Membership Revenue v Net Membership Revenue

[theflea]

It clearly delineates that its the average amount paid per member when weighed against membership revenue and it tells us that the average Bulldogs member will pay more per membership than a richmond supporter. It is what it is, nothing more. Perhaps Richmond people would like a website that creates its own stats based on spin from Punt Road.

This is true, so I'm curious to what is the definition of broad support? When did this term come up?

 

[bombersfan4000]

the Collingwood revenue from membership is a fudged heap of s**t, to make the club bigger than what they really are

 

[The_Wookie]

the Collingwood revenue from membership is a fudged heap of s**t, to make the club bigger than what they really are

the revenue is listed as including match receipts in the annual report. I dont think it makes look any Collingwood bigger than they are at all. They are the benchmark of the competition. If youve got other proof, lets here it.

 

[The_Wookie]

This is true, so I'm curious to what is the definition of broad support? When did this term come up?

here

If you want to gauge broad support, look at # of members, or attendances, or TV ratings. [/B]There are plenty of good options. If you want to look at how much $$$ the club is making from members, look at net membership revenue.

But if you want a stat that puts Gold Coast near the top, a club that is far, far below league average in revenue, and support, number of members, and every relevant measure you can think of ... well then gross revenue per member is your stat.

 

[Ned_Flanders]

It clearly delineates that its the average amount paid per member when weighed against membership revenue and it tells us that the average Bulldogs member will pay more per membership than a richmond supporter. It is what it is, nothing more. Perhaps Richmond people would like a website that creates its own stats based on spin from Punt Road.

I think you are partially right, but have gone to the wrong conclusion on this.

You say total spend is the only relevant metric because that measures the contribution that a person is willing to make, and that's a fair and reasonable position.

To say removing costs however tells us nothing I disagree with though. Price is only one factor that people consider when weighing up whether or not to buy a membership, the other is value, and as we are seeing now a lot of clubs are juicing this quite hard.

If Carlton and Richmond (for example) are both selling a reserved seat package for $1000, have sold identical numbers, identical bay, BUT in order to achieve this Richmond has had to provide away game AFL reserve access (at additional cost to the club), I'd argue the Carlton number is superior. They have had to give away less value to achieve the same number.

If you look at the revenue per member figures, it's no surprise that those with capacity issues rock net revenue per member for the most part. They are able to go to members, charge a ridiculously high premium on their package (compared to other clubs and buying independently), yet people take it.

To use my club as an example, net revenue per member highlights our long term weaknesses. We have had to hold down prices, increase premium package offerings, and promote three game packages because we are not a club with a long culture of paying premiums for these things (when you are s**t for thirty years, who gives a s**t about grand final guarantees?). While we may have strength in numbers, we don't yet have that same strength in the financial sacrifice against received value other clubs do.

Net also stops one thing from happening, and that's the ability to effectively give away a membership with other merchandise. We remember the Collingwood jumper/membership sale, so we think Collingwood actually made any coin out of that? Yes they got the names on the database (which is something I highly value), but the membership was around the price of the jumper normally. While this products gross figure would be reasonable, it's net would be pretty awful.

Personally I think people have a tendency to find one metric and hang onto it for dear life, but ignoring any data set that can show why a people are making a purchasing decision potentially ignores important information.


For the record, I had this argument with Final Siren last week. I think he has massively misinterpreted the small sample set of 2014 data (too many clubs are missing to create a proper analysis of net revenue per member), and he's also relying on data which includes revenues outside what we would all consider purely membership sales. Comparing the limited 2014 numbers to the 2013 ones the afl got from the age shows a very different picture.

 

[The_Wookie]

I think you are partially right, but have gone to the wrong conclusion on this.

You say total spend is the only relevant metric because that measures the contribution that a person is willing to make, and that's a fair and reasonable position.

To say removing costs however tells us nothing I disagree with though. Price is only one factor that people consider when weighing up whether or not to buy a membership, the other is value, and as we are seeing now a lot of clubs are juicing this quite hard.

If Carlton and Richmond (for example) are both selling a reserved seat package for $1000, have sold identical numbers, identical bay, BUT in order to achieve this Richmond has had to provide away game AFL reserve access (at additional cost to the club), I'd argue the Carlton number is superior. They have had to give away less value to achieve the same number.

If you look at the revenue per member figures, it's no surprise that those with capacity issues rock net revenue per member for the most part. They are able to go to members, charge a ridiculously high premium on their package (compared to other clubs and buying independently), yet people take it.

