Melbourne makes financial profit

[Whispering_Jack 28,096]

Actually the turn around in profit and loss figures from the current year and past year reflect the past administration's ills being cleaned up and put to bed by PJ.

In the Directors report from the 2013 Annual Report there was this:

Operating Net Loss (1,704,557) - PJ has cut over $ 1 million of unnecessary operating costs that he inherited from the past CEO.

AFL Investigation Costs (787,091) - Hmmmm - this was in regard matters occurring under the previous administration

Net Restructure Costs (after AFL funding of $1.45mil) (584,457) - Closing out contracts to members of the past administration including Schwab, Neeld and Connolly

That wasn't my point. I said that our financial problems weren't confined to the one administration but to successive administrations and that relates to the one from which Schwab took over which left a $5m black hole and the one before that when a previous CEO was said to have left a substantial unpaid tax bill in the drawer of his desk. The other point was that throughout these periods we were a house divided which is a condition that leads you to debacles like the tanking investigation, the collapse of our playing list from 2006/7 onwards, on field failures, poor recruiting, player development and coaching.

Much of this is being neutralised at the moment and that's good but we're by no means out of the woods and remain reliant on the largesse of the AFL and, after a decade of disaster, our future is now dependent to a large extent on the improvement of our on field performances.

[Biffen 12,447]

The point is irrelevant now.

We are all AFL subsidiaries.

The aim is to hobble the large teams onfield and then strip away everything they have off it.

The fixture is what makes cash.

And TV.

The fans are just let into grounds for colour.

[Qwerty30 196]

That wasn't my point. I said that our financial problems weren't confined to the one administration but to successive administrations and that relates to the one from which Schwab took over which left a $5m black hole and the one before that when a previous CEO was said to have left a substantial unpaid tax bill in the drawer of his desk. The other point was that throughout these periods we were a house divided which is a condition that leads you to debacles like the tanking investigation, the collapse of our playing list from 2006/7 onwards, on field failures, poor recruiting, player development and coaching.

The thread is about the 2014 profit result and every time someone comments on an adverse outcome from the previous administration you undertake this continual and silly exoneration of them. Any time there is a question about the past administration of McLardy and Schwab you have to immediately try and re write history or weave in the accountability of administrations before them. And regardless of whether you think we tanked or not, the fall out from the AFL investigation was 100% the domain of the Board and management from 2009 onwards. And if its a “house divided” then its their responsibility and no one else to resolve it. You have been vociferous in your condemnation of the EFC Board, coach and players in respect the drug scandal. It’s a pity you cant seem to do the same in respect of MFC issues.

And I am glad PJ is undertaking the appropriate early steps to move us forward.

[Lucifers Hero 37,396]

The following by no means paints the full picture EH but they are real figures ...

Revenue from the 2013 Annual Report (page 22)

There's huge scope for improving our revenues ... what we mainly need to do for that to happen is to win a lot more games - we are well set up to take advantage of an improved on-field showing.

To be in the black to the tune of 3 million plus after 8 years of mainly poor results is an outstanding result.

We could be talking about a far different result right now ... as a comparison, the Lions are apparently 12 million in the red. Port can't turn a profit and the Saints are losing big amounts as well.

Comparisons can be tricky as the Lions 12mill is 'Debt' not 'Operating Loss'. Our Debt at the end of 2013 looks about the same as the Lions. I suspect our Debt level in 2014 won't have changed much. While $161K Operating Profit is better than an Operating Loss it says we are just hanging in there. So agree with WJ, a fair way to go to get out of the woods.

BTW, very impressed to read in yesterday's PR that home game attendances this year were up 28% on 2013. An incredible performances by Demon fans given that most home games were against i/state teams at unfriendly times and we weren't winning. Perhaps explains why memberships are now up vs this time last year. Bodes well for 2015 financial performance!!

Your underlying point is very valid: win more games and things financial are greatly improved!!

Edited December 5, 2014 by Lucifer's Hero

[Macca 16,174]

Comparisons can be tricky as the Lions 12mill is 'Debt' not 'Operating Loss'. Our Debt at the end of 2013 looks about the same as the Lions. I suspect our Debt level in 2014 won't have changed much. While $161K Operating Profit is better than an Operating Loss it says we are just hanging in there. So agree with WJ, a fair way to go to get out of the woods.

BTW, very impressed to read in yesterday's PR that home game attendances this year were up 28% on 2013. An incredible performances by Demon fans given that most home games were against i/state teams at unfriendly times and we weren't winning. Perhaps explains why memberships are now up vs this time last year. Bodes well for 2015 financial performance!!

