Magpies gamble on sharemarket after kicking pokies
Collingwood is a well established financial powerhouse thanks to the transformation guided by Eddie McGuire. But after offloading its pokies the club had to look elsewhere for a revenue stream. Here’s what Eddie did next.
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Power club Collingwood is now gambling on the sharemarket after kicking its pokie habit.
Collingwood president Eddie McGuire and his board have amassed a $16.8m investment Future Fund for the club as it boosts non-footy revenue, it can be revealed.
The fund has already gained hundreds of thousands of dollars on the investments after less than a year.
The Collingwood Football Club Future Fund is invested in everything from international shares, to property and to complex “hybrid” securities recommended for sophisticated investors.
Collingwood has some of Australia’s most impressive business heavy hitters on it’s board including billionaire investor and rich-lister Alex Waislitz, Australia Post chief Christine Holgate and star liquidator KordaMentha founder Mark Korda.
The fund is directed by a club selected “investment committee” but Collingwood is keeping mum on who the investment gurus are who are guiding the portfolio.
As at 31 October 2019, the club had seen its fund increase by about $860,000.
This included income received from the investments — such as dividends — of $506,000.
It also included the investment’s value — through things like share price rises — increasing by $352,000.
As of late last year the CFC Future Fund was valued at $16.8m.
McGuire has said the move away from pokies would improve club finances.
“This is a prudent commercial decision, one that will strengthen the Collingwood balance sheet significantly,” he said when the intention to sell the pokies was revealed.
The investment cash came from the club off-loading its pokies operations – selling the leasehold for “The Coach & Horses” in Ringwood and “The Club” in Caroline Springs – in December 6, 2018.
The Melbourne Racing Club agreed to buy them – and their 156 gaming machines.
According to the club as of October last year the fund had just over $1 million invested in global shares.
About $4 million was put into “hybrids” which the corporate regulator describes as a “complex financial products that combine the features of bonds and shares”.
“They can provide income, like a bond, but their value can fall dramatically, like shares,” ASIC’s MoneySmart website says.
The CFC Future Fund also has $3.3 million invested in “fixed interest securities”, such as bonds.
Another $3.2 million is invested in property and “alternative investments”.
The remaining $5.2 million is “on call” waiting on market timing to execute “in accordance with the asset allocation guidelines approved by the Investment Committee”.
The club has $1m of this is in a term deposit while the rest is in an “investment holding account”.
According to its annual report the club received $17.3 million from the sale of the pokie venues. “(Collingwood also) invested $16m from the proceeds into the CFC Future Fund,” its annual report reveals.
It also paid down a $1.6m loan using the cash.
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Footy clubs are increasingly diversifying their revenue streams for when the team is not performing on field and membership revenue dries up.
Richmond has its Aligned Fitness business, Geelong recently bought a gym and Carlton has its Carlton College of Sport.
The “CFC Future Fund” appears to be named after the Peter Costello headed $168b Future Fund which is charged with investing to build a financial backstop to pay the nation’s public service pension debt.
Originally published as Magpies gamble on sharemarket after kicking pokies
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