Economic downturn will sink boot in to clubs

[medusala]

What will the AFL do if clubs cant get sponsors (or get very poor deals)?

http://www.realfooty.com.au/news/ne...1231608618279.html?page=fullpage#contentSwap2

"It is over 15 years since AFL clubs have had to operate in conditions of a severe economic downturn which appears almost certain in 2009."

"In summary, 2009 will be a most challenging year financially for the club."

"We expect the hospitality market to also be tough in 2009 … It reinforces how critical the support of our members will be in 2009."


SUPPORTERS of the poorest Victorian clubs — Melbourne, North Melbourne and the Western Bulldogs — would be well accustomed to being fed such gloomy sentiments in recent years. But when the club making these predictions is Essendon, far and away the richest of all of them, it should be sending a shockwave through all club administrations.

As the sporting spotlight has shifted to cricket in the past two months, most AFL clubs — St Kilda, Richmond and Fremantle being the exceptions — released their 2008 financial results without the usual scrutiny afforded to footy during winter.

Melbourne appears to be in the most dire financial position. Of the 13 teams to report, the Demons are the club whose debts outweigh their assets — a deficit of $3.8 million — which explains the urgency of new club president Jim Stynes' "Debt Demolition" campaign.

Only three of the 13 clubs reported an increase in profit for the year to October 31 compared to a year earlier: Hawthorn, North Melbourne and the Bulldogs. Furthermore, five of the others — Brisbane Lions, Collingwood, Melbourne, Port Adelaide and Sydney — lost money in 2008.

continues

 

[greenred]

Re: Economic downturn will sink book in to clubs

This is what should concern everyone, regardless of the club they follow.

...North Melbourne's annual results, courtesy of its audit firm Grant Thornton. "The company currently has a net asset deficiency, excluding cash set aside for the redevelopment of Arden Street," Grant Thornton said.
"As a result of the matters described … there is significant uncertainty whether North Melbourne Football Club Ltd will be able to continue as a going concern and therefore whether it will realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in the financial report."


..."The Melbourne Football Club Limited is economically dependent on the ongoing support of the Australian Football League through receipt of distributions and dividends," said the Demons' report.


And the Bulldogs: "The company's directors consider the going concern assumption to be appropriate … as the AFL has committed to continued support."

The article alludes to Carlton also having a similar statement in it's results. 4 out of 10 Victorian clubs who are reliant on the AFL for their very survival. Now, who still thinks there's not too many teams in Melbourne?

 

[Geoffa32]

Re: Economic downturn will sink book in to clubs

I think if a club has been struggling in a historical economic boom they should be a little concerned this year and the next with the anticipated bust/recession.

Although I personally am unsure if it will be as bad as some media outlets suggest.

 

[Henry Jr]

Re: Economic downturn will sink book in to clubs

I just hope that Tassie don't go broke in a hurry

 

[mcgarnacle]

Re: Economic downturn will sink book in to clubs

IMO, the AFL need to really take up the collective fight for Vic clubs with regards to stadium deals. ordinarily, id consider it a club by club issue, but when you have the situation where it appears as though the league is subsidising other sports at a stadium, then the fight needs to be taken up by the league as a whole. the AFL initially stuffed it up by rationalising 9 clubs into 2 stadia.

 

[The Old Dark Navy's]

Re: Economic downturn will sink book in to clubs

The article alludes to Carlton also having a similar statement in it's results. 4 out of 10 Victorian clubs who are reliant on the AFL for their very survival. Now, who still thinks there's not too many teams in Melbourne?

Slightly misleading there. All clubs rely on the AFL for its survival. If the game stopped being played, all clubs would fold.

If you mean rely on extra AFL handouts from the CBF, that doesn't apply to Carlton. We have one $1.5m loan to pay back with interest but receive no ongoing money from the CBF.

Our financial statement has said the same thing for the past several years based on debts from our writing down of the Legends stand. Carlton's ability to survive depends on us maintaining our membership and our operating revenue as a whole, just like many clubs. We have never actually used the competitive balance fund for freebies, although the interest saved on the loan might be seen as being as good as.

