NAFC injunction on the SANFL re the Power

[doggies4eva]

It would seem that $4.27M and $4.5M losses will exceed the profits to the SANFL of operating the stadium for those seasons. Can anyone confirm this?

Not when you take into account revenue from Crows matches as well.

But you can't count the Crow match revenue because if Port wasn't there they would still get the Crow revenue - although they may lose some sponsorship $s as they would only get exposure every second week.[/quote]

You asked about the profits to the SANFL of operating the stadium - they obviously include revenue from Port and Crows matches. I'm not sure what you're getting at by comparing the projected losses of Port with the projected profits of the SANFL. The losses made by Port don't translate to losses made by the SANFL from stadium management, except that if more people watched them play the SANFL would make more money.[/quote]

What I'm getting at is comparing the situation with a Port Power and that of without a Port Power. This is to assess the real value of keeping them afloat. For example if they lose $4 but the SANFL makes $8M from Port games at Footy Park then they have a net value to the SANFL of $4m But if the SANFL only makes say $2M from Port games then they are making a net loss of $2M and the SANFL should seriously consider selling the licence.

[Hondo]

What I'm getting at is comparing the situation with a Port Power and that of without a Port Power. This is to assess the real value of keeping them afloat. For example if they lose $4 but the SANFL makes $8M from Port games at Footy Park then they have a net value to the SANFL of $4m But if the SANFL only makes say $2M from Port games then they are making a net loss of $2M and the SANFL should seriously consider selling the licence.

You are confusing 2 separate things. Ownership of the license and ownership of the PAFC.

The $4m predicted loss is not the SANFL's responsibility. It comes out of the members' funds (net assets) of the PAFC.

From the SANFL's POV it's a comparison of + share of revenue from AAMI Stadium ($8m?) + annual license fee/dividend from PAFC less costs of running AAMI Stadium (?) less interest on loan taken out to give $$ to PAFC. Repayments of the loan will happen over the coming years and, hopefully, will be offset by > revenues from AAMU (in theory).

In the current econcomic climate the SANFL wouldn't have been able to take out such a large loan unless they were 1) secure financially and 2) there's wasn't a solid business plan to back it up. If there was any question mark over the longer term financial viability of the PAFC then the bank would have said "no way". As I've said before, there's a juicy new AFL TV rights deal coming up that will see larger amounts going back to all AFL clubs. My bet is that this is part of the basis of the short term funding before the new TV money kicks in.

We know the SANFL make a profit out of the Power's home games at AAMI because that was the basis of the whole bun fight between PAFC and the SANFL. There is a big pie that needed to be carved up differently.

[nickname]

Exactly, thankyou hondo.
Are you 100% sure though that Port will be required to pay back this loan?

[Sojourner]

According to Graham Cornes tonight on 5AA, the SANFL need to reduce their Salary Cap and focus on becoming Community Based Football Clubs. Which Rowe appears to vigourously oppose.

It makes me wonder if they simply flip a coin prior to the show starting to see what side they are going to take for the night with some of what they seem to come up with!

[Hondo]

There was a claim made on 5AA later on that the WAFL clubs are mostly profitable and healthy with their lower salary cap and far less money coming into the WAFL from the AFL. We know that the Dockers and Eagles rake it in from their home games but that's with sell out crowds and the WA Govt (I think?) owning the Stadium.

So it's not really apples and apples ....

[UK Fan]

Greg Griffin genius nondisclosure to the clubs shareholders.

Fact is it would be financially irresponsible to give the PAFC a further $2 mill dollars.Without putting in place some sourt of control on their expenditure. Seeing it is their expenditure that seems to be the happily accepted reason why Port are in their financial situation. Not the usual scapegoats PAMFC, 8 Other SANFL clubs or the SANFL itself as I have tried to explain.

I for one having been saying for many years the whole structure needs to be changed. The SANFL/shareholders need more control on the finances of the clubs. The non disclosure of $5 mill debt by the SANFL commision can not be justified or tolerated. Changes and controls will need to be actioned to make sure this never occurs again.

We all hear about how the AFL profits are so good for wider footballing community in SA. Well how much of a detriment is it to the same footballing community when an AFL club is forecasting a $12mill loss over the next 3 years.

Those figures are ridiculous $12mill in 3 years. Fitzroy was packed up after having what $2 mill debt. Port are in $5 mill debt already and are forecasting another $12 mill. Those figures are not acceptable.

