Just saw it on the news - how can a team blow 11 mill? I know there are still some open wounds, but what's the long-term plan out of here.

(Apart from win a flag - AND SOON!)

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Bring back Buzza

I heard that too and I was like "WTF?". I don't understand how we lost the money.

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Karma

Loyal & Proud

Well....once upon a time was this big ugly drunk ogre, with smoke emanating from every orifice. His name was Jack...."

I'm sure there's someone here with a better understanding of it all....I thought it had more to do with the devaluation/depreciation of the stands.

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And so while others miserably pledge themselves to the pursuit of ambition and brief power, I will be stretched out in the shade, singing.

It's due to the writedown on the value of the Grandstands at Optus Oval. No need to panic.

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Hooked on The Blues

While it looks really bad, it's mainly a paper loss. The grandstands, which Carlton paid for are now worth less than when they were first built so you books have to reflect that as a loss. Elliott and his mob did not devalue them fast enough so this board in an attempt to make things right have to catch up. They wrote the stands down by 11.1 million but we lost outright 11.146 million so a loss of $46,000 in real terms not great but far from panic stations.

That sounds better that media hype.

I'll put away any thought of a lamington drive for now then...

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Bring back Buzza

Not too fussed by it actually - doesnt look great but its mainly accounting issues

What I'm not happy about is the media beat up of the issue - particularly player contracts -

From the HUN


and from realfooty (the age)


Regardless of the breakdown of contracts, the club is paying 100% of the salary cap (as they should endeavour to do) - heavily backended contracts does NOT contribute to the financial loss of the club as we are paying our salaries within the salary cap. If any club so desired they could pay one player 3mill/year for the next 10 years and still not affect the financial sheets (P/L, cashflow, balance sheets etc) because the total player payments would still be the same provided it fell within the cap. To suggest otherwise is blatant crap journalism. Unless of course, they are suggesting that we are breaking the salary cap.

Jack's incredible financial mismanagement bordered on criminal! The Legends stand (our last glimmer of holding on to our suburban base) was the first step in a filthy huge mess that the current board have had all sorts of trouble cleaning up. That mongrel cost us big time... We did win 2 flags under him but...

Big_T
Fwiw, I dont think the legends stand would have been that much of an issue IF the AFL had been fair dinkum with draws, publicity etc - the moment the AFL decided that they wanted optus gone (which, from memory was after the legends stand had been built?), then it was a liability.

At a guess the stands are only being written down because games will no longer be played at optus. Were it not for that fact, then they wouldnt be depreciated as rapidly and our 'financial losses' wouldnt be as great. At a guess a normal grandstand would be depreciated over a period of at least 20 years (ie the average lifespan of a grandstand). Anyone with access to the MCC trusts annual reports etc should be able to find the normal time frame of depreciation readily from info on the great southern stand etc) - If the CFC had used these accepted accounting procedures over the past 3 years the losses reported by the club would be nowhere near as great. However, given the AFL's position on optus I think the club had little choice but to depreciate the stands completely given that games will no longer be played there. Consequently the majority of the value of the stands has been written off in the previous 3 years when clearly they would/could still hold some significant value - Obviously not much value as scrap metal but the same could be said for the MCG and telstra dome if the main drawcards ceased to be played there. ie if footy and cricket decided to quit the G' then the stands are basically worthless as they wont be filled with crowds.

John Elliot being arrogant decided to build the stand without AFL support. The MCG stand only got built because the AFL guaranteed games would be played there and the GF would be there for 50 years or some shit like that.

Elliot built the OO stand with only a 9 year guarantee from the AFL.

Considering it would take 20/30 years to properly recoup the costs of building it the decision to go ahead was madness. Trying to go alone in OO full stop has been madness. Its been a millstone for a long time and the Pies/Bummers have really kicked our ass financially - they realised a long time ago that fronting up costs for your own ground was going to be difficult.

You can't blame the AFL for not giving draws/publicity. If they didn't see OO as a viable venue then Elliot shouldn't have pumped so much money into it. Its not for the AFL to re-organise the comp to back up a dumb decision. They've got the good of the whole comp to consider.

Worrying bit of all those articles:
"We have liabilities of $15.1 million and assets which don't match that, so it is not a pretty picture when you look at the balance sheet itself."

Collins' own words.

