In the second of a series of regular columns, Richmond President Peggy O’Neal answers questions from members and supporters.
Dear members and supporters,
Thank you for the feedback you provided following my recent column. As expected there were a number of questions – some along similar lines - so I thought the best approach might be to work through them Q & A style.
Before I start addressing your questions – and as you are probably all aware – a board election will start today to elect two directors. Current directors, Kerry Ryan and Emmett Dunne, will both be standing for re-election while Simon Wallace and Peter Casey have also nominated.
I want to encourage all members to vote. This is your Club and it is important you have your say. Voting closes on 9 December.
To vote, click here.
On behalf of the board, I would like to endorse the two current directors standing for re-election. Emmett, only joined the Board on 1 September to fill a casual vacancy created by the retirement of John Matthies, and Kerry Ryan has just completed her first term. They deserve the opportunity to continue to serve the members. Their campaign statements give a brief summary of their work on the board.
Our Board is stale and needs to be changed – what is being done about it?
Despite what some would have you believe, there has been significant change at Board level over the past 12 months. John O’Rourke and Emmett Dunne have both joined the Board in the past year as well as Brendon Gale as Executive Director. There will be further change following Tony Free’s recent resignation. This effectively means four of our 10 directors have been in those roles for 12 months or less. I am not aware of any AFL club that has had more change at Board level in that period.
Further to this question, you might be aware that the Board accepted a Governance Committee recommendation that director tenure limits be put in place. The proposed constitutional amendments would see directors limited to three terms. As part of the transition, current directors who have already served three or more terms will serve out their current term but then not be eligible to serve as a director again. The Governance Committee also recommended limiting the President to two terms in that role. A full explanation of all proposed amendments will be included with the notice of the AGM.
Why does the current election not fill three positions (instead of two) given Tony Free’s resignation?
Under the Club constitution, casual vacancies created by the resignation of a director during the director's term must be filled by Board appointment, following a recommendation from the Club’s Nominations Committee. Tony Free had another year on his term so whoever is appointed to that vacancy will complete that term.
If you require more detail, please find the Club constitution, election by-laws and Nominations Committee Charter on the Club website under the “Club” menu item.
What is the over-arching vision and strategic direction of the Club?
Our vision is to build a Strong and Bold Premiership Club. An overview of the Club’s strategic plan that guides our operational planning to bring that vision to fruition can be found on the Club website under the “Club’ menu item, or by clicking here.
How did we finish with a loss given we have a membership of in excess of 70,000?
Membership gives us a great foundation for financial stability but doesn't guarantee that we will always have a profit.
The AFL commercial environment is cramped and highly-competitive. In fact, the AFL is expecting more than half its clubs to record an operating loss. As noted when we reported the financial result – a 15% drop in crowds as well as bad debts from two sponsors (in excess of $300,000) had a significant impact on our result. Our underlying position remains very strong as we remain debt free, have cash reserves of more than $2 million and a strong net asset position of $24.1 million.
I should also point out that some clubs choose to report their operating surplus without amortisation and depreciation costs which can create confusion among all fans. The AFL does not mandate that clubs report to the public in a consistent way.
We believe our method of reporting provides a true reflection of the Club’s financial position for our members and supporters. By way of comparison, should we have chosen to report our result before amortisation and depreciation, we would have reported a $1.2 million operating surplus.
Why has the full review not been shared?
When the review was announced, the Club was clear that the resultant changes would be shared with members and supporters. The Club did that through our own communications channels and the broader media.
Those changes were significant and extended to football administration, coaching and development, recruiting and list management and high performance. We are still working through several aspects of implementation and Neil Balme and Brendon Gale are in the process of assessing and prioritising possible further changes.
As you can appreciate, the specific detail of the review, and the recommendations that underpinned the changes so far, are not only confidential but also commercially sensitive - to share them would be inappropriate.
Why did we use an accounting firm (Ernst & Young) to conduct a football review?
I have addressed this in a couple of media interviews in recent months so I apologise if there is still some confusion on this matter.
