by RustyCage » Wed Dec 05, 2012 4:46 pm
Power fact sheet from President & CEO
PortAdelaideFC.com.au
9:15:51 AM Tue 12 November, 2002
Power members received a ‘fact sheet’ on Monday from club president Greg Boulton and chief executive Brian Cunningham. The fact sheet is as follows.
FACT SHEET – From one club to the Power and the Magpies
1. Purpose of fact sheet
This fact sheet has been prepared to counter often mischievous commentary through the media and other sources that the Power left the Port Adelaide Magpies Football Club in a perilous financial position upon entering the AFL. This sheet has been provided initially to members of the Port Adelaide Football Club and will be sent to various media commentators if there is any misrepresentation of the facts regarding the granting of the second AFL licence.
A very small, vocal minority (due to self interest or anti-Port Adelaide feelings) during the last 6 years have incorrectly reported the Magpies financial and organisational position upon the Power entering the AFL and the Magpies continuing in the SANFL competition.
2. Overview
The facts outlined below confirm that:-
- The SANFL imposed stringent conditions on all tenders for the second AFL licence and the separation of both the AFL club and the SANFL club was essential even though our club’s submission argued for continued links.
- Ninety nine percent of PAFC Inc members voted at a special members meeting in favour of entering the AFL competition with provision of $2.5 million capital to the new AFL club.
- During the period of Greg Boulton’s Presidency from 1993 – 1996 the Board and CEO increased the wealth of the Club from $256,000 in 1992 to more than $3.3 million at the end of 1996. This enabled $2.5 million capital for the new AFL Club with $792,000 remaining for the Magpies.
- The Magpies were left in a strong financial position in 1996 with $792,000 net assets and more than $303,000 in clearance fees for Magpie players transferred to the AFL team in following years.
- Since the AFL licence was granted, the Power negotiated with the SANFL for the Magpies to return to Alberton for training and for an increased share of licensed club profits from 15% to 25%.
3. Tender for second AFL licence
The SANFL set out certain conditions in a tender document issued to interested parties on 1 August 1994. These conditions included:-
--- The terms and conditions of the sub-licence would be negotiated between the SANFL and the AFL without club involvement.
--- The entity that was granted a sub-licence would be an autonomous body that would be subject to the ultimate control of the SANFL Commission.
--- Details of the offeror’s proposal would need to state what effect a successful bid would have on its team to be fielded in the SANFL competition and how this effect can be minimised.
--- The offeror’s view on the financial effect that a successful bid would have on its team to be fielded in the SANFL competition if a re-definition of boundaries to cater for an AFL team is applied.
--- The proposal of the tenderer had to include how the SANFL competition would be reduced to 8 teams.
Both the SANFL Commission and the Port Adelaide Football Club wanted to ensure that the tender process was both independent and without any conflict of interest.
The Port Adelaide Football Club lodged its tender document on 14 September 1994 and addressed the below issues that impacted on the SANFL competition and the Magpies.
--- The PAFC promoted strongly the idea of promotional zones with 4 SANFL clubs attached to each of the Crows and Port Adelaide.
--- The tender document strongly supported the continuation of the Magpies in the SANFL competition.
--- As part of the tender the Outback Odyssey would be run by the AFL club.
--- There was acknowledgement that to maximise the success of the Magpies it should operate as a separate organisation to the AFL club.
--- The document encouraged and promoted cross membership packages between the Magpies and the AFL club.
--- The PAFC tender document did not support nor agree to the pre-condition of a merger to create 8 SANFL teams was fundamental to the granting of the licence.
4. Announcement of second licence
- On 8 December 1994 the SANFL Commission provided a letter with terms and conditions for the granting of the second AFL licence. In this document there was no mention of the conditions required with regard to the Magpies.
- On 13 December 1994 the second AFL licence sub-committee and independent members of the SANFL Commission unanimously recommended the PAFC be granted the next AFL licence when available.
- On 13 December 1994 a league directors meeting approved the Commission recommendation and at a press conference Greg Boulton, President of Port Adelaide highlighted:-
--- That the success of the South Australian state league was fundamental to the success of the AFL clubs in Adelaide.
--- Promotional and other links to all SANFL clubs should be grouped with the AFL clubs and this concept needs to be fully explored in the future.
5. Negotiations with SANFL Directors and Commission re Magpies in the SANFL
- SANFL clubs lodged letters of concerns relating to the Magpies continued involvement in the SANFL following the entry of the PAFC into the AFL. These letters to the SANFL Commission strongly pushed the below points:-
--- The Magpies should not remain in the SANFL competition thereby enabling a reduction to 8 teams.
--- No joint administration facilities should occur.
--- The Magpies should not train at Alberton.
--- There should be no joint sponsorship and membership arrangements between the Magpies and the Power.
--- There be no common employees or Directors in both clubs.
--- Licence Club profit share tendered by the PAFC to the Magpies at 15% was too high.
--- The Magpies would have an advantage in recruiting players if linked with the Power.
--- The AFL facilities should not be accessible to the Magpies.
--- There should be no financial links, loans or any funding between the Magpies and the AFL club.
- The Port Adelaide Board in 1995 obtained legal opinions on the power of SANFL league Directors to expel the Magpies from the competition and were ready to defend this issue. The SANFL Commission was supportive of the PAFC remaining in the SANFL competition.
