North on the Brink of financial disaster - The Age

[MC Extra Dollop]

Re: North on the Brink

Most of the Tasmanian population already support an AFL side.

I doubt if they would be the slightest bit interested in supporting a club which has always been "opposition" to them.

Relocating a club to a location where the majority already supports an AFL side is a complete waste of time in my view.

I disagree. If they were to set up in Hobart, a city where there hasn't been a lot of AFL football played, the tempatation to switch allegiances would be pretty high. Plus, the stalwarts who would continue to support whichever club from the mainland would be phased out as the years went by. Can't imagine their kids/grandkids continuing to support a random Victorian club, when there's another AFL team on their doorstep. I'd say they'd be able to get 30,000 members in Hobart, easily. Then you combine that with whatever packages they can offer to Melbourne-based supporters and membership would be the least of their concerns.

 

[PieBeast]

Re: North on the Brink

A fairer draw with increased FTA exposure would increase revenue from sponsorship and coperate sources which are a major source of revenue. Even if the gate receipts increased by only a small portion it would still make a significant improvement to the club if we could sell the club to corporations knowing in advance we would not get screwed in terms of scheduling.

Do you think Emirates gives a shit about Collingwood? They want TV time.

You don't deserve or demand similar exposure to us.
Get over it and try to rectify the situation instead of bitching about it.

 

[McCrann]

Re: North on the Brink

The thing that really irks me is all those people on here so depserately licking their lips and hoping for Norths demise. Enjoy your soulless nights in front of the TV watching your team play your not so traditional rivals the Greater Western Whatevers with your former star player running around for them. Thats where we all heading folks and wont that be fun.

Oh and when North go, someone else becomes the weakest in the herd.....hmm who's next?

This post has not been brought to you by the TV rights and gazillion sponsors that keep the AFL rolling in cash.

All very well, but no other club is in North's predicament are they. If North went to Tasmania, played 12 games in Tassie, 8 in Melbourne, 5 elsewhere (25 Round season - it may happen), they can retain most of their support and the AFL cover off another base.

Also, if you look at the City of Melbourne, in 1980 there were 11 professional football clubs in Melbourne (+ 1 in Geelong).

Now there are 13 professional football clubs in Melbourne (+1 in Geelong). If North leave town, we are back to 12 (+1 in Geelong). Its been proven over a long period we can sustain 10-11 professional football clubs in this town, which we may be able to stretch to 12. But the 13th club seems to be a stretch too far.

Who will it be that leaves? Take your pick of North Melbourne or perhaps the Melbourne Storm or Melbourne Heart. One of them won't be here in 10 years, but which one will be gone?

 

[Mitchell Madness]

Re: North on the Brink

A fairer draw with increased FTA exposure would increase revenue from sponsorship and coperate sources which are a major source of revenue. Even if the gate receipts increased by only a small portion it would still make a significant improvement to the club if we could sell the club to corporations knowing in advance we would not get screwed in terms of scheduling.

Do you think Emirates gives a shit about Collingwood? They want TV time.

all we keep hearing from North supporters

Hawthorn gets just as rough of a draw as North.
Yes, we get a few more FTA games, however, nowhere near as significant as some, yet we have companies climbing ontop of each other looking to sponsor us

The fact is, North Melbourne are a weak club and any company can see this. If north stopped rolling over and started getting their act together on their own, then sponsors would jump on board, the negative news articles would become positive, north would get better time slots


Every company knows that the secret to success is what happens inside the company walls, unfortunately, North Melbourne are still at the point where they blame everything which happens outside

 

[McCrann]

Re: North on the Brink

If I was a North supporter I would start planning for a merger right now. I know everyone is going to go crazy at me and I'll probably get banned again but what other choice does North have?

The way I see it, if North does not merge, the AFL is going to force them to relocate to Tassie. North supporters need to ask themselves what they would prefer. The fight to stay in Melbourne is a fight they can never win unless they find someone who is mega rich and donates $50 million to the club.

I admire North as a club for their tenacity but the reallity is that 10 clubs can not survive in Victoria. Eight clubs might survive in Victoria, but really, the ideal number of clubs in Victoria is 6. If there were 6 clubs in Victoria I could honestly say that they would all thrive.

Very long term, you may be correct. But in a 20 team AFL (say by 2020), 9 clubs in Victoria should be easily viable at least until mid Century (2040-50). If you look over the last 30 years, this scenario has played out before

1980s - South Melbourrne to Sydney Swans
1990s - Fitzroy to Brisbane Lions
2000s - North Melbourne to Gold Coast?? - But it didn't happen, North staved it off (good on them), but the pressure will only increase in the 2010s.

