The Restatement Of 2011 Results
What happened with the ‘restatement’ of the 2011 results revealed last week?
- Broadcast revenue was recalculated which meant that in 2011 it was reduced by $3.1 million with that amount being transferred to future years which will mean it will be $3.1 million higher in 2013-15;
- A new category of revenue, ‘Matchday’, was added whilst previous revenue categories ‘Net Gate Takings’ and ‘Corporate Hospitality’ were removed;
- More detailed breakdown of expenditure was included across an expanded number of categories including six new ones;
- Apart from the $3.1 million reduction as a result of 1. above there was no change in the loss previously reported.
I covered the details of the $3.1 million change in broadcast revenue in my article on Friday and the ARU have provided a detailed explanation regarding this issue in the 2012 annual report. I see nothing out of the ordinary with this change or the disclosure regarding it.
Prior to 2011 ‘Corporate’ expenditure was called ‘Corporate Services’. Is it conceivable that the removal of the word ‘Services’ from the title could explain an increase of $7.1 million in this category in 2011 upon the ‘restatement’? Surely any items of expenditure that in 2012 are referred to as ‘Corporate’ should also have been included in ‘Corporate Services’ in past years, so no.
There has been a suggestion that there may actually only have been a small increase in ‘Corporate’ expenditure between 2010 and 2012 and that the higher number revealed in the 2011 ‘restatement’ may actually be offset by a decrease in other items of expenditure as certain items of expenditure may have just been moved from one area of expenditure to another.
So, let’s look at the changes to expenditure revealed by the ‘restatement’. Because the names of some of the categories have changed I can’t be absolutely certain which new category relates to each old category but as you’ll see the numbers and descriptions between the old and new figures are so close that I think we can be fairly confident in the following comparison.
As you can see the increase in ‘Corporate’ expenditure is not offset by any reduction in other areas of expenditure – in fact the other areas of expenditure reported by the ARU have also increased as a result of the ‘restatement’.
The Rugby & Team Expenditure allocation is not something that comes from the ARU – I have grouped the items of expenditure disclosed by the ARU that I believe relate to ‘Rugby’ under this heading to determine whether there was increase in ‘Rugby’ expenditure as a result of the ‘restatement’. The increase in expenditure under that heading is $2.218 million – very close to the $2.243 million in the new category ‘Commission and Servicing Costs’ which I presume relates to ticket sales. Accordingly I believe we can say that the majority of increased expenditure disclosed by the ‘restatement’ was not directly ‘Rugby’ related but was in fact overhead related.