Power Play Ian Anderson Chief Financial Officer
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FINANCIAL REPORT IAN ANDERSON CHIEF FINANCIAL OFFICER POWER PLAY Port Adelaide’s Robbie Gray was one of the stars of 2014. Ñ 158 AFL ANNUAL REPORT 2014 FINANCIAL REPORT 159 INFORMATION TECHNOLOGY PAYMENTS TO CLUBS The AFL’s IT department, as well as CLUB BASE FUTURE FUND OTHER TOTAL managing all the day-to-day needs of the AFL and its state operations, also ADELAIDE CROWS 7,514,004 500,000 2,105,064 10,119,068 undertook a number of new initiatives BRISBANE LIONS 7,514,004 1,414,431 2,676,149 11,604,584 in 2014 including: ÆÆContinued development of the Player CARLTON 7,514,004 750,000 3,239,505 11,503,509 Database system including adding COLLINGWOOD 7,514,004 - 3,587,330 11,101,334 a List Management module and ESSENDON 7,514,004 - 4,268,543 11,782,547 Player Movement report. ÆÆImplemented a player sanctions FREMANTLE 7,514,004 600,000 2,137,045 10,251,049 FINANCIAL database. GEELONG CATS 7,514,004 - 2,968,509 10,482,513 ÆÆImplemented a supplements reporting system for use by all clubs and players GOLD COAST SUNS 7,514,004 2,400,000 3,412,603 13,326,607 in the AFL. GREATER WESTERN SYDNEY GIANTS 7,514,004 2,693,973 3,340,340 13,548,317 ÆÆImplemented an AFL Club Officials registration database, which allows HAWTHORN 7,514,004 650,000 4,147,931 12,311,935 the AFL clubs to register all club staff MELBOURNE 7,514,004 2,270,000 2,596,582 12,380,586 REPORT directly with the AFL. NORTH MELBOURNE 7,514,004 2,810,000 3,170,960 13,494,964 ÆÆImplemented a new ticketing system for use in the 2014 season that PORT ADELAIDE 7,514,004 1,075,000 2,552,421 11,141,425 automated the distribution of tickets The AFL’s net surplus of $12.5 million RICHMOND 7,514,004 1,650,000 3,202,086 12,366,090 to AFL sponsors. ÆÆImplemented the first modules of a new ST KILDA 7,514,004 3,034,498 3,591,270 14,139,772 was ahead of the budget that was Human Resources Information System. SYDNEY SWANS 7,514,004 2,263,000 2,797,405 12,574,409 INSURANCE AND RISK MANAGEMENT WEST COAST EAGLES 7,514,004 - 1,970,439 9,484,443 set at the start of the financial year. The AFL’s Risk Management and WESTERN BULLDOGS 7,514,004 3,468,000 3,341,869 14,323,873 Insurance programs continue to provide a TOTAL 135,252,072 25,578,902 55,106,051 215,937,025 IAN ANDERSON valuable service to the whole AFL industry. CHIEF FINANCIAL OFFICER These services are supported by the AFL’s insurance broker, JLT. PROCUREMENT PAYMENTS TO AFL CLUBS At the AFL level, a Business Risk The AFL has continued to develop The AFL makes a number of distributions Assessment is prepared annually and its centralised procurement programs. and payments to AFL Clubs. These specific actions are undertaken to help These procurement activities are focused payments included the following in 2014: AFL CONSOLIDATED FINANCIAL RESULTS AFL CLUBS’ FINANCIAL RESULTS minimise these risks eventuating. on managing the purchasing activities ÆÆA base distribution to all clubs which The AFL recorded a net surplus of The AFL clubs continued to report mixed At the AFL club level, all AFL clubs are of the AFL, the state football bodies totalled $135.3 million, an increase $12.5 million for the 2014 financial year. financial results in 2014. Ten clubs reported monitored on a yearly basis to ensure they and the AFL clubs. In 2014, a number of $5.7 million. This result, while down on last year, an operating profit, with most of these meet the AFL’s minimum standards, of new initiatives were undertaken ÆÆA bonus distribution of $1.2 million was ahead of the budget that was set clubs in the finals. However, eight clubs as well as being assessed against the and implemented including: to all clubs from the broadcast at the start of the year. Most revenue reported an operating loss, which is a annual Key Performance Indicators that are ÆÆA new accommodation agreement rights proceeds. streams, except the finals series, were continuing trend from the past few years. put in place to target specific improvements with Accor for use throughout ÆÆEqual and disequal payments totalling up on last year. As well, there were a The AFL has announced two new in Risk Management behaviours. the AFL industry. $25.6 million to all clubs in 2014 from The AFL has number of new expenditure initiatives financial equalisation measures