Saints Financial result

[Wayne42]

St Kilda Football Club has announced an operating profit of $1,246,930 for the financial year ending 31 October 2020, however after accounting for facility funding revenue,
depreciation, amortisation and interest, the club made a statutory net loss of $963,106.

A snapshot of St Kilda’s 2020 financial year:

Operating profit before facility funding revenue, depreciation, amortisation and interest of $1,246,930
Net statutory loss of $963,106
Membership tally of 48,775
Net asset position is $16,257,585
Total debt is 13,827,105



https://www.saints.com.au/news/845848/s ... ial-result

[saynta]

Not too bad seeing the filth lost 10 million and the swans 6 million.

[1965 Saint]

I’m concerned about the debt, which I understand is still growing. Unless we have a benefactor who will step in if and when necessary, any material rise in interest rates will quickly see us insolvent.

[To the top]

The Facility Funding revenue is essentially “revenue” drawn down from a Line of Credit supplied to cover operating costs

The provider and the Terms and Conditions attaching to the provision of the facility including any Security provided to the Lender will be identified in the Financial Statements

You could speculate that the provider of the facility is the AFL - noting the unique characteristics of the season just passed

There was a cost to maintaining the Club as it was maintained in Queensland, including players, their families and the Club personnel

Depreciation is a non cash expense

Amortised debt is principal debt repaid

And interest is self explanatory

It could be presented that the debt identified will be a factor for generations

Hence the need to win some Premierships and establish a dynasty

Nothing succeeds like success

[Vortex]

The total debt has gone up and no mention of how it gets paid down.

[To the top]

The financial fallout from this health crisis has been varied across households, across businesses, across Industries including Globally

We live in a World of a Pandemic and continue to do so until the WHO reviews that status (on the protocols directed at the WHA, so the WHO is bound by convention, convention reviewed at WHA gatherings. The WHO also has internal and independent review protocols it abides by following any warning being issued, again subject to WHA review which was the fact at the most recent Assembly and this is where Australia has run to its problems trumpeting going outside those established and WHA voted practices)

In these times some have prospered, including households where income has maintained but the ability to spend is curtailed so there are “cashed up” households

Some have had to avail of credit, so borrow because of their circumstances (given they are able to satisfy a lender)

The AFL satisfied a Lender, offering mortgage over the Docklands real estate

That borrowing was to sustain a competition - and revenue from broadcasters and sponsors

The Clubs which comprise the AFL have been similarly impacted, forced to borrowings to meet operational expenses (those they have been unable to cut)

I would anticipate that the AFL is the “lender of last resort” to the Clubs (because it needs the Clubs to have a competition)

How the AFL treats that investment into its Clubs in the future is for the AFL and the Clubs

I don’t imagine the AFL will be bankrupting any of its Clubs

So it is down to the Balance Sheet and the trading viability of the AFL

St Kilda has net assets

Whether that means they are solvent (so able to meet their dues as and when due) is another question given the reliance on the Facility Funding draw down to cover come and go operational costs

There may be Auditor reservations appended to the Annual Accounts - which is not unusual for AFL Clubs

[To the top]

And just to add for clarity, individuals repay debt because at some stage you retire from employment with the impact on income - so in retirement you do not wish to be still servicing debt including paying interest

Business is perpetual (given solvency)

Government is perpetual

Business and government carry debt, time in memorial including that the Capital and Reserves of Companies are debt (dividends paid to the Investors who have lent to the Company)

The measure is not the debt but the enduring performance of the asset that debt is invested into

So the Profit and Loss Account for business and the GDP for government

Government is not a profit making vehicle then deploying that profit to debt reduction (given there are no assets left to sell, so privatisation)

The measure is debt to GDP

Further, the assets government invests in are multi generational assets (including the maintenance of same)

So “repaying the debt” is a furphy

[Yorkeys]

Just revalue Max, Hunter and Nick to their current worth. That should cover the "statutory loss" (which is of course a real loss accounting standards wise, but noting the big revenue deferral - I guess losses are easier to announce in a Covid year so bung it on). Fragile margins but, and large "inventory". The 2021 draw is a money spinner and RSEA Park aka Moorabbin can only increase in value. If we can get Dusty to let us know the points spread for a Saints upset win the Sydney bookie wants for our Richmond games that can be a bit of a windfall for us too. Membership is likely to climb in 21 as well. And 2020 was an opportunity to rationalise staff and costs - although player payments will have to be restored . Hope Gil can negotiate a good TV deal for the next contract period. Overall looks ok - impressive Board/Management team - at least on glossy paper.

