Resource 2017 Financial Results

[telsor]

Wasn't mentioned at all in the club's website statement which is why I referred to it because it's obviously a big factor. Fundraising for capital works can often be "one off" rather than ongoing so it may not be reflective of normal operating profit.

Agreed. Akin to how there were questions about the nature of the increase in the health club numbers on the Richmond report. It's a matter of interest, and much of the thinking behind the question is due to how sustainable it is (and in Richmond's case, how much is due to the premiership bump).

It's a good result from EFC, and getting coteries to chip in that much is awesome for them, but it's still something worth asking about.

 

[dave10]

Huge result from Essendon, although it could be argued it was always going to record a good result off a low cost base.

Excellent growth in commercial revenue will only continue into 2018 with predicted membership growth and higher yields from higher end memberships expected. Strong fixture will help its corporate hospitality sales and sponsorship.

Two points. Noting a further $24M expansion at Tullamarine must surely put EFC's facility head and shoulders above the rest when completed... And the new revenue streams to flow from its work being done to create new revenue flows from commercial operations at the expanded facility..

Donations, $4.0M but Essendon usually generates around $1.5M from this annually so still fair to say the profit outside of any abnormal levels of donations is still around $2.5M.

Most importantly, even removing all donations, the club still generated a cash surplus of +$4.0M from its activities (+$8.05M with donations). However you want to spin it, this is an extremely healthy financial result by the club with net assets now $32.5M and expected strong positive cash flows in the coming years.

Essendon is back in the black and back on track.

 

[telsor]

As a general comment, I think all of EFC's financial results for the past few years should have an asterix.

Not because they're in any way inaccurate, just that they need to be examined more closely because with the substances saga, the Tullamarine move, and this year the hype about being 'back' there has been a bit of a rollercoaster and thus the results have had a more significant than usual degree of one off/unusual items in them meaning that the headline results don't give as clear a picture as might be found at other clubs.

This isn't just an Essendon thing, most clubs go through similar unusual periods, but they're usually just for a year or two and can generally be pretty easily picked out (big boost in grant money, big increase in spending on new facilities, etc). It's just that in Essendon's case, it's gone on longer and been more pervasive than is the norm.

That said, I think that overall they've come through the past few years in excellent condition off field. You just have to look closer to figure out all the details.

 

[dave10]

As a general comment, I think all of EFC's financial results for the past few years should have an asterix.

Not because they're in any way inaccurate, just that they need to be examined more closely because with the substances saga, the Tullamarine move, and this year the hype about being 'back' there has been a bit of a rollercoaster and thus the results have had a more significant than usual degree of one off/unusual items in them meaning that the headline results don't give as clear a picture as might be found at other clubs.

This isn't just an Essendon thing, most clubs go through similar unusual periods, but they're usually just for a year or two and can generally be pretty easily picked out (big boost in grant money, big increase in spending on new facilities, etc). It's just that in Essendon's case, it's gone on longer and been more pervasive than is the norm.

That said, I think that overall they've come through the past few years in excellent condition off field. You just have to look closer to figure out all the details.

Tbh probably not overly necessary. It is what it is, unless you're looking for something.. In the end an excellent result built on strong fundamentals and growth. I think the club is well placed for growth and further strengthening. Bring on 2018!

 

[telsor]

Tbh probably not overly necessary. It is what it is, unless you're looking for something.. In the end an excellent result built on strong fundamentals and growth. I think the club is well placed for growth and further strengthening. Bring on 2018!

Yeah, I know, I'm just a bit of a nerd about these things, and like to understand the state of the organisation, not just see the headlines.

For most people, it's just the headlines that matter, sadly they tend to be the ones telling everyone who'll listen about those headlines without any understanding of the larger picture.

Completely agree EFC is in a good state, far better than I would have expected a few years back I confess, but when it comes to understanding the true state of the organisation, and what it means for their future, the rollercoaster I mentioned means they're tougher than most to decypher.

 

[The_Wookie]

Key points of the report:

● Club net operating profit of $2,107,556 for year ending 31 October 2017

● Achieved a record membership tally for the eleventh consecutive season

● 2017: 75,663 (2016: 75,351), including 9,550 Tasmanian members

● Gross merchandise revenue exceeded $1.8m

● Recorded an average attendance of 44,719 across seven Melbourne home games in 2017 (2016: 49,666). Season highlights included the Round 4 Easter Monday fixture against traditional rival Geelong (62,360) and the Round 23 fixture against the Western Bulldogs at Etihad which was Luke Hodge’s farewell game and drew a crowd of 48,090. The average attendance across four home games in Tasmania was 13,197

● The Hawthorn Football Club Foundation holds a balance of $4,688,572 in cash and investments as at 31 October 2017

● Hawthorn’s net asset position improved to $46.5m, up from $41.6m in 2016

● The club purchased a $7.75m 28-hectare site of land at Dingley, which was fully funded by club and Foundation cash funds. No debt funding was required for the purchase

● The club recorded gross revenues of $70,742,464 (consolidated) and $52,131,775 (club)

 

[Messenger]

The_Wookie do you have a Benchmark for a reasonable EBIT margin for AFL clubs?

