MFC and the Bentleigh Club

[DirtyDees DDC 171]

The Board of the Bentleigh Club has received a proposal from the Melbourne Football Club for the Bentleigh Club to merge into its operation with the MFC.

Reasons include the Bentleigh Club’s spiralling downward profitability trend, the challenging post 2012 new gaming regulations and the future capital expenditure projections required to maintain an attractive and viable venue.

The proposals include relocating to an alternative commercially viable location, in close proximity to the existing site,

but in any case remaining at Yawla St until at least until 30 June 2012.

Key issues include:

· The substantial profitability decline of the Bentleigh club, over the past 5 years

· The ongoing and increasing reliance of gaming to fund our existing operations, and facilities.

· The ongoing reliance on The Melbourne Football Club for survival

· An ageing venue that will require extensive capital expenditure, to meet regulatory

requirements, and to try to maintain an attractive and competitive venue.

· The uncertainty but inevitability of ongoing and substantial changes in regulations and taxes of

clubs and gaming venues in the future.

· The certainty of an even greater substantial investment in other venues, which will create even

more competition and pressure on our finances. (This has already begun with the upgrade to

the Bentleigh RSL, and will escalate as 2012 approaches) and

· The ongoing difficulty and inability to attract new and young membership numbers.

The board approached many consultants who have all come to the conclusion that the current location is a

significant impediment to its commercial success.

The Board has reviewed the proposal in detail is giving an ‘In Principal’

recommendation to further investigate the proposal.

This proposal can be found and downloaded from the Bentleigh Club website front page from Friday 23 July after 12 noon, at www.thebentleighclub.com.au

Be interesting to see the affect of this merger proposal on the MFC's bottom line in 2012 and beyond.

[Sdemon53 15]

After reading The Bentleigh Club Merger Discussion Paper I am not sure if such a merger would be the right move.

What worries me is the financial impact it would have on the club. We are about to wipe out debt with Debt Demolition but with this proposed merger of the MFC and The Bentleigh Club could send us back to the red zone.

I think the MFC should provide more information. It appears the location of a new site for The Bentleigh is the key to it being a financial success. Is there any suitable sites?

My gut feeling is that we may have to walk away from the Bentleigh Club. Though on the other hand we have an extra 48 gaming machines so if a better site is found then maybe it could be viable.

Lets hope the MFC and Bentleigh Club boards can workout a positive outcome for both, but protecting the viability of the MFC.

[DirtyDees DDC 171]

After reading The Bentleigh Club Merger Discussion Paper I am not sure if such a merger would be the right move.

What worries me is the financial impact it would have on the club. We are about to wipe out debt with Debt Demolition but with this proposed merger of the MFC and The Bentleigh Club could send us back to the red zone.

I think the MFC should provide more information. It appears the location of a new site for The Bentleigh is the key to it being a financial success. Is there any suitable sites?

My gut feeling is that we may have to walk away from the Bentleigh Club. Though on the other hand we have an extra 48 gaming machines so if a better site is found then maybe it could be viable.

Lets hope the MFC and Bentleigh Club boards can workout a positive outcome for both, but protecting the viability of the MFC.

Yes it costs a packet to fit out a new gaming club. The worry is if turns into another Collingwood hotels fiasco. Hope we get this right.

[Sdemon53 15]

Yes my thiughts as well DirtyDees.

The other factor here is what is happening with the Leighoak Club? How well is the Leighoak performing? Are we also having to invest into this facility as well.

All members of the Melbourne Football Club should be very concerned with the cost effectiveness of having these 2 Social Clubs.

[agent_orange 0]

Yes my thiughts as well DirtyDees.

The other factor here is what is happening with the Leighoak Club? How well is the Leighoak performing? Are we also having to invest into this facility as well.

All members of the Melbourne Football Club should be very concerned with the cost effectiveness of having these 2 Social Clubs.

What are the costs? Looking at the bentleigh club, I would say that it is struggling to get the 18-44 age group because it doesn't target their tastes and needs. That is just an assumption from looking at the website.

Having never been down that way, I couldn't tell what else is in the area.

As for the leighoak, not sure about that one.

[DirtyDees DDC 171]

We now have our new training facilities at AAMI stadium; we have our summer base at Casey; and we have an estimated $2 million profit for this year. The next stage seems to be the redevelopment of the Bentleigh and Leighoak clubs. I wonder if this includes a relocation to Casey - one of the fastest growing areas in Melbourne.

[Sir Why You Little 34,964]

I hope the MFC is very thorough in its analyasis of the Bentleigh club before any decision is made.

I like the Bentleigh club but it must make a profit, otherwise we will Fall over again.

I personally think the venue is too hidden-I would prefer a premises closer to a main road or shopping complex/strip.

