Bombers announce big operating loss - Sports News - Fanatics - the world's biggest events

Bombers announce big operating loss

Melissa Woods 22/11/2010 01:36:27 PM Comments (0)

Essendon's costly axing of coach Matthew Knights has contributed to the AFL club recording an operating loss of over $1.5 million for 2010.

Knights was fired with two years remaining on his contract, with the Bombers agreeing to a severance payment believed to be around $1 million.

The Bombers now have one of the league's most expensive coaching panels, with former skipper James Hird and ex-Geelong dual premiership mentor Mark Thompson on board for 2011.

Essendon chief executive Ian Robson said a number of factors, including a dramatic drop in game day attendances, contributed to the overall operating loss of $1,528,682 in 2010.

The result was in stark contrast to fellow Victorian powerhouse Collingwood, who last week announced a an operating profit of $5.389 million.

Hawthorn also on Monday announced an operating profit for the year ended October 31, 2010 of $2,326,545.

Robson said Knights' axing contributed to the loss.

"During the course of this year a number of long-term business decisions have been taken which have adversely affected our financial performance," the Bombers CEO said in a statement.

"These underlying operating circumstances were further exacerbated with the financial impact of the decision to implement a new coaching model and accelerated depreciation charges related to IT systems development."

Poor on-field performance by the Bombers in the second half of the season led to a drastic drop in game-day attendances and all related match-day revenue streams.

It's believed the club feared that further poor performances under Knights would negatively impact on membership, marketing income and corporate support.

Despite recording a loss, Essendon's net asset position remained strong at $20.7 million.

On the back of their AFL flag and playing in two grand finals in a week, Collingwood announced record performance levels in every revenue stream, growing overall income by $12.7 million, to a total annual turnover of $75.5 million.

This included a massive surge in membership numbers this year which resulted in an increase of 12,000 and a record membership tally of over 58,000.

The financial news was also good at Hawthorn, where president Jeff Kennett said the club had achieved a net operating result exceeding $2 million for the fourth straight year.

"The result is satisfying but there is still significant room for improvement in our business model," said Kennett.

"This profit continues to build some security for the club to protect itself against the vagaries of life and the challenges of managing an AFL club in the current economic climate."

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