To use my club as an example, net revenue per member highlights our long term weaknesses. We have had to hold down prices, increase premium package offerings, and promote three game packages because we are not a club with a long culture of paying premiums for these things (when you are s**t for thirty years, who gives a s**t about grand final guarantees?). While we may have strength in numbers, we don't yet have that same strength in the financial sacrifice against received value other clubs do.

Net also stops one thing from happening, and that's the ability to effectively give away a membership with other merchandise. We remember the Collingwood jumper/membership sale, so we think Collingwood actually made any coin out of that? Yes they got the names on the database (which is something I highly value), but the membership was around the price of the jumper normally. While this products gross figure would be reasonable, it's net would be pretty awful.

Personally I think people have a tendency to find one metric and hang onto it for dear life, but ignoring any data set that can show why a people are making a purchasing decision potentially ignores important information.


For the record, I had this argument with Final Siren last week. I think he has massively misinterpreted the small sample set of 2014 data (too many clubs are missing to create a proper analysis of net revenue per member), and he's also relying on data which includes revenues outside what we would all consider purely membership sales. Comparing the limited 2014 numbers to the 2013 ones the afl got from the age shows a very different picture.

Membership expense and removing costs from the equation is a purely economic position taken by the club that bears no indication on club support or membership. The fan pays no more or less whether costs are included in the report or not. The man on the street cares only for what his membership will cost, not how Richmond spins it in the annual report.

If the clubs are giving away memberships it will still be reflected in the revenue per member stat, the less you give away, the less 3 game memberships you sell, the higher the average revenue spend is going to be. Richmonds cost in persuing a membership has no bearing on whether the fan buys it.

In short, total revenue is a fairer indicator of support due to the fact that it uses the money paid for by members to become members. Not the discounted rate after costs removed that is purely accounting and has no bearing on whether someone obtains a tigers membership or not.

 

[Richo83]

To be fair to final siren, I didn't ask about support, I asked about returns, how much Richmond gets from its members. It is true however that if Richmond is running an efficient membership program which yields about the same net revenue as Hawthorn and Essendon, than it seems okay. I was concerned about the financial strength of Richmond, not the support Richmond gets, which is fine.

As for support, which is a different issue, tv ratings, crowd attendance and memberships seem to be a good way to gauge that. How much people pay for their memberships is, as DrMike pointed out, there's a number of reasons why someone spends more on something, and it doesn't necessarily mean they love the product more. For fans like us, memberships are a necessity to see our team play, which means that we're flexible in how much we'll pay, to a degree, it's an inelastic demand, it will be bought.

 

[Ned_Flanders]

Membership expense and removing costs from the equation is a purely economic position taken by the club that bears no indication on club support or membership. The fan pays no more or less whether costs are included in the report or not. The man on the street cares only for what his membership will cost, not how Richmond spins it in the annual report.

If the clubs are giving away memberships it will still be reflected in the revenue per member stat, the less you give away, the less 3 game memberships you sell, the higher the average revenue spend is going to be. Richmonds cost in persuing a membership has no bearing on whether the fan buys it.

In short, total revenue is a fairer indicator of support due to the fact that it uses the money paid for by members to become members. Not the discounted rate after costs removed that is purely accounting and has no bearing on whether someone obtains a tigers membership or not.

If the value proposition has no merit, why does Hawthorn simply not cut its melbourne membership prices (rather than go to the expense of paying for away game access for these members)?

Value is important, esp in an era when punters want more for their membership than a saving on their GA price.

Also just to repeat, this is a metric rfc currently suck at. We are well behind Collingwood, essendon, and Carlton, so it's not one you would use to pump up rfc tyres

 

[Albert Ross]

Updated

When you look at some of these figures, I can only think that differing accounting practices are as big a factor as anything.

I think Wookie does a great job compiling this info and recording it for prosperity, but that Gold Coast figure doesn't pass the smell test.

They are saying they get $560 per member yet that would imply that every single membership they have sold is in the Gold A full adult category reserved seat (which is priced at $560). They have not sold any other memberships in any other category including concessions, general admission or any of the other 12 membership options?

If you calculate an average based on Silver Reserved Seats and General Admission as a sort of best-guest mean ... you get a ticket price of $250 and less than half that revenue.

 

[theflea]

Membership expense and removing costs from the equation is a purely economic position taken by the club that bears no indication on club support or membership. The fan pays no more or less whether costs are included in the report or not. The man on the street cares only for what his membership will cost, not how Richmond spins it in the annual report.

