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Dees Post Operating Loss for 2019


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Losing $1.5 million from cash reserves is a big blow.

Winning is the core to success as others have mentioned.

 

Sustainable success is critical. As Hawthorn, Geelong and Collingwood have proven.

 

But you gotta have a good business plan too.

 

I am not against the idea of having another Debt Demolition campaign. But it should be done after a successful season when members are happy to fork out extra funds.

 

It would definitely be good to be completely debt free. However, that can change very quickly if we have consecutive poor seasons.

 

Finally having a home training base of our own should be the priority objective besides the obvious of winning Premierships.

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1 hour ago, Sir Why You Little said:

Whorethorn have been a Success ever since Norm Smith taught John Kennedy what it takes to Coach. Yes they have had some troughs, but they know how to climb out again. By winning games. 
 

Winning is the core to sustained success

People have short memories between 1996 and 2004 their years where spent mostly in the bottom 4.

They where a success in the 70 ,80 and 1991, and where broke by 1996, they could have gone the way of Fitzroy, they only started making profits when they opened pokies in Waverly and sold games to Tasmania and that's a fact, success did not make them any profits,  by the merger in 1996 Hawthorne had huge debt and could not pay their players, that's fact, take away pokies and their Tasmanian games and their profits disappear.

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I still havent heard a compelling reason for us to have sold them (or not renewed, whatever it was) in the first place.

Huge revenue stream gone. Replaced with what? Thats another $Mil or so a year we have to go cap in hand to find. If the club has to hit the phones begging again to stitch up a self inflicted wound, thats gonna be a very very hard sell.

Cant pay your creditors with "feelings" or whatever it is we gain from dropping pokies.

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pokies are disgusting, we were right to get out, but equally we should have grown revenue to cover ourselves by now. we have had worse years on field without losing so much cash. also don't like the way it was communicated suggesting debt was down just because they held on to the cash from the proceeds of assets. too much spin for my liking, they just need to own the loss and talk about how we rectify it going forward

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30 minutes ago, ding said:

I still havent heard a compelling reason for us to have sold them (or not renewed, whatever it was) in the first place.

Huge revenue stream gone. Replaced with what? Thats another $Mil or so a year we have to go cap in hand to find. If the club has to hit the phones begging again to stitch up a self inflicted wound, thats gonna be a very very hard sell.

Cant pay your creditors with "feelings" or whatever it is we gain from dropping pokies.

Apparently the new licence fees are exhorbitant.  Are they still profitable?  I don't know, but we had buyers, so someone must think so. The government sold the previous ones too cheaply, so they upped the ante. .

However, you are right.....what have we replaced that revenue stream with? 

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1 hour ago, george_on_the_outer said:

Apparently the new licence fees are exhorbitant.  Are they still profitable?  I don't know, but we had buyers, so someone must think so. The government sold the previous ones too cheaply, so they upped the ante. .

However, you are right.....what have we replaced that revenue stream with? 

The silence is deafening George. Also how are we planning to replace the Darwin lost revenue.

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Found this article when we exited Leighoak:  Dees to exit pokies

We get a net profit of about $2.m from Leighoak ($900k as per report in the op) and the Bentleigh Club.  We lose the Bentleigh revenue in 2022.  We lose the Darwin game in 2020 (said to be $500k).  That is $2.5m over a 3 year period.

The Leighoak sale proceeds were to be invested in other activities to earn replacement revenue.  At the time that was mooted to be naming rights of our new training centre, commercial activities at the training centre etc.  As the new training centre is not even in the embryonic stage I'm not optimistic of the club covering lost revenue over the next few years. 

Somehow the club convinced the AFL exiting pokies was a good business plan "... the AFL wanted to be assured that the Demons would not be hurt financially."

If this ends up being an 'own goal' can't see the AFL coming to the our rescue.

 

It would have made much more business sense if we had the other revenue streams ready to go before exiting pokies.  And if a new training centre was part of that other revenue the timing of the exiting pokies should have been linked to its opening.

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6 minutes ago, Lucifer's Hero said:

Found this article when we exited Leighoak:  Dees to exit pokies

We get a net profit of about $2.m from Leighoak ($900k as per report in the op) and the Bentleigh Club.  We lose the Bentleigh revenue in 2022.  We lose the Darwin game in 2020 (said to be $500k).  That is $2.5m over a 3 year period.

The Leighoak sale proceeds were to be invested in other activities to earn replacement revenue.  At the time that was mooted to be naming rights of our new training centre, commercial activities at the training centre etc.  As the new training centre is not even in the embryonic stage I'm not optimistic of the club covering lost revenue over the next few years. 

Somehow the club convinced the AFL exiting pokies was a good business plan "... the AFL wanted to be assured that the Demons would not be hurt financially."