 

[hawker11]

Re: North on the Brink

While things look pretty grim for the roos, it must be said they do help out Hawthorn's mission to stay away from the Docklands at all costs. They take up a large portion of the minimum quota of AFL games contracted to be played at that stadium.

Correct me if I am wrong, but it would be likely that Richmond, Hawthorn and Melbourne would have to fill the void of games at the Docklands if the Kangas were to fold?

 

[mrpez]

Re: North on the Brink

No, I am being sincere. If JB had a terminal illness and his focus was to save the footy club it would inspire a lot more people to the cause.

Such a weak and downright offensive argument.

Jimmy and his team have done wonders for the Melbourne football club. He is well loved by all Melbourne supporters, because of his on-field achievements, his dedication to helping kids in need and his ability to unite the factions, something that hasn’t occurred at Melbourne for decades.

Our rise in membership, sponsorship and reduction of debt accredited to him, all pre-date his diagnosis. Attributing everything he has done to the fact that he has cancer, is just insulting to the man.

 

[telsor]

Re: North on the Brink

( original reference was about how ASD is not compensation for poor draw/etc ).

A fairer draw with increased FTA exposure would increase revenue from sponsorship and coperate sources which are a major source of revenue. Even if the gate receipts increased by only a small portion it would still make a significant improvement to the club if we could sell the club to corporations knowing in advance we would not get screwed in terms of scheduling.

Do you think Emirates gives a shit about Collingwood? They want TV time.

You're right that the poor draw, lack of TV time and the like has a negative effect on the revenue of clubs like North.

That doesn't mean the ASD is 'compensation', as North supporters claim. More correctly it's there to treat the resulting problem, but is not directly due to the draw. If it was, then the AFL would need to compensate all clubs for having to play in 'less attractive' slots.

If Collingwood played all their games as untelevised sunday twilight games, they wouldn't get ( or need ) a cent from the ASD. If North played every game at their choice of timeslot, they still would.

 

[telsor]

Re: North on the Brink

No, I am being sincere. If JB had a terminal illness and his focus was to save the footy club it would inspire a lot more people to the cause.

That is just a fact of life, the Stynes tragedy invokes the spirit of non-supporters, imagine the impact it has on supporters.

Did it have an effect, probably. I dare say mostly just to make it more 'immediate', getting money in faster, rather than more money as such.

But the fact they had such a club legend who is a genuine character who was obviously putting his heart and soul into the effort to save HIS club helped a hell of a lot more.

In contrast, JB looks like a dilettante who is doing the job as a hobby.

 

[Dont be a lemon]

Re: North on the Brink

Would North Melbourne be better suited to the VFL?

It defies logic that the AFL presses on with GWS and GC while North is hemorrhaging. This obviously hasn't happened overnight.

Is this a joke?

If the AFL waited for North Melbourne to be 'sorted out' financially the league would NEVER expand.

 

[McCrann]

Re: North on the Brink

This really is the worst attitude. The fun in footy is the footy. If you have to play local teams to get the fun, you're less of a footy fan and more of tribalistic rivalry fan or something. It's insular thinking that people always like to characterise Sydney with. It's not 1950 any more.

The old VFL is dead. Move on. If playing local teams is so important, go follow the existing VFL. It's nothing but local teams!

Agree with this. Footy >>> Any club (AFL/VFL/whatever)

 

[The Falcon Strike]

Re: North on the Brink

North's plight isn't symptomatic of a poor draw or FTA rights.

Rather the fact that they are so poorly followed results in no FTA wanting to broadcast them and hence they get shunted around.

Whilst the poor FTA result only compounds the issue - if there was a fair draw and each club had control of their own TV rights - north would be worse off.

 

[Tas]

Re: North on the Brink

Tas, be that as it may, it doesn't change the fact that Melbourne would still have become debt free irrespective of Jimmy's condition. It also has nothing to do with the operational advances Schwab and Stynes have made through the RedandBluePrint in the last 3 yrs which offer Melbourne supporters a genuine future. Surely you of all North posters can fathom this.

I am not sure. You are saying people didn't become members or kick in money to the club because they didn't like your previous administration?

I am sure Jimmy would have raised much needed money either way, I just do not believe he would have been as successful had he not had cancer.