Your underlying point is very valid: win more games and things financial are greatly improved!!

I was comparing the Lions bottom line with our bottom line.

Whilst we're sitting at just over 3 million in the black it has been reported that they are 12 million in the red - that's a significant difference ... all clubs have debts but it's how those debts are serviced which is most important.

Edited December 6, 2014 by Macca

[Slartibartfast 16,050]

I said that our financial problems weren't confined to the one administration but to successive administrations and that relates to the one from which Schwab took over which left a $5m black hole and the one before that when a previous CEO was said to have left a substantial unpaid tax bill in the drawer of his desk. The other point was that throughout these periods we were a house divided which is a condition that leads you to debacles like the tanking investigation, the collapse of our playing list from 2006/7 onwards, on field failures, poor recruiting, player development and coaching.

What do you mean by "house divided"?

I'd contend that under Gardner's Board we were united in house. The only times I can recall (in more recent times) the house being divided was under the last administration where there were splits throughout the club personnel and under Gutnick we had a divided Board

It goes without saying that we have struggled financially for years which is why of course Ian Ridley recommended we merge with Hawthorn. He contended we couldn't compete or exist under the structure of the day but fortunately on more than one occasion the AFL has helped us survive.

Edited December 5, 2014 by Baghdad Bob

[Whispering_Jack 28,096]

The thread is about the 2014 profit result and every time someone comments on an adverse outcome from the previous administration you undertake this continual and silly exoneration of them. Any time there is a question about the past administration of McLardy and Schwab you have to immediately try and re write history or weave in the accountability of administrations before them. And regardless of whether you think we tanked or not, the fall out from the AFL investigation was 100% the domain of the Board and management from 2009 onwards. And if its a house divided then its their responsibility and no one else to resolve it. You have been vociferous in your condemnation of the EFC Board, coach and players in respect the drug scandal. Its a pity you cant seem to do the same in respect of MFC issues.

And I am glad PJ is undertaking the appropriate early steps to move us forward.

You could hardly call anything I've stated here as exonerating anyone but if, as you say, this thread is limited only to the 2014 financial reports, then why do you and others immediately point to the previous administration's failure in part of one year and fail to acknowledge its role in bringing the club out of a $5m black hole and into the black?

When I mention a "house divided", I refer not to that board internally but to the Melbourne community in general and the divisions over the years going back all the way to the time when we were a power in the 60s. There are plenty of examples of this that have been discussed and debated ad infinitum and don't need to be canvassed again.

As for your parallel with what's happening over at Essendon, apart from the fact that we're talking about an entirely different situation where much of the story is out in the open, you need to check your facts.

I have on many occasions commented favorably about how, despite the controversy raging about the supplements issue, Essendon has been allowed to perform to the best of its ability on the field without the distractions of bickering factions, quite the opposite of what happened at Melbourne in the latter part of the Bailey era and throughout Mark Neeld's time as coach.

And to add to that final point ... despite the raging storm over banned supplements, Essendon won enough games in each of the past two years to make the top eight ... and they recently announced a profit.

[Straight Sets Simon 23,113]

I'm just thankful that Jim Stynes helped clear our debt when he did.

[Macca 16,174]

Without our pokies venues we'd be in all sorts of trouble ... however, those venues are posting better profits as time goes on and we're not about to lose them in a hurry.

In effect, we're being subsidised by pokies but so are most of the other clubs ... I believe only North Melbourne of the Victorian clubs don't have a pokies venue (they do very well financially, all things considered)

If we become a much better team on the field our revenues in a number of areas are almost certain to improve - specifically ...

• Gate receipts
• Merchandise
• Membership & Annual Reserved Seating
• Marketing/Corporate sponsorship & general fundraising
• Foundation heroes

[Elusive Tunbridge 795]

In Australia, professional sports and state governments have become addicted to gambling revenue - in effect, addicted to gambling addiction. Can't look at our financial statement without feeling a little queasy.

[Macca 16,174]

In Australia, professional sports and state governments have become addicted to gambling revenue - in effect, addicted to gambling addiction. Can't look at our financial statement without feeling a little queasy.

I'd agree with you but we'd need to broaden the argument to include nearly all the clubs ... in fact, a number of clubs are doing quite a deal better than us (Carlton & Hawthorn?)

It's estimated that 1 poker machine turns a profit of $80 a day ... doesn't sound like much but if one multiplies that $80 x 365 days x 300 machines then it adds up to quite a tidy figure.

Me - I wouldn't go near one and would prefer if we didn't have them at all - Australia wide. But then people would just go online wouldn't they? Ya can't win and in the end, clubs will make the best of the situation.

