Friday, 26 January 2018

Notes from the 2017 AGM

The 2017 AGM was destined to be dominated by the linked issues of the social club/bistro/futsal court operation, the club's overall commercial strategy, and the club's finances, and this is what happened. Other issues - membership value, the quality of the team, even perhaps the ongoing issues with the operation of the various Lakeside leases - fell into the background, or did not get any time at all.

The timing and organisation of the event - midweek, 6:00PM, and moved from the social club to presidents room at short notice - was not just "not ideal"; it was breathtakingly poor behaviour for a club owned by its members. I do not understand why the club cannot hold an AGM by late November of the relevant year, on a weekend, and at a reasonable hour so we don't have to rush through everything. That's not an argument by the way for AGMs to go on forever, but the relatively limited time allocated and the tendency of some of our AGMs to descend into shouting matches means that some of the more important and particular issues I would have liked to have seen discussed did not happen.

Having an AGM seven months after the end of a financial year also means that the information provided in financial statements is also woefully out of date. Questions and presentations about the club's financial performance frequently consisted of two parts - the information as it was presented in the financial report, and if not quite "top of the head" answers then at least answers requiring a board member to recall from memory and do mental arithmetic to discuss our current financial position.

I don't know what our quorum is either, but at the start of the meeting it was dangerously close to not being met. A few later arrivals trickled in during the meeting, but it was one of the poorest attendances for many years. Considering last year's attendance was a bumper session - all seats taken up and about a dozen people standing at the back - I can only think that the timing of the meeting, along with the higher price of a social club membership, took its toll on attendance. Most board members were in attendance, except for Bill Papastergiadis (in China) and Nick Maikoussis (personal engagement).

As I've also made clear a number of times over the years, for better or worse, unless a rival ticket emerges to challenge this continually mutating iteration of the South Melbourne Hellas board, we continue to function as a club at its mercy. That doesn't mean we should go easy on the board or adopt a strident and self-serving cynicism (the latter of which is a habit I'm all too aware that I can fall into), but we can't pretend that the situation is any other way.

Finances
For this year at least, I'm finding it difficult to separate these issue of the financial position of the club from the futsal court and bistro; indeed, it will probably be impossible to ever separate them again, since the social club is now at the heart of our hopes for future prosperity, unless we somehow end up in the A-League.

The club recorded a small profit (about $17,000) from normal activities, and a much larger profit due to abnormal activity - namely, receiving the remainder of the allocated government grant money for the completion of the social club. To complete the social club however, the club also borrowed close to $700,000 (in various arrangements which I did not completely understand), which brought the total cost of the project close to the $1.5 million mark.

Here is where the majority of the AGM's controversy began. Some members bemoaned what they considered to be excessive borrowing, especially considering we had just managed to pay off our previous outstanding debts (specifically the Toumbourou debt, but also the cash flow issues of mid 2017). The club's argument went something like this - you need to spend money in order to make money, and the extra spending on the completion of the social club was both necessary, and added value to the project.

The club also stated that because of the donation of labour and materials, the overall value of the project was twice what it cost us to build, though I do not believe any formal valuation of the work has been made. The main loan has been guaranteed by three of the club's directors, and the club aims to pay it off in three years time (four years overall). Removing the cloud of pre-existing biases and personal grudges that flavoured the discussion, the main point of difference in the discussion seemed to be one of emphasis. Either this was reckless behaviour by the club, or it was necessary to properly finish off the social club space.

Honestly, I'm not confident enough or knowledgeable to take a stand either way. That's not me trying to hedge my bets - I honestly don't know how all this will turn out.

Bistro
The club characterised the operation of the bistro in its first year as a learning experience. I'd be somewhat less charitable about that, but it's best to move on to some of the specifics. The club decided (by its own admission, without any sign of an obvious plan) to run a full-time restaurant operation, believing that foot traffic from the local area, along with patronage from South Melbourne Hellas members outside match days, would magically happen.

As I have noted elsewhere, one could easily see how this approach was doomed to fail. For starters, compared to Clarendon Street and its surrounds - with its many and varied dining options - the South Melbourne social club will never be a pop-in option for people. Most locals would not know that it exists, and considering that the club or whoever was responsible for promoting it conducted minimal advertising for the social club even to South members and social media followers, how were people outside the club supposed to find the space?

