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What to do with Level 3 - Parramatta Leagues Club

Stagger eel

Moderator
Staff member
Messages
65,417
thanks PF,
just a quick question regarding sponsorship,
if you manage to come to terms with some major organisations who will commit themselves to the club on the proviso that the 3P win the majority of seats on the board, where will that leave Pirtek who are currently under contract with the club and are currently our major sponsor?
 

Stagger eel

Moderator
Staff member
Messages
65,417
btw, I know it's late and if you can't answer it before Tuesday than that's call, have a nice time away with ther family.
 

Parra Future

Juniors
Messages
890
thanks PF,
just a quick question regarding sponsorship,
if you manage to come to terms with some major organisations who will commit themselves to the club on the proviso that the 3P win the majority of seats on the board, where will that leave Pirtek who are currently under contract with the club and are currently our major sponsor?


Stagger,

In my belief, all original deals in place should be honoured. However, I'm sure that potential new sponsors could be given "other" special "things" in the meantime until deals expire. I need to be vague sorry because other wise it might be too close for details. I also want to state that people need to understand that Pirtek has been very good to the Eels and "Mr Pirtek" himself is a very keen Eels man and should be congratulated for his efforts. He should also be given the opportunity to renegotiate after his current deal expires due to the commitments that he has given the club in the past. It should be done as a courtesy to him and his company.
 
Messages
14,121
Hello PF,

It has been a while, since I had some down time to read your Essay. The Economics of which are sound, I wonder personally does this effect ones credit rating, I don't know but just something swimming in my head. In effect the questions you ask could have the potential to net some savings, again at a greater risk to our suppliers, but being we have been loyal to them for a very long time, I am sure we would work something out.

So the real question is, Has Tullio already thought about this and do we work in this current manner, and if we do, what then?
 

Parra

Referee
Messages
24,894
Sorry for stalling all. Last post regarding the big essay. A good example of the above is the following of what I have witnessed over the past several years. An $18 million business that I have been directly involved in has averaged settlements of $400k per year (equating to a rate of 2.2%). Increasing our payment terms deals from 30 days from end of month to 90 days from end of month meant that we kept our funds in the bank for another 60 days before having to pay for goods. This meant earning extra interest (even at todays rates, you can still earn well over 4% on large accounts. If you are paying out around $1.5million a month in suppliers and you negotiate an extra 60 days, in affect, you have just made another $50k minimum per year (again people, I am not doing exact mathamatics so as to keep it simple. Those of you that work it out for yourself will see the savings are actually quite higher). The you have the rebates. Both unqualified and with growth targets in a business around $18 million should bring home around the $800k mark (or 4.4% average).

Taking all of that into account, (again, I am not stating that Parra does not currently do this. They may, I just can't seem to find it), if you were to translate that into a Parra Leagues Club business worth around $60 million, the same numbers would come out around the following. Firstly if the Club bought $40 million in products and services, an extra 30 days in payment terms should net the club just over an additional $130k per year minimum. Secondly, if the right rebate structures were to be put into place (both unqualified and growth at 4.4%) an extra $1,760,000 would be made. Lastly if the settlement deals were all written up, an extra $880,000 would be saved.

The above example would mean,

1) Payment Terms : $130,000 minimum
2) Rebate Deals : $1,760,000
3) Settlements : $880,000

Total Savings in expense related areas = $2,770,000 without firing a single person may I add.


This sounds like accounting smoke & mirrors. Surely any rebates and settlements deals will be reflected in the cost of supply - so the club will end up paying anyway, maybe indirectly.

Does this sort of accounting provide tax benefits/higher deductibles for a company? This would seem like the main advantage - costs look higher up front, but are 'rebated' in a future accounting period. Whether this is treated as income and how taxes & GST are accounted for are questions that come to mind. Can a registered club get any benefit from this sort of thing?

The numbers sound impressive - but how concrete is any of this? There seem to be a lot of 'ifs' and 'shoulds'.
 
Messages
11,677
Stagger,

In my belief, all original deals in place should be honoured. However, I'm sure that potential new sponsors could be given "other" special "things" in the meantime until deals expire. I need to be vague sorry because other wise it might be too close for details. I also want to state that people need to understand that Pirtek has been very good to the Eels and "Mr Pirtek" himself is a very keen Eels man and should be congratulated for his efforts. He should also be given the opportunity to renegotiate after his current deal expires due to the commitments that he has given the club in the past. It should be done as a courtesy to him and his company.

From what I've heard (not from the Eels side), the Pirtek association with us is not so much the beginning of a long relationship but more of a shortish-term deal meant to expose the brand to a particular market (rugby league).

A few years in, say, motor racing before moving to, say, rugby league, before moving on to another market.

Also, if Pirtek want to continue their exposure in rugby league, the New Zealand international team are now an option that would cost less than the Eels.
 

Suitman

Post Whore
Messages
54,908
Just like to mention that in yesterdays Good Living section of the Sydney Morning Herald, there was a small tid bit on "suburban Yum Cha, and the Tingha Palace was one of three mentioned standouts.

If you can get past the dragon in the foyer who enforces the club's dress code with remarkable zeal, you'll find good, serviceable yum-cha ($4-$8). Fried ricenoodles with sesame paste and hoi sin sauce are soft and smokey, with toasted corn kernels adding texture. Unusually, they ask you to keep your tally card clean. Other than that, this place ticks all the yum-cha boxes, from steamed pork buns to chinese broccoliand oyster sauce. Just don't show up in thongs

There's some positive words for our club.

Suity

PS. Mods - couldn't find a link.
 

Parra

Referee
Messages
24,894
Just like to mention that in yesterdays Good Living section of the Sydney Morning Herald, there was a small tid bit on "suburban Yum Cha, and the Tingha Palace was one of three mentioned standouts.



There's some positive words for our club.

Suity

PS. Mods - couldn't find a link.

The yum cha is great. What do you have to wear to cop a dress code violation at lunch time? From what could tell as long as you wear a shirt and something on your feet your are in. Maybe this journo forgot his pants?
 
Messages
11,677
OK, everybody shut up, I've solved the problem.

Totally clear out level 3 and put in an indoor go-kart track.

I am a champion.
 
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