that will At the AFL Community level, the main ÆÆNegotiating new apparel agreements the Club Future Fund. announced two new budgeted during the year, particularly be introduced in 2015 to try to improve focus has been on improving the insurance with BLK and ISC for a variety ÆÆOther payments to clubs including in the areas of Marketing and Human the financial equality between all clubs. cover for all community clubs and their of apparel needs throughout the prize money, distribution of the AFL’s financial equalisation Resources. These factors combined with The first measure is a Revenue Sharing participants. In particular, over the past AFL and state football, including signage rights at Etihad Stadium and measures that will be increased distributions to clubs and stadia, formula which results in revenues from three years, the AFL has been increasing umpires’ apparel. promotional funding to help clubs contributed to the overall result being the top 10 clubs being redistributed to the the level of cover for serious injuries such as develop the game around Australia. introduced in 2015 down on last year. bottom clubs. The amount is fixed for the quadriplegia and paraplegia. The standard Finally, the consolidated result, next two years and will be reviewed after level of this cover was increased from which includes all the AFL’s controlled this date. The second measure is a soft $250,000 in 2013 to $500,000 in 2014. state subsidiaries, was a net surplus cap on non-player football department In 2015, this cover will increase again to At the AFL club level, all AFL clubs are monitored on a yearly basis of $13.3 million. All states produced expenditure. Any club that exceeds the $1 million. Pleasingly, this increase has an operating surplus, which was a cap amount will have to pay a tax on this been negotiated at no extra cost to to ensure they meet the AFL’s minimum standards, as well as pleasing result. excess amount, the proceeds of which the football community. being assessed against the annual Key Performance Indicators will be distributed to the bottom clubs. The cap has been set for the next two years and will be reviewed after this date. 160 AFL ANNUAL REPORT 2014 FINANCIAL REPORT 161 KEY FINANCIAL INDICATORS THE AFL 2005-14 Revenue 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Profit & Loss ($ mill) REVENUE $ million 500 Revenue increased by Revenue 203.695 215.220 284.794 302.139 303.450 335.862 343.017 428.623 446.505 458.157 $12 million with the major Operating Expenses 69.430 72.141 81.047 94.666 89.885 105.479 109.479 132.988 136.682 142.447 movements comprising: Interest Expense 3.861 2.982 1.272 0.028 0.022 - - ÆÆ 3% 400 Broadcasting and Media to $458 million Revenues up $9 million. Operating Surplus 130.404 140.097 202.475 207.445 213.543 230.383 233.538 295.635 309.823 315.710 ÆÆCommercial Operations Payments to Clubs 91.964 96.559 125.488 131.752 135.808 141.978 158.866 200.251 209.152 215.937 Revenues up $3 million. 300 Payments to AFLPA 7.767 8.701 12.131 12.518 13.897 14.491 21.992 21.986 21.692 22.680 2010 2011 2012 2013 2014 Expenses Game Development Grants 18.997 21.495 25.852 25.871 27.305 29.129 30.750 36.520 37.292 38.904 Ground Improvements 5.148 5.591 4.951 5.095 5.014 4.547 5.065 6.025 6.071 6.389 EXPENDITURE $ million AFL Foundation - 0.200 0.231 0.255 0.300 0.300 0.161 0.150 0.329 0.842 150 Expenditure increased by $6 million due primarily Facilities Development 4.665 8.655 13.735 9.524 6.720 7.731 5.890 7.306 to revenue-related increases. Strategic Partnership 1.198 0.877 1.502 1.848 1.915 1.645 1.237 1.228 120 4% New Markets 1.618 2.967 13.349 23.738 31.683 14.594 11.553 9.887 to $142 million Net Profit/(Loss) before 6.528 7.551 26.341 19.455 2.633 4.828 (23.614) 6.733 16.607 12.537 Transfers (to)/from Reserves 90 Op Profit 2010 2011 2012 2013 2014 Facilities Development Reserve (3.000) (3.600) (4.535) 0.314 6.333 2.123 (0.682) 1.731 0.190 0.990 Strategic Partnership Reserve (1.800) (1.800) 0.198 (0.123) 0.502 0.848 0.915 - - - OPERATING PROFIT $ million New Markets Reserve - - (0.382) (0.033) 0.415 - - - - - 350 The AFL’s Operating Surplus Future Fund Reserve - - (16.400) (17.245) (17.409) (18.431) (19.874) - - - increased by $6 million to Net Surplus/(Deficit) 1.728 2.151 5.222 2.368 (7.526) (10.632) (43.255) 8.464 16.797 13.527 300 $316 million.