Likewise, most of our members do not live near anywhere Lakeside, making visits to the social club outside match days and club events extremely unlikely. That the club thought it would be otherwise shows an incredible amount of naivety or pigheadedness. Nevertheless, the club has attempted to spin this attempt at a full-time bistro operation as a worthy experiment which did not quite work, but which has at least yielded a certain amount of quantifiable data, consisting not only of sales, but also of consumer habits.

The more successful bistro trading days were specific club nights - especially during the junior season, including gala days - and early on in the social club's life, bolstered no doubt by the keenness of South fans to actually experience a home social club again. The club has decided therefore that "events" is where it's at for the social club, both South Melbourne oriented events and cases where we can hire the bistro space out to outside groups.

It was explained that the leaving of the previous venue manager was essentially by mutual agreement, because the goals of the two sides were no longer compatible. The club will run the bistro for the time being, with the option of outsourcing the bistro to an outside party an option which the club will consider, now that it has some understanding of how the social club space works, and what kind of turnover it can achieve.

Futsal court
The futsal court suffered from similar issues to the bistro - lack of awareness, advertising, foot traffic - as well as some different issues. The club had been made an offer by an outside entity to run the futsal court, which was declined for similar reasons (and on similar grounds of research and planning).

The club's best days for the futsal court were Wednesdays where they had a competition running, and on Saturdays, where the club ran a junior comp involving several different club sides. Outside out of that however, apart from the occasional hiring out of the futsal court to outside parties, the primary usage of the court was by our juniors as part of their training schedule.

Our juniors using the court is obviously one of the reasons the court was built, and it's good that they use it on a regular basis. However as noted by some in the meeting (and previous meetings) the court takes up a very large amount of space, and needs to work hard to earn its own keep. There is still potential for the court's operation to at least be partly outsourced outside of the hours it's used our juniors, but I fancy this will be of limited appeal to an outside operator.

No mention was made of the maintenance costs for the futsal court.

State Sport Centres Trust
The club claims the relationship between itself and the SSCT is reasonably good at the moment. Of course we all know that can change at an instant and under the slightest bit of duress.

More importantly, the club has renegotiated parts of its agreement with the Trust over the costs of ground hire and renumeration. Rather than the previous crowd percentage based payment made to the Trust, the club has moved to a fixed fee payment for use of Lakeside on match days. There was also a similar agreement made in the event that we ever played in the A-League.

As noted last year, the club has also negotiated to take over food and drink service outside the social club area on South Melbourne match days, and on days where parties hiring the venue for soccer (such as FFV) are amenable to us providing the food services.

In order to do this, the club has given up some of the monthly stipend it receives from the government as part of our tenure at Lakeside. Whether this will be a worthwhile move in the short term remains to be seen. In the medium to long term, the stipend will eventually end, and thus getting on the front foot on this matter seems like a good idea.

Cost-cutting
Among the cost-cutting measures there were two which stood out to me. First was staffing, some of which has been explained in previous posts in passing. This is mostly based around office and social club staffing. A number of staffing re-arrangements have been made. In the office, a sponsor liaison has been hired, while media and events positions have been ended or downgraded. There was no word on whether there were outstanding wages or superannuation due to former and current employees.

Likewise, as the club has moved away from the full-time restaurant model for the bistro, the staffing situation there has changed to I guess what would be best termed as an 'at needs' basis, and there are no plans to hire a full-time venue manager as a replacement for Phil. What this means in terms of the extra match days (the South women's NPL fixture is now completely separate from the men's match days), volunteers/interns, etc, I do not know.

The second cost saving measure was the switch from Puma to Kappa, which is set to save us about $40,000 across all of our teams. No comment on whether merchandise for the fans will arrive on time for our first home game. Each year our merchandise and kit deals get touted as something quite special and full of promise, and each year regardless of whose fault it is, it doesn't seem to work out that way. This is one area where it always comes down to praxis over theory.

Football
As far as the senior men's team goes, there is one bit of news that will please many of us - the Spanish experiment is over! There seems to have been a belated realisation of the difficulty of getting a Spanish player that is fit, has enough English to communicate properly, and can adapt culturally to Australian soccer. To that end, a question was cast over whether utilising visa spots at an NPL level was even worthwhile, with the answer being that unless it was someone of the calibre of Jaime Reed, it may perhaps be a waste of time.

