The Crows - Have They Gang tackled The Wrong Man (Again)
There is no joy being an AFL coach when the chips are down. In a two team town where AFL football matters to people it is even worse. The unrelenting campaign by Michelangelo Rucci in The Advertiser to see the back of Neil Craig has been often vicious.
If in any doubt compare the way the player performance problems of the two Adelaide clubs have been treated this year. Everything at the Crows was Neil Craig’s fault, while everything at Port (eg Chad Cornes’ selection) was the selectors’ fault and never Matthew Primus’. (Matt, enjoy the sun while it shines mate especially with the squad you’ve got.)
The idea that Craig was left to make his own decision about his future as Crows coach is nice PR but hardly seems to match the reality. According to The Advertiser, steps towards a coaching transition commenced six weeks ago and board members do not have a two hour meeting with a coach straight after a game unless the writing is on the wall.
But the real issue here is the performance of the Crows board for they are the ones who hire and fire the coach, determine the club’s corporate and marketing strategy and make sure the place is solvent. On all counts they have failed the test, with the club now at serious risk of breaching its loan covenants with the Westpac Bank.
It is clear the problems with Neil Craig’s coaching style offered them two important prior opportunities to come to the conclusion that Craig, for all his strengths and loyalties, was not the man.
First was after the 2009 First Semi Final. Having finished 5th at the end of the minor round with a 14-8 record and steamrolling all before them in the weeks before including Essendon in the first elimination final, the Crows led six goals to one at quarter time against Collingwood in that First Semi but managed but five after that and lost by 5 points. This was a scenario that was as emblematic of Crows’ performances under Craig then as they were to the very end (eg the capitulation against Essendon two weeks ago.)
With an aging squad, the question to be asked was then the moment to realise Craig was not the man to bring a premiership to West Lakes. The Board said ‘no, Neil carry on.’
In response to that loss, Craig insisted that extra fitness was all that mattered – a strategy he had invoked in the past with disastrous consequences and so it proved again. Working his squad too hard in the earliest parts of the pre-season saw a third of his ‘playing group’ sidelined by Christmas with severe muscle injuries. The consequence of that was the squad was hopelessly under manned and under done for the opening rounds and it showed when they lost their first six games.
With the 2010 season as good as gone and senior players moving on (sometimes messily), again the board had to decide whether Neil Craig was their man to rebuild the club for the years ahead. Again they said, ‘Neil, carry on.’
Meanwhile club memberships and home crowd attendances were falling, as much due to the on-field disappointments as the decline in the support of the average Crows supporter. A club that once was the talk of the town, buoyed by Modra mania, now found its loyal supporters of 10-20 years ago aging (and less interested in traipsing down to Football Park each fortnight) and its current players cocooned away from the public. Other than Kurt Tippett (who enjoys over 4000 Facebook fans), who in the current Crows squad could be described by young girls as having spunk? Those that may also get named, like Taylor Walker, are not likely to be playing for Adelaide next year.
How was this playing out financially, well not very nicely. Looking at the Crows’ financial statements, from 2006 to last year, operating net cash flow (the only measure that really matters) declined from $2.58m to just $1.23m (of which Grant revenue was $869,000) with expenses climbing by nearly $8m (or about 40%) in that time. Over those five years, the club went from having no borrowings to $2.23m in short term loans.
In last weekend’s Sunday Mail, Jasper Fjeldstad wrote a piece singing the praises no doubt requested of him by the Crows stating ‘the club is also anticipating another cash flow surplus .. despite another projected loss which will have much to do with heavy depreciation of assets’ and ‘the club is also being able to retain $20m in net assets, which has them in a strong position.’
Well Jasper you and your readers and the Crows players should note the following:
In the 2009 year, the Crows built their new operations centre at a cost of $20m (called in the books ‘the player facility’ but known as the Westpac Centre – a ‘high performance and commercial venture’ according to Jasper), funded as to one third by the SA Government (ie us), one third by cash reserves and the remainder by sale of assets and borrowings. As the Crows don’t own the land the player facility is on, one has to question what value it might have should it ever be offered up for sale by the landlord – the SANFL (which has its own financial problems.)
In this regard, let us not also forget that when questioned at the SACA members’ meeting, SACA President Ian McLachlan stated (with the same circumstances of its buildings being on someone else’s land) that as the SACA didn’t own the land the SACA could not include them in its value and the lease the SACA holds is only worth the cash flow being generated by the operations themselves (or words to that effect.)
Jasper had previously sung in his article last Sunday about how the Crows were ‘finalising details of a 40 year deal to remain at [West Lakes] rent free.’ Given they already have a lease to 2048, 37 years hence, this is not much of a gain in terms of longevity. Given land rent can only be minimal anyway (for as noted above the Crows built the Westpac Centre), this hardly rates the headline ‘Footy Park Lifeline’.
Further, judging by the cash flow being generated by the Crows at the Westpac Centre (just $1.86m in revenue last year – note revenue not profit and this was in substitution for the old Crow shed) it would seem it is delivering neither high performance nor commercial returns and Kryztoff understands many of the hopes for commercial returns from that investment have indeed been dashed.
Further, and this is where the ‘strong [financial] position’ claim comes somewhat unstuck, the loans from Westpac (a total facility of $3m) have (according to the 2010 Crows Financial Statements) a covenant attached to them which states that ‘borrowing costs [interest] are not to exceed 1.25 times profit from ordinary activities before finance costs.’ Well, if the Crows are about to record another loss and annual interest costs are running at about $110,000 per annum, then it is not clear how the Crows will not be in default of this loan covenant in season 2011.
So, the Crows Board is managing an entity with net assets of $20m, at least $8m of which came from the taxpayer, but after you take out the ‘player facility’ the value of which is very subjective, they finish up with negative net assets, including a loan they can’t seem to meet the covenants of which. All the while they keep on a coach who is contributing to the burning of the club’s brand.
That’s if you can believe Jasper Fjeldstad and his The Sunday Mail and why wouldn’t you even if Jasper’s writer in arms on the famous ‘At Last – Stadium Details Revealed’ piece in late March (Brad Crouch) has now disowned the financial show piece of the Adelaide Oval move trumpeted in that piece when he stated last weekend that the ‘The modelling promoting the benefits of the Adelaide Oval upgrade [used] ridiculously optimistic forecasts of crowds.’ (Jasper we await your humbling back down on that as well this week.)
So, the Crows board kept on with a coach who had many obvious deficiencies in times when revenue and attendances were already falling, the brand was burning and player costs were only going up and now they have debts with terms they may not be able to meet.
Yes, Neil, you are not the only person involved at the Adelaide Football Club who ought to work out it is time to leave. But will those in the mainstream media who rely on the Crows board and management for corporate largesse dare to mention any of this? Mmm.
Still, it could be worse. The owner of the Crows (at least for now) the SANFL has even worse problems but more about them another day.
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