Debt

[mjt 640]

Does anyone know much about the clubs debt?

I noticed in the Herald they said the clubs debt was around 5.5 million and I was wondering if some of that had to do with the Bentleigh club because by god it ballooned out very quickly once again, I know we lost 3.1 million last season so hopfully they can reel it back in quickly with the correct people steering the ship.

[Its Time for Another 4,225]

I read somewhere that about $2.7mill is debt for pokie machines that the machines will pay off in the next 12mths. Some of the rest is debt taken over from the Bentleigh Club that I believe the Club takings are supposed to be paying off. The rest I don't know.

[The Song Formerly Known As 6,479]

Debt? What about it?

We love it.

[Whispering_Jack 30,235]

Does anyone know much about the clubs debt?

I noticed in the Herald they said the clubs debt was around 5.5 million and I was wondering if some of that had to do with the Bentleigh club because by god it ballooned out very quickly once again, I know we lost 3.1 million last season so hopfully they can reel it back in quickly with the correct people steering the ship.

These are not the figures that I've heard mentioned and in fact, as I understand it, despite last year's losses, our net asset position is in the black. Perhaps an accountant can get hold of the actual figures and explain them to us or we could wait for the finance report at Monday's AGM. We should know by then.

[Macca 16,997]

Melbourne releases annual report

According to Peter Jackson ...

Melbourne CEO Peter Jackson said: Despite a disappointing result, the Club has a sound balance sheet making the football Clubs future much more stable than the 2013 result indicates.

We have a clear objective to bring the Club back to a break even position in 2014 and I fully expect to achieve that, and for our Club to be in a sound position moving forward.

The Club has improved its non-football revenue streams with those businesses projected to pay off their own debt by 2017, creating an unencumbered business for the Club, in addition to the $9 million land asset attached to the Bentleigh Club. These businesses will secure the future sustainability of the Club.

The outlook for the Club is positive, but we will of course need and expect our football performances to improve to support the financial outcomes for the Club.

Annual Report (go to page 10 for the numbers and page 22 for the breakdown of revenue)

[mjt 640]

Melbourne releases annual report

According to Peter Jackson ...

Annual Report (go to page 10 for the numbers)

Thanks for that guys cheers.

[Macca 16,997]

Thanks for that guys cheers.

There's a lot that surrounds the Bentleigh Club and the LeighOak. Gross income vs total costs of running both businesses. Plus of course the net value of both businesses and the projected income of both going forward.

Like it or not, we're in the business of making a fair amount of money from poker machines. Without that income we might be in a spot of bother. Also, I'm not sure if both businesses are owned outright or if they are undervalued, overvalued or correctly valued. It's a bit of a grey area sometimes.

[Nasher 33,616]

These are not the figures that I've heard mentioned and in fact, as I understand it, despite last year's losses, our net asset position is in the black. Perhaps an accountant can get hold of the actual figures and explain them to us or we could wait for the finance report at Monday's AGM. We should know by then.

Well thank goodness for that, because if our net asset position was not in the black we'd be insolvent.

While the accountant is there, perhaps she could explain why being in debt isn't always a bad thing and in fact, is sometimes a necessity in business. Anyone with a mortgage is in debt - heaven knows I'm up to my eyeballs in it - it's only a problem if you can't service it or it's hindering your cash flow too much. I wouldn't be tossing myself off the bridge over the MFC debt yet until I see a bit of context about who it is owed to and what it was spent on.

[John Crow Batty 8,871]

Well thank goodness for that, because if our net asset position was not in the black we'd be insolvent.

While the accountant is there, perhaps she could explain why being in debt isn't always a bad thing and in fact, is sometimes a necessity in business. Anyone with a mortgage is in debt - heaven knows I'm up to my eyeballs in it - it's only a problem if you can't service it or it's hindering your cash flow too much. I wouldn't be tossing myself off the bridge over the MFC debt yet until I see a bit of context about who it is owed to and what it was spent on.

Once we start winning then we can F&$@ debt. Edited January 28, 2014 by america de cali

[DemonFrog 1,354]

I know the Club owes me at least three grand final victories.

But they never seem to be able to pay up.

[Sir Why You Little 37,051]

As long as the club can service it without creating more debt it is not a major concern.

We need attendances to be up in a big way this year. Spending at halftime and having a few celebratery drinks after the game.

Ordering merchandise during the week.

There is only one way that can happen.

Winning.

PJ is well aware of this.

Had a beer with Neita yesterday. He still looks match fit.

He feels the same pain we all do.

[Biffen 12,944]

As long as the club can service it without creating more debt it is not a major concern.

We need attendances to be up in a big way this year. Spending at halftime and having a few celebratery drinks after the game.

Ordering merchandise during the week.

There is only one way that can happen.

Winning.

PJ is well aware of this.

Had a beer with Neita yesterday. He still looks match fit.