If this ends up being an 'own goal' can't see the AFL coming to the our rescue.

We will still have revenue from the Bentleigh Club, just not from pokies.

Also, Jackson said at the time: ‘‘If you take the gaming revenue out of the equation, we need to make up 10 per cent of our overall revenue. Over a two- to three-year period, we will be able to readjust and grow, and we have several ideas on how to do that.’’

So maybe people are overreacting about the impact of the pokies revenue? At least for now.

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11 minutes ago, Lucifer's Hero said:

Found this article when we exited Leighoak:  Dees to exit pokies

We get a net profit of about $2.m from Leighoak ($900k as per report in the op) and the Bentleigh Club.  We lose the Bentleigh revenue in 2022.  We lose the Darwin game in 2020 (said to be $500k).  That is $2.5m over a 3 year period.

The Leighoak sale proceeds were to be invested in other activities to earn replacement revenue.  At the time that was mooted to be naming rights of our new training centre, commercial activities at the training centre etc.  As the new training centre is not even in the embryonic stage I'm not optimistic of the club covering lost revenue over the next few years. 

Somehow the club convinced the AFL exiting pokies was a good business plan "... the AFL wanted to be assured that the Demons would not be hurt financially."

If this ends up being an 'own goal' can't see the AFL coming to the our rescue.

 

It would have made much more business sense if we had the other revenue streams ready to go before exiting pokies.  And if a new training centre was part of that other revenue the timing of the exiting pokies should have been linked to its opening.

If you go to the AGM you can ask the question.

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7 minutes ago, Lord Nev said:

We will still have revenue from the Bentleigh Club, just not from pokies.

Also, Jackson said at the time: ‘‘If you take the gaming revenue out of the equation, we need to make up 10 per cent of our overall revenue. Over a two- to three-year period, we will be able to readjust and grow, and we have several ideas on how to do that.’’

So maybe people are overreacting about the impact of the pokies revenue? At least for now.

I wasn't counting the non-pokie revenue from Bentleigh in the $1.1m that needs to be made up elsewhere.  The amount to make up may be may be 10% but of overall revenue but it is still $2.5m!

As I posted the 'several ideas' were mooted to be linked to our new training centre which seems a long way off.

My point stands that the timing of exiting the pokies should have been linked with the other ideas being ready to go.

I'm certainly not arguing for keeping pokies it is the timing of the exit that I have doubts about.

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4 minutes ago, Lucifer's Hero said:

I wasn't counting the non-pokie revenue from Bentleigh in the $1.1m that needs to be made up elsewhere.  The amount to make up may be may be 10% but of overall revenue but it is still $2.5m!

As I posted the 'several ideas' were mooted to be linked to our new training centre which seems a long way off.

My point stands that the timing of exiting the pokies should have been linked with the other ideas being ready to go.

I'm certainly not arguing for keeping pokies it is the timing of the exit that I have doubts about.

I'm just saying let's hold off the lynch mob for now. Our previous CEO, whom I sure most rate very highly, signed off on this and clearly had plans in the works. The AFL also looked over the plans and the books and ticked it off. I'll take that over anything that has been 'mooted' at this stage. Instead of everyone getting so outraged, why don't we give it the actual time it needs to play out before starting our board ticket?

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8 minutes ago, Lord Nev said:

I'm just saying let's hold off the lynch mob for now. Our previous CEO, whom I sure most rate very highly, signed off on this and clearly had plans in the works. The AFL also looked over the plans and the books and ticked it off. I'll take that over anything that has been 'mooted' at this stage. Instead of everyone getting so outraged, why don't we give it the actual time it needs to play out before starting our board ticket?

'lynch mob'.  'outrage'.  A bit over the-top-comments for what was a reasonably put post. 

I repeat my doubts are about the revenue loss of the timing of exiting pokies not the decision.

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12 minutes ago, Lucifer's Hero said:

'lynch mob'.  'outrage'.  A bit over the-top-comments for what was a reasonably put post. 

I repeat my doubts are about the revenue loss of the timing of exiting pokies not the decision.

Sorry LH, should have clarified, that wasn't directed at you, was a general comment about this thread. Apologies.

 

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On 12/17/2019 at 1:04 PM, ding said:

Aint no way mining is going  to die.

Modern society would collapse without it. Can you imagine a world without electronics of any kind..... at all? 

Everything we touch is reliant on the mining industry in some way. If you said "coal mining", maybe you would have a point, but many other forms of mining will continue long into the future.

Mining as we've seen it is unsustainable and as technology grows, synthetic solutions will become more widely available or in some cases uncalled for. It's only a matter of time. Goldman Sachs have just started drilling the nail in that coffin.

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18 minutes ago, A F said:

Mining as we've seen it is unsustainable and as technology grows, synthetic solutions will become more widely available or in some cases uncalled for. It's only a matter of time. Goldman Sachs have just started drilling the nail in that coffin.