[Selhurst Saint]

It is also very important to point out that the $2.3 Million we would normally have received in October for membership instalments was deferred to Nov and therefore the next financial year.

[The_Dud]

The total debt has gone up and no mention of how it gets paid down.

Vertical marketing

[asiu]

“... at least on glossy paper “

nice work

[asiu]

that was a big read !

good work

why the deferral of ‘membership $’ in all that
‘n
was that structural or a sideways accounting shift

[Selhurst Saint]

that was a big read !

good work

why the deferral of ‘membership $’ in all that
‘n
was that structural or a sideways accounting shift

I think the club decided it was probably not a great idea to start charging for 2021 memberships while the 2020 season was still alive. Our debt would have been $2.3M less had we charged the instalment in October like normal.

[Sanctorum]

The financial fallout from this health crisis has been varied across households, across businesses, across Industries including Globally

We live in a World of a Pandemic and continue to do so until the WHO reviews that status (on the protocols directed at the WHA, so the WHO is bound by convention, convention reviewed at WHA gatherings. The WHO also has internal and independent review protocols it abides by following any warning being issued, again subject to WHA review which was the fact at the most recent Assembly and this is where Australia has run to its problems trumpeting going outside those established and WHA voted practices)

In these times some have prospered, including households where income has maintained but the ability to spend is curtailed so there are “cashed up” households

Some have had to avail of credit, so borrow because of their circumstances (given they are able to satisfy a lender)

The AFL satisfied a Lender, offering mortgage over the Docklands real estate

That borrowing was to sustain a competition - and revenue from broadcasters and sponsors

The Clubs which comprise the AFL have been similarly impacted, forced to borrowings to meet operational expenses (those they have been unable to cut)

I would anticipate that the AFL is the “lender of last resort” to the Clubs (because it needs the Clubs to have a competition)

How the AFL treats that investment into its Clubs in the future is for the AFL and the Clubs

I don’t imagine the AFL will be bankrupting any of its Clubs

So it is down to the Balance Sheet and the trading viability of the AFL

St Kilda has net assets

Whether that means they are solvent (so able to meet their dues as and when due) is another question given the reliance on the Facility Funding draw down to cover come and go operational costs

There may be Auditor reservations appended to the Annual Accounts - which is not unusual for AFL Clubs

Today's announcement by the AFL that the broadcast deal with 7, Foxtel and Telstra has been extended to end 2024 at the rate of $473 million p.a. should ensure that both the clubs and the competition will continue to flourish for the next 4 years.

[shanegrambeau]

Is it better to think of the financial viability of the club or the AFL in general when we think of what level of stewardship and enterprise sustains our St kilda idea?

It seems to me, that debt is something - and this goes for governments - that is entirely implicitly accepted as being part of the general architecture and yet debt rhetoric is something of a tool, a political lever.

Also implicitly accepted is that we are just making up numbers in a false vacuum...there is a bubble because the ins and outs that are meaningless, if the whole kit and kaboodle is suspended by another giant machine.

[SaintPav]

The total debt has gone up and no mention of how it gets paid down.

It’s not a problem, apparently.

What are our debt ratios?

What about cash flows?

One would think that debt servicing during a “global pandemic” and recession/depression is an issue?

Asset values can get written down too.

Accounting theory 101: businesses also exist into perpetuity apparently. Just compare the ASX 200 to its equivalent in 2000. How many firms are still on it?

The Saints and a few others are being bankrolled by the AFL and a lucrative media deal and hopefully we continue to be subsidised, but there are risks around serving this amount of debt and there’s no guarantee that this arrangement will continue indefinitely.

FMD.

