The Melbourne Football Club has released its financial result for the year ending 31 October 2020.
A key summary of the result and the Club’s position for the year is as follows:
- The Club recorded an operating loss of $2.9 million for the year, driven by a $17.9m decline in revenues as a result of COVID-19;
- Despite the operating loss, the Club has eliminated its debt and has $1.652m of cash reserves at 31 October;
- The elimination of debt and holding of cash reserves allowed the Club to remain an AFL ‘unassisted Club’;
- The Club’s balance sheet remains strong, with net assets of $21.2 million.
The Club’s debt-free status at year-end represents the culmination of a debt reduction plan implemented by the Board at the end of 2013. This has resulted in debt reducing from its peak of $8.2m in 2013, to the debt-free and cash surplus position the Club is now in.
The Club’s balance sheet remains one of the strongest in the AFL, underpinned by its land holdings of $22.500m. It is now debt-free and in a $1.652m cash surplus, following the decision to liquidate the majority of the Club’s investment portfolio during the year.
The efforts to mitigate the size of the loss, combined with the Club’s strong balance sheet, have enabled the Club to be categorised as an AFL ‘unassisted Club’.
Whilst it is disappointing to record an operating loss to members, the size of this loss is significantly lower than what was expected at the beginning of the COVID-affected season.
“The Demon faithful showed unparalleled loyalty during 2020,” Melbourne Football Club CEO Gary Pert said.
“We had one of the lowest membership cancellation rates in the AFL, despite members not being able to attend one game in Victoria. We also launched the Club’s Proud to Belong, Proud to Give fundraising program, which generated $1 million and was a critical factor in the Club limiting the financial damage of COVID-19.
“We were also very fortunate to have loyal commercial partners, who not only stuck with the Club throughout the 2020 season, but in the majority of cases, have extended their sponsorship agreements.
“Despite these positive measures, we were unable to offset the overall revenue reduction of $17.9 million. The decrease in revenue included a reduction of $4.5millon in Sponsorship & Corporate income, a $4.4 million reduction in Match Returns and AFL income reducing by $3.7millon.
“There is no doubt that we are disappointed to be announcing a loss. However, as a Club, we have made some significant steps in eliminating our debt, and our strong balance sheet enabled us to remain an AFL ‘unassisted Club’. This was important, as it allows us to continue to make independent decisions regarding football and administration strategies.
“I want to thank our members again. You are the lifeblood of our Club and we all look forward to welcoming you back to the MCG next year.”
The Melbourne Football Club Annual General Meeting will be held in February 2021.