The club announced record performance levels in every revenue stream, growing overall income by $12.7 million, to a total annual turnover of $75.5 million.
Financial support of the football department continued to grow this year, with an increased spend of $2 million in 2010 taking the club’s football department investment this year to over $19 million.
A massive surge in membership numbers this year resulted in an increase of 12,000 members and a record membership tally of over 58,000. This also generated an increase in membership revenue of $2.2 million, with a total of $12.3 million delivered through membership in 2010.
Collingwood CEO Gary Pert said: “There was no doubt that the Magpie Army was excited about the club’s prospects for the 2010 season, and they signed up in massive numbers. Without the members’ financial support, the club could not invest in its football program to the levels that we do each year.”
Winning the 2010 premiership generated a net increase to the club’s profit of around $2 million.
“Playing in two grand finals in a week provided a huge spike to our net profit at the end of the season, through a combination of prize money, merchandise, memorabilia and corporate events. Merchandise and memorabilia have continued to sell at a hectic rate since the premiership. Profits from these sales will largely be recorded in next year’s financials, as much of the activity has occurred since the conclusion of our financial year on October 31,” Pert added.
A commitment by the club to reduce debt levels during 2010 resulted in over $8 million being paid off existing loans associated with the purchase of our two hotel leaseholds. This also has the added ongoing benefit of saving the club over $600,000 in interest payments each year.
“Last year the club made a commitment to our supporters that we would substantially reduce debt attached to our gaming venue portfolio. By reducing our debt by $8 million this year, we are setting the club up to potentially be debt free by the end of next season,” Pert said.
This year the Collingwood Football Club board decided to write down the value of the Diamond Creek Tavern, which it now plans to retain as an ongoing profitable business within the club’s venue portfolio.
As our members were advised earlier this year, the club had sold the Diamond Creek Tavern business, but the purchaser was placed into administration by his banks, and was unable to complete the sale. As part of the club’s strategy to retain the business, the board had the Diamond Creek Tavern business independently valued as part of a necessary accounting process. This process has zero impact on the club’s cash flow and operations. It is simply a calculation of the value of the business as a multiple of its current earnings. The business was valued at $3.65 million, meaning the club will now record this figure in its financial reports, replacing the previous valuation of $8 million. To complete this process, a write-down figure of $4.389 million, which is largely the venue valuation write down, will be taken off the club’s operating profit, as per standard accounting practices.
The club will ultimately record a net profit of just over $1 million, which is simply the operating profit minus the valuation write down.