 

[telsor]

The_Wookie do you have a Benchmark for a reasonable EBIT margin for AFL clubs?

AFL clubs are not for profit entities, so I'm not sure it really applies. At least not in the same way it does for commercial entities.

For a NFP, revenue is there to be spent towards the aims of the organisation, and 'profits' are really just the surplus, put aside to be spent, sooner or later, on something else towards those aims.

 

[Kwality]

Tbh probably not overly necessary. It is what it is, unless you're looking for something.. In the end an excellent result built on strong fundamentals and growth. I think the club is well placed for growth and further strengthening. Bring on 2018!

Did they (Essendon) still require an AFL guarantee? Last year it went up from $5m to $10m.

 

[Kwality]

The_Wookie do you have a Benchmark for a reasonable EBIT margin for AFL clubs?

+ $1.

 

[Kwality]

http://www.richmondfc.com.au/news/2017-11-17/richmond-2017-financial-result

Richmond will report a profit of $3.06 million for the financial year ended 31 October.

The Club’s operating surplus was $4.31 million, before amortisation and depreciation.

Richmond generated total revenue of $65.2 million, an increase of $17.6 million year-on-year.

This significant growth in revenue is due to increased crowds and sponsorship, as well as sales of merchandise and memorabilia. It also includes a full year’s operation of the Club’s health and recreation business, Aligned Leisure, which expanded further in 2017 to include management of the Eltham Leisure Centre.

The Richmond Institute of Sports Leadership (RISL) – delivered in partnership with Swinburne University – has also contributed to Richmond’s revenue growth.

Richmond president Peggy O’Neal said the Club was in an extremely strong financial position.

“We remain debt free, have cash reserves of $9.88 million and a strong net asset position of $27.15 million,” O’Neal said.

“This position has been hard-earned and we will continue to make considered decisions to protect and enhance our financial position.

“While football is our core business, and always our number one priority, we continue to invest in the community.

“Our charity partnership with the Alannah & Madeline Foundation, and our work with Indigenous youth in the Korin Gamadji Institute are genuine examples of ways in which the Club is committed to making a difference in our community.

“Richmond is now the first AFL club to sponsor the Midsumma Festival – again underlining our authentic commitment to diversity and equality. I know that members and supporters are proud of the Club’s genuine contribution to the community.”

2017 statistics:

• Total home and away crowds in excess of one million (AFL number one)
• Average home crowds of 55,958 (AFL number one and Club record)
• Five games were played in front of crowds in excess of 85,000
• Dreamtime at the ‘G and Anzac Eve games were the 5th and 6th highest home crowds in Club history
• Seventh consecutive record membership 75,777 (AFL 3rd )
• Home and away TV audience in excess of 11.8 million
• Record sponsorship revenue

Link to concise financial report
http://s.afl.com.au/staticfile/AFL Tenant/Richmond/Images/Concise Financial Report 2017.pdf

Am I blind or are there no $s attached to the membership increase - minimum disclosure begs the question why?

 

[Ned_Flanders]

Am I blind or are there no $s attached to the membership increase - minimum disclosure begs the question why?

We dont publish a membership revenue number as a stand alone, its annoying and its been raised with the clib to no avail

 

[Kwality]

We dont publish a membership revenue number as a stand alone, its annoying and its been raised with the clib to no avail

That the AFL allow that to continue is one of my long standing whinges, minimum reporting standards.

 

[Ned_Flanders]

That the AFL allow that to continue is one of my long standing whinges, minimum reporting standards.

Its not an afl thing, its complying with corps law, and it doesnt require us to have a sep membership column on our public reporting.

 

[Rob]

Its not an afl thing, its complying with corps law, and it doesnt require us to have a sep membership column on our public reporting.

Kwality is right though in that the AFL could set it's own reporting standards and make it mandatory for the clubs to follow them. In the interests of transparency and good governance there are worse things the league could do.

 

[NoobPie]

Kwality is right though in that the AFL could set it's own reporting standards and make it mandatory for the clubs to follow them. In the interests of transparency and good governance there are worse things the league could do.