It's implied every year that we (fans and board) want more of our own juniors getting a senior gig, but this year that desire seemed a little bit more sincere from the board's point of view. It was noted that while the club would've liked to have promoted more of its own youth, the quality wasn't there in previous years. This year though? Players that have been under this junior system for five or so years were on the cusp of making a breakthrough, or so we're told. The proof is always in the pudding on that one though.

Confirmation that Tim Mala had retired (whether for this year only, or permanently, it was not said), and that Jesse Daley has also left us to go back to Queensland. No definitive statements made about new players signed, though the club was confident of soon securing the services of several of the players trialling with us. (and Neos Kosmos did have an article yesterday about goalkeeper Alistair Bray signing with us)

Gabrielle Giuliano made a brief presentation on the women's teams (NPL and state league) and the success they had in 2017. When questioned about "how much money was wasted on the women's team?", she replied "not as much as the men's", which defused the question but also brought a good measure of laughter to the room.

I asked whether it was true that senior men's team manager Frank Piccione had stepped down/retired, and this was confirmed by Mesourouni. I would personally like to wish Frank all the best, and hope to see him around the club in some capacity, as he's one of the nicest and funniest blokes around the club.

The club continues to make attempts to break into the schools market, offering the services of its coaches (for a fee of course) and hoping to gain the use of some of the participating schools' grounds in return (especially for our times away from Lakeside). One member was angry that the club (according to him) had not made any attempt to get any Greek schools on board for these programs, to which the answer was that those Greek schools approached did not want to pay (or could not afford) the cost of the service being offered; there was disputation on whether any Greek secondary schools had been approached at all.

Playing facilities (outdoor)
The question about access to Lakeside was asked, and why we were again away for so many games to start the season. The answer for this season's predicament provides an interesting example of the complications we have to deal with. As the start of the soccer season starts outside our priority period at Lakeside, as well as coinciding with athletics' major events and the grand prix, this year we worked with the relevant parties at Lakeside to book in the week of February 18th for our first home game.

Unfortunately, FFV decided this year to push the start of the NPL season back a week; and thus with athletics having their major events at the end of February and early March, the necessity of pitch repairs following that, then the grand prix - and then Orthodox Easter - it was almost impossible to hold a game early in the season. No one denies that this is far from an ideal situation on so many fronts, but it seems that there's little that can be done. The women's team is effected in pretty much the same way. (it will be interesting to see how the ground holds up under the weight over senior and reserves men on consecutive days as the season develops).

The club is hopeful of at least having a better situation in terms of its temporary training options this year, but opinions on this will differ. Players and coaches have in the past been quite open with their dissatisfaction with the alternative training grounds provided for them. At least this season, thanks to the World Cup, we are unlikely to see a midyear disruption to our access of Lakeside due to the arrival of any touring teams.

In better news, our allocated turf grounds in Albert Park are apparently in the best condition they've been in for a long time, now that they have proper drainage. Here's hoping that they manage to survive through the season in decent shape. It was also noted that the lights for those grounds are among the worst in the precinct. I'm not sure what action was going to be taken to improve that situation.

I asked the question about how the club was dealing with the Albert Park Master Plan, but I was not satisfied with the answer given, which I found to be vague at best. As one of the biggest clubs (if not the biggest) in the Albert Park precinct, there's a chance here not only for improved grounds, but also perhaps more grounds, should the golf course be reduced from 18 to 9 holes.

A-League bid
The A-League bid is stalled for the time being because of the mess that is FFA, FIFA, and the matter of the National Congress. On this matter, the club remains confident that it can snare one of the expansion places in part due to the belief that:
  • Melbourne and Sydney are the most desirable commercial options for expansion.
  • the board do not believe that Brisbane will receive a second team.
  • the board do not believe that the Victorian Government will invest in building new stadiums for Dandenong and Geelong, preferring to work with and/or improving Lakeside.
In the matter of the Roberto Carlos gala night, it was confirmed that the event did lose money, but it was claimed that the exercise was nevertheless extremely worthwhile. The loss was covered by three of our board members of their own volition; whether this was decided before or after the event lost money, it was not made clear.