Seriously, when someone as ill as him calls out for people to give money not to him, not to fight cancer, but to save his football club and you were a supporter how could you not rally to the cause?

That doesn't make it a negative, it doesn't matter how or why clubs get money through the door. But Jimmy has no closet stalker chasing him looking for any kind of story they can turn into a potential negative.

 

[Consolaçao]

Re: North on the Brink

Any other accountants here?

Running a debt is a completely normal thing to do as a company, and if I were a supporter of NM, I'd rather the club was being proactive in trying to invest in facilities to create future revenue streams than taking their eye off the ball, forgetting about the future, and prioritising the pay down of debt to the exclusion of all else.
My understanding is that they had significant receivables in their books, ie. money that they knew would be coming in from the AFL (and one other source from memory).
It's not unusual for a small company to have a low balance in their cash account at given times (the one I work for runs very low at times; it's deliberate, and certainly not necessarily symptomatic of financial problems).
Accountants are not idiots. They're good managers of money and they'll have cash flow spreadsheets designed to make maximum use of cash. I dunno what you'd all expect, but I doubt Collingwood's got $3,000,000 sitting in their bank account. If they do, the accountants are not really doing their job. THere are far more productive uses of that money.
I'm sure North's financial position is precarious, but you have to be careful of clueless journalists cherry picking balance sheets they probably don't understand.

 

[Tas]

Re: North on the Brink

Did it have an effect, probably. I dare say mostly just to make it more 'immediate', getting money in faster, rather than more money as such.

But the fact they had such a club legend who is a genuine character who was obviously putting his heart and soul into the effort to save HIS club helped a hell of a lot more.

In contrast, JB looks like a dilettante who is doing the job as a hobby.

JB is doing a job he isn't particularly qualified to do, he is there out of passion because the guys who were qualified to run the club did such a poor job of it.

It is why JB has the people around him that he has and why he wants to keep them together, they support him and provide the skills, knowledge and experience he lacks. Much like Eddie is no good at running a successful business, he has quality people around him and he can just run his mouth like he loves to do.

Lets be realistic, most of the stories in the media that involve Stynes since he has lead the club has had very little to do with Melbourne and has been more about him and his battle, he is using that to help generate support for what he is doing for the club.

That is what makes him the legendary person he is, because in this point in his life when he should be focused on his health and his family he is devoting precious time towards the club he loves.

He should be commended for it, but it is a terrible price to pay for a leg up in generating money or media support.

 

[Rummy]

Re: North on the Brink

Well I think the Kangaroos have no one to blame but themselves

They try and brazenly move most of their home games up to Canberra or anywhere else they can, in what is hoped to be a permanent move. They then throw away their traditional jumper and strip the ‘North Melbourne’ from the identity of their football club. That’d be like my club ripping off the “Collingwood” from everything their name is and has ever been attached to, and then doing away with the black and white stripes for some cartoonish magpie. It would seem like a different/new club, and not like the one I grew up supporting and that my dad took me to games when I was kid, and his dad did for him before me.

And for what, all just to try and seem homeless with no sense of attachment to anywhere or belonging identity, in an attempt to appeal to a broader base of supporters who will throw their hard earned money at the club…? What else did they expect their Melbourne based supporters to do?

I admired the clubs decision to not move up to the Gold Coast, but at that point the damage had been done. They would have lost tens of thousands of supporters due a perceived lack of loyalty shown to them, by their attempts to disassociate themselves as much as possible from Melbourne and their current loyal supporter base.

Even still I would have liked to see the “Kangaroos” stay afloat, because Im a traditionalist, even if they don’t seem to care for that sort of thing. But their decision to unnecessarily spend $5 million that they didn’t have, or could even contemplate paying back, borders on madness. They got themselves into trouble in the first place, and then threw away any reasonable chance they had of getting themselves out of it.

Now I’d like to see them moved to Tassie, before another AFL manufactured club is bought down there, and instead having some resemblance to the “North Melbourne” of old stay alive, as opposed to ceasing forever

 

[Blues_Man]

Re: North on the Brink

I disagree. If they were to set up in Hobart, a city where there hasn't been a lot of AFL football played, the tempatation to switch allegiances would be pretty high. Plus, the stalwarts who would continue to support whichever club from the mainland would be phased out as the years went by. Can't imagine their kids/grandkids continuing to support a random Victorian club, when there's another AFL team on their doorstep. I'd say they'd be able to get 30,000 members in Hobart, easily. Then you combine that with whatever packages they can offer to Melbourne-based supporters and membership would be the least of their concerns.

