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Finances

manlyone

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I notice a few posters have referred to the possibility of Manly again facing liquidity problems in 18 months if crowds etc are down. Are you able to expand on these comments?

On the assumption it costs $10m pa to be a serious player, by my calcs we will struggle. I have obviously made some assumptions but including funds from members (which may go to Max and not the footie team) I can only get our revenue to just over $8m.

1. Crowds 13 home games x avgerage crowd 15,000 x estimated average entrance fee $15 = $2,925,000

2. Sponsorship $1,400,000 (Delmage = $800k, sleeve = $300k, shorts = $100k, others = $200k)

3. Leagues club grant $1,000,000

4. Membership - 3,000 x $80 => $240,000

5. 05.06 NRL grant $2,500,000 (?)
 

The Wheel

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There has been talk (from people allegedly close to the club) that the club is facing a black hole of upto $3mill by the end of 2006. However I think they are going on the fact they have to spend money to make money (ie paying Orford $400K per year).

But unless they have a winning footy side they won't attract the crowds/sponsorhip etc to get $10 million in income - catch 22 I suppose.

Time will tell but Cummings is a shrewd businessmen and Wilson is well credentialled CEO so hopefully the decisions being made are in line with the strong business plan not an optimistic one.

PS Your assumptions/guesses are close to right, I guess that is where the 'black hole' comes from - the pint of concern is whether the business forecasts are strong & achievable or very optimistic. They need the team to win to close the gap also if the team losses games or it is a wet winter and crowds are down then the gap could widen.

The talk is that the plan is on the side of being optimistic.
 

Matabele

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Some of the membership money will be going to Delmege. (Was it $50,000 this year?)

One thing to keep in mind is that we may operate at less than $10m on the basis we have lower overheads than some clubs. I dare say our stadium costs are lower than some.

I do know that a "break even" crowd for a home game is around 7000.

Keep in mind that you could bank on food and grog sales at home games. Assume an ave spend of $10 per person for 1.8million. Assume a COG and COL at 70%, that's profit of $540,000 or thereabouts.

Merchandise sales is another area perhaps.

Finally I think the NRL grant goes up by $1m per club with the new TV rights deal kicking in 2007? Can anyone remember what was said about that?
 

manlyone

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It does puzzle me that with a salary cap of $3.25m it costs $10m to run a club ....... as an accountant I am sure it would be easy to cut some fat!

I'm sure in the CEO's job description (as listed/described on MSE at the time of appointment) the key criterion was the ability to sell the remaining shares + increase sponsorship .... it should be pretty easy to measure performance. The idea from memory was that the sales of the shares would be invested to generate future cash flows ......
 

The Wheel

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You also have to include the costs of the P/L, Flegg, Ball, Matthews teams. All the coaching staff of those teams, Drs, Physios etc etc plus the back office which would number about 12 to 15 I reckon. Also travel and property costs the list goes on.
 

Matabele

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I also doubt that superannuation and WGC would be included inside the Cap.
 

Dan

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there are no worries with finances!
 

Canteen Worker

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The thing for Manly is two:

We need some big paying home games for big crowds. Teams like the Broncos, Parra and the Rorters draw big crowds and we have hardly seen them at Brookie over the past few years. The club would like a favourable draw as some sides have fans that don't travel or not too many fans.

The second issue is hoping for dry weather. Should a wet winter intervene it plays havoc with crowds and revenue, with most fans happy to avoid a wet bum and watch on Fox.

The apparent resurgence of Manly in 2005 was important as we played in about 8 or 9 Channel 9 games including a few Friday night games, giving greater exposure, hopefully pleasing sponsors and developing more fans from the uncommitted. That hopefully leads to greater merchandise sales, greater game attendance etc.

Very important that we follow up with another strong season!
 

Dan

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The Wheel

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[quote author=Daniel]
there are no worries with finances!
Since when did you believe the party line?

[/quote]

Still drunk I say 8|
 

Dan

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There is 1 item that everyone forgets to include!

contribution by the NRL + minor sponsors + the new sponsorships that the Sea Eagles signed.
 
G

Guest

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There is 1 item that everyone forgets to include!

contribution by the NRL + minor sponsors + the new sponsorships that the Sea Eagles signed.
The club obviously has to provide a cash flow forecast to the NRL each year. It is a pity that they don't make this available to the public.

If the NRL provides an increased grant this year then that will go some way to offsetting the expected hole in the budget.

However Manly can only raise so much from sponsorships - would you expect sponsors to be falling over themselves wanting to sponsor Manly after their past 3 months perfomance and the Monaghan debacle? Hardly. I am sure that clubs such as Parra etc are very much more in demand from sponsors than Manly is at the moment.

The main problem in our cash flow compared to that of the major clubs is that Manly's grant from its Leagues club is millions of dollars less than these other clubs.
 
G

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Dan must have given the club his personal guarantee that he will meet any shortfall over the next 2 years. With his millions the club is safe.
 

Matabele

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Charisma and charm are not enough to plug a $1.5m per annum hole!
 

byso

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Dan's, charisma and charm would be lucky to muster $2.50 :)
 

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