'Operating Loss' in 2014 less than Previously Announced

[tnk64]

http://thenewdaily.com.au/sport/2015/05/07/port-adelaide-rejects-claim-misled-public-loss/
I'm not sure what to think of this. On the one hand finding out that we've got $1.5 million more than we thought sounds like a good thing. But on the other hand I get the impression that Port might seriously be in the wrong here, and could potentially have done something illegal (I should add that I know virtually nothing about the Australian legal system).
Thoughts?

 

[blaargh]

It's a storm in a teacup - and don't be sucked in by an accusatory headline.

It seems sensible to me to expect to run your business without relying on extra grants as a revenue stream.

Let's say that you are in a minimum wage job, and have to support a family. You would be making $35000 a year, and the government might help with $10000 in Family Tax benefits and Rent Assistance. That gives you a total income of $45000.

Assuming that it costs you $45000 to support your family for the year - you could choose to say that you made a loss of $10000 which you covered with extra help from the government, or you could choose to say that you broke even for the year.

It is sensible business practice to be honest with how much revenue you need to generate to cover your business costs without assistance.

 

[Porked04]

http://thenewdaily.com.au/sport/2015/05/07/port-adelaide-rejects-claim-misled-public-loss/
I'm not sure what to think of this. On the one hand finding out that we've got $1.5 million more than we thought sounds like a good thing. But on the other hand I get the impression that Port might seriously be in the wrong here, and could potentially have done something illegal (I should add that I know virtually nothing about the Australian legal system).
Thoughts?

Personally don't think there's any issue here and the article has a strong anti-Port skew. What isn't explained is what 'SANFL funding' means as this would determine why Keith decided to exclude this from the Operating Loss. The Trading Loss is a more accurate description on our actual financial performance, hence why the figure would have appeared.

The article suggests missing the GF by 3 points should equate to financial success - laughable considering we were screwed by the $ANFL and memberships lag a year behind performance. The author also is quick to point out that salaries increased by 25% and insinuating our Executives are greedy before stating a new staff member was appointed.

Above all, financial documents are audited by Accounting firms who would not produce unethical or misleading documents at the club's insistence, plus the great David Koch is an accountant by trade and would be quick to point out any inaccuracies.

All this article proves is this author most likely was ghost writing for Penberthy or Flejstad

 

[FallingLiefs]

Haven't we been called out on this before?

I'm certain we refer to our losses minus grants.

 

[Papa G]

I think it's brilliant.

 

[Malibu#27]

I don't get it - for years the club in documentation has posted the before and after grants profit/loss ...
Ie - From 2012
-------------------
Consolidated operating loss after grants of $2,117,071
Grants from SANFL $2m
Consolidated operating loss before grants of $4.12m ($3.16m loss in 2011)

And the media only ever reported the worse figure:
From 2012: http://www.foxsports.com.au/afl/afl...on-field-results/story-e6frf3e3-1226526992276

Port Adelaide's year from hell in the AFL took a savage financial toll, with the beleaguered club recording a staggering loss of more than $4 million.
The Power blame the consolidated operating loss of $4.12 million on their poor onfield results.

http://www.adelaidenow.com.au/sport...on-loss-for-2012/story-e6freck3-1226526658292

PORT Adelaide financial papers yesterday told another doleful story when an operating loss of $4.1million topped the 2011 season's by $1million dollars.
The turnover slipped, the crowd numbers dipped to below 20,000 for the first time since the club joined the AFL and corporate return was estimated to be down by about $600,000.

So this year they do the same thing, disclose fully in documentation to members, and talk the non-grant figure in the media. ...

 

[bomberclifford]

If the loss reported publicly was LESS than what actually occurred, then I'd be worried.

The best bit is how certain media outlets were very quick to run with the larger loss figure.

Wouldn't mind betting that it was an intentional tactic to leak the info without clarification.

 

[Doctor Feel]

We did well to do this. Harnessed the public reaction towards the result to grab the SMA by the throat.

 

[badbeats]

It's not illegal. What is legal is the paperwork you give to your members / ASIC.

The Crows overstated their loss too, as they took into account the next 20 years payments to the SANFL for their reserves team.

 

[tribey]

http://m.thenewdaily.com.au/sport/2015/05/06/port-adelaide-recall-asic-statement/

OMG!!!11111

 

[ash_78]

“Our reference throughout the course of 2014 to the marketplace and the parties with whom we were in negotiations with (was) about our ‘trading loss’ which did not include additional SANFL grant income,” Mr Thomas said.

