Chairman Paul Gardner offers a general report on where MELBOURNEfc sits not just for 2007 but as part of a much discussed and debated Victorian contingent.

As it is the almost the end of our financial year (not to mention, unfortunately, almost the end of our football year!), I thought that I would offer a general report on where the Melbourne Football Club sits, not just in 2007 but as part of a much discussed and debated Victorian contingent.

While our original budget forecast a profit of around $1m, we now believe that our final year-end result will be somewhat more modest and likely to be marginally over $900k. Like most years, there are a number of positive and negative reasons that have influenced this result, but two of the most significant relate to crowd numbers and additional player payments.

With our poor attendance and on-field performance, we have found ourselves down $186k in match receipts and $138k down in corporate hospitality.  Despite a conservative approach to budgeting attendance, all MCG home crowds up to and including the Port Adelaide game have missed targets (even St Kilda).

However, since then we met our crowd budget for the Kangaroos game and, hopefully will do the same for our remaining home matches. Today I call on all true supporters to do as the name implies and support the Club for our remaining home games against the Blues, Crows and Dogs.

Due to our excessive and widely reported injuries, we have been forced to play a number of players on performance, rather than all-inclusive, contracts.  This essentially means that a player earning money for playing in the firsts has been required to cover for another player who is paid regardless of whether or where he plays. So far this year, this has cost the Club an extra $100k in match payments, not to mention robbing us of much-needed on-field experience.

In terms of overall debt, the Club had been hoping to enter our 2008 season as completely debt free. This now looks ambitious and we believe that a more realistic target will be to achieve this feat next year rather than this.

With our $1.6m paid for debt reduction in 2007, it means that we will have paid more than $5 million off our horrendous debt position, including $1.6m in 2007, which has freed up more than $200k annually in interest payments for further investment in our football department.

In the past three to four years, as well as our improved debt position, we have lifted membership by 40%,   total revenue by 50%, and improved our net asset position by $3 million.  However, the gross revenues of bigger clubs remain some $300,000 a week ahead of clubs such as Melbourne.  While we are working hard to get a zero debt balance, other, wealthier clubs are investing in a string of commercial operations, and even the stock market, in order to generate even further revenues.  We look forward to joining them in such pursuits one day soon.

Despite being in the finals more than any other Victorian side over the past nine years, our club, along with others, has been privately pressing the issue of the competitive opportunities of Melbourne-based clubs for some time.  We welcome it now being both formally and publicly on the AFL agenda. 

The competition is tighter, but not more even, with ladder positions, finals appearances, and GF wins increasingly mirroring football department spending and club revenues.

No Victorian team has played in a Grand Final since 2003, none has won since 2000 and, perhaps surprisingly, non-Victorian clubs are all in the upper end of football department spending.

There is an imbalance in non-capped football spending.  In 2006, the total football department spending of interstate clubs averaged between $2 million and $4 million more than all Victorian clubs except Collingwood.

The gap between the most and least wealthy clubs is simply increasing.

Last year, if we exclude special assistance, and non-football  extras such as gaming, approximately 50% of clubs  were in loss, and five clubs (33%) had negative assets.  Of seven clubs with zero or negative assets, six are Victorian. 

Over the past five years, the top four profitable clubs from 2002 to 2006 have averaged a total of $10.6 million in profits, and averaged 4.8 in ladder positions, while the four least profitable clubs from 2002 to 2006 have averaged $4.4 million in losses and averaged 10.9 in ladder positions.

Melbourne is not whinging, but merely highlighting the fact that it today not only competes for the corporate and leisure dollar against nine AFL clubs, but also three racing clubs, two basketball clubs, two netball teams, rugby league, soccer, the highest per capita golf course infrastructure, and  the most intensive major events calendar in the world.

We remain confident that our developments with our new home, TeamMelbourne, China and other key initiatives will hold the Club in good financial stead for our 150^th celebrations next year, and that this and our growing community profile will encourage our supporters to continue to support us during the remainder of what has been a disappointing and largely unfulfilled 2007.