Salary Cap Prove Hits a Hitch

[drebin]

After that long ramble, all I am saying is "survival of the fittest" might suit some clubs now that it didn't suit before the AFL clubs came in, and I wonder if their views would change if suddenly a $1 million profit in a year at Central or North was counteracted by a $5 million annual profit at another club? You bet it would.

Big call Squawk - which other club is likely to post a $5M profit in the future if it is not North or Centrals???

Norwood are not even close to opening - that's if they can open?, Sturt has just got off the ground with "Bizarro World" which is in an area where pokie margins are a lot slimmer than many other socio-economic areas. Don't count their "sub-sub-sub" lease of the Castle Taven which will not generate the money some Sturt people think it will except for the real owners, The Frickers. Port are in the same "sub lease" boat with their Hotel deal so they won't be raking in the dollars as everyone thinks. As for West and Glenelg - their gaming operations are okay but read their figures as far as turnover goes - no where near the Eagle, Dogs or Roosters

I wouldn't think any other clubs will get near North, Centrals and to a lesser extent the Eagles for a long time in the profit stakes- especially North as we have 2 wholly owned gaming operations now and more than likely another to come within a year or two who knows? (touch wood).

We (North) made a SANFL all time record profit in 2004 of $550K with only 40 pokies so once our debt reduction strategy on our borrowings (which is our main focus presently) starts to shrink as well as more extensive renovations on both premises re the soon to be enfored no smoking legislation - which will effect all gaming operations, we will be a long way ahead off field of any other club in the very near future.

The other biggest concern for all clubs looking to expand past one gaming operation (I beleive the Dogs are about to announce another gaming operation?) will be how they all fit and stay in the "not for profit community" category re ATO rules - certainly North looks like it will be paying standard business earnings tax if it's off field operations increase in the future but that is being "allowed" for re future business strategies.

In the old days - Port and Norwood couldn't give a shit about the struggling clubs but now the wheel has turned these clubs don't want to budge on increasing the salary cap???. Why should those now proactive and successful clubs be held back because other clubs have mis-managed financially or not shown any planning and "creativity". No one held back on the richer clubs through the late 70's and 80's on spending and recruiting to help the strugglers. And if you think that is just my view - I have heard those thoughts aired publically by 2 long term CEO's in the past couple of years on numerous occasions. They get some satisfaction or revenge now the wheel has turned on some "supposed" powerhouses of old!

The "rumour" or mail from the league is that the cap will soon increase but only to catch up on the missed CPI increases since it's inception - which will mean around $356K next year - which is not a huge increase even for the struggling clubs - that is if they are actually paying close to it presently. Certainly in the past some clubs (including North in the "dark" years) were nowhere near paying close to the top of the cap.

[Squawk]

After that long ramble, all I am saying is "survival of the fittest" might suit some clubs now that it didn't suit before the AFL clubs came in, and I wonder if their views would change if suddenly a $1 million profit in a year at Central or North was counteracted by a $5 million annual profit at another club? You bet it would.

Big call Squawk - which other club is likely to post a $5M profit in the future if it is not North or Centrals???

Norwood are not even close to opening - that's if they can open?, Sturt has just got off the ground with "Bizarro World" which is in an area where pokie margins are a lot slimmer than many other socio-economic areas. Don't count their "sub-sub-sub" lease of the Castle Taven which will not generate the money some Sturt people think it will except for the real owners, The Frickers. Port are in the same "sub lease" boat with their Hotel deal so they won't be raking in the dollars as everyone thinks. As for West and Glenelg - their gaming operations are okay but read their figures as far as turnover goes - no where near the Eagle, Dogs or Roosters

I wouldn't think any other clubs will get near North, Centrals and to a lesser extent the Eagles for a long time in the profit stakes- especially North as we have 2 wholly owned gaming operations now and more than likely another to come within a year or two who knows? (touch wood).

We (North) made a SANFL all time record profit in 2004 of $550K with only 40 pokies so once our debt reduction strategy on our borrowings (which is our main focus presently) starts to shrink as well as more extensive renovations on both premises re the soon to be enfored no smoking legislation - which will effect all gaming operations, we will be a long way ahead off field of any other club in the very near future.

