Bombers CEO lays out long-term pokies and financial strategy

Essendon remain committed to pursuing gaming revenues in the short and medium term, but have identified several alternative revenue streams which will eventually allow the club to reduce its reliance on gaming, when financially viable.

Speaking to The Age, Essendon CEO Xavier Campbell emphasised the financial importance of gaming assets to the Bombers’ finances, as well as the community role played by the club’s gaming venues, where 140 people are employed.

Xavier Campbell.Credit:Getty Images

“We need to realise that, yes, pokies are an element of these venues, but there’s much more to these venues than just gaming… there’s a range of community groups that use these venues… we have to be conscious of their broader impact,” said Campbell.

Campbell pointed to the strong governance model employed by the club in the operation of gaming venues, noting other operators may not ensure the same levels of oversight and community-mindedness.

“We do not, and have no desire to, incentivise membership underpinned by gaming … we are not involved in loyalty programs,” he said.

Campbell re-affirmed the club’s commitment to pursuing its 29-year lease to operate the Melton Country Club at the next council meeting in February, after a motion to temporarily block the lease was upheld by Melton City Council officials.

It's understood the long-term nature of the potential deal is designed to align with Essendon’s long-term strategy to exit gaming, maximising the value of the asset for the club with a view to a potential sale.

“What the club does with that asset going forward – clearly we have a medium-term objective to continue to service community groups. What our longer-term gaming strategy looks like is something we continue to discuss and challenge,” said the Essendon CEO.

Diversifying Essendon’s revenue streams is paramount to the sustained financial success of the club, according to Campbell: “Make no mistake, our club is committed to investing in people and capability to challenge traditional thinking on what the footy club looks like moving forward.”

With some traditional revenue streams monetised to their peak capacity, Campbell is looking to creative ventures like e-sports and property holdings to provide long-term sustainability.

A parcel of land parallel to the club’s Tullamarine base will potentially spawn joint ventures with Melbourne Airport, while freehold assets at the club’s spiritual home of Windy Hill will be commercially maximised.

The Bombers will also look to enhance the Windy Hill venue’s community interface, something Campbell says he is “not particularly proud of.” The club will turn its sights to the Windy Hill redevelopment following the completion of its Tullamarine training base upgrade in 2021.

The Tullamarine upgrade is expected to cost $20 million, half of which the club estimates it has already raised. Federal opposition leader Bill Shorten earmarked $4 million towards the facility if Labor is elected at next year's federal election, and Campbell noted ongoing "positive discussions" with the federal Coalition government on a funding arrangement.

The club’s pokies strategy was also addressed by club president Lindsay Tanner at the Bombers’ AGM on Monday.

Tanner reminded onlookers that Essendon were a football club with financial imperatives, rather than the government of Victoria tasked with administering gambling regulations, acknowledging “significant divided community opinion” on the matter.

The president noted a number of board discussions about the club’s pokies holdings, saying “it would be financially irresponsible to simply fold our cards and say, ‘OK that’s it, whatever the cost, we’re just walking out’.”

He also raised the need to be commercially sensitive when flagging future commercial intentions.

The Bombers confirmed a bumper $5.7 million profit (before amortisation and depreciation) and a net operating profit of $2.3 million in the year ending October 31 2018.

The result has allowed Essendon to wipe another $3 million from their debt, now totalling $4 million. This represents a significantly improved position from the almost $12 million debt the club found themselves in following the supplements saga.

As revealed by The Age, Essendon recently signed a deal with furniture giant Amart to become club’s new co-major sponsor, replacing Kia, in a deal believed to be worth more than $2 million a season.

Source: Read Full Article