Just watching the On the Coach from last night and they were discussing us and Goodwin's future and cost to the club.

They discussed the finances of such a decision, here is what they said:

4th best balance sheet in the comp

If we raise only $400k more this year, we'll be one of 4 unassisted clubs in the comp!

Noted out recent $11m sale

Interesting info that was unexpected.

 

 

I’m flabbergasted (in a good way) that we could potentially be one of the unassisted clubs.

I thought we were a financial basket case?

Can we trust Tom Morris?

Yep, this was mentioned in one of the other threads, but it was certainly welcome news (if true, of course).

To finish where we finished last season and lose the membership that PJ and co had worked so hard to build over a number of years, to be in that group of 4 clubs in 2020 (if we raise the additional $400k) is pretty impressive.

I'd assume the other clubs are Collingwood, West Coast and Richmond?

So no Hawthorn? Is it just a case of banking the sale of Leighoak that just happened to occur at the right time, or have these new sponsors (Furphy and 78 Degrees gin) really put us in a good position? And have other clubs failed to land such sponsors in the recent past?

It's interesting to speculate I think, because you have to wonder about a club like Essendon. Are they in debt up to their eyeballs with their facilities? Has Hawthorn's Dingly move coinciding with COVID meant that they've had to approach the AFL for assistance?

I've gotta say if you can't stand on your own two feet having won 4 flags in 12 years, I reckon there's something majorly wrong with your administrative side of the business.

I wonder if we'd been building the war chest to be put into our new facilities? Surely, we'd need to put up a few million for a co-funding venture with local, state and federal governments RE: new facilities, without having to dip into bank loans, but realistically, that'd probably be part of the finance mix too. 

Perhaps, those that go to AGMs and read the yearly financial reports (unlike myself) can shed some better light on this? 

Edited August 4, 20205 yr by A F

30 minutes ago, Bring-Back-Powell said:

 

 

Can we trust Tom Morris?

NO

1 minute ago, dl4e said:

NO

One would be thinking he is getting his info from someone in the AFLHQ, not the Dee's. 

The question is how are the proceeds from the sale being represented in our accounts.  The reality is we don't really know how clubs are managing their real finances as opposed to what you see on the books.

 

Our Balance Sheet strength is underwritten by:

• the Bentleigh Club but it is 'illiquid'.  Its market value is well over that in the Balance Sheet but it would be hard to sell at a fair value in the short/medium term.  Property of any sort is going nowhere in Victoria, especially a 'development' site requiring sizeable borrowings as banks are getting toey.
• the cash/investments from the sale of Leighoak.  This was earmarked to help fund our new facilities.  We contribute then the AFL and other governments contribute.

The only way we can get cash from the Bentleigh Club without selling is to borrow against it.  But where would we get the cash to fund the borrowing?  Pokies money is all but gone.

As key financial stakeholders do we members/donators want the club to borrow or use the Leighoak monies to pay out contracts?  imv, no, it only weakens us financially going forward. 

Morris is parroting something he was told but doesn't understand what he is saying.

Edited August 4, 20205 yr by Lucifer's Hero

Dee's financing. 

Who is Dee and what do her finances have to do with us ? 

Anyway, I think Glenn Bartlett mentioned this (or it may have been Perty) on a recent interview somewhere. $1 million raised by Xmas will see us in the rarified air of being an unassisted club. Makes me feel all fuzzy and warm inside. 

Morris neglected to mention the taxes for exceeding the soft cap.  Soft Cap Tax

The tax, which has been set following intense discussions and significant pushback from some wealthy clubs l...has a rate of 100 per cent (per dollar over), or double the amount, when club goes over the cap by between $100,000 and $250,000 just once.  But if a club repeats the over-spend between $100,000 and $250,000, then it will be hit with a tax of 150 per cent in the second year, and 200 per cent in the third year.

For clubs that exceed the cap by more than half a million, the tax rates are enormous: 200 per cent (year one), 300 per cent in the second year and then a whopping 400 per cent in the third year".

So even if we find the cash to pay out contracts we either pay the hefty tax or reduce the money for coaching/fitness/development.  Hardly an enticing scenario with which to attract a new coach.

 

4 hours ago, Lucifer's Hero said:

Morris neglected to mention the taxes for exceeding the soft cap.  Soft Cap Tax

The tax, which has been set following intense discussions and significant pushback from some wealthy clubs l...has a rate of 100 per cent (per dollar over), or double the amount, when club goes over the cap by between $100,000 and $250,000 just once.  But if a club repeats the over-spend between $100,000 and $250,000, then it will be hit with a tax of 150 per cent in the second year, and 200 per cent in the third year.

For clubs that exceed the cap by more than half a million, the tax rates are enormous: 200 per cent (year one), 300 per cent in the second year and then a whopping 400 per cent in the third year".