The other biggest concern for all clubs looking to expand past one gaming operation (I beleive the Dogs are about to announce another gaming operation?) will be how they all fit and stay in the "not for profit community" category re ATO rules - certainly North looks like it will be paying standard business earnings tax if it's off field operations increase in the future but that is being "allowed" for re future business strategies.

In the old days - Port and Norwood couldn't give a shit about the struggling clubs but now the wheel has turned these clubs don't want to budge on increasing the salary cap???. Why should those now proactive and successful clubs be held back because other clubs have mis-managed financially or not shown any planning and "creativity". No one held back on the richer clubs through the late 70's and 80's on spending and recruiting to help the strugglers. And if you think that is just my view - I have heard those thoughts aired publically by 2 long term CEO's in the past couple of years on numerous occasions. They get some satisfaction or revenge now the wheel has turned on some "supposed" powerhouses of old!

The "rumour" or mail from the league is that the cap will soon increase but only to catch up on the missed CPI increases since it's inception - which will mean around $356K next year - which is not a huge increase even for the struggling clubs - that is if they are actually paying close to it presently. Certainly in the past some clubs (including North in the "dark" years) were nowhere near paying close to the top of the cap.

Drebin - typed a long response and lost it. Long and short of it was

1. North can thank Mr G in abig way but also credit to them for day-to-day management and success.
2. Agree Port never gave a shit - don't get me started on Bruce Weber and what him and that club did to SANFL footy.
3. The wheels will turn again someday and gloating now will not mean anything then. Humility is a wonderful thing.
4. Not sure what proposed new SANFL Constitution will mean for tax with ATO but will wait and see.
5. Do you really want a comp without Port, Norwood and Sturt?
6. That's enough.

[drebin]

Drebin - typed a long response and lost it. Long and short of it was

1. North can thank Mr G in abig way but also credit to them for day-to-day management and success.
2. Agree Port never gave a shit - don't get me started on Bruce Weber and what him and that club did to SANFL footy.
3. The wheels will turn again someday and gloating now will not mean anything then. Humility is a wonderful thing.
4. Not sure what proposed new SANFL Constitution will mean for tax with ATO but will wait and see.
5. Do you really want a comp without Port, Norwood and Sturt?
6. That's enough.

Sorry it was long-winded but it is a topic I am passionate about and fortunately have been "privy" (and I'm not gloating) to a lot of factual information re this topic, North's situation and also the current plight of the SANFL in general re this topic. So to follow your lead and in response to your 1-6:

1. Rob Gerard helped as a guarantor but we still had to borrow all the money we have invested and purchased - no direct handouts from Rob Gerard. Seems as if I repeat myself often on that point. Read our Annual Financial Report from last year 2005 - available through your own club as all clubs swap reports and it is on the public record. The borrowings are in B&W and not from the Bank of Gerard!
2. Fair call
3. I didn't mean to gloat just point out what are facts and current perceptions so sorry if you took it that way. Plus your last line on your original post "smacked" of sour grapes to a degree but was also a little unrealistic given the current and the short and intermediate situations of all clubs.
4. Don't know about that only raised the ATO point re the recent interstate ongoing investigations involving Southport FC and South Sydney RL Clubs.
5. No I don't but from a North perspective - the league was very silent when we were in trouble financially a few years ago - would have suited an 8 team comp to get rid of the historically the third most successful side in the comp. Different era & different agenda but North and it's "hierachy" certainly want a healthy comp but not one geared to ensure the survival of only "selected" clubs when it suits - consistency for all to sum that up. They won't forget for a while, the league stance and silence of a few years back!
6. That's enough.

[redandblack]

drebin, I don't think you could have borrowed the money if not for Mr Gerard's guarantee, so I don't think that can be downplayed. I'm not knocking it, good luck for having such a supporter, but it's highly significant, I would have thought.

[JK]

After that long ramble, all I am saying is "survival of the fittest" might suit some clubs now that it didn't suit before the AFL clubs came in, and I wonder if their views would change if suddenly a $1 million profit in a year at Central or North was counteracted by a $5 million annual profit at another club? You bet it would.

