I saw the announcement of Richmond’s financial results.
Having not read it at all what really struck me about it was that they HAVE WON TWO ■■■■■■■ FLAGS IN THREE ■■■■■■■ YEARS.
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The people whining about how we only just broke even when we made the finals need to look at the Richmond result and see why we have done well with our financial result. Imagine how much money we would generate and our profits if we actually could football.
But at the end of the day it’s a not for profit organisation with minimal ability to get a competitive advantage over our competitors. So making money doesn’t really mean much. The key is to ensure you’re continuing to invest in the key thing which is football. This is my only concern as it makes the ultimate goal of winning a premiership harder but I feel this has been corrected in the last few seasons.
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Is there anything in this financial and previous financial statements about paying for fees to ASADA for its education services.?
Richmond spend on football operations = $28,369,319
Essendon spend on football operations = $26,603,118
Difference = $1.77m more Richmond were able to spend on football than we were.
The club making large profits allows it to spend more money on that thing the should be its primary focus, football. That is the reason it should be focused on making money, the only reason. Our ‘increased’ spend on football this year still had us spending less on football ops than Richmond, West Coast and Collingwood spent a year ago in 2018 and these figures tend to rise quite a bit every year.
Making more money allows clubs to spend more money, it’s not rocket science I know but the reality is the clubs with the most money for the longest tend to be the most consistently successful, while those that can’t spend as much on football operations most often rely on flash in the pan fleeting successes.
We need to be doing a LOT better than turning a $60k profit in a finals year where so much went in the club’s favor off field, people dismiss it as unimportant but this stuff is vital for the future success or otherwise of the club. If the board made up largely of finance/CEO types these days weren’t a bit antsy after last year’s result I imagine they are now.
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Ignoring, naturally, the massive debt that none of those clubs had in the same time period, a debt incurred under a corrupt AFL.
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You are arguing two different things here - one we should be spending money on football operations and two we should be making a bigger profit. I realise the two are linked but you can’t expect to spend more money on football and still make a profit. I have no issue with a 60k profit as it shows we now have sustainable financial base to make a regular assault on what we should be doing - winning premierships. I’m also doubtful the “largely of finance/CEO types” on the board are too disheartened over posting a profit.
Also I feel your comment is on football operations spending is misleading. All 3 clubs you give as examples played more finals in 2018 or this year. Take the Richmond example this year, the numbers you have stated show they spent 6.24% more on football operations than we did - but they also played 8% more games by playing two additional finals. This means that our spending was higher per game of football played. You need to look beyond the headline numbers sometimes.
Another thing, I am sure Richmond’s gate receipts and prize money revenues would both far exceed what we brought in - meaning that as a percentage of revenue we have spent a higher proportion on football operations. You also state that we should have made a bigger profit given we played a final. Personally I don’t think this holds much weight given the club would have made little from playing in the finals other than the small prize money given the final was played in Perth. I imagine we would have sold few corporate packages and very little merchandise.
I get you are always want to play devils advocate but you need to weigh up all sides in this argument and compare things on a like for like basis. However I’m really not sure the club can ever meet your expectations. If we had posted a 3m profit you would have said we hadn’t spend enough on football or not reinvested enough for the future and I can only imagine would you would have said if we had lost 3m.
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Also a substantial operating profit in a NFP organisation is NOT something you want to have.
That just means you’ve brought in money with no plan at all on what to do with it.
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I think they factoring in $3.5mil in donations
Coaches and football departments aren’t payed on a per game basis they’re on contracts just like any other employees, while player payments for finals games for two extra finals over us would total a couple of hundred k, maximum. Other finals expenses are covered by the AFL is my understanding, and if those that weren’t would be extremely minimal and not go close to closing a $1.8m gap.
I didn’t state that, sorry. I described the year as a ‘finals year’ to give it a descriptor that meant the year was ‘ok’ on field on a basic evaluation scale, that is we made finals. It wasn’t a Premiership year, it wasn’t a bottom 4 year, it was a finals year. Yes a Premiership year should show greater financial success , yes a bottom 4 year would clearly show less success and likely substantial losses (at our current rate) on the P&L, a finals year should show a decent return. It had nothing to do with the act of playing a final meaning we should make a big profit from that game.
Thanks for telling me what I would’ve said. 
FYI if we’d had this exact ‘final’ financial result with a footy ops spend rivaling the big boys I wouldn’t have been as critical of it, the increase in footy department spending was not much more than superficial given our low starting base and didn’t lead to any better product on field. If we’d made a $3m profit without spending on footy I would’ve definitely said we should be spending more on footy. If we’d posted a $3m loss with the exact year we had I would have been much more concerned. It’s not all about posting profits provided the spending is being done in the right place.
