Hawthorn president Jeff Kennett believes that North Melbourne’s financial state is “unsustainable.” While newly re-elected Kangaroos chairman James Brayshaw says the club is not broke, Kennett insisted he faced an enormous challenge to ensure North became profitable.
Brayshaw bristled at a report in The Age on Thursday that the struggling club was in deep financial trouble and had less than $3000 in its bank account when its annual report was filed on October 31.
He said the figure was plucked from a single month and a week later there was $1.5 million in the same account.
But Kennett said he was “absolutely” concerned by the Kangaroos’ financial situation.
“It’s unsustainable,” Kennett told Fairfax Radio and hinted that the club directors must overhaul the organisation before it became insolvent.
“I’ve read the reports, I know the difficulty they’ve been having for a number of years but with the debt that they have and the costs of running a club.
“… there comes a time in any commercial organisation when you approach that point where there’s got to be a massive change or the directors are putting themselves at risk because the entity of which they are part, whether it’s a radio station, a football club, is insolvent.
“James Brayshaw has got a huge challenge now – no-one should underestimate how big it is and it’s probably in one sense only got worse over the last three or four years.”
Kennett said North would survive but it could come at a risk of putting a severe dent in the league’s television rights income.
“They are working very closely with the AFL,” he said.
“The club will survive, I make no bones about that, because the AFL will be signing a contract with the media shortly for the delivery of 17 and then 18 clubs.
“We are going to be spending as an organisation about $100 million establishing the Gold Coast, and another $100 million getting GWS off the ground.
“If the AFL gets $1 billion dollars for the media (television) rights, $200 million of that is already committed over the next five to 10 years.
“So the money situation is not that much better (than the previous TV deal) but you do have to make sure that those existing clubs are also properly recognised.
“I’m quite sure the AFL will come to a deal with North Melbourne but it’s very hard for them.”
Brayshaw said the report claiming the club had just $2749 when it filed last year’s annual report was unbalanced.
“There was no mention of the fact that a week later $1.5 million was in the same account,” Brayshaw said.
“Football clubs draw down ferociously every month. It’s like a credit card cycle, that’s how you operate.
“At any given time you might have $500,000 in there, you might have $1.5 million in there, you might have $2000 in there.
“That’s just how it works and the next month is the same … so to just pick out one figure to paint a picture like that was pretty ordinary in my view.”
North Melbourne CEO Eugene Arocca said the club had ramped up its football department expenditure by $3 million after it decided against relocating to the Gold Coast in 2007.
“We could have pocketed that money and maybe had a million dollars in the bank account on the 31st of October 2010, but we see, as does Richmond, that the long term recovery of any football club off-field is generally tied to on-field success,” Arocca told Radio SEN.
He said the club might begin a debt demolition program, similar to the successful appeal used by Melbourne.
North Melbourne posted an annual profit of $233,752 last year which included a special distribution payment of $1.4 million.
TW
Guest
Apparently the AFL has taken over the Hobart - Nth Melbourne project and has told AFL TAS and the TAS Govt to only deal with them in future not clubs. They (AFL) were not happy with the original result - Expect to see 2 NM games in Hobart each year is the word on the street. Is this the start of NM move out of Melb????.
Republican
Guest
Plugger. Me too
Republican
Guest
I still reckon Canberra would be a good relo option as well.
plugger
Guest
I miss the old days when teams were poor but local. Dr Who, where are you?
Australian Football
Guest
What does everyone think of these future Footy Clubs all associated in the AFL in less than 20 years? Tasmanian Devils (Either Bulldogs or North relocate there)(will play at Launceston and Hobart) Northern Territory Thunder (will play majority of games at Darwin, but some games at Alice Springs) Canberra Bears (will play neally every home game at Manuka Oval, but should play at Lavington, Albury as well and maybe Wagga Wagga) Rockingham Rams (a town located south of Perth and has a population of 60,000+)(will play home games at Subiaco and at Bunbury and Albany) North Queensland Crocodiles (play home games at Cairns, Cazaly's Stadium and a couple of games at Townsville) (the other club from Melbourne that relocates, moves to Country Victoria, Plays home games at Ballarat, Bendigo, Shepparton, Wangaratta and Mildura) What about the future Foxtel Cup? 2012 - Add another team from each State/Territory = 24 teams 2013 - An American football conference style stucture: 32 teams: North Conference:- 2 N.T teams 6 S.A teams South Conference:- 2 Tasmanian teams 6 Victorian teams East Conference:- 3 Queensland teams 3 N.S.W teams 2 A.C.T teams West Conference:- 6 W.A teams 1 PNG team 1 NZ team ...and future NEAFL Comp? less then 10 years away, this should be what the future NEAFL Competition should look like:- Northern Conference:- 2 teams from N.T 4 teams from Gold Coast 4 teams from Brisbane 1 team from Toowooba 1 team from Sunshine Coast 1 team from Bundaberg/Rockhampton/Mackay/Hervey Bay 2 teams from Cairns 1 team from Townsville 1 team from Mount Isa 1 team from Papua New Guinea + Suns and Lions Reserves 20 teams in Northern Conference Eastern Conference:- 5 teams from A.C.T 1 team from Newcastle/Central Coast 1 team from North Coast 1 team from South Western N.S.W 1 team from Wagga Wagga 3 teams from Ovens and Murray 3 teams from Sydney 1 team from South Coast/Sapphire Coast 1 team from New Zealand 1 team from a regional area in N.S.W (Orange, Bathurst, Tamworth, etc.) + Swans and Giants Reserves Thoughts?
