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Bigger isn't better

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RussellEbertHandball

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Interesting article to go with the others that was about 2007 Club Financial Review Survey. In 2006 the AFL put a power point slide of the 2005 Club Financial Review Survey on it's website. They took it off early last year when the website went thru its annual change. Hopefully it will put up the 2007 Fianancial Review on it's website in the next few days.

Bigger isn't better

12/03/2008 4:39:56 PM
Paul Gough
Sportal

Bigger is not always better and that is certainly the case when it comes to the financial viability of each of the AFL clubs' home venues.

The AFL released a detailed financial analysis of last season on Wednesday which showed those clubs playing in smaller stadiums - such as Geelong and the non-Victorian clubs - were making infinitely more money per home game than those clubs playing in the larger Victorian venues of the MCG and Telstra Dome.

Even Victoria's two biggest clubs Collingwood and Essendon could not match the stadium deals of the Western Australian clubs West Coast and Fremantle or even the Sydney Swans.

AFL chief executive Andrew Demetriou said the difference in revenue last year between the club with the most lucrative stadium deal - West Coast - and the team with the least lucrative - the Kangaroos - was $9.3 million.

The Eagles generated nearly $15 million out of their 11 home games at Subiaco mainly because the 43,000-capacity stadium is nowhere near big enough to cater for their huge supporter base - meaning their fans are forced to pay for reserved seats every match or risk losing their spot to one of the 15,000 people on West Coast's waiting list for membership.

In contrast, those Victorian clubs that play at either the 100,000-capacity MCG or 53,000-capacity Telstra Dome - and particularly those with small supporter bases such as Melbourne, the Kangaroos and the Western Bulldogs - did not have the luxury of being able to make extra money by selling reserved seats for their matches because their fans know they can just turn up on the day and find a seat at no extra cost.

"The non-Victorian clubs playing at smaller capacity venues generate greater stadium returns per attendee," Demetriou said on Wednesday.

"Overall the Victorian clubs playing out of Telstra Dome and the MCG generate less and there is a large disparity between the two groups in terms of stadium returns."

Demetriou said the difference in home game receipts for each club was one of the key reasons why clubs such as Melbourne, the Kangaroos and the Bulldogs received additional funding from the AFL to make up for their lack of income from home games.

In addition, the non-Victorian clubs such as West Coast, Fremantle, Sydney and Brisbane - which rank first, second, third and fifth respectively in terms of revenue from their home grounds - had the benefit of getting more signage revenue from their respective homes at Subiaco, ANZ Stadium and the Gabba.

In contrast much of the signage revenue at the MCG goes back to the Melbourne Cricket Club, which runs the ground.

Collingwood and Essendon - which rank fourth and sixth respectively for stadium returns - are better off than their Victorian counterparts because of their larger supporter bases and additional reserved seat revenue from blockbuster games such as Anzac Day at the MCG.

And reigning premier Geelong fares better because like West Coast its 28,000-capacity Skilled Stadium home is not big enough to cater for its fan base while Hawthorn is also slightly better off because of its deal to play four home games a season in Launceston.

But apart from Port Adelaide, which struggles to fill the 51,000-capacity AAMI Stadium, Victorian clubs bring up the rear for stadium returns with the other bottom six spots being filled by the Bulldogs, Carlton, Richmond, Melbourne and the Kangaroos.

The difference in stadium returns was also summed up by just how much each club makes from each person that goes to one of their home games.

While the Eagles - the leaders in this area - make $32 off each spectator, Richmond makes just $14 and Carlton just $13 with even Essendon only making $15 but benefiting from having bigger crowds.

Demetriou admitted the non-Victorian clubs had a major revenue advantage over the Victorian clubs when it came to stadium deals.

"Whilst the clubs that are playing out of the MCG may be getting more attendees, they are not getting the returns that the other clubs are getting because there are no premium (reserved) seats for sale at the MCG for example," he said.

"So we need to work on ways we can get better value for Melbourne teams out of their stadium deals."
Click to expand...



Interesting that this article concentrates on Stadium Returns but the AFL's Key Performance Indicator in 2005 and 2006 was Net Stadium Returns. WCE pay just under $3mil in rent for Subi and Freo pay about $2.5mil. The Gabba rent is high as is the Telstra Dome as the Kangaroos and WB can't make money if they don't average 30,000+ and StK couldn't until they got their crowds up over 35,000. Brian Cook last year said Geelong make more more from 23,000 people at Kardina Park than 38,000 at a home game at Telstra Dome.

Port and the crows pay rent to the SANFL. Both clubs report a net position in their accounts ie game day receipts minus rent rather than the rent amount. It is lower than the WA clubs because unlike the WAFC, the SANFL collect catering revenue, corporate box revenue, signage fees, parking fees etc ,were as in WA, the clubs collect most of these income streams.
 
I don't know so I'm just speculating, but one could assume that at Subi they can charge extra for tickets than at the MCG due to the fact there's so much more demand than there is seats.

And everyone knows clubs make f--k all profit from games at the Dome.
 

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ManWithNoName said:
I don't know so I'm just speculating, but one could assume that at Subi they can charge extra for tickets than at the MCG due to the fact there's so much more demand than there is seats.
Click to expand...
West Coast make a profit of $32 from every ticket sold, thats more than the cost of GA ticket to the MCG. So yes the Eagles charge extra for tickets, they could probably charge even higher and Subi would sell out.
 
A Living God said:
West Coast make a profit of $32 from every ticket sold, thats more than the cost of GA ticket to the MCG. So yes the Eagles charge extra for tickets, they could probably charge even higher and Subi would sell out.
Click to expand...
:eek: Jesus christ, how much do they charge for a ticket? No bloody wonder you make so much more profit.
 
A Living God said:
West Coast make a profit of $32 from every ticket sold, thats more than the cost of GA ticket to the MCG. So yes the Eagles charge extra for tickets, they could probably charge even higher and Subi would sell out.
Click to expand...

No they do not make a $32 profit from every seat at Subi. Read the article closely, they generate income of $32 per seat, ie sales thru membership fees, general admin ticket sales, signage, corporate box income, catering rights, if any, etc.

If you read these statements and do the maths
The Eagles generated nearly $15 million out of their 11 home games at Subiaco mainly because the 43,000-capacity stadium ......

While the Eagles - the leaders in this area - make $32 off each spectator...
Click to expand...

you will see it means turnover not profit.

West Coast home games attendance in 2007 = 448,703 x $32 = $14,358,496.
So if in fact it is closer to $32.50 per spectator you get closer to the "nearly $15 million" figure.

http://stats.rleague.com/afl/crowds/2007.html
 
Subiaco is a shithole, without any question. But the fact it's profitable for both clubs has little to do with the 'deal'. $3m annual rent for such a terrible venue is hardly a good deal compared to other clubs. Melbourne clubs, for instance, generally pay no rent, just stadium costs. However, like the article says, the WA clubs can sell signage. But the big dollars come from 2 sources:
1) Huge reserved seat premiums;
2) Massive corporate box sales. I read in an article published a few weeks ago that the Eagles make $11 million from corporates, whereas the Kangaroos make just $2 million.
These things have got nothing to do with the stadium deal, that's simply how popular a club is. You put the Roos at a venue like Subiaco with exactly the same deal, and they aren't going to sell more to corporates (they'd probably sell less) and they aren't going to pull more people through the gates (once again, they'd probably draw less).
 

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