AGM and financials

[Nick_BlueNRG]

Even at 2% interest that is still $200,000 down the drain per year.

Not if you're getting 4% return on the investment you borrowed the money for.

Tell me where I can get 4% and I will sign up now.

[saintspremiers]

Even at 2% interest that is still $200,000 down the drain per year.

Not if you're getting 4% return on the investment you borrowed the money for.

Tell me where I can get 4% and I will sign up now.

I’m getting 7% return on one investment I have and 10% return on another - both cash quarterly distributions.

I won’t discuss them on here nor via PM, but they are out there in the market. And these aren’t considered high risk either.

[BarryGrogan]

Even at 2% interest that is still $200,000 down the drain per year.

Not if you're getting 4% return on the investment you borrowed the money for.

Tell me where I can get 4% and I will sign up now.

Seriously?

[BackFromUSA]

Fantastic summary. Thank you.

[To the top]

Two schools of thought

Firstly, the most opportune time to repay debt is when interest rates are low because more is coming off the principal debt than going to servicing interest

For that to occur you rely on the performance of the asset the debt is invested into - because the money being used to repay debt has to come from somewhere (and without impinging on the ability to service dues as and when due, so the liquidity of the Balance Sheet)

Which leads to the second school of thought

It is not the debt, it is the performance of the asset Shareholder funds AND the debt are invested into that is critical - including satisfying Shareholders and Creditors

Between January 2000 and January 2010, by RBA data, the amount we owed to our home mortgage lenders increased from $335 Billion to $1.226 Trillion, a 350% day increase over 10 years

You could argue that that debt is now impinging on society and economic indicators - including because of debt pay down being a priority given the fraught employment and wages increase data

[Nick_BlueNRG]

This thread has completely lost the plot.

The fact is we have a $10Mil debt. We need to get rid of this debt as soon as possible and we need to make our club debt proof. What I mean by this is we need to diversify into other businesses so our balance sheet is not affected so much by a period of bottom 4 finishes. Sure, when we are flying we can make a decent profit but the problem occurs when we are s*** ie the last 7 years.

All going well, the next 5 years we should be playing consistent finals footy and the profits will come. But when the inevitable decline happens again we have to have knocked off the debt and have cash reserves. Our debt hit an all time high of $12mill on this cycle (consecutive low finishes). When we hit the next cycle of low finishes, what happens if our debt hits $20Mil?

I have said it all along, if we don't embrace NZ (and it seems we haven't), our club will be out of the AFL by 2030. We will either be forced to merge or relocate to another state.

The Bulldogs are making money from Ballarat. The Dees are making money from the top end. The Kangaroos are making money from Tassie which we stupidly abandoned. Hawthorn have made a killing from Tassie over the last 25 years to the point where they are now one of the richest clubs around.

It is only a matter of time before the AFL force another Victorian team to relocate or merge. While we have a huge debt we are at risk.

[SaintPav]

Nah.

Economics 101: Debt is irrelevant when Melbourne property doubles every seven years and has done so since 1835.

[To the top]

Hence our banks can lend against real estate security with impunity?

Because if the ability to service is impinged therefore absent, the bank can just sell the real estate to recoup its debt (plus penalty interest and realisation costs)?

Given the purchaser can remain a real estate proprietor for a couple of years - because real estate prices double every 7 years

What happened elsewhere other than in Australia with the GFC is a lesson - replicating the Savings & Loans fiasco of the late 1980’s/early 1990’s

Sub prime debt - because of a lack of proprietor equity and the absence of servicing abilities

And the balloon went up - on both occasions

[To the top]

Hence our banks can lend against real estate security with impunity?

Because if the ability to service is impinged therefore absent, the bank can just sell the real estate to recoup its debt (plus penalty interest and realisation costs)?

Given the purchaser can remain a real estate proprietor for a couple of years - because real estate prices double every 7 years

What happened elsewhere other than in Australia with the GFC is a lesson - replicating the Savings & Loans fiasco of the late 1980’s/early 1990’s

Sub prime debt - because of a lack of proprietor equity and the absence of servicing abilities

And the balloon went up - on both occasions

[sunsaint]

Nah.

Economics 101: Debt is irrelevant when Melbourne property doubles every seven years and has done so since 1835.

Nah
Debt is ONLY irrelevant given the entity has the means to pay it back in a timely manner
Which is why I think those sticking it to NBnrg are being a bit unfair
IN our case a 10mil debt IS significant regardless of present day economies - so his point is valid

Besides I wonder how many of you claiming that debt is irrelevant have been voting for the Liberals over the past decade whose mantra is debt is BADDDD?

[sunsaint]

Oh and does Stkilda FC own any property ???

[SaintPav]

Nah.

Economics 101: Debt is irrelevant when Melbourne property doubles every seven years and has done so since 1835.