Big call Squawk - which other club is likely to post a $5M profit in the future if it is not North or Centrals???

Norwood are not even close to opening - that's if they can open?, Sturt has just got off the ground with "Bizarro World" which is in an area where pokie margins are a lot slimmer than many other socio-economic areas. Don't count their "sub-sub-sub" lease of the Castle Taven which will not generate the money some Sturt people think it will except for the real owners, The Frickers. Port are in the same "sub lease" boat with their Hotel deal so they won't be raking in the dollars as everyone thinks. As for West and Glenelg - their gaming operations are okay but read their figures as far as turnover goes - no where near the Eagle, Dogs or Roosters

I wouldn't think any other clubs will get near North, Centrals and to a lesser extent the Eagles for a long time in the profit stakes- especially North as we have 2 wholly owned gaming operations now and more than likely another to come within a year or two who knows? (touch wood).

We (North) made a SANFL all time record profit in 2004 of $550K with only 40 pokies so once our debt reduction strategy on our borrowings (which is our main focus presently) starts to shrink as well as more extensive renovations on both premises re the soon to be enfored no smoking legislation - which will effect all gaming operations, we will be a long way ahead off field of any other club in the very near future.

The other biggest concern for all clubs looking to expand past one gaming operation (I beleive the Dogs are about to announce another gaming operation?) will be how they all fit and stay in the "not for profit community" category re ATO rules - certainly North looks like it will be paying standard business earnings tax if it's off field operations increase in the future but that is being "allowed" for re future business strategies.

In the old days - Port and Norwood couldn't give a shit about the struggling clubs but now the wheel has turned these clubs don't want to budge on increasing the salary cap???. Why should those now proactive and successful clubs be held back because other clubs have mis-managed financially or not shown any planning and "creativity". No one held back on the richer clubs through the late 70's and 80's on spending and recruiting to help the strugglers. And if you think that is just my view - I have heard those thoughts aired publically by 2 long term CEO's in the past couple of years on numerous occasions. They get some satisfaction or revenge now the wheel has turned on some "supposed" powerhouses of old!

The "rumour" or mail from the league is that the cap will soon increase but only to catch up on the missed CPI increases since it's inception - which will mean around $356K next year - which is not a huge increase even for the struggling clubs - that is if they are actually paying close to it presently. Certainly in the past some clubs (including North in the "dark" years) were nowhere near paying close to the top of the cap.

Posted a lengthy reply to this one too last night, but unfortunately lost it (perhaps same problems Squawk faced) ... Basically it went along the lines of, I'd love to be able to disagree with this, but unfortunately I can't, I think it's pretty much on the money.

I'm sure the struggling clubs will get their act together to ensure survival, perhaps even in relative comfort, however the big boys (North, CD, Eag's) will no doubt have learnt from the mistakes of traditionally/previously big clubs who took their eyes of the ball, thus ensuring they remain one step ahead.

[doggies4eva]

Not sure if this thread is about the cap or pokies! As far as pokies are concerned some interesting comments posted above.

It seems the SANFL is headed the way of NRL - where the main revenue source is pokies. When they start losing their tax status the clubs here should start worrying. Before you jump in - I know that ther has been a recent case but the facts of the ATO NRL case are pretty different to the current situation in SANFL clubs.

If clubs ever start making so much money that they need to consider their tax status that will be the least of their problems.

As far as the long term impact -you need to look at the socio-economics of the pokies industry. I would think that Glenelg would have a good opportunity given the aged population in that area and maybe South - its got both Noarlunga and Vicor in its boudaries!

[Wedgie]

If clubs ever start making so much money that they need to consider their tax status that will be the least of their problems.

Excellent point, Ive talked to an "official" involved with a very successful club and they said the same, it'll be nice to milk it from the ATO for as long as possible but they thought it was just a matter of time before the big boys started paying full tax and didn't think it would be an issue in the slightest.

Let's face it, if Centrals make 1.3million or 1.1 million one year do you think they're going to be too worried?
I think not.