If the clubs are giving away memberships it will still be reflected in the revenue per member stat, the less you give away, the less 3 game memberships you sell, the higher the average revenue spend is going to be. Richmonds cost in persuing a membership has no bearing on whether the fan buys it.

In short, total revenue is a fairer indicator of support due to the fact that it uses the money paid for by members to become members. Not the discounted rate after costs removed that is purely accounting and has no bearing on whether someone obtains a tigers membership or not.

If net revenue is purely an economic position, then surely gross is the same. Club support is therefore then just the pure numbers of members. Being able convince fans to pass on their money, is the only metric that counts.

 

[theflea]

here

This was in response to your point about support. As I said earlier, converting supporters to members who pay their cash is good way to go about it.

 

[The_Wookie]

I think Wookie does a great job compiling this info and recording it for prosperity, but that Gold Coast figure doesn't pass the smell test.

They are saying they get $560 per member yet that would imply that every single membership they have sold is in the Gold A full adult category reserved seat (which is priced at $560). They have not sold any other memberships in any other category including concessions, general admission or any of the other 12 membership options?

If you calculate an average based on Silver Reserved Seats and General Admission as a sort of best-guest mean ... you get a ticket price of $250 and less than half that revenue.

Does NO ONE read the notes that go with these things. its been said already that Gold Coasts figure includes its match returns in its annual report. In fact all the figures highlighted in pink do...why do you think they are all a different colour for?

If net revenue is purely an economic position, then surely gross is the same. Club support is therefore then just the pure numbers of members. Being able convince fans to pass on their money, is the only metric that counts.

Net revenue isnt indicative of ANYTHING to do with suipport. Its purely indicative of how much the club spent on attracting members. Nothing more, nothing less.

If the value proposition has no merit, why does Hawthorn simply not cut its melbourne membership prices (rather than go to the expense of paying for away game access for these members)?

It can afford not to. We're talking about a club that turned a 5 million profit last year. Its strategy is working.

Value is important, esp in an era when punters want more for their membership than a saving on their GA price.

Also just to repeat, this is a metric rfc currently suck at. We are well behind Collingwood, essendon, and Carlton, so it's not one you would use to pump up rfc tyres

So you completely manuifacture a metric that richmond alone use?

TLDR Version:

Membership revenue/Members = average revenue paid per member. its that simple.. Honest to god Im not even sure what the Richmond argument is.

 

[Tiger71]

Membership revenue/Members = average revenue paid per member. its that simple.. Honest to god Im not even sure what the Richmond argument is.

There is no "Richmond" argument here Wookie. Its just guys asking a question.

 

[Richo83]

Does NO ONE read the notes that go with these things. its been said already that Gold Coasts figure includes its match returns in its annual report. In fact all the figures highlighted in pink do...why do you think they are all a different colour for?

Alright, ignorant person question, what specifically does match returns mean? Like why do the suns get so much revenue?

 

[The_Wookie]

Alright, ignorant person question, what specifically does match returns mean? Like why do the suns get so much revenue?

Its their stadium arrangement. Since they manage the stadium, they get all returns on all categories of admissions, including corporates. Whereas clubs in Melbourne receive about 25% - 75% of standard admissions (depending on category) at Etihad.

There is no "Richmond" argument here Wookie. Its just guys asking a question.

Please look at this thread again, and tell me why its not a Richmond argument. The only people arguing net revenue is more important support the only club that feels the need to report membership revenue as net.

 

[Ned_Flanders]

Membership revenue/Members = average revenue paid per member. its that simple.. Honest to god Im not even sure what the Richmond argument is.

If you're asking why the club reports it as net revenue, I thought it would be pretty obvious

For the club, where it finishes on the "membership ladder" is irrelevant. For us here, yes it's interesting, but for the club memberships are about one thing. Getting cash to spend on the footy dept

Gross revenue means s**t for that, because a big chunk of it gets taken out in expenses. The footy dept only gets its hands on the money after that, and it's maximising that money which should be its priority.

It's like what any half decent sales person is told from day one, turnover means s**t - it's your margin that is all that matters.

 

[The_Wookie]

If you're asking why the club reports it as net revenue, I thought it would be pretty obvious

For the club, where it finishes on the "membership ladder" is irrelevant. For us here, yes it's interesting, but for the club memberships are about one thing. Getting cash to spend on the footy dept

Gross revenue means s**t for that, because a big chunk of it gets taken out in expenses. The footy dept only gets its hands on the money after that, and it's maximising that money which should be its priority.