Nah
Debt is ONLY irrelevant given the entity has the means to pay it back in a timely manner
Which is why I think those sticking it to NBnrg are being a bit unfair
IN our case a 10mil debt IS significant regardless of present day economies - so his point is valid

Besides I wonder how many of you claiming that debt is irrelevant have been voting for the Liberals over the past decade whose mantra is debt is BADDDD?

Equity, mate.

[Gershwin]

Summary of the AGM from Saints supporter Michael Egan on Facebook:

"Heres my point-form takeaway fro the AGM for any Saints fans interested. All the usual formal business stuff was done with no issues.
1, All directors wore 2020 Club polos rather than suits (a first that I can recall)
2. One of the early home games next year will be dedicated to the memory of Daddy Frawley. A more permanent memorial is still being discussed.
3. Construction of the pool/wellness centre/grandstand will commence the day after the last AFLW home game. The Club didnt want a construction zone to compromise the AFLW home games and the Mens pre-season game.
4. No we have no short term plans to remove the poker machines. They are still an important revenue steam with the large amount of capital works we are undertaking
5. The John Moran Loyalty Award was presented to Stephen Byrne for 40 years of service with past players and housing recruits
6. The new players were introduced to the Members by Ratts (Dan Butler absent). Ratts pumped up Leo Connolly's tyres by saying if he had to rank the current squad on just skills, he'd be somewhere between 8-12 already. Fair wrap.
It was a pretty uneventful meeting attended by maybe 100-120 Members."

[SaintPav]

Hence our banks can lend against real estate security with impunity?

Because if the ability to service is impinged therefore absent, the bank can just sell the real estate to recoup its debt (plus penalty interest and realisation costs)?

Given the purchaser can remain a real estate proprietor for a couple of years - because real estate prices double every 7 years

What happened elsewhere other than in Australia with the GFC is a lesson - replicating the Savings & Loans fiasco of the late 1980’s/early 1990’s

Sub prime debt - because of a lack of proprietor equity and the absence of servicing abilities

And the balloon went up - on both occasions

Banks will lend against the market value of a property
but that doesn't fully explain fractional reserve banking and the money creation process.

House of cards.

[BarryGrogan]

There's debt, then there's debt.

If you build up debt just by doing your daily s***, that's bad. You're living beyond your means and realistically can't pay it back.

If you're borrowing to invest, and accruing debt on investments that generate income and/capital gains that offset the debt - that's not bad. It can be very good.

That's not to say that having the debt is good necessarily - but it can facilitate a better outcome.


The Saints are in the former situation though. We have a s*** product, and a small customer base in a market that is pretty much finite.

The debt we have is from simply not having enough money to run an AFL football club.

To be honest, I can't see that ever changing significantly. There'll be ups, but for 120 years it's been downs.

We have a very small market share.


Having said that - who gives a s***?

We make the AFL far more than what we cost them, and as long as that's the case - there's no problem.

[Nick_BlueNRG]

There's debt, then there's debt.

If you build up debt just by doing your daily s***, that's bad. You're living beyond your means and realistically can't pay it back.

If you're borrowing to invest, and accruing debt on investments that generate income and/capital gains that offset the debt - that's not bad. It can be very good.

That's not to say that having the debt is good necessarily - but it can facilitate a better outcome.


The Saints are in the former situation though. We have a s*** product, and a small customer base in a market that is pretty much finite.

The debt we have is from simply not having enough money to run an AFL football club.

To be honest, I can't see that ever changing significantly. There'll be ups, but for 120 years it's been downs.

We have a very small market share.


Having said that - who gives a s***?

We make the AFL far more than what we cost them, and as long as that's the case - there's no problem.

But that is the case Barry!!!!!
When, not if, but when the AFL decide to get rid of another Vic team it will be us in the firing line. If we want to safeguard against this threat then I would suggest we lock in China for at least another 10 years. Hopefully by then Auckland finally re configures their ground for AFL and we play 2 home games per year. I will say it again, if we don't embrace NZ we will be out of the AFL within 10 years.

[BarryGrogan]

When, not if, but when the AFL decide to get rid of another Vic team it will be us in the firing line. If we want to safeguard against this threat then I would suggest we lock in China for at least another 10 years. Hopefully by then Auckland finally re configures their ground for AFL and we play 2 home games per year. I will say it again, if we don't embrace NZ we will be out of the AFL within 10 years.

Debt won't be a factor in getting rid of a team.

Generating revenue for the AFL is what will be the factor.


Getting rid of the Saints doesn't wipe their debt.


GWS and the Suns cost the AFL squillions in isolation - but the overall revenue for the AFL is higher with them in the comp.

If the AFL's market research showed them that merging the Saints, or getting rid if them would somehow increase the customer base - as opposed to losing 500k of them, then they'd do it tomorrow.

But it's highly, highly unlikely that that is the case.

[SaintPav]

I think the Club should seriously consider playing out of Iceland.

The place is booming!

[Nick_BlueNRG]

I think the Club should seriously consider playing out of Iceland.

The place is booming!

We are trying to have a serious debate here and you go and post this dribble.