[ace]

The total debt has gone up and no mention of how it gets paid down.

Whose example are they following ?

[ace]

The total debt has gone up and no mention of how it gets paid down.

It’s not a problem, apparently.

What are our debt ratios?

What about cash flows?

One would think that debt servicing during a “global pandemic” and recession/depression is an issue?

Asset values can get written down too.

Accounting theory 101: businesses also exist into perpetuity apparently. Just compare the ASX 200 to its equivalent in 2000. How many firms are still on it?

The Saints and a few others are being bankrolled by the AFL and a lucrative media deal and hopefully we continue to be subsidised, but there are risks around serving this amount of debt and there’s no guarantee that this arrangement will continue indefinitely.

FMD.

Don't know any statistics but I am guessing more have left the ASX200 than still remain.

[To the top]

In terms of Companies listed on the ASX200 there are always movements based on considerations such as the “pecking order”, so Capitalisation courtesy of performance, “spin offs” such as Coles as a Listed Company from Westfarmers, M&A’s, IPO’s etc etc

In regard IPO’s it can go the other way and Companies privatise (so Pty Ltd from Limited)

There are also name changes such as ICI (once)

And some Companies fail and are wound up such as HIH after acquiring FAI and ABC Learning (with “Fast” Eddie Groves)

So there are comings and goings including some being liquidated to evade tax obligations and penalties applied by the ACCC

Then there are those which fail because of fraud

But, in the normal course, Companies are perpetual

There is a banking industry providing a raft of facilities to those Companies and the Group they are a component of

And hopefully without a need to appoint to recover what is owed to the bank

[To the top]

So, by extension, the Club receives $2.3 Million in membership remittances in the month of October, the season concluding on the last day of September so a 4 week period until the Club closes its books

I would have expected that such receipts pertaining to the next season would be treated as pre-payments

That would have been my instruction if any accounting firm presented the bringing forward of revenue for out periods - and I would have instructed a change of accountants for the customer/banker relationship to continue

What was the total of Membership revenue - noting the membership numbers?

[asiu]

so i gather from that ToT ,
given that new accountants were to be recommended
... the membership $ (issue) is a sideways accounting shift(y)


note : i’m out of my depth here

regardless of drowning
so .... shifty accounting is in our favour ... yes
... surely

thats good then

yes ?

[SaintPav]

The ’going concern’ accounting assumption is for financial reporting purposes; it doesn't necessarily reflect economic reality.

Am I wrong?

[To the top]

It distorts (and from the foregoing it appears there is a change in treatment to exclude these pre-payments)

Plus, if there is a need to refund for any reason?

Because the product is not delivered

Just examples

What are you looking for the Financial Statements to provide?

So in regards any particular playing season that revenue received equaled or exceeded (such that debt can be repaid) the costs of operations for that particular playing season

Hence the Accounting year concluding when it does, as soon as practical after the season concludes and not 30 June (or with some 31 December where there is ultimate foreign ownerships and those parent Companies close their books on 31/12)

So are expenses for the next season bought forward?

In regards Companies, expenses from out years can be bought forward to reduce tax liabilities (eg Qantas) including to receive tax holidays (plus writing down asset valuations)

But there is no such incentive for a not for profit entity because there is no tax assessment issued

It distorts from the answer you are seeking

[CQ SAINT]

The club was making reparations for the 2020 membership upgrades. This would have absorbed time and man power. They made this fairly clear and the workforce was returning late too.
2021 easy pay pledges for memberships were delayed accordingly. The 2020 books would have already been cooked prior.
Only those early pledges would have counted anyway. We need 50000 of those next year, with at least 25000 reserved seats.
The club is being run very well. This is certain. The big concern is maintaining momentum onfield, to boost other areas of revenue. This seems to be unfolding pretty well too.

[ausfatcat]

The ’going concern’ accounting assumption is for financial reporting purposes; it doesn't necessarily reflect economic reality.

Am I wrong?

Just a FYI with the ongoing concern portion of the financial statement it has been in every saints finance report for at least 15 years, and basically means without payments from AFL (ie salary cap payments every club receives) we would be broke