Owning the Ground - Financially What Does it Mean?

[Sixgill]

As far as I know, we are the only team that owns their football ground.

I've always thought of this as a good thing but I've been reading that other teams get 'paid' a certain amount to play at other grounds like Homebush.

But then, I've also heard the Titans have to pay money to use their stadium.

There is obvious value in the real estate, but does owning the ground provide other advantages or actually disadvantage us financially?

We have to look after the ground, upkeep, maintenance, staffing, utilities, cleaning...

But I presume we get all the gate takings.

So when I get to the end of my long winded discussion, if real estate value is put aside, does owning the ground actually provide a day to day financial advantage?

 

[Matty C of the Shire]

I'm happy that we do,movies us a bit of bragging rights over other clubs. And. The coin

 

[Mark^Bastard]

I would say that owning your own ground means that a packed house earns you way more money, but a poor crowd actually costs you money.

It means more than any other team our fans need to show up to every game. If we got 20k fans to every game, we wouldn't have the issues we do.

 

[Garbs]

Back in 2009, our then CEO Tony Zappia said that a typical break even crowd for the Sharks at the time was about 13 000.

So when we have rubbish weather and pull 8000, the hip pocket would take a bit of a beating.

Of course, there are other opportunities that we haven't really had an opportunity to explore that come from owning our own field. Leasing it out to other events could prove a money spinner... I guess it's just a matter of finding other tenants.

 

[Mark^Bastard]

Didn't Zappia actually say that he'd budgeted for an average crowd of 13,000? Not that it was the break even point.

13,000 seems really high to break even.

 

[slide rule]

I think it's a big advantage that we aren't placed over a barrell when the Goverment decides to lift the rent.

It's a bit of a monopoly in many situations as there often aren't any suitable altermative grounds.

I think internationally many soccer clubs own their own grounds.

Also, we can use the ground for whatever we want and whenever we want. We don't have to worry about scheduling conflicts and training facilities etc.

 

[Garbs]

Didn't Zappia actually say that he'd budgeted for an average crowd of 13,000? Not that it was the break even point.

13,000 seems really high to break even.

Actually, you're probably right.

Even so, we'd cop it badly when we get small crowds.

 

[Mark^Bastard]

Actually, you're probably right.

Even so, we'd cop it badly when we get small crowds.

Yeah for sure.

Let's say the break even point is 8,000. Almost all the costs would be fixed. Security, game day staff etc.

And let's say the average ticket is $30.

Even getting just 1,000 extra people is 30 grand. If there are any increased costs they'd probably be offset by selling food and drinks anyway.

Over 10 games that's 300,000 bucks.

There'd surely be 1,000 people umming and ahhing about going to the Sharks during the week, if only they could commit.

 

[BurgoShark]

A bit of non-Shark info on the other teams' arrangements.

All of the stadiums in Queensland (Dairy Farmers, Suncorp and Skilled) are owned by the Queensland Government. The teams pay to play at the venue, and get money from gate takings - but not from the catering.

The teams who play at ANZ get paid ~$100k by the NSW Government each home game they play there, but don't get any takings etc. This was part of the deal done when they built the stadium for the Olympics; the NSW Government had to allocate funds towards attracting other events to the stadium. Any of the teams who plays a home game there get the same deal.

The Tigers are a good comparison to the Sharks (but they don't own their field - which I believe is owned by the Sydney City Council but I'm not 100%) in terms of "break-even". The Tigers pretty much sell out a home game at Leichardt every time, and they make a profit, but if it's a night game they lose money because the lights aren't good enough for TV and they need to hire lights. So it is impossible for the Tigers to make a profit on a home night game at Leichardt, even though it gives them a higher chance of winning - so the Tigers play 4 home games every year at ANZ to get $400k.

The problem with this scenario for the Sharks is that Homebush is a pretty inconvenient location for Sharks fans to get to. If we can only get 10,000 at Shark Park on a cold rainy night we'd be lucky to get a third of those travelling to ANZ.

 

[slide rule]

A bit of non-Shark info on the other teams' arrangements.

All of the stadiums in Queensland (Dairy Farmers, Suncorp and Skilled) are owned by the Queensland Government. The teams pay to play at the venue, and get money from gate takings - but not from the catering.

The teams who play at ANZ get paid ~$100k by the NSW Government each home game they play there, but don't get any takings etc. This was part of the deal done when they built the stadium for the Olympics; the NSW Government had to allocate funds towards attracting other events to the stadium. Any of the teams who plays a home game there get the same deal.

The Tigers are a good comparison to the Sharks (but they don't own their field - which I believe is owned by the Sydney City Council but I'm not 100%) in terms of "break-even". The Tigers pretty much sell out a home game at Leichardt every time, and they make a profit, but if it's a night game they lose money because the lights aren't good enough for TV and they need to hire lights. So it is impossible for the Tigers to make a profit on a home night game at Leichardt, even though it gives them a higher chance of winning - so the Tigers play 4 home games every year at ANZ to get $400k.