“The reporting of the statutory loss of $1.09 million versus the trading loss of $2.5 million did not give Port Adelaide Football Club any leverage in this deal as all parties had a great deal of transparency about each other’s financial positions throughout the deal timeframe.”

 

[chiwigi]

I love it!

They hate us because we are poor. Now they hate us because we aren't so poor after all!

 

[Jim Dixon]

This story is written by a financial journalist who would be well aware of the murky world of football financials. Let me guess, he's a Crows man pissed off after another Showdown loss.

Did we have a trading loss of $2.5 million, or not? Of course we did. That's the number that the club needs to report back to members. KT has been upfront with us since day 1.

 

[Jonts]

I'm calling this a win

Well done keeping this hush hush until the deal was down

 

[finbarr]

Port wins again.

 

[RussellEbertHandball]

http://thenewdaily.com.au/sport/2015/05/07/port-adelaide-rejects-claim-misled-public-loss/
I'm not sure what to think of this. On the one hand finding out that we've got $1.5 million more than we thought sounds like a good thing. But on the other hand I get the impression that Port might seriously be in the wrong here, and could potentially have done something illegal (I should add that I know virtually nothing about the Australian legal system).
Thoughts?

What's the problem? We had a trading loss before SANFL grants of $2.5mil and a consolidated bottom line loss of
Total comprehensive income/(loss) $(1,091,999) .... as reported in our statutory accounts

Do not go round saying "could potentially have done something illegal" when you know nothing about basic accounting. ASX companies etc every year talk about trading profit and loss as well as their bottom line pofit and loss after one off and extraordinary adjustments and report 2 figures to the press and public.

We did it in 2008 when we had an operating loss of $1.14mil but because we got grants of $2 x $2.5mil from the feds and atate government to build stage 2 of our facilities, our Total comprehensive income was $3.86m profit. Every club in the AFL does it and so does the AFL when they receive government grants or an extra ordinary income stream or loss occurs. They report the true trading position for the year and then report the bottom line after one off event for the year.

As Paul Keating has said for over the last 3 decades, you cant rely on Cabinet Briefing Papers, you gotta go and do your own independent thinking to understand the situation, not rely on someone else's who has shortened it down to their notes. No different here.

 

[Malibu#27]

What's the problem? We had a trading loss before SANFL grants of $2.5mil and a consolidated bottom line loss of
Total comprehensive income/(loss) $(1,091,999) .... as reported in our statutory accounts

Do not go round saying "could potentially have done something illegal" when you know nothing about basic accounting. ASX companies etc every year talk about trading profit and loss as well as their bottom line pofit and loss after one off and extraordinary adjustments and report 2 figures to the press and public.

We did it in 2008 when we had an operating loss of $1.14mil but because we got grants of $2 x $2.5mil from the feds and atate government to build stage 2 of our facilities, our Total comprehensive income was $3.86m profit. Every club in the AFL does it and so does the AFL when they receive government grants or an extra ordinary income stream or loss occurs. They report the true trading position for the year and then report the bottom line after one off event for the year.

As Paul Keating has said for over the last 3 decades, you cant rely on Cabinet Briefing Papers, you gotta go and do your own independent thinking to understand the situation, not rely on someone else's who has shortened it down to their notes. No different here.

glekakis@thenewdaily.com.au

 

[RussellEbertHandball]

Ok I see what Georgey boy is on about and trying to dig up... its the misfiled documents he is really digging into and salaries not so much the misleading angle. From the story that started this post

http://thenewdaily.com.au/sport/2015/05/07/port-adelaide-rejects-claim-misled-public-loss/

A leading AFL club has told its supporters it lost $2.5 million last year even though official documents lodged with the Australian Securities and Investments Commission show the loss was less than half that.
.....
According to official financial accounts lodged and then re-lodged with ASIC last month, the club’s “operating loss” in 2013/14 was $1.09 million.
......
Even though Port Adelaide believed the club’s true trading performance was more than twice the official loss stated in the accounts, the aggregate salaries of its key management personnel last year increased by almost 25 per cent. The payroll for senior executives, which includes the CEO, increased to $2.17 million from $1.73 million in 2013.

