WHo's going to the pre AGM damage control meeting on Monday?

[spider]

Of course any business continually operating at a loss with a huge loan,can't go on .

that was my point

if they continue to decline 10% a year in revenue, they wont be servicing much at all - what is going to change the revenue streams around into a profit considering the development which will bring extra foot trafffic into the joint, is years off.

it was public information that osborne gave them the blue print - seeminlgy they have gone in another direction

 

[Russell Crowe's Band]

in any case

who is going tonight?

 

[carcharias]

I might...see how witching hour is going first.

 

[Bastard Squad]

that was my point

if they continue to decline 10% a year in revenue, they wont be servicing much at all - what is going to change the revenue streams around into a profit considering the development which will bring extra foot trafffic into the joint, is years off.

it was public information that osborne gave them the blue print - seeminlgy they have gone in another direction

Won't the new TV deal mean the football club can operate on its own legs ?

 

[Russell Crowe's Band]

well...

if its the huge figures projected. its a bigger club grant and higher salary cap.

dunno how much tho.

 

[Feej]

If the development goes ahead but the club still dies, who profits?

Conspiracy theories anyone???

 

[Russell Crowe's Band]

the jews

and the alluminati

but mostly the ewoks

 

[Feej]

Damn those ewoks!

 

[Ronnie Dobbs]

If the development goes ahead but the club still dies, who profits?

Conspiracy theories anyone???

In the words of Graeme Hughes. Hmmmmmmmmmmmmmm. Interesting, isn't it?

I'd say its a DRagons plot, but that would be giving Doustie far too much cred.

Therefore, via process of elimination, its the ewoks I'm afarid. Those cute little bastards will spear you in the back first chance they get.

 

[newman]

If the development goes ahead but the club still dies, who profits?

Conspiracy theories anyone???

The consortium, which is the club in part.

This eventuality wont happen though; If the club dies, the land assets will be seized and there will be no development. The developers (3 companies) will be considerably out of pocket, so it is in their interest for the club to survive and this is one thing that gives me real comfort.

 

[taipan]

that was my point

if they continue to decline 10% a year in revenue, they wont be servicing much at all - what is going to change the revenue streams around into a profit considering the development which will bring extra foot trafffic into the joint, is years off.

it was public information that osborne gave them the blue print - seeminlgy they have gone in another direction

The way I read it
the bank has a $13.5m loan.If the club goes under,they have land worth $8.5m unimproved,meaning a loss of conservatively $5m,could be a lot more.
If they get this $10m debt reduction,the worst they lose is $3.5m plus accrued interest and the dfevelopment consortium bears a lot more of the brunt.
The Bank sees having a debt of $3.5m and sees long term revenue stream for the club as about the only way to go.Surely they would have factored negative streams for a couple of years in their decision making,based on current figures.
The Tv grants for 2013 according to Gallop,will be there to buttress the clubs who are battling ATM.
Since Feb 2011,6 months a lot has changed in the current financial environment.
i have not seen anywhere where anyone believe this will not be a long term issue.

 

[taipan]

The consortium, which is the club in part.

This eventuality wont happen though; If the club dies, the land assets will be seized and there will be no development. The developers (3 companies) will be considerably out of pocket, so it is in their interest for the club to survive and this is one thing that gives me real comfort.

You got it.It is in the interest of all parties for the club to survive and be an ongoin concern,and not a real concern

 

[carcharias]

just on the development...the food court over looking the water sounds pretty cool.

 

[coolumsharkie]

There is no reason why it wont be approved though is there? The club will probably still come out about 10 million in front. The area will become popular with the shopping center and residential area... So it's still looking good to me.

 

[Ausguy]

im openly pessimistic... why?

cos im a sharks fan... its in my blood.

 

[coolumsharkie]

Well considering the fact that the local council approved the last debacle, and then this one going through a better channel of approval with it's proffesional attributes...

 

[blacktip-reefy]

10 million is a drop in the ocean & not enough & it will be a trickle.
To put it in perspective, take off player payments, 10 million is what the Broncos & Storm spend on football club each year.

 

[Weaponhead]

10 million is a drop in the ocean & not enough & it will be a trickle.
To put it in perspective, take off player payments, 10 million is what the Broncos & Storm spend on football club each year.

True. We are not likely to be a rich club but for the moment I will be happy to have the club out of intensive care. Let some other club be the one most likely to fold for a while

 

[Magumba]

True. We are not likely to be a rich club but for the moment I will be happy to have the club out of intensive care. Let some other club be the one most likely to fold for a while

Agree.

 

[BrisVegas]

10 million is a drop in the ocean & not enough & it will be a trickle.
To put it in perspective, take off player payments, 10 million is what the Broncos & Storm spend on football club each year.

It's a touch more disproportionate than that.

As the Broncos are a publicly traded company there full finanicals are available on their website:

http://www.broncos.com.au/default.aspx?s=documents

You would have to go back 9 years (2002) to get close to that $10 million figure.

(Broncos - 2002)
Operating Revenue: $14,259,355
Salary Cap Expenditure: $3,450,000 (First Grade Only)
Non Salary Cap Expenditure: $10.8m

(Broncos - 2010)
Operating Revenue: $26,574,081
Operating Profit: $1,463,038
Salary Cap Expenditure: $4,687,500 (First Grade, 2nd Tier, U20's)
Non Salary Cap Expenditure: $20.4m


Compared to the Sharks who lets are operating at lets say ~$9m in revenue p.a.

In was well publicised earlier this year that Cronulla wasn't spending their 2nd tier cap, so:

(Cronulla - 2011)
Operating Revenue: ~$9,000,000
Salary Cap Expenditure: $4,300,000
Non Salary Cap Expenditure: ~$4.7m


An operating budget difference of $20.4m vs $4.7m is enormous.

True it's a comparison of the financial power house of the competition to the club under the greatest financial duress, but even if you take the average club expenditure of about $16m p.a. , that is still over ~$11m in football operations vs the Sharks $4.7m.

What should be even more worrying is:

a) The commercial side of the development, once fully operation, is supposed to bring in ~$1m - $2m a year, which would still likely see Cronulla anchored to the bottom of the revenue list.

b) The rate of growth shown by the trend setters. The top clubs are growing their operating budget by over a million dollars per year. Each time the Brisbane/Gold Coast/Newcastle/Melbourne markets can produce an additional $1m of money towards an NRL club, Sydney has to produce 9m just to keep up the pace. The Sydney market as large and important as it is can't keep up, so each club gets a smaller slice of what is available which over time results in a greater disparity of the income of each club.
Therefore any income generated by the development will be quickly eaten up by the rising cost of core expenditures to remain even slightly competitive (probably before the full revenue stream has been implemented).


The AFL has done multiple studies that show success is directly linked to revenue generated:

http://www.gfc.com.au/News/NewsArticle/tabid/3933/Default.aspx?newsId=56150


http://www.realfooty.com.au/news/news/harris-warns-of-afl-class-system/2007/05/30/1180205337951.html

They have even gone so far as pumping millions of dollars into the lower revenue club's football departments in an effort to keep them competitive.