My main concerns as detailed much earlier in this thread are around money disappearing into expenditure in various other areas of the club that are not having a positive impact on its primary business, footy. The club generated enough positive outcomes this year in its key areas of membership, sponsorship and gate receipts (up $1.8m year on year) to have produced a much better result than it did considering it only increased football spend by $500k …honestly I don’t think the club would argue that, surprised anyone would.
From our annual report this is what makes up football expenses and I am guessing all clubs would be very similar:
(I) FOOTBALL EXPENSES
Football expenses include football department related costs including total player payments, coaching and support staff remuneration, recruiting costs and costs in respect of the standalone VFL and VFLW teams
Given player payments are included, the additional games would increase football operations costs. Also I am in little doubt that all the coaching staff and possibly more football related staff ie fitness and medical would be rewarded with a decent bonus for winning finals. The 6.24% gap would be easily accounted for. This is without even getting into the AFLW/VFLW spending which falls into this category.
You’re sorry? This is your exact quote:
So you are saying we were in a finals year but that is different to playing a final? 
You need to look beyond the headline number stating we spent “$500,000 in non-player-related football investment”. Overall we increased football spend by $1.65m. If you compare this number to 2018 our football operations expense increased in 2019 by 6.59%. This far outpaced the growth in operating revenues which only grew by 2.3% from 2018 to 2019. Therefore its reasonable to assume they have invested sufficiently in football relative to the increased revenues.
Also you can’t expect all the additional revenue membership, sponsorship and gate receipts to go straight to football spending. To increase these revenues you are having to spend cash to do so. Let me know if you know of a business that can increase its revenues without touching its costs - I would be super keen to invest.
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An oversold TV raffle
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Wot ?? Revenue is revenue, donations are part of the business model. I donate to the Club every time I visit the pokies at the Melton Club.
Generosity plus.
I’m not sure which of my previous posts on the topic made you think I don’t understand financials and needed them explained to me … so let’s continue that trend…
The extra $1.1m you’re assigning as a terrific increase in footy department spending was actually a mandated increase in total player payments as per the collective bargaining agreement.
This is essentially inflation in the industry that every club has to pay, this wasn’t Essendon voluntarily increasing their spend in the area of football. The voluntary increased spend by the club in that area was $500k (presumably largely due to paying to bring Ben Rutten across from Richmond during that financial year). This was all very clearly laid out in the Finance Directors Report, in case you missed it I’ve included an image below. Maybe the Finance Director is wrong on that?
In that same Finance Directors report he described the result as “mixed” and “significantly lower than last year” while describing a couple of the factors behind that, and also describing the club’s overall financial situation is strong. I’ve never disagreed with the latter point, and made the same point in my earlier post. Maybe he’s just being a whiner when he describes this as a “mixed” financial result, or some aspects of it as being disappointing, including money being spent and losses taken in non-football areas?
You’re on the ultra-defence of something that the club isn’t defending or needing defence of. It’s strange, but whatever floats your boat.
This was a mixed financial result, as stated by the Finance Director himself in the Annual Report. The CEO likewise in his video to the members when discussing the financial result described “some relatively mixed results” and “some areas that we’re going to have to really challenge for 2020” among his positive news.
There were some strong positive gains made in areas of membership, gate receipts and sponsorship, but too many of those gains were eaten up in non football related losses and costs, as detailed in part by the Finance Director in the Annual Report, and discussed elsewhere. The club is in a stable financial position moving forward based on previous results, but this wasn’t a great result and we need to do better than a $60k operating profit in years where the club is at least moderately successful on field (i.e. playing finals). Again the club isn’t disputing any of that, but you are?
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Agree with 99% of where your coming from.
The one angle I’m not sure about, is the successful year narrative. Yes we had record memberships and finals, but the general mood of supporters was really, really odd last year. There was a lot of frustration and some even seen to be totally broken. I’ve seen people stop going and offering up their seats and multiple long term members not renewing.
I wonder how that malaise is flowing through. If people renew but on a lower level or take out memberships and not go or the casual fan goes less it must flow through to the dollars.
crowds slightly up year-on-year (505k > 535k home, 1026k > 1060k H&A). Plus the final.
So not a bonkers increase, but certainly steady.
Hmm decent then.
I agree that the mood of the membership overall wasnt terribly positive this year, perhaps that is to be expected after so many years not winning a final. Overall membership revenue was up $360k so rehardless of people downgrading or whatever the club still made $360K more profit from memberships than the year before. I will watch this year with interest as it’s the first in a long time that I won’t be renewing my membership, well unless…
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