthorn were a centimetre from being
One club , Dicker secured Waverley for $1. formed a coterie of the richest most powerful supporters to bail
them out , politics got them Pokies venues that generated multi million dollars for stuff all investment ,
Politics got them Tasmania they would have not been there without it millions given to bottom line every year.

Collingwood were broke , Brumby gave the Lexus Centre for nothing .
Again given a beautiful deal at the MCG ...and rich & powerful business people ensured their survival
even so some of money came from dubious sources, give McGuire some credit for coordinating things
relative to their supporter base .

Richmond again were broke during this period saved by people with influence.

West Coast is a suit & tie club , was given entire state at a time when the WAFL was a very powerful
league and a mining industry that exploded with cash supporting them.

Stkilda were playing in a Grand Final during this period , unfortunately our Admin was poor and succeeded
to commit club to the worst stadium deal that was ever created included catering .
Club is a very very different beast these days Admin , Medical & Training facility is as good as any one
and I mean any team.

Winning games & Flags is all the Saints need at this time , sport never changes everyone loves a winner.


Interesting thing for me is Essendon one of the richest clubs not mentioned ...might have something to do
their administrative strength or lack of these days.

We have to start winning ASAP. You can have the best storeroom in the universe but if the shopfront looks like s**t you aren't in business for long. We are probably where we are because of the poor admin that was there before though.


We still look a long way off judging by the North fade out. Probably 2 to 4 years to develop the Marshall, King, Clark, Battle generation.

The mid career guys look like they won't be challenging. Billings, Dunny, Carlisle, Sinclair, Ross etc aren't up to it and the older guys are pretty much a waste of spots. Billings is good but he's like a modern day Fiora, saps momentum IMO.

 

[plugger66]

We have to start winning ASAP. You can have the best storeroom in the universe but if the shopfront looks like s**t you aren't in business for long. We are probably where we are because of the poor admin that was there before though.


We still look a long way off judging by the North fade out. Probably 2 to 4 years to develop the Marshall, King, Clark, Battle generation.

The mid career guys look like they won't be challenging. Billings, Dunny, Carlisle, Sinclair, Ross etc aren't up to it and the older guys are pretty much a waste of spots. Billings is good but he's like a modern day Fiora, saps momentum IMO.

Winning solves everything with a good administration. Sums us up that we didn’t when we were winning. And now is a bad time to have a huge debt.

 

[Keg on legs]

Just a little perspective about the so called rich clubs it’s because of people with power saved them not so
long ago ...

Kennett takes all the credit for Hawthorn these days ..Ian Dicker saved Hawthorn.
When everybody was rushing for the Telstra Dome , Melbourne & Hawthorn were a centimetre from being
One club , Dicker secured Waverley for $1. formed a coterie of the richest most powerful supporters to bail
them out , politics got them Pokies venues that generated multi million dollars for stuff all investment ,
Politics got them Tasmania they would have not been there without it millions given to bottom line every year.

Collingwood were broke , Brumby gave the Lexus Centre for nothing .
Again given a beautiful deal at the MCG ...and rich & powerful business people ensured their survival
even so some of money came from dubious sources, give McGuire some credit for coordinating things
relative to their supporter base .

Richmond again were broke during this period saved by people with influence.

West Coast is a suit & tie club , was given entire state at a time when the WAFL was a very powerful
league and a mining industry that exploded with cash supporting them.

Stkilda were playing in a Grand Final during this period , unfortunately our Admin was poor and succeeded
to commit club to the worst stadium deal that was ever created included catering .
Club is a very very different beast these days Admin , Medical & Training facility is as good as any one
and I mean any team.

Winning games & Flags is all the Saints need at this time , sport never changes everyone loves a winner.


Interesting thing for me is Essendon one of the richest clubs not mentioned ...might have something to do
their administrative strength or lack of these days.

Very true mate. I often think about Hawthorn. For a long time they were nothing more than an average outfit. It can turn around.

At least now we have an administration that I believe will enable us to cash in on our success when it finally arises.