Second division
As usual, it's a matter of wait and see. The club says that while it is a keen participant and observer in the AAFC and second division processes, it is not necessarily at the forefront or aiming to be the public face of these things. The club also played down the expectation that we were likely to see at first a second with promotion/relegation to the top tier, but instead were initially likely to see a truly national second tier connected to the state leagues. Wait and see, as per usual.

Closing comments
You have to expect that any South Melbourne Hellas AGM can lose time in personality clashes, statements instead of questions, and argumentative periods. Still, it is what is for lack of a better cliché. I don't know if the club's on the right track or not, and I don't even want to kid myself that I'm qualified to make a judgement either way.

Thanks to whoever the anonymous poster was who left all the questions in the comments. I'd done zero preparation for this AGM, thinking to maybe type up a quick list on the day of the AGM, but it was easier to just copy, paste and print what you'd provided. Funny how a great deal of the questions seemed to coincide with what the board covered, though not everything got covered. Where was the mention of Skip Fulton joining the board? Oh well.

Anonymous' question regarding the "South in Business'\" coterie unfortunately didn't get a run, and the board did not bring this up. This was particularly disappointing in light of that I didn't get to ask (in the meeting; I did get to have a very brief chat later) about what if any efforts the club had made to make use of the Australian Sports Foundation. Soccer does very poorly when it comes to making use of the ASF, and while FFV has made some attempts in recent times to get its clubs to get on board that programme, it's disappointing that South is apparently not one of those clubs.

There was also an absence of membership questions, discussion about how to make Lakeside (the arena area and the social club) feel more like home. The lesson from that is (and one which I have neglected) that in future if one wants to have a topic covered, they better submit it for general business in writing in the weeks leading up to the meeting after the AGM is announced.

I'll try and do better next time around.

If I've forgotten anything, or if you were there and wish to prompt me about something, feel free to add your two cents in the comments.

2 comments:

  1. Marvelous write up as always Paul. Many thanks for following up some of the questions I had posted.

    Some may utilise the AGMs as an exercise to air personal grievances and agendas against the current Board, but the AGM is the opportunity to hold the current office holders accountable for their actions. It is vital that we continue to do so.

    The Board has made poor decisions on how the bistro/futsal operation should be run. Football is a game of opinions, but sometimes taking a common sense approach to things can work. Why would a full time restaurant operation work with such little foot traffic at Lakeside Stadium as compared to Clarendon St, which has high traffic and pedestrian numbers!

    What is more worrying is the self-belief of some on the Board that 'we can do it better', when none of the current Board have run a food and beverage operation, let alone a futsal operation. It is not a case of 'well that makes sense in hindsight'. The club should focus its resources on what it knows best - putting a football team on the park. It would have been much more efficient, less resource intensive, and more strategic to outsource the bistro and futsal operations to third parties with proven industry experience and success.

    As for the cost cutting measures, perhaps some of those costs should never have been incurred in the first place. Why would the Board significantly expand its front-office operations when loaded with high debt levels? Would it not be more prudent to run a lean operation for a year or two and focus on debt reduction. Once the debt levels have been significantly reduced, then the business can look at expanding on a more sustainable footing.

    I agree with you that AGMs should be held within six months of the end of a financial year. This current practice is simply unacceptable. What is also shocking is the fact the AGM was scheduled midweek at 6pm! Its a largely inconvenient time given many people have work commitments, and a later start at 7pm would allow more members to attend. The cynic in me says it may be a deliberate ploy by some on the Board. I hope that is not the case.

    I get the impression that the Board has not given the fullest of consideration to the Albert Park Master Plan. This is something that the Board should be devoting time and resources to. If there is an opportunity to expand the club's footprint and gain more real estate, then this should be strongly pursued.

    Its a shame there was not much discussion on the reduced value of memberships and the sponsorship portfolio. These are critical areas of the club which needed more debate and discussion.

    As is the case, there's always next year to ask those questions.


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  2. Just thinking on this now, without a proper social club venue manager, who will the club get to organise the proposed outside food and drink stations?

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While I like people commenting on the blog, it would be useful if different posters could at least leave some sort of nickname to make it easier to sort through all the different 'anonymous' posters. If your post doesn't get approved straight away, it's probably because I haven't seen it yet. Lastly, just because I approve a comment for publication does not mean that I endorse its content.