Mr Thomas said the increase in the pay of key staff was due to “step increases in remuneration and performance-based bonuses, of which football performance was a key factor for some individuals”. “Further, there was an additional senior executive role in 2014 that was not in place for the whole of 2013, thus artificially inflating the percentage year on year comparison,” he said.

http://thenewdaily.com.au/sport/2015/05/07/port-adelaide-rejects-claim-misled-public-loss/

and the other one linked in the story

http://thenewdaily.com.au/sport/2015/05/06/port-adelaide-recall-asic-statement/

Issues with Port Adelaide’s financial reporting were not limited to the announcement of its operating loss.

The New Daily last week alerted the club, and its auditors from accounting firm BDO, to shortcomings in the official accounts filed to the Australian Securities and Investments Commission. The accounts, as filed to ASIC on March 20, did not contain a signed statement from the club’s auditors.

However, they did include a confidential report prepared by the BDO audit team, which detailed private advice given to the club about the preparation of the 2014 accounts. A member of Port Adelaide’s finance division included the sensitive report by mistake in the ASIC filing. The club has since recalled the filing and resubmitted amended accounts.

When The New Daily notified BDO engagement partner Geoff Edwards last week that copies of his confidential report were in the public domain, he said: “You’re kidding.” When asked whether the BDO audit team had asked the club to include the confidential audit report in the accounts, Mr Edwards said: “We absolutely have not asked the club to include that report in the accounts. “They’ve done that in error.”

http://thenewdaily.com.au/sport/2015/05/06/port-adelaide-recall-asic-statement/

**** I wouldn't want to be on the end of a Kochie blast over this down at the club.

 

[Macca19]

I'd say someones probably looking for a new job over that mistake

 

[Hong-Kong Phooey]

does this have any ramifications? surely an official audit report would only contain legal stradegies?

 

[Ando39]

Reports that we freely handed out figures to members, then we somehow hid them from the SANFL. The cognitive dissonance is strong in this one.

 

[RussellEbertHandball]

does this have any ramifications? surely an official audit report would only contain legal stradegies?

No - the official audit report that auditors sign off, on is fine and there we no qualifications. Auditors write management style reports summing up what they do and areas of concern that may or may not need adjustment is not considered the official audit report that by law they have to produce and are legally liable for their opinion in that report. If sog35 is still posting he can give you the ins and outs of it as he is a green tick merchant.

 

[sog35]

No - the official audit report that auditors sign off, on is fine and there we no qualifications. Auditors write management style reports summing up what they do and areas of concern that may or may not need adjustment is not considered the official audit report that by law they have to produce and are legally liable for their opinion in that report. If sog35 is still posting he can give you the ins and outs of it as he is a green tick merchant.

Looks right to me based on the articles.

 

[Grave Danger]

It's not illegal. What is legal is the paperwork you give to your members / ASIC.

The Crows overstated their loss too, as they took into account the next 20 years payments to the SANFL for their reserves team.

Yet wee George doesn't call them out over this in this summation in another article:

Adelaide
Verdict: Mortgaged to the hilt
The Crows posted a record net loss of $8.03 million last year, which has severely eroded the club’s balance sheet. They are under immediate financial pressure because at the end of October last year they had only $2.3 million in cash and liquid assets to cover short term debts totalling $9.5 million.


This is what he says of our "$1M" loss:

Port Adelaide
Verdict: Nice shiny house, but rent a problem
Their on-field revival drew larger attendances and boosted revenue by almost $7 million. But a blowout in player payments and administration costs helped to keep the club in the red. Port should be generating bigger returns from its on-field performances and desperately needs to renegotiate the terms of its revenue sharing arrangement for its home games at the Adelaide Oval. With net assets of only $3 million Port has no leeway for more losses.

George hasn't been keeping up...

 

[tribey]

"Port has no leeway for more losses"

Yeah, he's looking at things through the prism of a business model that simply doesn't exist in professional football.

GWS and GCS will run at a loss for virtually their entire existence. It's irrelevant. Their existence fills a market vacuum and adds value to TV rights by providing 22 extra fixtures each year that ordinarily wouldn't exist.

PAFC is in a weird purgatory whereby it is insanely valuable in terms of the overall revenues it generates but only finds itself receiving a small portion of them. Because we are essentially propping up the SANFL in terms of our AFL licence repayments (for a second time, ladies and gentlemen) and seeing no catering and pourage revenue inside Adelaide Oval, our balance books will never reflect our true value.

This is what collective balance is all about. If at the end of a financial year where we are facing a loss and end up having to be topped up with say, $1,000,000, $2,000,000 or even $5,000,000 to breakeven, that's a drop in the bucket compared to the dollar value brought to the SANFL and AFL by Port Adelaide.