The problem with this scenario for the Sharks is that Homebush is a pretty inconvenient location for Sharks fans to get to. If we can only get 10,000 at Shark Park on a cold rainy night we'd be lucky to get a third of those travelling to ANZ.

We should just play our **** crowd games at homebush get 3,000 people and pocket the money to make improvements to Shark Park.

 

[Mark^Bastard]

Yeah it's interesting. The Tigers transient policy sees them pick and choose the best venues. It's sort of smart but the NRL shouldn't be making it so this is the most attractive option I don't think. It's ludicrous how many grounds they use in a season.

 

[SharkShocked]

A bit of non-Shark info on the other teams' arrangements.

All of the stadiums in Queensland (Dairy Farmers, Suncorp and Skilled) are owned by the Queensland Government. The teams pay to play at the venue, and get money from gate takings - but not from the catering.

The teams who play at ANZ get paid ~$100k by the NSW Government each home game they play there, but don't get any takings etc. This was part of the deal done when they built the stadium for the Olympics; the NSW Government had to allocate funds towards attracting other events to the stadium. Any of the teams who plays a home game there get the same deal.

The Tigers are a good comparison to the Sharks (but they don't own their field - which I believe is owned by the Sydney City Council but I'm not 100%) in terms of "break-even". The Tigers pretty much sell out a home game at Leichardt every time, and they make a profit, but if it's a night game they lose money because the lights aren't good enough for TV and they need to hire lights. So it is impossible for the Tigers to make a profit on a home night game at Leichardt, even though it gives them a higher chance of winning - so the Tigers play 4 home games every year at ANZ to get $400k.

The problem with this scenario for the Sharks is that Homebush is a pretty inconvenient location for Sharks fans to get to. If we can only get 10,000 at Shark Park on a cold rainy night we'd be lucky to get a third of those travelling to ANZ.

However, as you put it, we wouldn't get any money from the gate... so it wouldn't matter in the slightest what sort of crowd we got financially.

It would just piss most sharks supporters off and the overall opinion of our team being the next in line to get the boot, would probably get worse, even though financially it could be a 'wiser' option.

 

[Art Vandelay]

well, souths get 100k a game regardless of who turns up at homebush.


we run it ourselves..so ther ewould be a break even point. and yeah zappia was budgeting 13k home crowd average to break even.

bad weather at the sharks is really bad for crowds. the team performance dosnt help either.
theres also external to the game costs like security for the surrounding area that the council wanted.

one way we could save money is have the eastern concourse all general admission. then you wouldnt have to pay those ushers.

 

[Mark^Bastard]

and yeah zappia was budgeting 13k home crowd average to break even.

There's a difference between break-even and budgeting.

Break even means costs are covered for the game. The budgeted amount would be the 'expected crowd'. ie he would spend a certain amount of money on football operations in the year based on a projection of having average 13k crowds.

 

[BurgoShark]

However, as you put it, we wouldn't get any money from the gate... so it wouldn't matter in the slightest what sort of crowd we got financially.

It would just piss most sharks supporters off and the overall opinion of our team being the next in line to get the boot, would probably get worse, even though financially it could be a 'wiser' option.

Absolutely correct. Homebush is a terrible showcase for the game, but even if you get 500 people you still get the cash. You can't blame those teams for playing there.

 

[Gow's Scissors]

doesnt mean much when the debt is more than the land value...

 

[Mark^Bastard]

doesnt mean much when the debt is more than the land value...

Unimproved land value you mean.

 

[since1967]

Yeah, i think this would be a massive positive if previous management of the club hadn't borrowed against the land value.

I remember seeing that there are quite a few fixed costs that hit us before crowds turn up eg the big screen at the south eastern end is hired. Had we not been in so much debt, or in fact someone used half a brain years ago, some of the money we borrowed could have been used to actually purchase the big screen, meaning we had a cost reduction going forward, which helped cash flow as well as a depreciation expense to claim each year.

It gets me fired up to think how those fools used to put there hand out to the bank with no vision on how to best use the funds.............

 

[Addy]

You have to take into consideration that we pocket the ground sponsorship

 

[A.Snowden]

well, souths get 100k a game regardless of who turns up at homebush.


we run it ourselves..so ther ewould be a break even point. and yeah zappia was budgeting 13k home crowd average to break even.

bad weather at the sharks is really bad for crowds. the team performance dosnt help either.
theres also external to the game costs like security for the surrounding area that the council wanted.

one way we could save money is have the eastern concourse all general admission. then you wouldnt have to pay those ushers.

God i love that avatar Mr Swearengen!