Tigers get a land-tax windfall from pokies venue [updated]

[10 FLAGS]

Im amazed that the club did a deal where the starting rent was $714,000 a year. For that - they should have taken out a big loan and purchased a freehold pub and put the $714,000 a year rent towards paying for an asset the club would own rather than just leasing it and giving someone else the money.

I don't think any bank would've allowed us to take out a big loan back then? IIRC given our million dollars loses at the time the AFL had to come in and go guarantor for our existing overdraft (which still exists). Having said that I agree Ramps that $714k per annum is a massive amount to pay in rent  .

ps. Aren't we writing off $180k per year for the remaining life of the contract (until 2018)?

Maybe so but $714,000 a year is massive money. For that they could have purchased one property around Melbourne every year and now that portfolio of properties would have been worth $8 to $10 million. What a complete waste

funny how some people love taking pot shots from the cheap seats when they have no idea on the facts or the details.

You probably be first in line in calling for the boards head if what happened to collingwood and their pub and pokie disaster had happened to richmond. Most of the time the club whatever it does can't win. 

Blaisee I'm not going to get into a massive debate with you about this. All I want you to do is answer one question - do you think that paying $714,000 as a starting rent for the Wantirna Club was a good thing to do?

[tiger4life]

Im amazed that the club did a deal where the starting rent was $714,000 a year. For that - they should have taken out a big loan and purchased a freehold pub and put the $714,000 a year rent towards paying for an asset the club would own rather than just leasing it and giving someone else the money.

I don't think any bank would've allowed us to take out a big loan back then? IIRC given our million dollars loses at the time the AFL had to come in and go guarantor for our existing overdraft (which still exists). Having said that I agree Ramps that $714k per annum is a massive amount to pay in rent  .

ps. Aren't we writing off $180k per year for the remaining life of the contract (until 2018)?

Maybe so but $714,000 a year is massive money. For that they could have purchased one property around Melbourne every year and now that portfolio of properties would have been worth $8 to $10 million. What a complete waste

funny how some people love taking pot shots from the cheap seats when they have no idea on the facts or the details.

You probably be first in line in calling for the boards head if what happened to collingwood and their pub and pokie disaster had happened to richmond. Most of the time the club whatever it does can't win. 

Blaisee I'm not going to get into a massive debate with you about this. All I want you to do is answer one question - do you think that paying $714,000 as a starting rent for the Wantirna Club was a good thing to do?

$714k really isn't that much in the grand scheme of things, a decent pokie venue can almost make that in 1 night and then some.

[blaisee]

Im amazed that the club did a deal where the starting rent was $714,000 a year. For that - they should have taken out a big loan and purchased a freehold pub and put the $714,000 a year rent towards paying for an asset the club would own rather than just leasing it and giving someone else the money.

I don't think any bank would've allowed us to take out a big loan back then? IIRC given our million dollars loses at the time the AFL had to come in and go guarantor for our existing overdraft (which still exists). Having said that I agree Ramps that $714k per annum is a massive amount to pay in rent  .

ps. Aren't we writing off $180k per year for the remaining life of the contract (until 2018)?

Maybe so but $714,000 a year is massive money. For that they could have purchased one property around Melbourne every year and now that portfolio of properties would have been worth $8 to $10 million. What a complete waste

funny how some people love taking pot shots from the cheap seats when they have no idea on the facts or the details.

You probably be first in line in calling for the boards head if what happened to collingwood and their pub and pokie disaster had happened to richmond. Most of the time the club whatever it does can't win. 

Blaisee I'm not going to get into a massive debate with you about this. All I want you to do is answer one question - do you think that paying $714,000 as a starting rent for the Wantirna Club was a good thing to do?

You and I are both unqualified and uneducated in the facts to have a worthwhile opinion on this.

Is $714k alot of money? Yes

is it alot of money in an organisation turning over $35 million? less so

Would it have been better to invest $10 million in owning a pub to avoid the rent? IMHO no, go ask Collingwood and Eddie Mcguire why.

It just amazes me how flabbergasted some people get about decisons being mad when they don't have any idea about what the facts are, just crazy.

[10 FLAGS]

The facts according to the article are that we agreed to pay $714,000 as a starting rental for the Wantirna Club. What more is there to say? This issue is not about us owning 5 or 6 pubs which is what Collingwood tried to do and for what they massively overpaid, we are talking about our situation thats all. Its got nothing to do with Collingwood.

[WilliamPowell]

The facts according to the article are that we agreed to pay $714,000 as a starting rental for the Wantirna Club. What more is there to say? This issue is not about us owning 5 or 6 pubs which is what Collingwood tried to do and for what they massively overpaid, we are talking about our situation thats all. Its got nothing to do with Collingwood.

Seriously Flags, without knowing the details of the full business plan,CB anaylsis and the the actuall terms & consitions of the lease it really is too hard to say whether it is a reasonable number or not.

Remember though that the location was chosen based on the clubs data telling them that; that area (region) had a high level of RFC members & supporters

However, based on what other clubs had to do then when all clubs were establishing gaming facilities then you could argue (easily) that $714k p.a. was a reasonable number

ANd BTW "the facts according to the article" ..... really you should know better with the media 

[10 FLAGS]

All we can talk about is the contents of the article. If the contents are not correct then that is not our fault.

All any of us can do is comment on the article as presented. Thats all I have done.

Not here to be popular all I've done is give an opinion and as we all know opinions can be right or wrong. Some people get upset at the slightest criticism of the club, whether it be recruiting someone like Jordan McMahon or whether someone questions whether or not $714,000 in rent is too much.

Its just a forum and all of us should be allowed to put forward our opinions based on articles etc. as long as we dont defame or harrass anyone. I havent done that.