Well you must be a fickle supporter if you would jump ship just because a struggling opposition team has been relocated to your area

Sometimes it's best to actually think about what you are saying before running your mouth off .

You also have no idea about the Tassie demographics ..nobody from the North of the state (half the population) will travel to Hobart to watch a relocated team play on a sub standard ground .

Nobody has the millions to spend on another football venue when there is already one in the state .

You really do have no idea

 

[Rob]

Re: North on the Brink

Any other accountants here?

Running a debt is a completely normal thing to do as a company, and if I were a supporter of NM, I'd rather the club was being proactive in trying to invest in facilities to create future revenue streams than taking their eye off the ball, forgetting about the future, and prioritising the pay down of debt to the exclusion of all else.
My understanding is that they had significant receivables in their books, ie. money that they knew would be coming in from the AFL (and one other source from memory).
It's not unusual for a small company to have a low balance in their cash account at given times (the one I work for runs very low at times; it's deliberate, and certainly not necessarily symptomatic of financial problems).
Accountants are not idiots. They're good managers of money and they'll have cash flow spreadsheets designed to make maximum use of cash. I dunno what you'd all expect, but I doubt Collingwood's got $3,000,000 sitting in their bank account. If they do, the accountants are not really doing their job. THere are far more productive uses of that money.

Actually, Collingwood has $10m cash in the bank according to their latest annual report.
As far as other productive uses of that money go, sometimes term deposits and the like are as good as any. Banks are still the safest place to have money parked. What do you suggest? Pubs?

 

[Consolaçao]

Re: North on the Brink

Such a weak and downright offensive argument.

Jimmy and his team have done wonders for the Melbourne football club. He is well loved by all Melbourne supporters, because of his on-field achievements, his dedication to helping kids in need and his ability to unite the factions, something that hasn’t occurred at Melbourne for decades.

Our rise in membership, sponsorship and reduction of debt accredited to him, all pre-date his diagnosis. Attributing everything he has done to the fact that he has cancer, is just insulting to the man.

Don't be so sensitive.
As much as Jim Stynes is a pretty inspiring person - I think all football supporters are somewhat in awe of him - his circumstances have made Melbourne 'untouchable' in the eyes of the media and have helped mobilise your supporter base.
If you deny that you're in la la land.

 

[AngelEyes]

Re: North on the Brink

lol I am an accountant and I have worked for the largest accountancy firm in the world for many years, I try to keep things simple for people on forums because most people do not have the basic understanding of accountancy, like the moron who wrote the article about the club.

I have clearly explained that as a business things have improved dramatically over the last three years, there are some timing issues some have focused all their attention on.

There are a few things the club needs to work on but they are not critical to the club being able to continue operating.

That is as simple as I can keep it for people too simple to understand a more in-depth analysis of the various issues.

Well then you were clearly trying to be deceptive of your definition of a current asset. Deceptive or wrong, your definition of a current asset was wrong. You are being just as deceptive of the journalist you cause of being wrong. At least he can claim he isn't knowledgeable on accounting where you claim to be.

 

[King Elvis]

Re: North on the Brink

As for the equalization fund from the AFL. Yes, North Melbourne receives 1.4M at the moment. It has been worked out that this is the amount North Melbourne misses out on by not getting a fair draw/good timeslots. North would survive just as well without it if they received a similar draw to what Collingwood gets.

Always find this argument to be a strange one.

North Melbourne get a fair draw, but they don't get good timeslots because nobody wants to watch them play.

They're compensated for having a small supporter/membership base, and a general lack of interest in them.

 

[Kimbo]

Re: North on the Brink

I hope people have read the club's website "NMFC financials: The facts", responding to the Age article?

http://www.kangaroos.com.au/news/blogarticle/tabid/9795/newsid/107970/default.aspx

It seems a lot of posters are using The Age article just as Caro would have intended - as a launching pad for their own already held views (and biases) about North Melbourne. If people can't see how this (and her regular, negative articles) create an impression that makes our job harder, I'm staggered.

No time for those actively seeking our demise as if it affects you or your club. Just immature, mean-spirited stuff from those who can't distinguish on-field from off-field issues. I think the BF term is 'haters'?!

 

[Tas]

Re: North on the Brink

Any other accountants here?