It's like what any half decent sales person is told from day one, turnover means s**t - it's your margin that is all that matters.

But none of it is indicative of actual support which is where this thread went awry in the first place.

As an accounting measure, its relevant sure. But in terms of determining support, less so.

 

[Ned_Flanders]

But none of it is indicative of actual support which is where this thread went awry in the first place.

As an accounting measure, its relevant sure. But in terms of determining support, less so.

Agreed, but when you refer to "the Richmond argument" aren't you referring to the club (who as I mentioned don't give a s**t about using this measure as an indication of support)?

 

[The_Wookie]

Agreed, but when you refer to "the Richmond argument" aren't you referring to the club (who as I mentioned don't give a s**t about using this measure as an indication of support)?

The only problem i have with that is that if thats the case why report net membership revenue at all? they dont bother in the annual report, but its specically trumpeted to the media, so obviously there is a care factor involved.

 

[Ned_Flanders]

But none of it is indicative of actual support which is where this thread went awry in the first place.

As an accounting measure, its relevant sure. But in terms of determining support, less so.

Sorry, forgot to address the alt

If you're referring to this as a Richmond fan argument, I'd firstly say we are far from one united collective on this

For me personally, I think this is just one useful measure in analysing why either membership numbers or membership revenues may be trending a certain way, but it needs to be looked at in conjunction with those other indicators.

It's like idiots who use cpi or gdp in isolation to determine the health of the economy, on their own they are inadequate because they miss key elements for consideration

 

[Ned_Flanders]

The only problem i have with that is that if thats the case why report net membership revenue at all? they dont bother in the annual report, but its specically trumpeted to the media, so obviously there is a care factor involved.

This is a fair question, and I suspect the reason comes from our past

We were a club who was addicted to the "build it and they shall come" method of rebuilding the club, and it usually imploded in our face

The club has made a big thing that our clubs budgeting will now be based upon conservatism, and being able to pay our bills even in a downturn

Reporting net shows our members what growth they are getting in membership in real terms, not just a great rev number based upon overcompensating in our packages

Remember our membership earnings are relatively poor because we were behind other clubs in terms of our lack of premium sales. Focusing on net is good for us as it helps show whether we are increasing this as we are increasing our membership (and to date it's been modest at very best)

 

[The_Wookie]

Sorry, forgot to address the alt

If you're referring to this as a Richmond fan argument, I'd firstly say we are far from one united collective on this

Fair call. i dont mean it as all richmond fans believe it, but it seems to be a predominantly tiger philosophy.

For me personally, I think this is just one useful measure in analysing why either membership numbers or membership revenues may be trending a certain way, but it needs to be looked at in conjunction with those other indicators.

I agree.

It's like idiots who use cpi or gdp in isolation to determine the health of the economy, on their own they are inadequate because they miss key elements for consideration

True.

 

[Richo83]

Wookie is right, net revenue is only relevant for accountants and financial analysts, it has little relevance in terms of support. I mean, hell, Collingwood could pay their membership staff 100k+ salaries, doesn't change how popular they are, only how much they're earning. I'm kinda sorry I brought it up, but I was curious about the financial side to it, not how it relates to support, because it doesn't.

Its their stadium arrangement. Since they manage the stadium, they get all returns on all categories of admissions, including corporates. Whereas clubs in Melbourne receive about 25% - 75% of standard admissions (depending on category) at Etihad.

Would the AFL buying Etihad outright allow for more returns from Etihad? There was a debate about that on this forum recently.

 

[The_Wookie]

Wookie is right, net revenue is only relevant for accountants and financial analysts, it has little relevance in terms of support. I mean, hell, Collingwood could pay their membership staff 100k+ salaries, doesn't change how popular they are, only how much they're earning. I'm kinda sorry I brought it up, but I was curious about the financial side to it, not how it relates to support, because it doesn't.



Would the AFL buying Etihad outright allow for more returns from Etihad? There was a debate about that on this forum recently.

Theres another thread for this, but I believe so.

 

[smasha]

Oh I just realized footyindustry.com is your site. I like that site a lot; well done. Does it not bother you, though, that you're using a stat for "broad support" that puts clubs like the Bulldogs ahead of Richmond? And that the Suns would sit near the top in? I mean, that doesn't pass a sanity test.

The last time Richmond really surged ahead in memberships .the membership thread got moved to a sub forum.
Will it happen again now we will be the club with the most members?
Where will they hide it this time, under five sub forums?