Mods - Please delete SaintPav's post and then this post!!!!!

[SaintPav]

I think the Club should seriously consider playing out of Iceland.

The place is booming!

We are trying to have a serious debate here and you go and post this dribble.

Mods - Please delete SaintPav's post and then this post!!!!!

That's quite a reaction there, Kells!!

[Trev from the Bush]

Good to see Chicken Little is still posting "the end is nigh" in neon lights. Complete anti-Saint ratbags (such as the much lamented CityWest) would be proud of your efforts to talk the club down.

[saintspremiers]

This thread has completely lost the plot.

The fact is we have a $10Mil debt. We need to get rid of this debt as soon as possible and we need to make our club debt proof. What I mean by this is we need to diversify into other businesses so our balance sheet is not affected so much by a period of bottom 4 finishes. Sure, when we are flying we can make a decent profit but the problem occurs when we are s*** ie the last 7 years.

All going well, the next 5 years we should be playing consistent finals footy and the profits will come. But when the inevitable decline happens again we have to have knocked off the debt and have cash reserves. Our debt hit an all time high of $12mill on this cycle (consecutive low finishes). When we hit the next cycle of low finishes, what happens if our debt hits $20Mil?

I have said it all along, if we don't embrace NZ (and it seems we haven't), our club will be out of the AFL by 2030. We will either be forced to merge or relocate to another state.

The Bulldogs are making money from Ballarat. The Dees are making money from the top end. The Kangaroos are making money from Tassie which we stupidly abandoned. Hawthorn have made a killing from Tassie over the last 25 years to the point where they are now one of the richest clubs around.

It is only a matter of time before the AFL force another Victorian team to relocate or merge. While we have a huge debt we are at risk.

Ok I have two questions for you:

(1) Are you a current member of St Kilda FC?

(2) Have you ever attended an AGM and directly asked this question to the people that run our club??

[Nick_BlueNRG]

This thread has completely lost the plot.

The fact is we have a $10Mil debt. We need to get rid of this debt as soon as possible and we need to make our club debt proof. What I mean by this is we need to diversify into other businesses so our balance sheet is not affected so much by a period of bottom 4 finishes. Sure, when we are flying we can make a decent profit but the problem occurs when we are s*** ie the last 7 years.

All going well, the next 5 years we should be playing consistent finals footy and the profits will come. But when the inevitable decline happens again we have to have knocked off the debt and have cash reserves. Our debt hit an all time high of $12mill on this cycle (consecutive low finishes). When we hit the next cycle of low finishes, what happens if our debt hits $20Mil?

I have said it all along, if we don't embrace NZ (and it seems we haven't), our club will be out of the AFL by 2030. We will either be forced to merge or relocate to another state.

The Bulldogs are making money from Ballarat. The Dees are making money from the top end. The Kangaroos are making money from Tassie which we stupidly abandoned. Hawthorn have made a killing from Tassie over the last 25 years to the point where they are now one of the richest clubs around.

It is only a matter of time before the AFL force another Victorian team to relocate or merge. While we have a huge debt we are at risk.

Ok I have two questions for you:

(1) Are you a current member of St Kilda FC?

(2) Have you ever attended an AGM and directly asked this question to the people that run our club??

Yes I am a member.

I used to go to AGM's every year. In fact, I was at the AGM the year the Saints decided to abandon Tasmania. During Q&A I put my hand up and to my surprise BUTTHEAD (Rod Butters) chose me. I said abandoning Tasmania is a huge mistake and can you please re-consider. BUTTHEAD's response was that the players and the coaches don't like playing down there and then went to the next question.

I have said all along that this decision will come back and bite us badly. And it has. I also said at the time this is a free kick to Hawthorn and they will make millions at our expense. History has shown that I was correct and that BUTTHEAD is, was and always will be a f***wit. That one horrendous decision has put us in the position we are in today which is a huge debt (the largest in the AFL), and at the mercy of the AFL.

When NZ came up I was so happy. I thought that if we played 2 games per year plus maybe had our pre-season camps there, huge benefits would follow. Unfortunately Wellington city council decided to the pull the pin.

In answer to your second question, I spoke to Finnis at the open day at RSEA Park in January (or was it February?) earlier this year. I pleaded with him to not give up on NZ. I said he should ask the AFL to help fund the reconfiguration of the ground at Auckland so we can start playing games there. I congratulated him on the China deal and I actually said it would be great if we could play 2 games in NZ and 1 game in China every year.

Finnis then went on to tell me that the club still needed to build the Aquatic centre and the women's change rooms.

[SaintPav]

I’m actually a little offended. I thought I was your arch enemy.

[Nick_BlueNRG]

I’m actually a little offended. I thought I was your arch enemy.

You are not my arch enemy SaintPav. It's all fun and games (unless you are really Joffaboy).
Anyway, in all seriousness, what do you think of my response? Were you at that AGM all those years ago when I asked BUTTHEAD not to leave Tassie. I know that a few on here remember that day. Do you?