- During 2 months of negotiations and various SANFL Directors meetings, certain conditions were imposed in the sub-licence agreement that was signed on 26 November 1996. These included:-
--- No promotion or joint membership packages with the Magpies SANFL club.
--- No joint fundraising activities.
--- Any proposed joint activities between the SANFL club and the AFL club must be approved by the SANFL Commission.
- Separate resolutions of the SANFL Directors further imposed:-
--- The Port Adelaide Magpies Football Club must not train at Alberton.
--- The Port Adelaide Magpies Football Club must not operate administration from Alberton Oval.
6. Strengthening position of PAMFC upon entering the AFL
- The Board of PAFC Inc spent significant time and energy to ensure that once the new club entered the AFL competition, the Magpies both financially and organisationally were strong.
- The first PAFC (AFL) Limited Board meeting was held on 24 April 1995 and a separate interim board was established to be ready for entry into the AFL in 1996. On 1 February 1996 the AFL advised no licence was available until 1997 at the earliest.
- $2.5 million capital was tendered as the amount to be contributed to the new AFL club. Growth in both profits and net tangible assets was the key focus of the PAFC Inc Board following the unsuccessful bid to enter the competition in 1990. The below table shows the growth in a 9 year period:-
Code:
($ 000’s)
Ladder Position Year Annual Profit NTA
1 1992 20 256
3 1993 86 1,170
1 1994 364 1,596
1 1995 723 2,533
1 1996 13 792
2 1997 178 933
1 1998 (65) 867
1 1999 123 991
4 2000 116 1,108
Notes to financial figures
1. PAFC negotiated the purchase of the land where the licensed club was located and other land on the boundary of Alberton Oval from Port Adelaide Council in 1997. These premises were re-valued to market value prior to entry into the AFL.
2. Upon establishment of the AFL side 13 players were recruited to the Power from the Magpies in the inaugural team with resultant transfer fees to Port Adelaide Magpies Football Club for approximately $303,000 in the 1997 year and further fees thereafter.
3. The $2.5 million capital was provided through the transfer of the licensed club premises and the Quinn Stand totalling $1.754 million and a further $746,000 raised by the AFL club from Foundation supporter members.
4. At the end of October 1997 the Magpies were left with $933,000 in net assets with more than $500,000 being cash. The club was financially strong and the profit plus negotiated land purchases from 1993 to 1996 enabled both clubs to be financially stable and viable upon the Power entering the AFL competition.
5. Organisational changes were important for the survival of the Magpies:-
--- A special meeting of PAFC directors took place on 6 January 1995 to identify and plan for board members for the Magpies assuming entry to the AFL in 1996. Discussion took place on which directors would nominate for the AFL club and which would remain involved in the Magpies to ensure continuity.
--- On 21 May 1996 the AFL Commission agreed the Port Adelaide Football Club would enter the AFL competition as a 17th side if necessary and on June 4 1996 the merger of Fitzroy was announced and Port Adelaide’s entry was assured in 1997.
--- In June 1996 Stephen Williams was appointed coach of the Magpies after the announcement of John Cahill as inaugural coach of the Power.
--- On 16 July 1996 Greg Boulton resigned as President of Port Adelaide Football Club Incorporated to concentrate on the AFL and Simon Forrest was appointed Chairman of the Port Adelaide Magpies Football Club.
7. Variations to sub-licence agreement after 1997
- The SANFL Commission, Port Adelaide Football Club and Port Adelaide Magpies Football Club through negotiation achieved modifications to the sub-licence agreement:-
--- It was agreed the dividend from the licensed club would increase from 15% to 25% of surpluses to the Magpies.
--- The league and reserves team were approved to train at Alberton Oval.
--- Training facilities under the Fos Williams Grandstand at Alberton Oval was rented from the Power by the Magpies upon completion of the Allan Scott Power Headquarters. The building of the headquarters enabled suitable and separate facilities for both clubs to train at Alberton.
--- Directors of the licensed club currently include 1 member nominated by the Magpies and a further board member of the Magpies co-opted to the board in 2000. PAFC appoint 4 directors and members of the licensed club elect a further 2 directors.
--- Both the Power and the Magpies utilise the facilities of the licensed club for events where less than 400 people attend.
8. Summary
The above facts and history reveals how SANFL directors placed restraints on the operations of the Magpies to ensure separateness in every conceivable way. With time there has been modifications to the sub-licence agreement to assist the Magpies and ensure they are not disadvantaged in relation to other SANFL clubs.
The Port Adelaide Football Club, its Directors and Management, treasure the history, success, tradition and culture of the Magpies since 1870 and recognise the part previous players and administrators played in laying a foundation for successful entry into the AFL. The Club continues to build on this fine history and tradition but equally, as a South Australian club in a national competition, continues to push for its supporter base to be beyond the traditional Port Adelaide area and provide support to all SANFL clubs.
Greg Boulton (President) & Brian Cunningham (Chief Executive)
Port Adelaide Football Club
NOTE: There was an error in the fact sheet distributed to club members. It is acknowledged that Bob Clayton replaced Brian Cunningham as General Manager of the Magpies for an interim period of one year in 1995 / 1996 and that David Hutton was subsequently appointed as General Manager of the Port Adelaide Magpies Football Club by the Magpies board in 1996.
I'm gonna break my rusty cage and run
