Blues in the red: $6.9m to be repaid by OctoberMark Hawthorne
February 26, 2011CARLTON faces an end-of-season debt crisis, with $6.9 million of loans due to be repaid by October 31.
The Blues have amassed more than $10 million of debt that must be repaid within two years. It is the highest level of current liabilities in the AFL, but the club believes revenue from 260 new poker machine licences, along with the good grace of its bankers and the AFL, will stave off insolvency.
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Such is the concern that Carlton's directors issued a warning in this year's accounts. ''As at October 31, 2010, the Carlton Football Club had a current asset deficiency of $8.1 million,'' it read. ''This gives rise to significant uncertainty about the ability of the company to operate as a going concern.''
That current asset deficiency has soared from $3.5 million in 2008 to $8.1 million last year.
But chief executive Greg Swann said he expected Westpac and the AFL to roll over the loans once again this season. ''That is what has happened for the past four years of my tenure. The debt is an issue, we don't hide from that. The directors are aware of it, but we have budgeted to make inroads into that over the next two or three years.''
A number of rival clubs and independent accountants have also suggested that Carlton has been ''misleading'' in claiming a $2.23 million operating profit. They say the figure includes as operating revenue $2.39 million of government grants earmarked for the redevelopment of Visy Park.
St Kilda, Richmond, the Western Bulldogs and North Melbourne all received such grants for rebuilding training facilities. None treated that money as operating revenue in their annual accounts.
Joe Dicks, a forensic accountant with Melbourne-based firm PPB, said: ''I see what Carlton has done, but one would suggest the club is not playing the game properly here.
''They get to report a big profit, but most of that money has come from a grant that is to be spent on capital works.
''It's not money from the usual operation of the football club,'' Mr Dicks said. ''It's very misleading, especially as the club has sent out a media release declaring it has made a substantial profit. One would be perfectly within their rights to say Carlton is not being very transparent.''
Mr Swann shrugged off such concerns. ''A proportion of the grant money we generated ourselves … To say that profit figure was misleading is wrong. We reported as per the Australian accounting standards and through the auditors.''
Mr Swann said the club would make a $1 million profit this year without any government grants.
''The business will now stand on its own two feet. That said, it's an important time for Carlton people to get behind the club if we are to eradicate the debt.''
After striking a deal with Victorian pokies king Bruce Mathieson, the Blues will open new gaming premises in Richmond, Williamstown and Bulleen. From August, the club's 260 new poker machines will start raking in funds.
http://www.theage.com.au/afl/afl-news/blues-in-the-red-69m-to-be-repaid-by-october-20110225-1b8um.html