But i trust our board to get it right.

[hoopla 418]

I hope the MFC is very thorough in its analyasis of the Bentleigh club before any decision is made.

I like the Bentleigh club but it must make a profit, otherwise we will Fall over again.

I personally think the venue is too hidden-I would prefer a premises closer to a main road or shopping complex/strip.

But i trust our board to get it right.

To me the Bentleigh Club is a tired facility in a staid residential area removed from public transport. The Yawla St venue is surely a dead duck.

If there is any way the merged entity could cash in on the land value and use the funds to build a new facility in Casey,say, then it might be an exciting opportunity .... no risk - no reward.

Like you ,I trust the club to identify all the complex legal and commercial issues that will certainly be involved.

Edited August 2, 2010 by hoopla

[george_on_the_outer 7,067]

To me the Bentleigh Club is a tired facility in a staid residential area removed from public transport. The Yawla St venue is surely a dead duck.

If there is any way the merged entity could cash in on the land value and use the funds to build a new facility in Casey,say, then it might be an exciting opportunity .... no risk - no reward.

Like you ,I trust the club to identify all the complex legal and commercial issues that will certainly be involved.

Analysing the information provided, it shows that the MFC is now thinking strategically, instead of fighting to stay afloat in the short term. They have identified the problems with the Bentleigh club, particularly location and demographic base and ongoing profitability. Even with a capital injection it would not provide long-term return on investment.

Relocation to a commercially viable location is the obvious answer, but in order to do that would require even short term borrowings....buy a site, sell Bentleigh club. I think it was the Beaumaris hotel which would have fitted this criteria recently, but how do you do it financially? On its own the Bentleigh club couldn't do that, so the MFC is the logical "banker of last resort".

Transferring to Casey would not be an option per se, because poker machines have limits in each area. To keep the licences they stay in the zone for which they are allocated.

Good to see that the club in all aspects is thinking about the future.....

[beelzebub 22,373]

Having grown in or around Beauie in my teens +

I was astounded and saddened to recently pass the old girl ( Beauie Pub) and see it dormant . The Pav group killed it off it seems . Once a vibrant venue ... Could be again

[Tim 2,966]

Having grown in or around Beauie in my teens +

I was astounded and saddened to recently pass the old girl ( Beauie Pub) and see it dormant . The Pav group killed it off it seems . Once a vibrant venue ... Could be again

Saw article the other day that said it was being redeveloped, opening scheduled for Grand Final weekend. There was a football personality involved, but can't remember who it was.

[Happeninghunts 7]

What are the costs? Looking at the bentleigh club, I would say that it is struggling to get the 18-44 age group because it doesn't target their tastes and needs. That is just an assumption from looking at the website.

Having never been down that way, I couldn't tell what else is in the area.

As for the leighoak, not sure about that one.

I went to the Bentleigh Club Saturday night with a couple mates we are in our late 20's and your right there wasn't many between the age of 18-44. There also wasn't as many supporters as I hoped for.

[Sir Why You Little 34,964]

Having grown in or around Beauie in my teens +

I was astounded and saddened to recently pass the old girl ( Beauie Pub) and see it dormant . The Pav group killed it off it seems . Once a vibrant venue ... Could be again

I grew up near Beaumaris, and think it is really sad that Pub is gone-during the 70's & 80's in summer that joint used to pump on weekends.

I drove past a few months back, and was just stunned it was now dead-Primo spot for sure.

[DirtyDees DDC 171]

The Board of the Bentleigh Club has received a proposal from the Melbourne Football Club for the Bentleigh Club to merge into its operation with the MFC.

Reasons include the Bentleigh Clubs spiralling downward profitability trend, the challenging post 2012 new gaming regulations and the future capital expenditure projections required to maintain an attractive and viable venue.

The board approached many consultants who have all come to the conclusion that the current location is a

significant impediment to its commercial success.

Here is a report from the Melbourne Leader dated 11 Aug 2010:

'Melbourne chief operations officer Matt Green told the meeting the Bentleigh Clubs profitability had fallen 92 per cent since 2000 and up to $3.7 million was needed for an upgrade.

Mr Green said the venue had been unsuccessful in attracting new and younger members, and that its location on residential Yawla St was the biggest problem.'

The MFC have now revised their offer to the members of the Bentleigh club. Here are exerpts from an open letter to Bentleigh Club members received today (10/2/11) from the Bentleigh Club subcommittee.

FACT

Club has lost money for last 3 years

Has Debts of over $1.8m and bank seeking solution as no repayments are being made

Has Gaming machines 2012 commitment of $1.3 mil

Is faced with new legislation in regards to gaming machines and ATMs. Both are

considerable risk to the club if it operated as a an independent

Most gaming venues are now part of bigger groups to share costs and risks

Given the potential personal risk it will be difficult to get board members/ management to

be involved if it remains an independent club.