 

[medusala]

Re: Economic downturn will sink book in to clubs

Havent 3 clubs still not got a major sponsor?

You would think they will get bent over. Its hardly a sellers market.

Must be a worry.

If the Tigers get knocked back I think there will be some harsh words spoken (or has this already been approved?).

No wonder the commission is nervous re West Sydney.

 

[hawker11]

Re: Economic downturn will sink book in to clubs

the AFL initially stuffed it up by rationalising 9 clubs into 2 stadia.

True, but did the AFL 'then' expect to have 9 clubs to rationalise in 2009?

It has been reported again and again that the Demons, Kangas, and Bulldogs are in strife - however at this stage the AFL 'today' appear to be supporting their endeavours to stay afloat (e.g. the million dollar demon bail-out).

I think at the end of this year we will get a better indication of the outlook for Vic clubs with the Gold Coast, Stadium deals and sponsorship all major factors in the decision making of the AFL.

 

[shintemaster]

Re: Economic downturn will sink book in to clubs

IMO, the AFL need to really take up the collective fight for Vic clubs with regards to stadium deals. ordinarily, id consider it a club by club issue, but when you have the situation where it appears as though the league is subsidising other sports at a stadium, then the fight needs to be taken up by the league as a whole. the AFL initially stuffed it up by rationalising 9 clubs into 2 stadia.

I'd say the case of Melbourne Victory playing out of the Dome is one of the main reasons why they're pushing this fight now. It must grate on them immensely that essentially they're profits are being used to subsidise soccer.

 

[medusala]

Re: Economic downturn will sink book in to clubs

I'd say the case of Melbourne Victory playing out of the Dome is one of the main reasons why they're pushing this fight now. It must grate on them immensely that essentially they're profits are being used to subsidise soccer.

Yet if the contract allows them to do it then what are the AFL going to be able to do about it?

 

[shintemaster]

Re: Economic downturn will sink book in to clubs

Yet if the contract allows them to do it then what are the AFL going to be able to do about it?

There's a hell of a lot of wriggle room left even if the contract is legal. The AFL can cut games at the Dome back to the bare mimimum if necessary. At the moment they're obviously trying to win a PR battle so that the Dome look like the bad guys. Public & Government pressure can be useful.

 

[Atomboy]

Re: Economic downturn will sink book in to clubs

Yet if the contract allows them to do it then what are the AFL going to be able to do about it?

Renegotiate the AFL contract and/or play low drawing crowds back at Optus Oval .

(aside from the fact it is currently being re-developed)

 

[shintemaster]

Re: Economic downturn will sink book in to clubs

Renegotiate the AFL contract and/or play low drawing crowds back at Optus Oval .

(aside from the fact it is currently being re-developed)

It's my understanding the MCG can be configured fairly easily for low drawing games. I'm sure that the MCC would be more than amenable to assisting with this process if it meant they had another 10-20 games a year...

 

[morgoth]

Re: Economic downturn will sink book in to clubs

It's my understanding the MCG can be configured fairly easily for low drawing games. I'm sure that the MCC would be more than amenable to assisting with this process if it meant they had another 10-20 games a year...

Or you just build a boutique 20- 25,000 seat stadium that is owned and controlled by the AFL. Perfect lcoation is the Pies new oval on the old Olympic Park site. Close to public transport, central and could be done on the cheap.

Of course nothing could be done until the AFL works out whether they can break the contract with the Dome but it is a potential gun that can be held to the domes head.

 

[The Old Dark Navy's]

Re: Economic downturn will sink book in to clubs

IMO, the AFL need to really take up the collective fight for Vic clubs with regards to stadium deals. ordinarily, id consider it a club by club issue, but when you have the situation where it appears as though the league is subsidising other sports at a stadium, then the fight needs to be taken up by the league as a whole. the AFL initially stuffed it up by rationalising 9 clubs into 2 stadia.

Yes and by leaving clubs little option but to rationalise as such. Here's money to leave and play here, abandon your cute little suburban strongholds because we can't guarantee fixturing and you won't be getting any financial support to stay there. Oops, we need another ground ... let's build one.

