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Richmond on course to being debt-free by end of year, revenue up $3mBy John Stensholt
Australian Financial Review
September 2, 2013Richmond is set to post a net profit of more than $3 million as it competes in its first AFL finals series since 2001. Revenue is forecast to top $40 million, up from $37 million last year, and the club will be debt free by the end of 2013.
There are now more than 60,000 members and Richmond’s average home crowds of almost 47,000 make it the second most popular club in the AFL behind only Collingwood.
Richmond’s last game of the regular season on Saturday night, a victory over Essendon, the club at the centre of the AFL drugs scandal, saw the number of spectators watching all its matches this week go past the one million mark.
Club chief executive Brendon Gale says the strong financial position and on-field success is a long way from the “ridicule” Richmond received from the football industry when he took on his role near the end of the 2009 season. The following year the club released an ambitious five-year strategic plan with a “3-0-75” headline, which stood for the ambition of playing three finals series by 2014, having zero debt and 75,000 members. It also came as Richmond’s top six sponsors left the club.
“We were ridiculed for those targets,” Gale says. “But here we are a few years later and we will have no debt by the end of this year, we will play finals and we are aiming for and expecting to play finals again next year. And we have got to 60,000 members and will give 75,000 a really good shake next year.”
Club major sponsor Jeep has just renewed its contract, worth more than $1 million annually, through to the end of the 2017 season, while in August Suncorp’s Bingle online insurance brand extended its deal for another three years .
Gale says the club has also chosen not to renew its contract to play a game annually against Gold Coast in Cairns, which was worth $500,000 every year to Richmond. Now its financial position is such that Richmond does not need the financial incentive of selling games interstate and will play all its home games in Melbourne next year.
The club has also raised $6 million through its Fighting Tigers Fund in the past three years, to pay for infrastructure improvements at its headquarters at Punt Road Oval in the shadows of the Melbourne Cricket Ground.
“We brought in a new coach and new management with an agenda of transformational change,” Gale says. “We’ve also got a strong physical indication of our rebuilding [with the refurbishment of Punt Road Oval]. The past few years this organisation has been about changing its culture and setting a series of goals that we have delivered on.”
The refurbishment includes the adjoining Korin Gamadji Institute, an indigenous training centre the club helped establish and administer. The institute has provided vocational training for 2500 young indigenous people since its doors opened 18 months ago.
Government funding helped build the premises, but Gale says the club is now almost solely reliant on football operations for its revenue. He says the next stage for Punt Road is further upgrades so it can host VFL matches for its feeder team. Plans also include hosting functions and conferences.
Otherwise, the club is investigating finding more non-football revenue, such as a gaming facility, to off-set any dip in membership numbers or on-field performance. “We’ve been investing in our football department from our core football revenue, and haven’t been relying on other places like gaming,” Gale says.
“That has been good, and we’ve gone from being average 14th in the AFL in football spending to ninth, but we’ve got the balance sheet at a stage now we could make other investments.”
Although the club has gained respect under highly regarded coach Damien Hardwick, Gale believes it is vital for the team to continue to have on-field success. He says this year’s finals appearance needs to be repeated in the next few years.
“That is the expectation we have,” Gale says. “We have to break that cycle of having a good year and then not. We have not played in many back to back finals series since [the early to mid 1970s]. We hope and expect to do that this time.”
http://www.afr.com/p/lifestyle/sport/richmond_year_course_revenue_being_1AGNCuRV05aDhoIIvUhE6M