[Blistering 493]

The thread is about the 2014 profit result and every time someone comments on an adverse outcome from the previous administration you undertake this continual and silly exoneration of them. Any time there is a question about the past administration of McLardy and Schwab you have to immediately try and re write history or weave in the accountability of administrations before them. And regardless of whether you think we tanked or not, the fall out from the AFL investigation was 100% the domain of the Board and management from 2009 onwards. And if its a “house divided” then its their responsibility and no one else to resolve it. You have been vociferous in your condemnation of the EFC Board, coach and players in respect the drug scandal. It’s a pity you cant seem to do the same in respect of MFC issues.

And I am glad PJ is undertaking the appropriate early steps to move us forward.

What's your problem? Can you damn people for the loss made in one year when things went bad on a number of levels including a selective and costly AFL investigation without also praising them for saving it from extinction when it was deep in debt and friendless?

[Bossdog 2,002]

I'm just thankful that Jim Stynes helped clear our debt when he did.

Not wishing to start another huge debate but........CS and the board at the time also had a lot to do with the debt demolition

For all his short comings CS did a few things right.

[Slartibartfast 16,050]

Not wishing to start another huge debate but........CS and the board at the time also had a lot to do with the debt demolition

For all his short comings CS did a few things right.

The debt demolition was a very successful fund raising exercise, arguable the best the AFL has seen and I'd think it was "best practice".

But reality is you can't have a debt demolition often and the money raised was squandered. At the end of the McLardy/Stynes/Schwab era we were in as bad a financial position as when Stynes took over.

The previous administration get full marks for being able to raising the money and a very low score with how they managed it. Jackson at least realizes a club can't sustain itself by going to the membership and asking for funds.

IMO whilst it was done beautifully the debt demolition was the soft option and poor management.

[Whispering_Jack 28,096]

The debt demolition was a very successful fund raising exercise, arguable the best the AFL has seen and I'd think it was "best practice".

But reality is you can't have a debt demolition often and the money raised was squandered. At the end of the McLardy/Stynes/Schwab era we were in as bad a financial position as when Stynes took over.

The previous administration get full marks for being able to raising the money and a very low score with how they managed it. Jackson at least realizes a club can't sustain itself by going to the membership and asking for funds.

IMO whilst it was done beautifully the debt demolition was the soft option and poor management.

Bob, I believe the comment highlighted is wrong.

Macca on a Demonland thread Debt, concerning the club's financial situation posted as follows earlier this year:-

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)

The figures relate to YE31/10/13 and were also the subject of Peter Jackson's report at the AGM in February this year. I spoke briefly with him after that and he confirmed that notwithstanding the poor financial result for 2012/3 we weren't carrying the massive debt of more than $5m that the Stynes administration inherited and wiped out a couple of years before.

You are correct in suggesting that an organisation can't sustain a business such as that conducted by our club by going to the members with hands out for donations or with collection tins. Stynes/McLardy/Schwab did so nevertheless in a very classy and dignified way and that did save us from extinction/relocation/merger as far as I'm concerned.

I think it's equally fair to say that the business can't be sustained from getting AFL handouts either (which is in part what got us kick started again under PJ). The bottom line in improving our own bottom line is by being good, smart and innovative at running the business and given that this business revolves around football, we need good governance in every facet of the organisation and with a focus on producing a team that's ultimately going to be successful on the field.

I believe we are heading in that direction (albeit slowly) under the administration currently in place but I would really like to see us asserting our independence from the AFL and being able to stand up in our own right and be the masters of our own destiny. We shouldn't forget that at the moment, we remain tied to the AFL and somewhat reliant on its largesse which doesn't entirely sit comfortably with me.

[PJ_12345 1,098]

The debt demolition was a very successful fund raising exercise, arguable the best the AFL has seen and I'd think it was "best practice".

But reality is you can't have a debt demolition often and the money raised was squandered. At the end of the McLardy/Stynes/Schwab era we were in as bad a financial position as when Stynes took over.

The previous administration get full marks for being able to raising the money and a very low score with how they managed it. Jackson at least realizes a club can't sustain itself by going to the membership and asking for funds.

IMO whilst it was done beautifully the debt demolition was the soft option and poor management.

What would you have done differently?

I mean I'm all for one to sit and take pot shots, but I'm genuinely intrigued to see if you've actually got something behind that statement; or, going from some of your previous posts and noting what others have touched on, if it's some personal grudge you've got with the previous administration.