TheDuke - I'm not saying the elliot isnt at fault - but I dont think he is solely to blame. Part of it though really depends on timeframes (which I'm not privvy to atm) but as examples
1. Whether TD was built/slated to be built when the legends stand was intially planned/construction commenced
2. When the AFL decided that OO wasnt a viable venue
3. When the other clubs decided to move from windy hill, vic park etc to TD
I'd like to have that info so I can comment further but unfortunately dont have it at my fingers atm

Re: Collo's comments - what he doesnt mention is that the assets dont match that because they have chosen to write down the assets. Under a normal scenario (normal depreciation rates), the CFC assets would probably cover the liabilities - Again I say, its mainly an accounting issue.

Listening to Micheal Maloof this morning on Sport 927 he basically said that while $ 11.146 million looks really bad we actually made on operating profit of around $ 200K without the stands, pretty good seeing we only had half a major sponsor.

Maloof also went on to say that we are far from being out of the woods just yet, our operating debt will grow over the next two years with 2007 being the time that we should start to get right, this could be faster if things go well off the field.

He also said no stone was being left unturned in finding this money, which could mean salary cuts to the players. From all things said I think we are in a better position now that when this new board first started.

From memory the new stadium (now Telstra Dome) was proposed AFTER the legends stand. I remember Elliot fighting Graeme Samuals (former AFL Commissioner) and Ron Evans over the proposed new stadium, the sale of Waverly and conflict of interest with Evans owning Spotless catering who won the catering rights for Telstra.

People have to remember that the only reason Optus failed to continue as an AFL stadium was wholely and solely because the AFL did not want to support it as it wanted it's OWN STADIUM. It had nothing to do with the viablity financially with operating AFL games out of Optus.

Take a look at what the Cats have done with their redevelopment. With AFL support, both the Cats and Doggies will have new ground redevelopments which could have happend at Optus with less outlay to both AFL and Government as Carlton had already rebuilt the Legend Stand.

Optus was doomed without AFL support, end of story.

Put it this way - if the crowds turn up at the Dome consistently (a favourable draw will help), then TD is a much more viable option.

In 5 years we'll wonder what all the fuss is about.

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Bring back Buzza

Whilst the write-down has been reasonably explained and would probably be appropriate as per accounting standards given the clubs position, I believe that there are ulterior motives behind inflicting this loss in the year the club decided to transfer games away from OO. Given that the club should experience an increase in attendance and sponsorship revenue in 2005, and that the abnormal expense of the AFL penalty wont re-occur, then the operating profit should improve considerably.

Subsequently, the positive turnaround in financial performance will be attributed to the board's correct decision to relocate games away from OO. I have been all for the move but I can see the club using this strategy to justify their decision, otherwise, normal accounting practice would probably still allow the stands to be depreciated (albeit at a higher rate) over a reduced number of years. Also, the club wont be able to reduce their profits going forward via deprecation expense and thereby reduce their tax obligations, so this can be viewed as a poor business decision.

It is a worry that the club is in a negative asset position. Any other business would be stuffed but AFL clubs are protected. Lucky for them and us...

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C'mon Blueboys!

Is it possible to get a copy of the club's balance sheet? As members I think we are able to get them on request?

The explanation of the depreciation being more of a paper thing is spot on, and indeed, as Malouf said, our actual operating profit was fine last year. I don't think the paper beat up of the loss will harm us, in fact I think that it may actually inspire people to buy memberships (much like in 2003 - ie. the club are in trouble, they need our support)... here's hoping anyway!

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If meat is murder then yoghurt must be burglary
GO YOU BIG RED FIRE ENGINE
Move aside Kouta, Lance etc - you're holding us back... from entering the under 18s

Marciblu, standard business practice really. Accounting rules can be manipulated with writedowns for a football club just as they can be for a bank, manufacturer etc. At my previous bank this joker as CEO rocked up and sacked half the workforce, managed to put the cost of all sackings in above the line to create an operating loss, and then with basically the asme revenues the later year created a bumper profit.

FWIW, the stands now really have minimal value so the accounts better reflect the position of the company.

Molsey, CA

That is why was in my memory bank as well - in which case criticism of of the CC (read Elliott's) decision to to build the stand is unjustified. Given the precedent of close to 100 years of footy it was a reasonable assumption that games would still be played at optus, windy hill etc. Therefor to have built the stand would have been a reasonable business decision at the time. If the dome had never been built, the CFC would be in a much strongerposition now and collingwood/Essendon* would be in weaker financial positions.

Marciblue - that is my impression of things as well - the club wants it to appear as if moving to telstra has a massive impact on our finances hence the write down and huge losses this year

Legends stand commenced being built after 1995 season and opened in 1997. Decision on docklands was made early 1997 and opened 2000.

So what is the latest on our financial position today? i

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Mjonc signing off at 8888