THE Port Adelaide Football Club today announced a consolidated operating loss of $1.74 million for the 2010 financial year.

Download the 2010 Annual Report

Port Adelaide President Brett Duncanson said that 2010 was a tough year on and off the field for the club, but importantly the situation was already looking better for 2011, with a number of initiatives already in train.

These include the reunification with the SANFL Magpies and associated financial benefits, including the multi-million dollar contribution of Gordon Pickard, and the success of the club’s Business Ambassadors Group.

“We want to return to consistent profitability and that’s what we are working towards in conjunction with our key stakeholders, the SANFL and AFL,” Duncanson said. “As with many clubs, ours is a revenue challenge, while of course keeping a close eye on costs.

“Importantly, we now have short, medium and long-term revenue strategies which are starting to bear fruit. We will continue to work hard with those key stakeholders to deliver substantial improvement in 2011 and beyond.

“In the short term we have still faced financial challenges and required reinvestment from our parent bodies, which we thank them for.”

Duncanson says a number of factors contributed to the 2010 deficit, including the timing of the receipt of key parent body reinvestment grants.

“This year we would have reported a modest surplus of $310,000 had we received all the reinvestment grants committed to us during 2010,” Duncanson said. “However due to a timing issue, $2.05 million of a $4 million reinvestment committed by the SANFL in mid 2010 will now not be recorded as income by us until 2011.”

SANFL Executive Commissioner Leigh Whicker confirmed that of the $4m funding assistance package that was approved by the SA Football Commission and announced in July 2010, $1.95m was paid to the PAFC in the 2010 financial year and the balance of $2.05m will be paid to the club in the 2011 financial year as required.

Port Adelaide Chief Executive Mark Haysman said although the result was in line with expectations, it was not what the club wanted.

“In 2010 we generated $5 million more in non-grant revenue than we did four years ago. That is great, but we need to grow much more,” Haysman said.

“We have started 2011 with a great deal of momentum on the revenue front, with the Power-Magpies reunification, Gordon Pickard’s new multi-million dollar contribution, the Prince of Wales Hotel coming onto our books, and the success of our new Business Ambassadors Group, which has reaped $1.8 million in its first three months of operation, of which we’ll bank $950,000 in 2011. We also look forward to another major fundraising function in April next year.

“This follows growth of 9% in corporate partner revenues in 2010, on the back of a growth of 16% in corporate partner numbers. We would like to thank our sponsors for their support in 2010, in particular our Joint Major Partners My ATM and Aussie ATM.

“We have set an ambitious membership target of 35,000 members following the reunification, up from 31,000, and are working hard to make sure we reach that. The early signs are promising but the hard work is yet to come. We will also work hard together with the SANFL and AFL to increase our attendances.”

Duncanson said the club’s revenue strategy involves a series of strategic business initiatives to diversify and grow the club’s revenue base away from football-dependent income sources. By necessity many of these initiatives have a medium-term timeframe for implementation (3-5 years).

Specific elements of the club’s revenue strategy developed over the last two years include:
- Unification of the Port Adelaide Football Club and the Port Adelaide Magpies Football Club (achieved November 2010)
- Subsequent refinancing and upgrading of the Prince of Wales Hotel (2011 onwards)
- Increased corporate support through the Business Ambassadors Group and other corporate supporters (2011 financial year onwards)
- Expansion into the Northern Territory market (2010 onwards)
- Relocation of gaming machines from the Port Club at Alberton to a more profitable location (expected 2013)
- Changed uses of the Port Club space to become a revenue-generating community hub (also incorporating a Port Adelaide Football Club Museum)(2013 onwards)
- The potential move to Adelaide Oval (2014 onwards)

SANFL Executive Commissioner Leigh Whicker recently told the media at the launch of the Power-Magpies reunification that Port Adelaide is expected to generate $12 million net for the League over next three years.

"The present Port Adelaide AFL licence will provide approximately $12 million in profits to the SANFL over the next three years alone,” Mr Whicker said. “That is an amazing asset for South Australian football.

"The money generated by the licence is shared between the SANFL clubs to ensure our State League competition can remain the strongest in the nation. It also used to fund junior footy programs and provide young talent with the best possible opportunities."

“We, along with the Adelaide Football Club, contribute directly to the SANFL being a Top 50 company in South Australia, which is something we can be very proud of, although it makes direct balance sheet comparisons with other clubs very difficult,” Duncanson said.

Other key points of the 2010 PAFC Financial Results were:
- Turnover of $31.9 million
- Football Department expenditure of $15.3 million
- Net assets of $8.3 million (not including the Prince of Wales Hotel, which will not be reflected on the club’s books until 2011)
- Debt of $3.6 million