[harley d]

Huh?
Rucci conveyd North's side of the story quite well in the paper today.
Would they be responding to themselves?

Not a fan of Rucci for several reasons and despite the story today I still dont even remotley take anything he says as gospel and would much prefer to hear it officially from the club, a story in the paper isnt remotley equivalent to what the club actually states themselves through their officials!

Around the mark Sojourner. Lets just say a copy of a report intened for some heavyweights has found its way into Ruccis hands and he has taken a lot if not most of the details in this letter out of context. Sit tight for a bumpy ride. In 2 weeks Port must produce a business plan showing their plan out of this mess. I cant say too much more unfortunately.

[Adelaide Hawk]

According to Graham Cornes tonight on 5AA, the SANFL need to reduce their Salary Cap.

I can't handle the humour.

[Squawk]

If the Port Power licence was sold, you'd imagine the SACA might be interested in bidding for it. What if they bid for it in partnership with the 9 SANFL clubs? That would be an interesting scenario. Home games at Adelaide Oval and the clubs would still get a dividend.

[Barto]

There was a claim made on 5AA later on that the WAFL clubs are mostly profitable and healthy

HAHAHAHAHAHAHAHAHAHAHAHHAHAHA

[doggies4eva]

What I'm getting at is comparing the situation with a Port Power and that of without a Port Power. This is to assess the real value of keeping them afloat. For example if they lose $4 but the SANFL makes $8M from Port games at Footy Park then they have a net value to the SANFL of $4m But if the SANFL only makes say $2M from Port games then they are making a net loss of $2M and the SANFL should seriously consider selling the licence.

You are confusing 2 separate things. Ownership of the license and ownership of the PAFC.

The $4m predicted loss is not the SANFL's responsibility. It comes out of the members' funds (net assets) of the PAFC.

From the SANFL's POV it's a comparison of + share of revenue from AAMI Stadium ($8m?) + annual license fee/dividend from PAFC less costs of running AAMI Stadium (?) less interest on loan taken out to give $$ to PAFC. Repayments of the loan will happen over the coming years and, hopefully, will be offset by > revenues from AAMU (in theory).

In the current econcomic climate the SANFL wouldn't have been able to take out such a large loan unless they were 1) secure financially and 2) there's wasn't a solid business plan to back it up. If there was any question mark over the longer term financial viability of the PAFC then the bank would have said "no way". As I've said before, there's a juicy new AFL TV rights deal coming up that will see larger amounts going back to all AFL clubs. My bet is that this is part of the basis of the short term funding before the new TV money kicks in.

We know the SANFL make a profit out of the Power's home games at AAMI because that was the basis of the whole bun fight between PAFC and the SANFL. There is a big pie that needed to be carved up differently.

I don't think that I am confused Hondo. I work in finance and have a good grasp of these issues.

While I take your point that Pt Power is a separate legal entity (correct me if I'm wrong) but isn't it wholly owned by the SANFL? So the assets and financial health are of direct interest to the SANFL. After all the proceeds of the profits are either plowed back into the business or distributed to the SANFL and then back to the 9 clubs.

So my point is to take a wholistic view. - ie what is the total economic value of Port Power playing out of AAMI? If the loss for Port is really from an unfair distribution of footy Park profits between Port and the SANFL then by consolidating the operations we get a clear picture of the business without having to enter into the political debate about who gets what from the Footy Park operation.

[Ronnie]

Greg Boulton's little contribution in today's paper adds nothing to the understanding of this situation. Everything was fine until the Global Financial Crisis came along basically. In other words, external forces the board had no control over. Ok to a point, but hardly explains the extent of Port's financial disaster. No mention of poor public support and awful crowds, a Port social club poorly run, and a football club that has lacked true leadership since the Brian Cunningham days. This will probably bounce around between the Port Board, SANFL commission and SANFL clubs and no one will take responsibility.

[Hondo]

I don't think that I am confused Hondo. I work in finance and have a good grasp of these issues.

While I take your point that Pt Power is a separate legal entity (correct me if I'm wrong) but isn't it wholly owned by the SANFL? So the assets and financial health are of direct interest to the SANFL. After all the proceeds of the profits are either plowed back into the business or distributed to the SANFL and then back to the 9 clubs.

