Essendon Football Club has recorded an operating loss of $9.8 million for the 2016 financial year.
The Court of Arbitration for Sport decision had a number of direct and indirect financial impacts on the Club’s bottom line, including;
- The net additional cost of player compensation claims and legal fees - $4.5 million
- The associated costs of the short-term contracted player program - $1.5 million
- A reduction in consumer and commercial revenues, and match receipts - $3.1 million
In addition, there was a non cash cost of $806,000 in writing off certain assets at Windy Hill, which are no longer in use, per accounting standards.
CEO, Xavier Campbell, said the abnormal costs to the business in the 2016 financial year were disappointing but not unexpected given the circumstances.
“Our club has experienced a unique set of challenges this season, and while we’ve been stringent in our financial operations, a number of one-off costs severely impacted the financial result,” Campbell said.
“Shortly after the CAS decisions, the Board and administration implemented serious measures to respond to these challenges, including a range of cost cutting measures and identifying greater efficiencies across the business.
“With the abnormal costs to our business now largely behind us, we are confident that our underlying business model, debt reduction plan and strategic priorities, will return Essendon to a position of strength in the coming years.
“Our debt position currently stands at $9,006,603. We expect debt levels to peak during 2017 and our strong cash flows from normal operations will then allow us to begin paying down the debt.
“Despite these issues, we have taken a number of important steps to ensure a positive future for our club both on and off the field and I am confident we can now transition into a new era with a strong sense of optimism and purpose.
“The executive team, with the support of the Board, has laid the foundation for our comeback as a football club in line with our vision to be the most respected, inclusive and successful sporting club in Australia.
“The unwavering support of our passionate members, new and existing commercial partners, and other key stakeholders continue to be a great strength of our club.”
Key points of 2016 Financial Result:
- Net assets - $27,453,599
- Total Revenue - $53,499,545
- Membership Tally – 57,494
- Total debt position - $9,006,603
- Cash at bank - $2,904,392
