Clubs to hit the ground running in 2010

THE state’s professional sporting clubs have reported mixed results on the back of the global financial crisis, in what has been another year of changes and challenges for Western Australia’s sports franchises.

The West Coast Eagles were again top earners among the state’s major sporting codes, reporting a $46 million operating revenue in the past 12 months, posting a $3.7 million profit.

The Fremantle Football Club used the economic downturn to trim some fat on the corporate side of its operations, posting a $591,000 profit despite its operating revenue being down $2.5 million from 2008.

In the past year, RugbyWA has spent $2.6 million moving the Western Force to ME Bank Stadium, meaning the club has had to transfer sponsorship and corporate hospitality members from Subiaco Oval.

Although it has not yet released a financial statement for 2009, Western Force’s operating revenue was down almost $3 million from 2008, attributed to the costs associated with the move.

Difficulties in selling corporate boxes and having to look for major sponsorship deals did not thwart the Western Australian Cricket Association’s attempts to weather the economic downturn, with the WACA tripling its profit to $977,000, while increasing operating revenue by more than $6 million.

For Perth Glory owner Tony Sage, however, it was another tough year, with the club reporting a $2.5 million loss.

“It wasn’t that we weren’t getting the support from corporates, our corporate support was up 15 per cent despite the economic downturn,” Mr Sage told WA Business News.

“We just didn’t get the crowds ... if we’re not getting bums on seats, then the club will continue to be losing money.”

Last year, Perth Glory launched a membership drive in a bid to recruit 4,000 new members, which Mr Sage said would bring the organisation close to break-even point.

Incentives for new members include offering priority access to some of the Glory’s international fixtures, and freezing match prices to the previous season’s rates.

Although membership at Fremantle Football Club is down by 4,000 compared to this time last year, the club says it is tracking well financially, having undergone a restructuring on and off the field during the past two years.

After an intensive internal review, some corporate positions were consolidated to cater for the needs of the Dockers’ 23 new players, with a major focus on sport science and football development.

“Last year was a challenging economy and the AFL was not immune from that,” Fremantle chief executive Steve Rosich said.

“With respect to the Fremantle Football Club, we saw fit to manage our costs proactively and because of that we were able to secure our budgeted profit for the year.”

Looking ahead, Mr Rosich said there was scope to forge more relationships with local businesses, such as Woodside Energy, TAB Sportsbet, and Forty Winks, which recently signed on with the club.

“Firstly, on the business front, we’re looking to get not only as many sponsors involved with us as possible, but more corporate partners and members,” he said.

“On the corporate partner front, we’re tracking pretty well; we’ve got about 550 corporate partners and at this stage we’re tracking close to last year’s numbers in terms of revenue and number of companies involved at the corporate partner level.”

West Coast, which recently renewed BHP Billiton as the principal community partner of its Kicking Goals program, increased membership to 54,000 last year.

West Coast chief operating officer Richard Godfrey said while many clubs were fearful of the impacts of the GFC, the club’s many long-term corporate partnerships enabled it to stay in the black.

“In the last year those fears we had were allayed somewhat and financially we’re having a pretty good year in terms of our budget ... so we’re obviously extremely happy that that occurred,” he said.

Perth Wildcats chief executive Nick Marvin has heralded a new golden era in the rejuvenated National Basketball League, with the club last year overcoming the loss of major sponsor Saville Australia and the prospect of no league to play in.

The NBL was on the brink of collapse as financial woes forced the Brisbane Bullets to withdraw from the 2008-09 season, followed by the Sydney Kings and South Melbourne at season’s end.

But the Wildcats, owned by American-born millionaire businessman, Jack Bendat, last year managed operating revenue of $3.5 million, and now draws capacity crowds of 4,000 at Challenge Stadium.

To combat the effects of the GFC and stadium issues limiting membership numbers, Mr Marvin implemented a corporate restructuring campaign, whereby the Wildcats overhauled its entire business model in a bid to tighten spending and improve efficiency.

“We restructured our DNA at the club, on and off the court,” Mr Marvin told WA Business News.

He said the club began by consolidating 11 positions in the office to six, before rewriting its mission statement.

The new three-year plan redefines what the club views as ‘success’, and outlines where it wants to be, on and off the court, by 2012.

“We said ‘look guys we’re in crisis here’, and it wasn’t just us, the whole economy was in crisis and when you’re in crisis you have to act differently,” Mr Marvin said.

“If you don’t change what you’re doing in the first, second and third quarters, then you’re going to lose the fourth quarter.”

The Wildcats now have 3,000 members, including corporate partners, which leaves about 800 seats for sale for every home game. These are all often sold.

To boost its revenue, the club now offers travel packages for supporters to travel on the road with the 10-man squad to interstate games, for a fee.

The club acts like a travel agent, organising ticketing, accommodation and airfares for supporters, for about $2,500 for a six-day road trip.

RugbyWA chief executive Vern Reid is equally bullish on the year ahead, having signed major sponsor Emirates for three more years. He is confident the Super 14 team can fill the 20,500 capacity at ME Bank Stadium regularly this season.

“The costs of operating at Subiaco Oval were significantly higher than they are at ME Bank Stadium for us,” he said. “At this stage the transition from Subiaco Oval, the experience at ME Bank Stadium will be better, but it’s still very much a temporary stadium.

“We’re very much in the hands of the government to make the announcement as they said they will do at some stage, of a redevelopment of ME Bank Stadium into a proper rectangular, seated stadium for 25,000 to 27,000 people.

“But the key for us is corporate involvement and we are in the process transferring our corporate hospitality members from Subiaco Oval, a venue that they know well through attending a whole lot of sporting competitions there, to an unknown one, so that means we are still looking to complete that process.”

WACA chief executive Graeme Wood said despite the association often facing more challenges than other sports codes because it ran a “very different” operating model, he was confident of success in 2010.

“We’re responsible for a venue, we’re responsible for game development, we’re responsible for high performance, so we are very different to the football model, which has the WA Football Commission responsible for game development and the clubs, the Eagles and Dockers responsible for high performance,” he said.

But Mr Wood said the Ashes series next year would be a drawcard for the WACA in terms of sponsorship deals and increased crowd numbers.