So my point is to take a wholistic view. - ie what is the total economic value of Port Power playing out of AAMI? If the loss for Port is really from an unfair distribution of footy Park profits between Port and the SANFL then by consolidating the operations we get a clear picture of the business without having to enter into the political debate about who gets what from the Footy Park operation.

Best as I can tell, PAFC is a company limited by guarantee. This seems to be a company structure available only to not-for-profit or charitable organisations. I am not an expert on these, do you know? My understanding of "not for profit" is that there's not dividends paid out to shareholders, as such. It seems more like a normal incorporated association structure that most sporting clubs use. ie, profits are distributed back to the Power members and then spent on the club, rather than paid back to "shareholders".

As far as I am aware, the Crows don't automatically distribute surplus profits back to the SANFL. They pay their sub-license fee and then their money is theirs to spend within the footy club.

As I said, unless the SANFL were doing OK from the Power from your "holistic" POV, then the bank wouldn't have lent them the money in the first place. I think the SANFL clubs are using the opportunity to take back more control over the AFL licenses and that might be a good thing. Interesting that the quotes of "overspending at the PAFC" is a direct comeback to Leigh Whicker's same comments about the SANFL clubs earlier in the year. Payback!

[drebin]

Interesting that the quotes of "overspending at the PAFC" is a direct comeback to Leigh Whicker's same comments about the SANFL clubs earlier in the year. Payback!

Yes - Leigh Whickers un-informed comments about SANFL clubs spending based on last years financial results, which for at least one (NAFC) and maybe two or 3 other clubs were not even remotely accurate as to how financially solid they are long term!

That debate hasn't been helped (at the time and now) by the pathetic ramblings of Graham Cornes who has "bleated" on about the over spending of SANFL Clubs Football Departments and paying players too much. Again for someone in his position in the media and the Football community in general, it shows complete disrespect and lack of knowlegde of how a SANFL clubb operates today. Thankfully though Stephen Rowe has defended the SANFL clubs and at least he has some intimate knowledge through his involvement at Glenelg.

Clearly it "irks" the likes of Whicker and Cornes to see a vibrant strong SANFL because they are quite happy to concede concessions to the AFL re reducing the SANFL Salary Cap and limiting "imports". If either of those two "suggestions" ever get voted into the SANFL then you will see the SANFL reduced in time to being basically an U/18 feeder comp for the AFL which is what the Victorians want.

I hope out of this whole present situation (led by North) that many at West Lakes (SANFL and Commission Administrators) are made accountable for the mess that the Port AFL Club have got themselves in and the fact that Whicker and Co and some on the Commission have treated the SANFL clubs with contempt in bullying us like second class citizens and hiding financial facts to suit themselves.

It could be in the very near future (or should be) as a result of this that the 9 SANFL clubs vote onto the Commission reps that that will ensure the protection and growth of the SANFL so it remains the leading comp outside the AFL and resist the selfish "whims" of those whingning Victorians. Those "judas" like sympathisers eg Whicker and Cornes can also leave with them!

[darley16]

Spot on Drebin.

[doggies4eva]

I don't think that I am confused Hondo. I work in finance and have a good grasp of these issues.

While I take your point that Pt Power is a separate legal entity (correct me if I'm wrong) but isn't it wholly owned by the SANFL? So the assets and financial health are of direct interest to the SANFL. After all the proceeds of the profits are either plowed back into the business or distributed to the SANFL and then back to the 9 clubs.

So my point is to take a wholistic view. - ie what is the total economic value of Port Power playing out of AAMI? If the loss for Port is really from an unfair distribution of footy Park profits between Port and the SANFL then by consolidating the operations we get a clear picture of the business without having to enter into the political debate about who gets what from the Footy Park operation.

Best as I can tell, PAFC is a company limited by guarantee. This seems to be a company structure available only to not-for-profit or charitable organisations. I am not an expert on these, do you know? My understanding of "not for profit" is that there's not dividends paid out to shareholders, as such. It seems more like a normal incorporated association structure that most sporting clubs use. ie, profits are distributed back to the Power members and then spent on the club, rather than paid back to "shareholders".

As far as I am aware, the Crows don't automatically distribute surplus profits back to the SANFL. They pay their sub-license fee and then their money is theirs to spend within the footy club.

