North on the Brink of financial disaster - The Age

[Goady138]

Kangaroos on the brink
Mark Hawthorne
February 17, 2011

James Brayshaw last night at the Roos' annual meeting. Photo: Pat Scala
NORTH Melbourne stands on the brink of financial disaster, with the club's bank account holding just $2749 of cash when it filed its annual report on October 31.

At the same time, the Kangaroos have run up a $201,268 overdraft and have drawn down $4.75 million of a $5 million bank loan facility to help fund the club's new training facilities at Arden Street.

Concern has been growing in recent months among senior figures at AFL House about the parlous state of the club's finances, and the perceived bungling of the club's plan to relocate home games to Tasmania.

http://www.theage.com.au/afl/afl-news/kangaroos-on-the-brink-20110216-1awke.html

 

[Godzke]

Re: James Brayshaw , we were damned if we did, damned if we didn't.

Oh uh spaghetti-os!

 

[Frank Grimes]

North on the Brink

We al knew North was struggling financially. But it's looking critical.

http://www.theage.com.au/afl/afl-news/kangaroos-on-the-brink-20110216-1awke.html

Will be interesting to see what the AFL does. The AFL is going to have to decide to keep them on life support or pull the plug.

 

[grizzlym]

Re: North on the Brink

By all means discuss the issue, but please try to resist the urge to make cheap trolls.

 

[Memories]

Re: North on the Brink

I'm not sure how debt can grow and yet profit can be made? How is this possible without fancy book work?

 

[fishguts]

Re: North on the Brink

I'm not sure how debt can grow and yet profit can be made? How is this possible without fancy book work?

They counted an AFL handout in their profit from memory.

 

[The Falcon Strike]

Re: North on the Brink

I'm not sure how debt can grow and yet profit can be made? How is this possible without fancy book work?

Debt is probably attributed to the capital account (for the arden st upgrade), where the profit is attributed to the revenue account

A bit like borrowing 500k to buy a house doesn't mean you've run at a loss.

 

[Memories]

Re: North on the Brink

They counted an AFL handout in their profit from memory.

But the amount the debt allegedly grew is higher than the profits they made? I guess we need to find out if the allegations made about the true state of debt are correct. The article linked by OP makes it seem even worse than I thought.

 

[theyellowsash]

Re: North on the Brink

coming from a professional auditor (and not just some mug on the street who saw some big numbers and assumed it was bad) that is very worrying. you never like to hear phrases like "uncertainty which may cast significant doubt [over] the company's ability to continue as a going concern" and "there is a significant risk the club will not be able to pay its debts".

 

[UpForGrabs]

Re: James Brayshaw , we were damned if we did, damned if we didn't.

NORTH Melbourne stands on the brink of financial disaster, with the club's bank account holding just $2749 of cash when it filed its annual report on October 31.

http://www.theage.com.au/afl/afl-news/kangaroos-on-the-brink-20110216-1awke.html

That's the scariest part. Are players, coaches and staff even getting paid? If so, where's the money coming from?

 

[DeadlyAkkuret]

Re: North on the Brink

Shit looks real dire for the Kangaroos at the minute.

 

[Memories]

Re: North on the Brink

Debt is probably attributed to the capital account (for the arden st upgrade), where the profit is attributed to the revenue account

A bit like borrowing 500k to buy a house doesn't mean you've run at a loss.

Right, but I'd like to know what investment they obtained in the global financial crisis that hasn't lost value? I'm not sure how they can obtain loans for further capital when they are already 5 million in the hole and no seeming way out?

 

[Bulldog1954]

Re: North on the Brink

Hopefully there aren't to many people reveling in the news and that the author of the story is being a bit dramatic.

 

[jonoman89]

Re: North on the Brink

Scary news. They have less in their bank account than me.

JB and Arocca stating the debt was $4.5 million when in reality net debt is $6 million is an absolute disgrace.

North members, as do any club members, deserve better from their board than that.

 

[TownleyTime]

Re: North on the Brink

At the same time, the Kangaroos have run up a $201,268 overdraft and have drawn down $4.75 million of a $5 million bank loan facility to help fund the club's new training facilities at Arden Street

While North booked a $233,752 profit last financial year, that figure included a $1.4 million special distribution payment from the AFL

So they basically lost $1.1 Million.

In 2009, the club's net current liabilities totalled $4 million. That blew out to $6.85 million last year

So they have close to $7 Million debt.