He feels the same pain we all do.

Nietz was always approachable and genuine .

I'm glad he still has time for ABC agitators .

[Sir Why You Little 37,051]

Nietz was always approachable and genuine .

I'm glad he still has time for ABC agitators .

Thanks Biff. At least my income is taxable

[Rhino Richards 1,467]

Well thank goodness for that, because if our net asset position was not in the black we'd be insolvent.

While the accountant is there, perhaps she could explain why being in debt isn't always a bad thing and in fact, is sometimes a necessity in business. Anyone with a mortgage is in debt - heaven knows I'm up to my eyeballs in it - it's only a problem if you can't service it or it's hindering your cash flow too much. I wouldn't be tossing myself off the bridge over the MFC debt yet until I see a bit of context about who it is owed to and what it was spent on.

When you are a club that at best is barely breaking in an environment where the costs of the competition are always increasing, having a millstone of debt around your necks is the last thing you want.

Debt is not necessarily a bad thing in a business when that debt is undertaken in a planned manner in respect of the investing in assets that will provide a return in the future that will provide a satisfactory return and mitigating the risk of the debt. Sadly this is not the case here.

Any debt taken on is a consequence of the BAU outcomes of the previous admin where attendances/membership fell/ penalties occurred and significant senior contracts paid out.

The current Board would be well aware that we need to boost on and off field performance to ensure we derive revenues that cover operating expenses and pays whatever debt there is as soon as possible.

Given where the competition is going and that MFC is one of the minnows we have no need to carry longer than necessary the dark shadow of debt bestowed by poor decisions in the past.

[Whispering_Jack 30,235]

Well thank goodness for that, because if our net asset position was not in the black we'd be insolvent.

And what would the consequences of that be?

It's my understanding (and I stand corrected if someone can produce the figures), we were substantially in the red in 2008 when the Stynes Board took over and had somehow been managing to survive for several years despite that fact. My reading of the figures provided above indicate that we're now $3.27m in the black. I know accountants can do magical smoke and mirrors stuff with figures but you're right about debt per se being something we can live with - especially in our case where it's underpinned by $12m in property assets which appear to be conservatively valued.

Collingwood was in a worse place financially than we have been recently when Eddie McGuire took over more than a decade ago. His board made some smart decisions on several levels and managed to build the organisation, helped by having a successful team (only 1 flag but regular finals appearances). They are now debt free and have been in a position for years to reinvest substantial profits into their football department.

As much as I hate to say we should be like the Pies, that's exactly what we should be aspiring to achieve at Melbourne.

[DemonFrog 1,354]

These are not the figures that I've heard mentioned and in fact, as I understand it, despite last year's losses, our net asset position is in the black. Perhaps an accountant can get hold of the actual figures and explain them to us or we could wait for the finance report at Monday's AGM. We should know by then.

I will see what I can find out WJ.

After a very quick revire it appears its not all doom and gloom.

We I have some spare time to read the financial statements in more detail I will post some highlights.

Edited January 28, 2014 by DemonFrog

[Rhino Richards 1,467]

The key issue is that we need to service the debt from BAU activities. When we are living hand to mouth to keep up with the competition the last thing you need are the servicing costs and the stigma of debt in a small lowly club.

Given the basis upon which the debt was derived there is no purpose to maintain it. And while you feel secure with balance sheet assets covering the debt. The last thing you want is to have the assets called/sold to pay it off.

And your analogy with Collingwood is a little simplistic. When Eddie took on the Pies from Kevin Rose they were a club that had systematically failed to engage draw revenues off a largest supporter base in the country. He used that natural advantage to build the club where it is today. He employed debt at an appropriate time when the Club was able to service normal operating expenses and the cost of debt from the inflows that a large supporter/member and sponsor base. The debt was used to further invest in assets that would provide further returns for the Club.

Unfortunately MFC don't share the inherent advantages that Eddie assumed control of. It's a case of small steps to turn this Club around. Eliminating the debt should be an early goal.

And it would be good that Bartlett and co could emulate Eddie's success. He is sometimes in his role conflicted and has on occasion said some dumb things but over the course Eddie Maguire has been outstanding for Collingwood

[Whispering_Jack 30,235]

You presume a lot when you claim I draw an analogy with Collingwood. At no stage did I suggest the two clubs were identical. McGuire drew off his club's strengths and that's what I think our vision should be as well, despite that each club has different strengths in different areas.

[Cards13 9,117]

The Bulldogs debt is $10m, now that doesn't look healthy for a club that also spends the least on there core business, football.

[old dee 23,799]

And what would the consequences of that be?

It's my understanding (and I stand corrected if someone can produce the figures), we were substantially in the red in 2008 when the Stynes Board took over and had somehow been managing to survive for several years despite that fact. My reading of the figures provided above indicate that we're now $3.27m in the black. I know accountants can do magical smoke and mirrors stuff with figures but you're right about debt per se being something we can live with - especially in our case where it's underpinned by $12m in property assets which appear to be conservatively valued.