As I said, unless the SANFL were doing OK from the Power from your "holistic" POV, then the bank wouldn't have lent them the money in the first place. I think the SANFL clubs are using the opportunity to take back more control over the AFL licenses and that might be a good thing. Interesting that the quotes of "overspending at the PAFC" is a direct comeback to Leigh Whicker's same comments about the SANFL clubs earlier in the year. Payback!

I don't consider myself an expert on limited by guarantee companies as most of my experience with sporting organisations has been with incorporated bodies but my general understanding is that this is a legal vehicle which has been set up to give legal separation between the new organisation (Port) and the effective "owner" (the SANFL). This helps minimise the risk of Port going broke or being sued for billions and the injured parties pursuing the "owner" for any shortfall in recoveries. This is probably a bit simplistic but gives the general idea.

The Crows may not automaically transfer their "profits" but the sub-licence fee can be adjusted from time to time and would be based on the Crows ability to pay and effectively under the control of the SANFL. A lawyer may argue the technicalities but my generalisation is that the Crows are owned by the SANFL and their profits are controlled by the SANFL and used for the good of football within SA.

I don't agree with your asssessment of the bank's reasoning about why they lent the money to Port. You have a lot more faith in the ability of banks to delve below the surface and gain an understanding of the fundamental business. I wish you were right - we wouldn't have a GFC!

I think the bank would assess the lending risk - ie what is their chance of getting their money back if Port defaulted. It would have looked at the guarantee and the net assets and made its decision.

[Edward Teach]

The SANFL have made an awful mess of the whole thing.

Should have been Northern based SANFL Clubs aligned with Port playing out of AAMI and Southern based SANFL Clubs aligned to the Crows playing out of a re-furbished Adelaide Oval.
Or both playing out of Adelaide Oval with the Hell-hole that is AAMI sold off.

Port's only hope is to get into AA asap and get the hordes of Sturt/Norwood/Glenelg AAMI haters/AA lovers to jump on so that they can watch AFL in a quality venue.

Either that or Port should pack it in and let a consortium of say Norwood/Sturt/Glenelg set up a club based at AA to rival the Northern Burbs Crows (as the Crows have zero presence in either Adelaide City or the South).

[Hondo]

The SANFL have made an awful mess of the whole thing.

Should have been Northern based SANFL Clubs aligned with Port playing out of AAMI and Southern based SANFL Clubs aligned to the Crows playing out of a re-furbished Adelaide Oval.
Or both playing out of Adelaide Oval with the Hell-hole that is AAMI sold off.

Port's only hope is to get into AA asap and get the hordes of Sturt/Norwood/Glenelg AAMI haters/AA lovers to jump on so that they can watch AFL in a quality venue.

Either that or Port should pack it in and let a consortium of say Norwood/Sturt/Glenelg set up a club based at AA to rival the Northern Burbs Crows (as the Crows have zero presence in either Adelaide City or the South).

Take AFL footy away from AAMI Stadium and you take money out of the SANFL and give it to the SACA. How much? Don't know. But that's not the outcome everyone is looking for right now as that would ultimately impact the 9 SANFL clubs.

The Crows are supported strongly in all areas of SA expect Port Adelaide probably. I don't think any single region feels they have a stronger tie to the Crows than any other. What's this strong presence in the North you are talking about?

Also, why do you want to link Adelaide Oval and AAMI Stadium to regions? If anything, AAMI should be linked to the South? I don't think people tie their club support in to which ground the team plays at. Are you a SACA member?

[Wedgie]

If anything, AAMI should be linked to the South?

Whilst I agree with everything else you said how do you come up with that statement?
Football Park is 5km further North than Adelaide Oval and I can get to Adelaide Oval almost twice as quickly from the South.
Similarly if I lived North Id prefer a quick trip down the Port Expressway than going down Main North Rd.

[Hondo]

If anything, AAMI should be linked to the South?

Whilst I agree with everything else you said how do you come up with that statement?
Football Park is 5km further North than Adelaide Oval and I can get to Adelaide Oval almost twice as quickly from the South.
Similarly if I lived North Id prefer a quick trip down the Port Expressway than going down Main North Rd.

TBH, I don't think either oval services the North or the South one way or the other. if anything, they service the Western suburbs and CBD. Not that it really matters.

If he said Elizabeth Oval and Nourlunga then fine.

I think Edward Teach works for the SACA. They'll come up with any argument to say they should get AFL games. That's officially the worst I've heard.