Running a debt is a completely normal thing to do as a company, and if I were a supporter of NM, I'd rather the club was being proactive in trying to invest in facilities to create future revenue streams than taking their eye off the ball, forgetting about the future, and prioritising the pay down of debt to the exclusion of all else.

This was the problem we had for so long, we have lacked vision ever since the 70s. Most of what the club has done for the last 30 years was reactive to whatever was impacting us at any given point in time.

This administration is the first time we have been looking to the future. Facilities were needed to be a viable AFL club, Ballarat is a place we plan to be heavily involved with for the long haul and invest a lot of time, effort and resources with the community there and the surrounding regions.

It costs money to make money. It takes time to grow and expand the supporter base, especially in a very competitive environment. Foremost you need a team that young kids will support, we can't cut corners with the development of the side or producing an elite level team.

My understanding is that they had significant receivables in their books, ie. money that they knew would be coming in from the AFL (and one other source from memory).
It's not unusual for a small company to have a low balance in their cash account at given times (the one I work for runs very low at times; it's deliberate, and certainly not necessarily symptomatic of financial problems).

We did and they are back to a more normal level for us, they were abnormally high the last season.

Ultimately, it is about the operating result, if you continue to go from year to year and your operating result is positive then you do not have burning issues to address.

There are a lot of events that can occur outside of the normal operation of the business that can detract from the overall performance, but you are on shaky foundations if the core of your business is struggling to make ends meet.

Take for instance, Collingwood lost a lot of money on the investments and wrote them down last year but their operating performance was excellent. It is a concern about the investments but while the operating performance is rock solid then the club is still in a very good position.

Accountants are not idiots. They're good managers of money and they'll have cash flow spreadsheets designed to make maximum use of cash. I dunno what you'd all expect, but I doubt Collingwood's got $3,000,000 sitting in their bank account. If they do, the accountants are not really doing their job. THere are far more productive uses of that money.
I'm sure North's financial position is precarious, but you have to be careful of clueless journalists cherry picking balance sheets they probably don't understand.

Exactly, there is no point to have millions sitting in a transaction account that wouldn't earn much interest. The first sign of trouble is if you have problems securing a line of credit. Even if our accountants are clueless, the financial institutions are not. They wont lend money to an entity they feel can't service their debt and are unlikely going to be able to repay it.

Football income is cyclical and it doesn't come in evenly, from the AFL to sponsors to corporates, the money comes in huge chunks. Clubs know exactly when it comes in and knows what they have to pay and when.

Overdrafts and other lines of credit smooth out the periods where money has to go out before it comes in. It doesn't mean you are destitute, it just means the timing of the incoming and outgoing of cash does not line up.

If you were to do a cash flow on the operational side of the club it would be rock solid.

Most of the debt on the books is in the form of a liability accrued during the Miller era where the board at the time guaranteed the social club against the recommendation of professional advice.

Since increasing the profitability of the club we had begun to reduce the overall liability but it was important for future growth that we raise spending on the football department to be competitive with other clubs.

Had we not spent the money and paid debt off we would have had less debt on the books but we would unlikely have a top class coach nor top class young kids who come in and perform.

Giving us another 10 years of onfield misery is not worth saving $250k per year in interest payments. We can't go another decade in the wilderness, we are a long way behind in terms of supporter base, you need a good quality side on the park to have any hope of making any headway in that area.

 

[The Falcon Strike]

Re: North on the Brink

Don't be so sensitive.
As much as Jim Stynes is a pretty inspiring person - I think all football supporters are somewhat in awe of him - his circumstances have made Melbourne 'untouchable' in the eyes of the media and have helped mobilise your supporter base.
If you deny that you're in la la land.

I think the point mrpez was making - is that a large part of the mobilsation and money raised was done prior to Jim being diagnosed with cancer.

I don't have a timeline of all functions - but as of August 2008 - DD had raised $2m. Jim was diagnosed in July 2009.

So attributing his success due to his circumstances is plain wrong.

No doubt his protection in the media comes from his circumstances, but not a large part of the mobilsation of support resulting in debt being reduced.

 

[Consolaçao]

Re: North on the Brink

Actually, Collingwood has $10m cash in the bank according to their latest annual report.
As far as other productive uses of that money go, sometimes term deposits and the like are as good as any. Banks are still the safest place to have money parked. What do you suggest? Pubs?

Collingwood had $10,000,000 sitting in 'cash and cash equivalents'. That is not money in a bank account... it includes things like shares.

Totally incomparable to a figure sitting in a bank account.