North Melbourne's assets have fallen from $4.2 million in 2009 to $564,600 in 2010

They note the money North earned from memberships has fallen in the past two seasons, from $4.65 million in 2009 to $4.41 million last year. They note the money North earned from memberships has fallen in the past two seasons, from $4.65 million in 2009 to $4.41 million last year

North are not travelling too well.

 

[The Falcon Strike]

Re: North on the Brink

Right, but I'd like to know what investment they obtained in the global financial crisis that hasn't lost value? I'm not sure how they can obtain loans for further capital when they are already 5 million in the hole and no seeming way out?

Who knows? Perhaps they obtained finance prior to Lehman's going belly up.

The issue with a lot of their capital is that it isn't able to be liquidated (i.e the arden st property) as they don't own the land

 

[Kahuna]

Re: North on the Brink

It would appear that this 5million dollar loan for new facilities was a bit of a mistake, sure they needed to keep up with the rest of the competition. However, the benefits of these new facilities is not going to repay the loan + interest.

 

[The Zebra]

Re: North on the Brink

the company's ability to continue as a going concern"

That is there every year.

Doesn't it just mean:

1. We have debt
2. If our revenue took a dive, we would be in trouble

In other words....yeah, obviously, let's hope half our members dont reneg on their memberships.

This is sensationalism.

 

[theyellowsash]

Re: North on the Brink

could we see the afl forced to buy out north's debt and own the club as their own little plaything? unless north have a mcguire or pratt hidden somewhere this could be their only option but it could see them forcefully relocated or even merged. at this point it seems that if north cannot make profits so soon after a major campaign to prevent relocation, then it is inevitable that north cannot survive without a huge input from the afl.

cmon north fans get off your bums and save your club, the fans of a few others already have!

 

[roodav]

Re: North on the Brink

That is there every year.

Doesn't it just mean:

1. We have debt
2. If our revenue took a dive, we would be in trouble

In other words....yeah, obviously, let's hope half our members dont reneg on their memberships.

This is sensationalism.

It basically means, If we weren't in the AFL we wouldn't be financially viable...well no shit sherlock.

and If any club keeps more than absolutely necessary in their current account then they are stupid

as said, same report everyyear...if it wasn't for the afl blahdeblah. The article puts a few facts which people who perhaps don't understand financial statements can find astonishing and the pads out with complete garbage like

Concern has been growing in recent months among senior figures at AFL House about the parlous state of the club's finances, and the perceived bungling of the club's plan to relocate home games to Tasmania.

 

[The Falcon Strike]

Re: North on the Brink

could we see the afl forced to buy out north's debt and own the club as their own little plaything?

North had a chance to prospe - the AFL provided an option to go to the goldcoast

The north members voted to try and stick it out in Melb on their own, turning down AFL support.

So IMO - they make it or they don't - they knew the consequences of the vote they cast. That could turn out really well - or really poorly

 

[Memories]

Re: North on the Brink

cmon north fans get off your bums and save your club, the fans of a few others already have!

What have they been doing since 2007? If they can't get off their bums the last time it was made clear the club needed them why would they now? The way I see it, the support for North just isn't there to compete in the realms of AFL. It's a proud club with some decent history but if you can't afford to play in the AFL then I can't see North have a future in it?

Besides what North members say, the major problem simply is they don't have enough core members to support them. All teams experience growth in their support but if you're coming from an unsustainable base and no new market to tap into I'm not sure what the solution is.

 

[Godzke]

Re: James Brayshaw , we were damned if we did, damned if we didn't.

That's the scariest part. Are players, coaches and staff even getting paid? If so, where's the money coming from?

The overdraft facility

 

[Gus]

Re: North on the Brink

It all looked down for the Dogs at one stage. We got through it. North will too.

 

[theyellowsash]

Re: North on the Brink

North had a chance to prospe - the AFL provided an option to go to the goldcoast

The north members voted to try and stick it out in Melb on their own, turning down AFL support.

So IMO - they make it or they don't - they knew the consequences of the vote they cast. That could turn out really well - or really poorly

the thing is i dont think the afl wants them to die. i dont buy into the whole 'theyre going to cut the league to 16 again by killing vic clubs' argument. it means less games for them, which is less revenue, fewer players etc. i am 100% confident that if the club was going to die, that the afl would buy them out, and probably relocate them. it helps them expand without incurring all the extra trouble and costs, while keeping alive a traditional club with an existing (although much reduced in the chance this happens) fanbase to build upon. ie sydney mk2