Ernst & Young have a highly-regarded Sports Advisory Practice and we engaged them to assist with the review process. They have conducted a range of performance evaluation projects for, and on behalf of, a number of elite sporting organisations, including the AFL Research Board, other AFL clubs, the Victorian Institute of Sport, Cricket Australia, Australian Sports Commission, Swimming Australia and Sport and Recreation Victoria.
The Club's audit work is conducted by PWC.
What were the criteria that saw the Board reappoint Damien Hardwick?
During October 2015- February 2016 the Board conducted a thorough evaluation of Damien’s performance against the following criteria: technical skill, personal qualities, communication, leadership and management.
The Board also took a broader view in considering what Damien had delivered during his time at the Club. As you know, this included having taken the side to three consecutive finals’ series – for the first time in 40 years - and two 15-win seasons.
This, combined with his character and values, and the great respect the players have for their coach saw us make the unanimous decision to extend his contract for two years. We wanted to send a strong message of belief and solidarity as we went into last season.
Nobody was more disappointed than Damien with how last season unfolded but, as is his way, he is very focussed now on what lies ahead. As everyone is aware, we have also made some significant changes to the administration and coaching staff around him and we believe this will deliver improved performance next season.
Why do we have appointed directors?
Appointed directors are important to ensure the Board has the required skills to carry out its responsibilities. It is sensible business practice and it was unanimously approved by members when constitutional amendments to permit appointments were presented at the Club AGM four years ago to bring Richmond in-line with more common governance practices.
Approaches vary between clubs and there is no right or wrong answer. Some clubs – West Coast for example - have boards that consist only of appointed directors. Sydney Swans have one member-elected director and the rest are appointed. Adelaide's new constitution provides for two member-elected directors out of nine total directors.
I think we have a balanced approach that serves our members well.
Why are you the appointed director? How does the Board arrive at that decision?
Again, under the Club constitution, we have three directors on rotation each year. One director can be appointed by the Board and two stand for re-election (should an election be required). The Board determined some time ago that I would be the appointed director this rotation. If the proposed constitutional amendments are passed at the 2016 AGM, this will be my last term as a director and as president.
How does the Club work with the AFL on fixturing?
Every club across the competition puts fixture priorities into the AFL and the AFL then works (in conjunction with broadcasters) to develop the fixture. Clearly nobody gets everything they request. We did however get the season opener, Dreamtime at the ‘G and our Anzac Eve game locked in for 2017 - all three of which were priority requests for us.
What are the Club’s plans around a women’s team in the future?
The Club was granted a provisional licence by the AFL. We are now working with the AFL to develop a program that will support growth in participation by women and girls – most notably in our Next Generation Academy zone. We have some other opportunities which we are considering that we will be able to share in due course but it remains our intention to field a Richmond team in the national women’s competition.
Why are we in the bottom four clubs for sponsorship revenue?
I’m glad to have the opportunity to clear this up as it’s been reported in the media in recent years but is simply not true. The facts are that the AFL captures and measures such data each year. At the end of 2009 - before we embarked on the strategic plan 3-0-75 - we were in the bottom quartile across the competition. Since then, we have had six consecutive years of growth; in fact, six years of record results, which is testament to the relationships we have formed, and continue to grow, with partners such as Jeep and Bingle. The difficulty comparing commercial performance is the uneven playing field, particularly in relation to revenue generated by clubs that control their own stadiums. I can, however, assure members and supporters that relative to other tenants of the MCG, our sponsorship results are very strong.
Why have we not been able to secure a naming rights partner for Punt Road Oval?
We enjoyed the ME Bank relationship, as our inaugural partner, for five years and they remain good friends of the Club and, importantly, powerful advocates for Richmond’s ability to support our commercial partners. Given the high regard in which we all hold our traditional home, Punt Road Oval, we must be careful to select a partner that invests in our Club for the right reasons and can authentically add to the experience we deliver to our members and supporters.
From a purely commercial perspective, it’s also critical that we don’t undervalue Punt Road Oval. We don’t want to take a short-term view with such a property. It’s imperative we find the right partner (not just any partner) and we are currently talking to a number of interested parties.
Apologies if I have not addressed your question in this column. I will endeavour to do so in my column next month. If you have any other questions you would like me to address, please direct them to president@richmondfc.com.au
Go Tigers
Peggy O’Neal