Collingwood was in a worse place financially than we have been recently when Eddie McGuire took over more than a decade ago. His board made some smart decisions on several levels and managed to build the organisation, helped by having a successful team (only 1 flag but regular finals appearances). They are now debt free and have been in a position for years to reinvest substantial profits into their football department.

As much as I hate to say we should be like the Pies, that's exactly what we should be aspiring to achieve at Melbourne.

Amen to that WJ.

I have been saying similar for six years but quite a few dees supporters don't want to know!

There is IMO one way out and that is win games, start doing that and we have a chance.

[Dr. Gonzo 24,234]

And what would the consequences of that be?

It's my understanding (and I stand corrected if someone can produce the figures), we were substantially in the red in 2008 when the Stynes Board took over and had somehow been managing to survive for several years despite that fact. My reading of the figures provided above indicate that we're now $3.27m in the black. I know accountants can do magical smoke and mirrors stuff with figures but you're right about debt per se being something we can live with - especially in our case where it's underpinned by $12m in property assets which appear to be conservatively valued.

Collingwood was in a worse place financially than we have been recently when Eddie McGuire took over more than a decade ago. His board made some smart decisions on several levels and managed to build the organisation, helped by having a successful team (only 1 flag but regular finals appearances). They are now debt free and have been in a position for years to reinvest substantial profits into their football department.

As much as I hate to say we should be like the Pies, that's exactly what we should be aspiring to achieve at Melbourne.

There is good debt and bad debt. We have bad debt that has been accumulated due to a lack of revenue and paying out contracts. It is not debt that has been accrued to be reinvested in profitable business (some of it maybe but not all).

The analogy with Collingwood is OK as you are right we need to leverage our strengths however I think if we're looking at a club to emulate we should be looking at Hawthorn who have capitalised on their Tassie deal and strong on ground performance over the last 7 years. They came from a prett lowly position (crowds similar to ours) to be one the strongest clubs going around. Now we'll have to see how they go once the teams performance drops off but I think they've done it right this time.

[Blistering 541]

Melbourne CEO Peter Jackson said: Despite a disappointing result, the Club has a sound balance sheet making the football Clubs future much more stable than the 2013 result indicates.

We have a clear objective to bring the Club back to a break even position in 2014 and I fully expect to achieve that, and for our Club to be in a sound position moving forward.

The Club has improved its non-football revenue streams with those businesses projected to pay off their own debt by 2017, creating an unencumbered business for the Club, in addition to the $9 million land asset attached to the Bentleigh Club. These businesses will secure the future sustainability of the Club.

The outlook for the Club is positive, but we will of course need and expect our football performances to improve to support the financial outcomes for the Club.

I think this speaks a great deal about the direction the club was taking under Stynes/McLardy and that it was not all negative as many would paint it. Where they failed was to produce a strong or even competitive team on the field and I suspect this came about initially because our debt forced us to accept second best in terms of coaching and facilities for players. The mistakes were then compounded and this led us to where we were in 2013. The recruitment of Roos and other football related innovations under PJ suggest we're turning things around on that front and better performance on the field should see us move away from any concerns with debt.

[Sir Why You Little 37,051]

I have no doubt The MFCcan be a strong debt free club if it is run the right way with the best people available.

Not neceessarily Demon People or anyones close mates.

The Best People.

For too long the club has been left to run down like a beautiful old mansion. She needs work by a top quality builder but it can be done fairly quickly.

The damage is superficial. But it cannot be left unattended otherwise it may be too big a job...

PJ & Roos know this

[Rhino Richards 1,467]

Amen to that WJ.

I have been saying similar for six years but quite a few dees supporters don't want to know!

There is IMO one way out and that is win games, start doing that and we have a chance.

OD, I don't think you have saying out of the normal for the past six years. We all know who and what we want to emulate. It's pretty obvious.

As Peter Jackson has said he thought MFC is not a hard fix but it's not a quick fix.

[dee-luded 2,959]

There's a lot that surrounds the Bentleigh Club and the LeighOak. Gross income vs total costs of running both businesses. Plus of course the net value of both businesses and the projected income of both going forward.

Like it or not, we're in the business of making a fair amount of money from poker machines. Without that income we might be in a spot of bother. Also, I'm not sure if both businesses are owned outright or if they are undervalued, overvalued or correctly valued. It's a bit of a grey area sometimes.

interestingly, with the calls on the AFL to reel in the footy dept spending under a cap arrangement, maybe the AFL couls arrange clubs to get Out of the One Armed Bandits.

If all clubs, were without the Pokies, it may help to level up the AFL's playing fields.

.... together with a Footy Dept' Spending Cap!