[mightytiges]

ps. Aren't we writing off $180k per year for the remaining life of the contract (until 2018)?

No; not necessarily - it is a an extremely difficult one explain

However,  the club would be following accounting standards, which means they are required by law to value the impairment value of the contract on a yearly basis. Yes they wrote down an amount a couple of years back an amount but if circumstances (trading conditions) were to change that write off could be reversed back to the P&L. As I said extremely difficult to explain

Cheers for the explanation WP. I guess the question then is is there any realistic chance of trading conditions changing for the better in the next few years?! 

[tiger4life]

All we can talk about is the contents of the article. If the contents are not correct then that is not our fault.

All any of us can do is comment on the article as presented. Thats all I have done.

Not here to be popular all I've done is give an opinion and as we all know opinions can be right or wrong. Some people get upset at the slightest criticism of the club, whether it be recruiting someone like Jordan McMahon or whether someone questions whether or not $714,000 in rent is too much.

Its just a forum and all of us should be allowed to put forward our opinions based on articles etc. as long as we dont defame or harrass anyone. I havent done that.

Flags, I used to work in Camberwell at a gaming venue, the weekly turnover of cash was $1m+ in a week, and that was only with about 25 machines.

Now not all of that is profit, as the venue still has to pay fees and everything else that comes along with owning a venue, so in the grand scheme of things a once off $714k rent payment is not really a lot a decent gaming venue will make that back quite easily.

[WilliamPowell]

Cheers for the explanation WP. I guess the question then is is there any realistic chance of trading conditions changing for the better in the next few years?! 

I think at this stage the realisitic and conservative answer would be NO based on the continual drop in gaming revenue over the last few years... but if they win this case that may very well change

And BTW I have just looked at the 2010 Fin reports and the Club has made 2 allowances (2010 & 2009) @ $160k each year  for "provisions of onerous lease"

[bojangles17]

for all intents and purposes it looked to be an appalling business decision, for the money committed there we could have bought 2 or 3 cafes and made more $$$ than this white elephant but hey what would I know, im only a salesman

[tiger4life]

for all intents and purposes it looked to be an appalling business decision, for the money committed there we could have bought 2 or 3 cafes and made more $$$ than this white elephant but hey what would I know, im only a salesman

Actually, at the time it would of been a very good business decision as Pokie Revenues have gone through the roof since then.

[bojangles17]

for all intents and purposes it looked to be an appalling business decision, for the money committed there we could have bought 2 or 3 cafes and made more $$$ than this white elephant but hey what would I know, im only a salesman

Actually, at the time it would of been a very good business decision as Pokie Revenues have gone through the roof since then.

well how is it then that it has turned an operating loss just about ea year since inception. i live nearby and rarely is the carpark even half full. I recommended some time back they needed to advaerise specials on the banner as in tues pot and parma night $9.90 and they would have been queing from belgrave to get in

[WilliamPowell]

Actually, at the time it would of been a very good business decision as Pokie Revenues have gone through the roof since then.

Not at the RFC they haven't

Been steadily decreasing the last 4 years and the nett profit from them due to the increase in govt taxes have decreaed as well

[tiger4life]

for all intents and purposes it looked to be an appalling business decision, for the money committed there we could have bought 2 or 3 cafes and made more $$$ than this white elephant but hey what would I know, im only a salesman

Actually, at the time it would of been a very good business decision as Pokie Revenues have gone through the roof since then.

well how is it then that it has turned an operating loss just about ea year since inception. i live nearby and rarely is the carpark even half full. I recommended some time back they needed to advaerise specials on the banner as in tues pot and parma night $9.90 and they would have been queing from belgrave to get in

Obviously the area in which they purchased these machines were a mistake but they had the right idea in mind.

Actually, at the time it would of been a very good business decision as Pokie Revenues have gone through the roof since then.

Not at the RFC they haven't

Been steadily decreasing the last 4 years and the nett profit from them due to the increase in govt taxes have decreaed as well

Sorry, I should have worded it better, what I meant was Pokies Revenue in Australia has gone through the roof, not necessarily that the RFC had made large profits from these machines.

[mightytiges]

Cheers for the explanation WP. I guess the question then is is there any realistic chance of trading conditions changing for the better in the next few years?! 

I think at this stage the realisitic and conservative answer would be NO based on the continual drop in gaming revenue over the last few years... but if they win this case that may very well change

And BTW I have just looked at the 2010 Fin reports and the Club has made 2 allowances (2010 & 2009) @ $160k each year  for "provisions of onerous lease"

Ta WP. Here's the links to the Financial reports from 2004-2010 btw for those interested.

2010 - http://oneeyed-richmond.com/forum/index.php?topic=12217.0
2009 - http://oneeyed-richmond.com/forum/index.php?topic=10387.0
2007 - http://oneeyed-richmond.com/forum/index.php?topic=6251.0
2006 - http://oneeyed-richmond.com/forum/index.php?topic=4168.0
2005 - http://oneeyed-richmond.com/forum/index.php?topic=2492.0
2004 - http://oneeyed-richmond.com/forum/index.php?topic=1127.0

CONSOLIDATED INCOME STATEMENT
 
Provision for Wartirna Club onerous lease
                           $
2008          (1,540,000)
2009              160,000
2010              160,000


REVENUE

Receipts from gaming and social operations
                           $             
2003             6,280,807
2004             5,815,571
2005             6,268,598   
2006             6,397,903
2007             5,824,755
2008             5,771,663
2009             5,518,281
2010             5,371,647

Net Gaming revenue
                         $
2004               105,000
2005               326,000
2006               450,000
No further mentions of net gaming revenue in later reports. Smoking ban came in 1st July 2007 IIRC.