How Collingwood makes the money to run football empire
Collingwood has always had hordes of fans but it was under Eddie McGuire that the club transformed into a financial powerhouse. So how do the Pies make their money and can they really be called the AFL’s biggest club?
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Collingwood president Eddie McGuire has been in the top job 21 years – in a world in which most corporate CEOs and chairs last about four years it’s a remarkable stint.
His term has delivered a premiership, a move from Victoria Park to a base in the heart of the city’s sporting precinct and engaged an enormous supporter base.
But he knows the club needs to stay on a strong financial footing to make sure the team hums along.
Last year the Pies made a net profit of $3.87m for its year ending in October.
But the real story for perhaps the league’s best run club is taking the bold move to offload its pokies.
The cash, instead of going into profits, went into its paying down debts and into the club’s asset bases and funds for the future — something which gives the club an even more formidable war chest.
It also helped make sure the club was debt free.
WHERE DOES COLLINGWOOD GET ITS CASH?
McGuire attributes much of the Pies success in the last year to its fans and their willingness to stump up for memberships and go to games.
The revenue of the club last year hit $72 million up from $66 million the year before.
The Pies hit a membership record of 85,226 which was an improvement of 9,490 members.
They had an average home game attendance of 58,975, an improvement of 9,077.
This saw membership and match-day revenue leap up $7.1 million to a sweet $30.9 million from $23.8 million the year before.
It also got $11.5 million in distributions from the AFL, steady on the year before.
The club’s function centres raked in $7.7 million which was a solid 8.5 per cent leap on the year before.
But the boon for the year was the 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.
The club also used the sale to pay down a $1.6m loan but it also set aside the profits for its war chest.
It is now sitting on an arsenal of net assets of $44.72m compared to $32.69m in 2018.
“(This is) an increase of $12.03 (million) due to the profit on sale of the Club’s gaming interests and the strong 2019 profit result,” the club’s annual report says.
It also has strong sponsor deals with Emirates, CGU, Holden and La Trobe Financial.
Notable is that last year Emirates extended their partnership with the club in 2019 for a further five years.
This will take the club to a 25-year partnership with the airline, the longest deal the airline has done with a sporting club worldwide.
The club also partnered with Coles who came on board to work with it by investing in Collingwood’s community program
WHAT DOES IT COST TO RUN COLLINGWOOD?
A machine like Collingwood requires spending to keep the wheels turning. And boy do the Pies know how to spend it.
Clearly its biggest expense is the cost of keeping its various teams on playing fields.
Last year it cost a whopping $30.8 million to fund “teams expenses” (the club now has seven sporting teams, four of these being women’s teams, with around 120 athletes).
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This is basically unmoved from $30.6 million the year before.
Cash spent on “commercial activities, membership and match day expenses” comes next at $22.3 million. This was up from $21.4 million the year before.
WHAT DANGERS COULD THE PIES FACE?
On field success is crucial to the Pies who need the cash of an enthused fan base to fund operations.
When the team finished in 13th place in 2017 the club made a $2.73 million loss. The year before it finished in 12th and recorded a $2.6 million loss.
(To be fair though, McGuire pointed out in 2017 that the club still had 75,985 members — still a strong result for an AFL club).
The Pies had $2.8 million of depreciation on assets in the last year, the year before that the depreciation was $2.9 million.
The club may be rich in facilities — with the Glasshouse and Holden Centre — but it has to keep updating them and that is costly.