 

[eldorado]

Re: Economic downturn will sink book in to clubs

Or you just build a boutique 20- 25,000 seat stadium that is owned and controlled by the AFL. Perfect lcoation is the Pies new oval on the old Olympic Park site. Close to public transport, central and could be done on the cheap.

No such thing as a cheap stadium anymore. $200M +

It won't happen.

Princes Park should have been/should be looked at again.

 

[greenred]

Re: Economic downturn will sink book in to clubs

No such thing as a cheap stadium anymore. $200M +

It won't happen.

Princes Park should have been/should be looked at again.

But will anyone go? It's all well and good to say a smaller stadium is required, but history shows that Princes Park is not a venue that people (other than Carlton supporters) will go to. If no one turns up, you are still going to lose money wherever you play.

 

[shintemaster]

Re: Economic downturn will sink book in to clubs

Princes Park should have been/should be looked at again.

Ignoring all the problems with access and the actual condition of the ground itself. This will never happen IMO while Carlton are running the show down there.

 

[Mario the Lothario]

Re: Economic downturn will sink book in to clubs

"As a result of the matters described …there is significant uncertainty whether North Melbourne Football Club Ltd will be able to continue as a going concern and therefore whether it will realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in the financial report."

This all seems very vague. Are there matters not described?

The article alludes to Carlton also having a similar statement in it's results. 4 out of 10 Victorian clubs who are reliant on the AFL for their very survival. Now, who still thinks there's not too many teams in Melbourne?

What is your point? Every club in the AFL is reliant on the AFL for its survival.

 

[Winner]

But when the club making these predictions is Essendon, far and away the richest of all of them, it should be sending a shockwave through all club administrations.

Is the author saying that Essendon are the richest of those clubs listed, or from the whole competition?

 

[hawker11]

Re: Economic downturn will sink book in to clubs

This all seems very vague. Are there matters not described?




What is your point? Every club in the AFL is reliant on the AFL for its survival.

Yes, but some are more reliant that others...

North will always be considered a relocation candidate with their current level of support.

 

[Mario the Lothario]

Re: Economic downturn will sink book in to clubs

Yes, but some are more reliant that others...

North will always be considered a relocation candidate with their current level of support.

The relocation concept is dead and buried, so I don't quite see your point..

Mergers are also dead and buried.

I think if clubs go anywhere, it will be in to the VFL.

 

[damochandler]

isnt if a club doesnt gennerate any member. they more likely to fold than in any other way. memberships drives and club. but with the new rights coming up. a majority of that will probably go to helping the new clubs stay afloat

 

[hawker11]

Re: Economic downturn will sink book in to clubs

The relocation concept is dead and buried, so I don't quite see your point..

Mergers are also dead and buried.

I think if clubs go anywhere, it will be in to the VFL.

My point is the article discussed relocation and referred to North Melbourne. I don't personally believe any club will relocate to Tasmania.

I wouldn't say mergers are dead and buried entirely. It would always be an option if push came to shove for 2 clubs.

Hypothetically if the GFC bit as hard as the article claims, would you prefer to demote to the VFL as opposed to a Melbourne Kangaroos?

Maybe, but others might disagree. E.g. the Kangaroos would continue in the premier league as a melb based club wearing blue and white stripes in its away games...

Despite of all this the AFL look to be continuing to prop up the weaker clubs, so until that changes...

 

[Mario the Lothario]

Re: Economic downturn will sink book in to clubs

I wouldn't say mergers are dead and buried entirely.

The AFL would.

Hypothetically if the GFC bit as hard as the article claims, would you prefer to demote to the VFL as opposed to a Melbourne Kangaroos?

Absolutely. I'd still prefer my clubs culture and heritage to remain intact before it became diluted by a relocation or merger.

How about you, what would you do in this instance?

Despite of all this the AFL look to be continuing to prop up the weaker clubs, so until that changes...

That's all that really matters. The governing body is an record as stating that 10 clubs in Victoria are essential.