MFC REVISED DEAL

1. Minimum 12 Year commitment to location unless original BC members vote to move

2. Never moves unless members vote to (all members included after 12 years)

2. First $100k of profit goes to capital upgrades every year

3. 2 positions on sub-committee to oversee management and financials

4. Commitment it will be run as a club going forward

5. MFC takes over debt of $1.8m and gaming machines liability.

In summary, we are proposing to swallow up a poorly situated venue that is losing money and dropping in revenue. We are willing to cover the Bentleigh Clubs' debts to the tune of $1.8 million and the gaming machine expenses of $1.3 million, plus the venue needs another $3.7m in renovations. But what is the point of renovating a club that is regarded by Matt Green and every consultant as a dud venue?

One option is the possibility of selling 2 blocks of Whitmuir Road end of the car park to reduce the debt by approximately $1.5m, but there are significant planning issues around selling the blocks.

Another option is moving to a new venue. However the current Victorian Commission Gaming Regulations make it more difficult to transfer machines to other zones compared to a transfer within the current zone (Caulfield, Carnegie, St Kilda East, McKinnon, Bentleigh, Elsternwick, and Bentleigh East). So it seems a transfer to Casey Is unlikely.

In the original proposal by the MFC last year, the club stated 'There is a clear incentive for MFC to relocate to a venue within the zone.'

Yet here we are committing to at least 12 years at this venue, unless the original Bentleigh Club members vote to move. And what are the chances of that?

We have finally paid off our debts and turned a small profit. We are now planning to sink our football clubs profits into 'Melbourne's hidden treasure' that is the Bentleigh Club. This could cost us more than Tom.

Edited February 10, 2011 by DirtyDees DDC

[old dee 23,013]

Here is a report from the Melbourne Leader dated 11 Aug 2010:

'Melbourne chief operations officer Matt Green told the meeting the Bentleigh Club’s profitability had fallen 92 per cent since 2000 and up to $3.7 million was needed for an upgrade.

Mr Green said the venue had been unsuccessful in attracting new and younger members, and that its location on residential Yawla St was the biggest problem.'

The MFC have now revised their offer to the members of the Bentleigh club. Here are exerpts from an open letter to Bentleigh Club members received today (10/2/11) from the Bentleigh Club subcommittee.

FACT

Club has lost money for last 3 years

Has Debts of over $1.8m and bank seeking solution as no repayments are being made

Has Gaming machines 2012 commitment of $1.3 mil

• Is faced with new legislation in regards to gaming machines and ATM’s. Both are

considerable risk to the club if it operated as a an independent

Most gaming venues are now part of bigger groups to “share costs and risks”

Given the potential personal risk it will be difficult to get board members/ management to

be involved if it remains an independent club.

MFC REVISED DEAL

1. Minimum 12 Year commitment to location unless original BC members vote to move

2. Never moves unless members vote to (all members included after 12 years)

2. First $100k of profit goes to capital upgrades every year

3. 2 positions on sub-committee to oversee management and financials

4. Commitment it will be run as a “club” going forward

5. MFC takes over debt of $1.8m and gaming machines liability.

In summary, we are proposing to swallow up a poorly situated venue that is losing money and dropping in revenue. We are willing to cover the Bentleigh Clubs' debts to the tune of $1.8 million and the gaming machine expenses of $1.3 million, plus the venue needs another $3.7m in renovations. But what is the point of renovating a club that is regarded by Matt Green and every consultant as a dud venue?

One option is the possibility of selling 2 blocks of Whitmuir Road end of the car park to reduce the debt by approximately $1.5m, but there are significant planning issues around selling the blocks.

Another option is moving to a new venue. However the current Victorian Commission Gaming Regulations make it more difficult to transfer machines to other zones compared to a transfer within the current zone (Caulfield, Carnegie, St Kilda East, McKinnon, Bentleigh, Elsternwick, and Bentleigh East). So it seems a transfer to Casey Is unlikely.

In the original proposal by the MFC last year, the club stated 'There is a clear incentive for MFC to relocate to a venue within the zone.'

Yet here we are committing to at least 12 years at this venue, unless the original Bentleigh Club members vote to move. And what are the chances of that?

We have finally paid off our debts and turned a small profit. We are now planning to sink our football clubs profits into 'Melbourne's hidden treasure' that is the Bentleigh Club. This could cost us more than Tom.

I agree with your concerns DD however the management of Stynes, Schwab, and the board have done a very good job over the last three years

and I trust them to do the right thing.

