What a Fine Line Clubs tread Financially

[WilliamPowell]

Membership drop puts Bulldogs back in the red
By Caroline Wilson
June 15, 2004

A disturbing downturn in membership will cost the Western Bulldogs more than half a million dollars this season and cause the financially struggling club to record another big loss in 2004.

The desertion of more than 2000 supporters means the club will struggle to reach 19,000 members and contribute to an annual loss of more than $500,000, a worrying result as the figure includes a $1.5-million cash injection from the AFL.

The Bulldogs' off-field chiefs David Smorgon and Campbell Rose agreed yesterday that the club had lost financial supporters because of the notion it would now be kept alive by the AFL.

While the Bulldogs scored a club record membership of more than 21,000 last year, about 2000 of those joined because they believed it could fold. Many of those were not Bulldog supporters and a significant number of those have joined Melbourne this year, according to club research.

"I must say I do feel a little disheartened after the hard work that's been done and all that we've achieved," confessed Rose. "We've balanced our budget and increased our revenue by $2 million but we will still lose money.

"I think we've got to leave behind this mentality that we are desperate for members to survive. We have the support of the AFL and the 15 other clubs and now we've got to go out and find members, not scare them into joining us."

Smorgon added that Bulldogs' surveys had found some members from last season found the cost prohibitive, while others were put off by the 2003 wooden spoon. While the Bulldogs lost $554,000 last season, that figure included only a $1 million injection from the AFL.

Smorgon hoped the club's inspirational win over top side St Kilda would lift the club's membership total to 19,000 by close of business today, the AFL's official membership close-off.

"But it didn't help that we lost the first two games," added Smorgon. "Whether we like it or not, there are people out there who see that and decide they are not going to bother financially supporting the club over the season on the strength of that.

"Sometimes you wonder whether it's worth the financial outlay to woo those supporters in the first place when they are put off in that manner."

Carlton, despite lifting its membership to 32,000, will become the 10th club in 2004 to apply for an AFL-guaranteed bank loan. While the Blues have significantly cut debt, they will be unable to meet player wages and other significant payments without a seven-figure bank redirection order via the AFL.

Carlton chief executive Michael Malouf said yesterday whatever deal eventuates, and even if the Blues secure a major sponsor the long-term, the financial viability of the club remained shaky. "At certain times of the year, we are going to find it difficult to meet our payments," Malouf said.

http://realfooty.theage.com.au/realfooty/articles/2004/06/14/1087065082529.html

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This really highlights what a toungh market clubs find themselves in and how fine the line is.

To increase revenues by $ 2 million and still face losing money is scary.

The tigers on the other hand have not had the increases in revenues that the budgeted for - hence why they are going to lose money.

[Tiger Spirit]

The competition is so money driven now that unless Clubs stop and have a look at where it’s heading and what’s happening, money will be the driving force behind all decision-making, whether it be by the AFL or Clubs themselves.  If it isn’t already.

If it weren’t for Richmond, I would gladly give it away, because I despise the money-hungry/driven direction the competition is taking.

[mightytiges]

Sadly it all comes back to Victoria having 10 clubs. Even the Clubs with large supporter bases can make losses if they are down - Carlton and Richmond now, Collingwood 5 years ago. Essendon's continued success over such a long period keeps them rolling along comfortably. It hard to compete with the interstate sides who at most have only one direct competitor. I honestly can't see all 10 being around in 20 years time.

You feel sorry for the dogs and roos who bust their guts out surviving whereas we just keep on pressing the seif-destruct button.

[Tiger Spirit]

What I don’t understand is how a competition that gets the amount of money it does from broadcasting rights can’t easily sustain 16 Clubs.  There is something seriously wrong there.  Where does all that money go?

You feel sorry for the dogs and roos who bust their guts out surviving whereas we just keep on pressing the seif-destruct button.

Our ability to self-destruct is unparalleled MT.  How we’re still in one piece is a testament to our supporters, probably more than anything else.

[WilliamPowell]

What I don’t understand is how a competition that gets the amount of money it does from broadcasting rights can’t easily sustain 16 Clubs.  There is something seriously wrong there.  Where does all that money go?

To pay off the AFL debts that were accumulated over many years. Although over the last few years the AFL have record great profits - there are still a number of debts. Their commitments for example, are paying for Telstra Dome (which they will own one day if my memory serves me correctly) and new stands at the MCG to name a couple.

What you have to remember is from the current TV rights deal only a very small percentage goes to the clubs in dividends. Another part goes to clubs to fund yearly increases in the salary cap.