So even if we find the cash to pay out contracts we either pay the hefty tax or reduce the money for coaching/fitness/development.  Hardly an enticing scenario with which to attract a new coach.

 

Spot on LH and that is why we can't pay him out unless we take on a rookie coach who is prepared to work cheap for the first few years.

This is what Norf did with Shaw and Scott I suspect but there it was only a one year pay out whereas we face two plus for the first year Shaw was temporary IIRC.

16 hours ago, Darkhorse72 said:

They discussed the finances of such a decision, here is what they said:

4th best balance sheet in the comp

If we raise only $400k more this year, we'll be one of 4 unassisted clubs in the comp!

Noted out recent $11m sale

Interesting info that was unexpected.

 

 

16 hours ago, Bring-Back-Powell said:

I’m flabbergasted (in a good way) that we could potentially be one of the unassisted clubs.

I thought we were a financial basket case?

Can we trust Tom Morris?

Someone has got their wires crossed:

This is from Michael Gleeson's article in the AGE today:

https://www.theage.com.au/sport/afl/chairman-s-criticism-was-fair-goodwin-20200804-p55ih8.html

...."Melbourne are one of the AFL-assisted clubs required to provide weekly updates on their profit and loss so they would require AFL approval to make a large payout to cover a sacking - were it to come to that."...

As Lucifers Hero says...the Balance sheet is OK because of the Bentleigh Club ( which hasn't been revalued in donkeys years )  but a Balance sheet doesn't put food on the table i.e money to run the show......unless you sell an asset. 

Or as LH says:

"The only way we can get cash from the Bentleigh Club without selling is to borrow against it.  But where would we get the cash to fund the borrowing?  Pokies money is all but gone." ....

 

Edited August 5, 20205 yr by george_on_the_outer

I believe we recently had the Bentleigh Club valued as a 12 block residential sub division -  valuation was c. $18m.  
 

Asset rich..... income poor.

 

Edited August 5, 20205 yr by Canplay

3 minutes ago, george_on_the_outer said:

 

Someone has got their wires crossed:

This is from Michael Gleeson's article in the AGE today:

https://www.theage.com.au/sport/afl/chairman-s-criticism-was-fair-goodwin-20200804-p55ih8.html

...."Melbourne are one of the AFL-assisted clubs required to provide weekly updates on their profit and loss so they would require AFL approval to make a large payout to cover a sacking - were it to come to that."...

As Lucifers Hero says...the Balance sheet is OK because of the Bentleigh Club ( which hasn't been revalued in donkeys years )  but a Balance sheet doesn't put food on the table i.e money to run the show......unless you sell an asset. 

Or as LH says:

"The only way we can get cash from the Bentleigh Club without selling is to borrow against it.  But where would we get the cash to fund the borrowing?  Pokies money is all but gone." ....

 

Thanks for that.

I assumed Morris had no idea what he was talking about.

3 minutes ago, Bring-Back-Powell said:

Thanks for that.

I assumed Morris had no idea what he was talking about.

you don't need to assume anything......take it as a fact ?

And people question Barlett's motive. The board has worked better than any other board in the past 50 years to get us to a position. We are ready for takeoff as a club and company but are held back by shocking on-field performance. Rightly frustrated. Bartlett and co. have done their job. Now over to Goodwin and Co.

2 hours ago, Diamond_Jim said:

Spot on LH and that is why we can't pay him out unless we take on a rookie coach who is prepared to work cheap for the first few years.

This is what Norf did with Shaw and Scott I suspect but there it was only a one year pay out whereas we face two plus for the first year Shaw was temporary IIRC.

I thought Morris said (or maybe I read elsewhere) that Melbourne had been told that paying out Goodwin's wage (if it came to that) would not be considered inside the footy department cap - which has angered other clubs.

18 minutes ago, praha said:

And people question Barlett's motive. The board has worked better than any other board in the past 50 years to get us to a position. We are ready for takeoff as a club and company but are held back by shocking on-field performance. 

Spot on.

35 minutes ago, deelusions from afar said:

I thought Morris said (or maybe I read elsewhere) that Melbourne had been told that paying out Goodwin's wage (if it came to that) would not be considered inside the footy department cap - which has angered other clubs.

That's a pretty good deal if true, where can I donate lol

1 hour ago, deelusions from afar said:

I thought Morris said (or maybe I read elsewhere) that Melbourne had been told that paying out Goodwin's wage (if it came to that) would not be considered inside the footy department cap - which has angered other clubs.

Hard to believe given how difficult it is to even pay out permanently injured players eg KK without impacting the cap.

Of course it could be like GCS where the pay out to Eade was effectively AFL money and thus the soft cap tax is going in and out of the same pockets.

Edited August 5, 20205 yr by Diamond_Jim

2 hours ago, Canplay said:

I believe we recently had the Bentleigh Club valued as a 12 block residential sub division -  valuation was c. $18m.  
 

Asset rich..... income poor.

 

Sounds about right