RB negligent: should've applied for AFL assistance

[saintspremiers]

Given the schemozzle of our trading loss to be reported for 2007, the question I have is should have we applied for financial assistance from the AFL??

Paying out Hamill was almost a given even one year ago - the club would've surely known he had little chance of playing again.

Also, the GT settlement was well on the cards very shortly after he was sacked.

Now, we couldn't go cap in hand to the AFL and whinge for money re the GT bit, but surely Hamill's situation was unforseen several years ago when the famous 5 year contract was struck.

My point is, why should we suffer a bottom line loss whilst several other clubs post a profit with AFL assistance?

Pride is one thing, and standing on your own two feet, but surely if we were the ONLY Melbourne club to post a loss this year, we (or should I say RB) are dills!

[Mr Magic]

Given the schemozzle of our trading loss to be reported for 2007, the question I have is should have we applied for financial assistance from the AFL??

Paying out Hamill was almost a given even one year ago - the club would've surely known he had little chance of playing again.

Also, the GT settlement was well on the cards very shortly after he was sacked.

Now, we couldn't go cap in hand to the AFL and whinge for money re the GT bit, but surely Hamill's situation was unforseen several years ago when the famous 5 year contract was struck.

My point is, why should we suffer a bottom line loss whilst several other clubs post a profit with AFL assistance?

Pride is one thing, and standing on your own two feet, but surely if we were the ONLY Melbourne club to post a loss this year, we (or should I say RB) are dills!

I'm pretty sure you'll find that the 'loss' this year is just an accounting exercise and not a 'real trading loss'.

For whatever reason(s) it would appear that the new Board has decided they would rather push as many expenses/provisions as they possibly can into this years results.

It's akin to your business leasing premises for the next 3 years and you deciding to include in this year's expenses the cost of the rent for next year, even though it's not really incurred until next year.

It all depends on what it is you are trying to achieve?

If you are trying to show as big a profit as possible then you would defer some expenses until the next accounting period so as to inflate your profit.

If you are trying to show as minimal a profit as possible then you would include as many expenses/provisions from the next accounting period that you could substantiate in any way, so as to make the profit smaller.

Why the Board has chosen this particular way can only be speculated on. The reason that jumps out to me is that they are trying to make this year's figures look worse and next year's better.

[BackFromUSA]

Mr Magic ... yep ... it is the only reason!

And if you ask me ... fair enough too.

Why should their 2008 result be harmed by those items inherited from the past administration?

They have done the right thing in my eyes.

Expensed items that were a result of the past administration (and their decision re Thomas and Hamill) against the income generated by that administration.

The only bit to watch for in the future is if the final amounts paid to Hamill and Thomas are lower than the provision, then this will artificially inflate their 2008 result. But then again you would hope they disclose this.

Good accounting? Good politics?

Probably both.

Professional definitely.

[Mr Magic]

BFromUSA, does that mean that any future 'income' derived from the previous administration should also be 'included' to the 2007 accounts?


Personally I have no problem with them doing anything they like with the accounts (as long as it's legal).

But, I'm just pointing it out to those who wish to use this 'accounting practise' to belittle the previous Board over what was their most significant contribution - putting the Club in a 'secure financial position'. By all means criticize them for their failures but why use 'accounting subterfuge' to belittle their good achievements?
Is it so difficult to admit that some things they did were good and correct? The same should be said for GT. Not everything he did was bad/wrong. He did many good things for our Club and should be recognized for them just as he should be criticized for the negatives durnig his reign as coach.

[saintspremiers]

sure it's an accounting excerise, but the fact remains regardless if the money is debited against 07 or 08 it's is a REAL expense/cost that hurts our bottom line.

ie. if you combined 07 and 08, you'd get the real picture if you get my drift!

[Mr Magic]

sure it's an accounting excerise, but the fact remains regardless if the money is debited against 07 or 08 it's is a REAL expense/cost that hurts our bottom line.

ie. if you combined 07 and 08, you'd get the real picture if you get my drift!

Except that I think some, if not all, of the money being charged against 2007 is a 'provision' which means it may not actually get paid.
Certainly the $270,00 being set aside for the GT legal case may never be paid but it has been deducted from the 2007 accounts. Is it real money or just an accounting trick? What if they settle with him for $50,000? Does that mean they will add $220,00 back into the 2007 accounts?

[Mr Magic]

1 side benefit of doing what the Club is with the 2007 accounts, is that by minimising the profit, they are also minimising any tax they would need to pay (is the Club a tax paying organization or tax exe,pt organization?)

If what they are apparently doing is legal, then that would be a good reason to employ such accounting methods as it would delay payment of any tax on that money to a later year.

[BackFromUSA]

of course they are going to claim the income generated by the previous administration (specifically ongoing sponsorship arrangements) but they could also argue that these come with an opportunity cost (as they cannot replace them with better sponsorships) and that servicing costs on existing contracts are too high ... JUST for arguements sake!

as for the $50,000 / $220,000 provisions question

that unpaid amound from the provision gets added to the bottomline for 2008 ... a nice accounting and political bonus for the new administration

i think it is likely that the payout to GT will be 100K and that 170K will be added to the 2008 result.

just my best guess.

looks legal to me.

smart politics and accounting.

As for the Butters admin - they did a great job until this year but losing key personnel hurt them in many areas - sponsorships, membership, event income and they have had some expenses associated with the botched Moorabbin redevelopement BUT the reality is that the club made a profit this year - probably a few hundred thousand BUT the provisions made "created" the loss.

[Eastern]

AFL assistance comes at a cost.

I would much prefer that the destiny of StKFC was in the hands of StKFC !!

[ausfatcat]

AFL assistance comes at a cost.

I would much prefer that the destiny of StKFC was in the hands of StKFC !!

honestly i don't think they would've given it to us even if we did apply.

[casey scorp]

AFL assistance comes at a cost.

I would much prefer that the destiny of StKFC was in the hands of StKFC !!

ie with conditions/strings attached.

Anyway it is only for clubs which are really down and out financially - I don't think in recent years we would have considered ourselves to be as poorly off as the Kangas and the Bullies. Mind you the Assistance Fund (or whatever it's called) hasn't given the AFL its ultimate desire to be able to dictate compliance with a direction to go to the Gold Coast.

[Eastern]

AFL assistance comes at a cost.

I would much prefer that the destiny of StKFC was in the hands of StKFC !!

ie with conditions/strings attached.

Anyway it is only for clubs which are really down and out financially - I don't think in recent years we would have considered ourselves to be as poorly off as the Kangas and the Bullies. Mind you the Assistance Fund (or whatever it's called) hasn't given the AFL its ultimate desire to be able to dictate compliance with a direction to go to the Gold Coast.

Yet !!

[rodgerfox]

Butterss and his Board only had '$1M' profits to hang their hats on.

There was no way they would compromise that. No way known.