 

[Stewart66]

We have to start winning ASAP. You can have the best storeroom in the universe but if the shopfront looks like s**t you aren't in business for long. We are probably where we are because of the poor admin that was there before though.


We still look a long way off judging by the North fade out. Probably 2 to 4 years to develop the Marshall, King, Clark, Battle generation.

The mid career guys look like they won't be challenging. Billings, Dunny, Carlisle, Sinclair, Ross etc aren't up to it and the older guys are pretty much a waste of spots. Billings is good but he's like a modern day Fiora, saps momentum IMO.

Just my opinion think we are a lot closer to being good team ,no hiding from round 1 result ..poor .

Little consequence doubt season happens myself .

 

[gringo2011]

Just my opinion think we are a lot closer to being good team ,no hiding from round 1 result ..poor .

Little consequence doubt season happens myself .

A year off means a year of all our kids not playing and home training. Much worse for a young side. I still think we look more like North Melbourne than a top 4 side. No top end talent yet and a lot of good but not elite players. Geelong will be worse though, so many over 30s there. Even worse. the VFL looks in all sorts of trouble, we might not even be able to play our kids in the seconds. I'm losing my confidence that the lower sides can catch up any time soon. They are talking of cutting sizes of squads.

 

[frenchconnection]

Councils pay insurance on buildings. They own it. I don’t think we would bother insuring equipment in a local footy club. Nothing worth insuring. No idea what d and o are.

Directors & Officers Insurance.

 

[goodie23]

Interesting thing for me is Essendon one of the richest clubs not mentioned ...might have something to do
their administrative strength or lack of these days.

I reckon it'll be an uphill battle for any Marvel-based club to achieve true profitability, you're never going to get the kind of profits there that you would at the MCG. And the doping saga was always going to hurt them long-term, off-field strife coupled with becoming on-field basketcases will take ages to get over.

 

[plugger66]

Directors & Officers Insurance.

Well local footy clubs don’t have them. Certainly not paid in any way

 

[gringo2011]

I reckon it'll be an uphill battle for any Marvel-based club to achieve true profitability, you're never going to get the kind of profits there that you would at the MCG. And the doping saga was always going to hurt them long-term, off-field strife coupled with becoming on-field basketcases will take ages to get over.

I think you can but you need crowds like we did 15 years ago. Back then you could hardly get a seat in GA. The AFL handed back the keys at exactly the time that we could hardly fill 20 seats in the cheer squad section.

 

[The_Steadier]

If a ventriloquist walks into a bar and his dummy orders a beer- who pays, the dummy or the ventriloquist?

It's not our debt, it's the leagues debt.

The league manage/confect the competition to such a degree that the clubs biggest reason for existing is as branding tools.

Sure, the league would prefer clubs to be making money rather than losing it... but our debt is loose change in the scheme of things.

The debt itself is not a threat to our existence.... the fact that it gives the league an excuse to kill us off (if they get serious about wanting to do something about their "too many teams in vic" problem) ... well that IS a threat

 

[From 45]

Councils pay insurance on buildings. They own it. I don’t think we would bother insuring equipment in a local footy club. Nothing worth insuring. No idea what d and o are.

Directors and Officers- Management liability. It covers you for internal operations of your business such as employment embezzlement, sexual harassment, unfair dismissal, statutory liability etc

 

[plugger66]

Directors and Officers- Management liability. It covers you for internal operations of your business such as employment embezzlement, sexual harassment, unfair dismissal, statutory liability etc

Yes someone said something like that. Thanks. I would doubt any local footy club would have that insurance. Certainly not my club

 

[From 45]

Yes someone said something like that. Thanks. I would doubt any local footy club would have that insurance. Certainly not my club

Perhaps not but most clubs/organization do have this cover in place. I can't see why Ormond wouldnt

 

[plugger66]

Perhaps not but most clubs/organization do have this cover in place. I can't see why Ormond wouldnt

Why would we. There is nothing you suggested we could claim for. I would doubt many local clubs would. The only insurance we would have is player’s insurance. We certainly wouldn’t insure stock. The building would be the council. Well it is for sure.