Australian Football
Guest
North must relocate, in the next 5 years. To Tasmania, would be the most logical relocation or Ballrat or somewhere.
Republican
Guest
Jeff Kennett is a banker at heart. He sold off most of Melbournes public utilities when at the helm only to have some re instated. He loves the Hawks but would exploit any other club to further his agenda - I wonder what it might be this time. I am only glad Tassie and NOT the ACT has affiliation with this club - he is likely to drop Tassie like the proverbial hot spud, in favour of NZ of all places, if there is a quid to be made - believe me. I reckon his sooner than later plan is to have Tassie share the Hawks brand with NZ - what a farce. Go the mighty Shinboners. They have managed to remain a stand alone Melbourne entity thus far, long may they prosper as one!
Timmuh
Roar Guru
Quite the opposite. Any game in Tasmania would see North die, thanks to media pressure destroying all sponsor confidence. Hawthorn is a very different thing. They already had massive local support in Launceston, which is why Hawthorn (not Joim Bacon's government as te Mercury would have people believe, chose Launceston begin with - they had five times as many member in Launceston than in Hobart years before playing a game in Tasmania) and already draw money out of Tasmania than is actually available. Hobart might be decent idea for some clubs, but it would very probably be the death of North Melbourne. North need the Ballarat option to come to fruition, or a stadium deal at least on par with other tenants at Docklands. And a fairer draw for free to air TV and timeslots would be of far moew benefit to the lower income clubs than a bigger TV deal would be. Giving the big clubs all the TV is costing the smaller clubs far more revenue than is returned through the AFL's extra payments.
Fez's are cool
Guest
Its a problem both codes face - Melbourne has 1-2 too many AFL clubs, and Sydney 1-2 too many NRL clubs. TV rights/ratings, advertising and sponsorship dollars are always far greater if you can spread the clubs around, and 10 teams in Victoria for the AFL and 10 in NSW for the NRL is simply too many. The down side is the overheads these new clubs generate - eg the Storm generate something like $20m a year for the NRL, yet cost $8m in handouts. North Melbourne will have to go - maybe splitting games between Melbourne and a rural satellite city like Bendigo or Ballarat might work, a bit like St George Illawarra in the NRL. Either that, or some sort of permanent relocation to Tasmania, Albury Wadonga or Canberra would be on the cards. The NRL has a similar problem with Cronulla, who are broke, and only a massive proposed property development can keep them alive, but not growing. They are still up the creek being surounded by St George Illawarra. Wellington, Christchurch or Adelaide are their only real options, but they have decided to sink or swim in Cronulla. Mind you, the NRL wouldn't shead a tear if they did fall over; it would allow them to bring in the Central Coast, Brisbane II and Perth all by 2013. Hawthorn have found a nice little cash cow in Tasmania, and are only a partial Melbourne side. They may end up permanently moving, but I doubt it. I think what will happen is another club in Melbourne will become a part time Melbourne side similar to Hawthorn, selling games to some other regional centre, this would effectively mean Melbourne + Geelong has 7 "full time" clubs and 2 "part time". Manly are the other RL team that might have to relocate, even though they are solvent now. Their stadium is appalling, and because the area is isolated and has very little decent transport routes in, it isn't possible for them to play out of the SFS or ANZ stadium - they will be cut off from their fans. Unless they get $50m from a government for a stadium rebuild, their private owners might look at the Sunshine Coast in Queensland, where they have previously taken trial games and invested in the QRL side. This will be even more likely if the Central Coast-North Sydney Bears are admitted to the comp. The AFL is likely to get only around $900m from the next TV deal, as competition is less this time around, where RL will be looking at something around the $800m mark. Both codes will be getting stronger, but their problems will be growing also.
OzFootballSherrin
Roar Pro
agreed - North have become the 'non-descripts'. Back in the 90s it was very different, and we had some big Friday nights and in '94 drew about 74,000 vs Collingwood both home and away, and regularly did 50,000 vs teams like Ess, Carl and Rich. Back then, we were a force, we had the likes of 'every hates Wayne' Carey, Corey, Arch, Martyn, Schwatter etc. A bit of grunt, and a bit of some that rhymes with it. Right now - - precious little of that, we don't currently have a real 'go to' player other than Harvey, the shortest guy on the ground. That's not inspiring. Perhaps that's why, just quietly, a lot of North people (and probably sympathetic neutrals) will be very curious about how Majak Daw goes this weekend (year).
ac
Guest
It is sad a great club like North cant get any help from the AFL but clubs like the Gold coast and Western sydney get everything.
SportsFanGC
Roar Guru
The problem with North Melbourne is that not enough people care about the club and also not enough people hate the club either. This is the very problem they face, trying to be recognised in a crowded sports landscape in Melbourne. Very rarely do you go to the footy thinking that your team (insert AFL club name) has a great rivalry against North currently, even if they may have had one previously The do not polarise opinion from opposition fans and if people do occasionally head down to watch the footy when their own team is not playing they obviously do not head to North games either. Just check their average crowd figures...
Perce of the Valley
Guest
Would that mean that North Melbourne suddenly becomes (very) South Melbourne? Maybe Darwin would be a better option: at least it'd let them keep their name.
JamesP
Guest
I dont think North will be able to survive playing 11 or 12 home games in melbourne. I think Tasmania is there best hope to at least sell some games there, if not a full relocation. Not sure if there is any deal with Richmond to play at Bellreive Oval in Hobart, but that should be their main priority. Certainly worked for the Hawks....
Redb
Roar Guru
Seriously Kennett, stick to your own football club!
Johnny
Guest
North Melborne will be fine the A.F.L have got plenty of money as they keep saying, they will help them out.