Why we had to close?
Our attempts to make it work?
How we will use the money?
Where will a new meeting place be provided?
Ian thought it would be useful to provide information on all these points to a wider audience.
Why we had to close?
Over the last five years the business performance of the Social Club has declined to the point where a trading loss of $250,000 was incurred in the last financial year. This figure grossly understates the real cost of running the Social Club since the business made no return by way of rent on the property and the trading loss does not include management or administration costs.
Such was the poor performance of the poker machines that, in agreement with TabCorp, these were withdrawn just prior to Christmas 2005 and we would have had to confront a similar scenario with the TAB outlet.
The tables below show the decline in turnover across the three key elements of the Social Club business – bar, food and gaming since 2001. It is important to point out that the operation of the Social Club is completely separate from the management of our partnership with BLM of Vegas at Waverley Gardens. The Social Club Management Fee disclosed in our annual accounts refers to the share of net turnover at Vegas that we pay to BLM under the terms of our agreement with them.
Our attempts to make it work
A number of members have asked what the Club’s efforts were in attempting to revitalise the business model of the Social Club. In 2004, the Club invested just over $400,000 into capital improvements, which stands as testament of our intention to respond to the declining performance of the Social Club.
The time that has passed sadly confirms that the long-term trends, borne out of a widespread change in the Club’s membership demographics and loss of accessibility to the players, since the Social Club was built in the 1960s, has caused a massive decline in the number of patrons using the venue.
How we will use the money?
The Board has established a subcommittee called New Business Opportunities, chaired by Director Geoff Harris. The purpose of this committee is to explore potential business investments that will produce long-term capital growth and immediate cash flow for the benefit of the football club.
To clarify comments made recently by President Jeff Kennett, some short-term borrowing has been put in place. This borrowing has allowed us access to $800,000 owed to the Club by the AFL over the next three years. Money from the sale of the Social Club will not be used to repay this loan or fund the move or fit-out of our new headquarters at Waverley.
Where will a new meeting place be provided?
With the assistance of Directors Greg Cook and Geoff Harris, we are delighted to announce we have struck a deal with the Grace Park Tennis Club, located just 200 meters from Linda Crescent. Along with providing the opportunity for all members and coterie groups access to Grace Park, other key components include:
Thursday nights with Mort
Monthly Hawkers Lunches
Melbourne-based day games post-match meeting point
Grace Park will be a meeting place for members to get together and enjoy our inter-state matches via live broadcast.
The Club is also in negotiations with one other venue in Hawthorn together with the Mulgrave Country Club for a similar range of benefits for our members. Wherever possible, Club Legend and Ambassador Graham Arthur will host functions at all meeting points throughout the season.