However I would like to know how the MFC intends to solve some of these problems

[Sir Why You Little 34,964]

I agree with your concerns DD however the management of Stynes, Schwab, and the board have done a very good job over the last three years

and I trust them to do the right thing.

However I would like to know how the MFC intends to solve some of these problems

Call it the MELBOURNE FOOTBALL SOCIAL CLUB & advertise events & functions-People will go.

At present the name Bentliegh club just does not cut it.

We need somewhere to go as a club, if it is not the Bentleigh Club, sell it-But the place does have potential

At present it is vastly under used IMO

[Dreamin' Demon 10]

5. MFC takes over debt of $1.8m and gaming machines liability.

Yes. I must admit this line in the letter also worried me. It doesn't make sense to commit to absorbing a $1.80m debt, when we just cleared ours. Unless there is some "grab all pokie machines at all cost mentality", which would be wrong.

What also concerns me is that the Melbourne Racing Club did a due diligence & found that they "could not get a return to justify the investment".

So what are we doing? Does the club see something I don't?

[RalphiusMaximus 5,993]

I have only one question. Is part of the proposal that Tom Scully be employed to promote the club at around $500,000 a year? :D

[Rogue 585]

Call it the MELBOURNE FOOTBALL SOCIAL CLUB & advertise events & functions-People will go.

At present the name Bentliegh club just does not cut it.

We need somewhere to go as a club, if it is not the Bentleigh Club, sell it-But the place does have potential

At present it is vastly under used IMO

Will people who don't support Melbourne?

How often would you choose to go to the Collingwood Football Social Club over some other venue nearby?

[Rhino Richards 1,467]

Call it the MELBOURNE FOOTBALL SOCIAL CLUB & advertise events & functions-People will go.

At present the name Bentliegh club just does not cut it.

We need somewhere to go as a club, if it is not the Bentleigh Club, sell it-But the place does have potential

At present it is vastly under used IMO

Its a tacky dump with little endearing it but the fact MFC owns it. The name is not the issue. There are better alternatives for locals and others to go than there.

The only value is the land and the pokies licence

[IWAP 168]

I liked this idea when i thought we would move the club somewhere more viable.

It just won't make money in its present location. I used to live 5 minutes walk away, and even i used to get lost getting there. Its seriously hard to find - in a side street off another side street.

[John Crow Batty 8,317]

Suburban pokie venues are soulless mausoleums where one goes to get euthanised. How can anyone have a good time when it's populated by only the lonely doing their dough and all you hear is PING, PING, PONGO. The club should get out of the business or get a venue back to where the soul of the club resides that is the inner city, close to the MCG and near a tram and train line. And offer attractions that attract real supporters and not just suburban losers. I've lived in the Melbourne area most of my life and don't even know where Bentleigh is and never been to that other place Leighoak nor do I want to.

Edited February 10, 2011 by america de cali

[dee-luded 2,958]

To me the Bentleigh Club is a tired facility in a staid residential area removed from public transport. The Yawla St venue is surely a dead duck.

If there is any way the merged entity could cash in on the land value and use the funds to build a new facility in Casey,say, then it might be an exciting opportunity .... no risk - no reward.

Like you ,I trust the club to identify all the complex legal and commercial issues that will certainly be involved.

Nah, I think their Idea is to setup a new complex to suit the existing supporter base within that region, Bentleigh/McKinnon,,, But in a preferred locale.

I think thats a good Idea. Lets hope we get it right.

I agree with WYL,,, that it needs to be in High Visability near a main Rd/RDS,,, & public transport,, obviously, with the drink drive rules, etc.

I reckon casey will happen as we grow the supporter base down there. Next couple of years perhaps. I think this will follow some climbing the ladder & onfield success.

[dee-luded 2,958]

Suburban pokie venues are soulless mausoleums where one goes to get euthanised. How can anyone have a good time when it's populated by only the lonely doing their dough and all you hear is PING, PING, PONGO. The club should get out of the business or get a venue back to where the soul of the club resides that is the inner city, close to the MCG and near a tram and train line. And offer attractions that attract real supporters and not just suburban losers. I've lived in the Melbourne area most of my life and don't even know where Bentleigh is and never been to that other place Leighoak nor do I want to.

I get the feeling that we will oneday, have a social scene setup around docklands,,, Event,,, ually... As well as the Bentleigh area, and the Casey Zone.

Another alternative site would be handy is the Elsternwick Hotel,,,, close to Great transport Facilities, trams up Brighton rd & along Glenhuntly Rd... trains nearby, Sandy Line, or the tram to Glenhuntly Station/Frankston Line... Night Rider Bus outside late @ night to City or to Point Nepean...

Great locality.

[Redleg 38,092]

If there is any way the merged entity could "cash in on the land value"

Give the man a cigar.