Nope, mining is increasing every single day. China and a rising India will see to it that mining of all sorts will survive LONG into the future. 

Synthetic technology will still requires all sorts of exotic things to be dug up as nothing can be made without involvement of things that came from the  ground.. Unless you want the world living like cave-dwelling hunter-gatherers, mining stays well into the future.

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7 hours ago, Dee Watcher said:

So the club took the morale high ground and sold the gaming venues but didn't replace that revenue? We have withdrawn from Darwin so that income drops off next year.

Doesn't sound like a very good business plan 

 

Maybe not, but perhaps good for morale

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meanwhile, afl set to re-up with bet easy (aka crownbet, soon to be part of sportsbet) to the tune of $8m a year for the next three-five years 

“If this goes ahead, the AFL will have abandoned their right to moral leadership in the community,” Alliance for Gambling Reform spokesman Tim Costello said.

https://www.heraldsun.com.au/sport/afl/more-news/afl-closing-in-on-8-millionayear-deal-with-corporate-bookmaker-beteasy/news-story/fbc9a5f8895c5b85300f770cd04cee42

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3 hours ago, whatwhatsaywhat said:

meanwhile, afl set to re-up with bet easy (aka crownbet, soon to be part of sportsbet) to the tune of $8m a year for the next three-five years 

“If this goes ahead, the AFL will have abandoned their right to moral leadership in the community,” Alliance for Gambling Reform spokesman Tim Costello said.

https://www.heraldsun.com.au/sport/afl/more-news/afl-closing-in-on-8-millionayear-deal-with-corporate-bookmaker-beteasy/news-story/fbc9a5f8895c5b85300f770cd04cee42

God forbid, are you suggesting the AFL are hypocrites? The AFL has only one rule, money, money and more money.

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On 12/16/2019 at 10:55 PM, whatwhatsaywhat said:

they're not...but the afl commission, led by anti-pokies strongman richard goyder, is STRONGLY against them and will eventually make it that all clubs divest themselves of poker machine licenses

And what will the commission do to help those clubs who do divest? What consequences are there for those that don't? Goyder won't be around forever but our pokies revenue is now done and dusted. I can't imagine the AFL chipping in a few extra mil per year to cover our lost revenue.

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On 12/17/2019 at 12:56 AM, Demon17 said:

It's not a personal choice for gambling addicts who make up most revenue. Its a physiologogical addiction hard to beat.

More of them will now move to the hawks venues.

 You know - the Family club  

Talk about hypocrites

Yet the AFL still comfortable having a "major betting partner"

Talk about hypocrites

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On 12/17/2019 at 8:14 AM, drysdale demon said:

Having worked with gambling addicts for 4 years between 2006 and 2010 in conjunction with 2 financial advisors of the salvation army along with the then Major in charge of Southern Australia of the Salvo's and members of Gamblers Help I fully support all sporting clubs to pull out of gaming machines, these machines cause at least 80% of all gambling addictions.

The machines are still there. It's just that instead of the money going toward a football club it is going towards Woolies and Bruce Mathieson.

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On 12/17/2019 at 10:36 AM, A F said:

I don't think we could have predicted an onfield fall from grace quite as dramatic as the 2019 season proved. Therefore, any moderate financial projections saw us breaking even or posting a meagre profit. Instead, an onfield disaster, which is clearly unsustainable and needs to be righted immediately in 2020. 

Across the business world, businesses are moving towards sustainable revenue practices/streams and often this coincides with ethical wins that can be spun as PR and positive brand positioning in the marketplace. It doesn't matter where I or the MFC stand politically on the pokies, it's a dying business, just like mining and it will eventually go the way of the dodo. 

Have we moved out of the pokies 5 years too early? I'm not sure. Don't we still have this as revenue stream until 2021? I can understand us waiting to exploit it for the next few years, but equally, those clubs signing 20 year deals are tying their wagons to an industry that will eventually see itself legislated into oblivion. Diversifying the revenue streams at this point is a good strategic move, now we just need our [censored] football team to win some games and things will turn.

Governments rarely give up revenue, what makes you think they'll ban pokies and give up the revenue that flows through from that?

A financial model that relies on sustained success is doomed to failure. The only way we could operate that way would be to have so many members they are forced into reserve seat packages at the start of the year which would be extremely difficult given our large home ground, large number of MCC members and low supporters base.

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3 minutes ago, Dr. Gonzo said:

A financial model that relies on sustained success is doomed to failure. The only way we could operate that way would be to have so many members they are forced into reserve seat packages at the start of the year which would be extremely difficult given our large home ground, large number of MCC members and low supporters base.

well said.... time to break the model...

How I'm not sure.... but it's the real discussion

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