[Guest]

I am of the view that Jimmy would have been better off being a Don Scott style figure for our club. He was definitely someone to rally around but like Scotty, he was probably unsuited to the politics of the joint. In Scott's case, it's because he is too temperamental, intense and incredibly eccentric. In Jimmy's case, he, sadly, was a central figure in bringing in the cronyism that plagued the club until the moment CC was told that his services were no longer required after his suspension was lifted.
Bringing those old players (and CS) back to the club for the sole purpose of creating Debt Demolition wasn't a bad thing BUT it should have ended there like Scotty with Operation Payback. While a new board moved in that were broadly aligned with the goals of Operation Payback, Don was not a member of it and besides Derm (not sure if Jason had come on board at that stage), it wasn't populated by ex-footballers looking for an ego boost and a new gig.

[Demonsone 1,702]

I'm a suffering supporter & it's been tough from 07-13...

But my heart beats true!!!!!

Edited December 6, 2014 by Hogan2014

[Demonsone 1,702]

In Australia, professional sports and state governments have become addicted to gambling revenue - in effect, addicted to gambling addiction. Can't look at our financial statement without feeling a little queasy.

Agree gambling addiction destroys life's.... The smaller clubs like ours need stadium deals were they can make money not write out cheques due to ridiculous high costs Eg Etihad stadium a disaster for most clubs.....

When you look @ Geelong you would want to play 11 home games there & make 500k a game... Oops I forget this is not a home & away comp it's a TV fixture ratings competition!

[Demon trucker 1,788]

The AFL don't give the MFC one cent of handouts. They give as compensation for the poor financial draw we get every year. We have not had a home game against Carlton Richmond and Essendon in three years, we should be getting at least 50% as home games not 0%.

[Slartibartfast 16,050]

What would you have done differently?

I mean I'm all for one to sit and take pot shots, but I'm genuinely intrigued to see if you've actually got something behind that statement; or, going from some of your previous posts and noting what others have touched on, if it's some personal grudge you've got with the previous administration.

I'd have done what Jackson is doing. Spent money where it's needed and not on administrate head office.

And I'm not saying I could do it. I think the CEO role at a footy club is a very difficult job. Jackson is showing us just how it's done and how poor our previous CEO's have been.

[The Third Eye 212]

I'd have done what Jackson is doing. Spent money where it's needed and not on administrate head office.

And I'm not saying I could do it. I think the CEO role at a footy club is a very difficult job. Jackson is showing us just how it's done and how poor our previous CEO's have been.

Yes, but how would you have raised the money in the first place?

[PJ_12345 1,098]

I'd have done what Jackson is doing. Spent money where it's needed and not on administrate head office.

And I'm not saying I could do it. I think the CEO role at a footy club is a very difficult job. Jackson is showing us just how it's done and how poor our previous CEO's have been.

Ok, so you're one of the worst teams in the AFL and you've inherited $5,000,000 of debt in the worst economic environment since the Great Depression; and instead of raising money through a debt demolition, you'd "spend money where it's needed"... haha WHAT MONEY?!?

The only reason PJ can do what he can do now, ie great ideas like leveraging $2m to increase gaming revenue, is because of the money generated through the debt demolition.

PJ's got the opportunity now to put the club in a fantastic position. But to compare the current situation to 2008/09 is a joke.

[Slartibartfast 16,050]

Ok, so you're one of the worst teams in the AFL and you've inherited $5,000,000 of debt in the worst economic environment since the Great Depression; and instead of raising money through a debt demolition, you'd "spend money where it's needed"... haha WHAT MONEY?!?

The only reason PJ can do what he can do now, ie great ideas like leveraging $2m to increase gaming revenue, is because of the money generated through the debt demolition.

PJ's got the opportunity now to put the club in a fantastic position. But to compare the current situation to 2008/09 is a joke.

I'm not sure whether you're being argumentative but I think you'll find that Jackson has wiped very significant amounts from unnecessary head office salaries which were established by Schwab in "the worst economic environment since the Great Depression". haha - WHAT MONEY? That money.

But the point is pretty simple. If you think Jackson is not as good as Schwab then you'd argue for Schwab. I contend that Jackson or someone of his ilk would have done a much better job with the resources at his disposal. That would have resulted in either no need for the debt demolition or a much better outcome as a result of the debt demolition.

[Demonsterative 2,161]

Fundraising via donations is a legitimate and relevant way to make money. its not a soft option. its not a poor strategy. The fact is this fund-raising exercise has made millions of dollars for the club that can only be seen as a good thing. The MFC tapped into a resource and milked for all it could.

Footscray rattled tins on the streets and roads that in effect helped save their club.

Other clubs have used the same strategy to varying success using the same successful model the MFC used.