Yep, I don't like saying "Kwality is right" because it might encourage him I have wondered why the AFL hasn't already mandated a standard. Obviously it helps with bench-marking but also given the way funding is distributed and the introduction of a football department cap, it seems that a standard would support these two objectives/instruments as well

 

[Ned_Flanders]

Kwality is right though in that the AFL could set it's own reporting standards and make it mandatory for the clubs to follow them. In the interests of transparency and good governance there are worse things the league could do.

Surely the corp act and asic are better authorities on corporate governance and disclosure than the afl?

Melbourne guilty of not tanking
The joint asada investigation of essendon
The self reporting illicit drug policy

 

[Ned_Flanders]

Yep, I don't like saying "Kwality is right" because it might encourage him I have wondered why the AFL hasn't already mandated a standard. Obviously it helps with bench-marking but also given the way funding is distributed and the introduction of a football department cap, it seems that a standard would support these two objectives/instruments as well

Afl get these numbers released to them privately. Its why occassionally they are able to release the mass comparison data, as they get in full.details broken down from all clubs

 

[NoobPie]

Surely the corp act and asic are better authorities on corporate governance and disclosure than the afl?

Melbourne guilty of not tanking
The joint asada investigation of essendon
The self reporting illicit drug policy

The AFL's historic failures of governance aren't really relevant to this debate.

The question is, would there be a benefit in the AFL establishing accompanying reporting standards to those requirements established by the corporations act?

Afl get these numbers released to them privately. Its why occassionally they are able to release the mass comparison data, as they get in full.details broken down from all clubs

Fair enough

 

[The_Wookie]

The question is, would there be a benefit in the AFL establishing accompanying reporting standards to those requirements established by the corporations act?

In terms of transparency, sure there would be a benefit to folks like us who read the reports for the details. In terms of benefits to the AFL, theres probably little difference, as they get the information anyway.

 

[NoobPie]

In terms of transparency, sure there would be a benefit to folks like us who read the reports for the details. In terms of benefits to the AFL, theres probably little difference, as they get the information anyway.

yep, rfctiger pointed that out too

Alas, I don't think transparency would suit anyone in a position who could actually bring it about!

 

[Ned_Flanders]

yep, rfctiger pointed that out too

Alas, I don't think transparency would suit anyone in a position who could actually bring it about!

Depends what you define transparency as

Do we get advised what revenues are and categories of them? Yes. We know what we earn for our various consumer revenue activities

Do we know for each? No. Do we need to know? Id like to know, nit sure if i need to know

For the rah rah bigfooty comparison, yeah we "need" it, but the club shouldnt be making disclosure decisions based upon a dick measuring contest

Id like to know, but im not losing sleep on it

 

[RussellEbertHandball]

In terms of transparency, sure there would be a benefit to folks like us who read the reports for the details. In terms of benefits to the AFL, theres probably little difference, as they get the information anyway.

What looks better for the AFL industry, Adelaide announcing a 2016 comprehensive loss of $1.34mil or spinning it that it is an operating profit of $1.46mil?? The difference was depreciation of $1.35m ie a normal business expense but AFL clubs theses days say its not part of normal operations, and a couple of annual payments of $415k to put a team in the SANFL and a $695k payment both SA clubs make for using AO whilst Footy Park is being liquidated and has carrying costs. These are all normal expenses not abnomal or extraordinary. There was a further $350k of two other expenses not included as normal operating and they were fair enough.

So The Fin Review and others pick it up as a profit of $1.46m which is good PR for the club and the industry but not reality and they show graphs of how many AFL clubs are making milion dollar profits.

That's why the AFL doesn't mind inconsistencies because most clubs now spin their operating result by taking out depreciation given everyone has built large facilities the last decade and seem to have $1mil+ depreciation and write offs of plant and equipment or stadium grandstands etc each year.

 

[RussellEbertHandball]

In April 2006 the AFL produced their 2005 Club Financial Review - Survey Results Media Briefing 11 April 2006. They put up a 13 slide Power Point presentation. They stopped it after this but kept the beriefing going every year for 4 or 5 years in late March and early April once the annual report was made.

They produced these 2 slide of the 13 of the statistical average club. They bench marked clubs against these in some of the other slides. The copy they put on the website removed the individual clubs names from bar graphs and charts.

The AFL would still be doing this exercise, probably having broader categories as the clubs have been diversifying their activities and just keeping the info to itself and the clubs.

 

[RUNVS]

I noticed a number of clubs posting healthy profits. Is this partly down to introducing the soft cap on football department spending?