In US sports there is often talk about "small markets" and "big markets" in relation to their geographical location and the market they are competing for. So let's do a little analysis of AFL cities and their respective market:
1. Sydney
Population: 4.8m (2014)
AFL teams: 2
Other major sports teams: 15 (NRL, BBL, AL, SR, NBL)
2. Melbourne
Population: 4.4m (2014)
AFL teams: 9
Other major sports teams: 7 (BBL, AL, NRL, SR, NBL)
3. Brisbane
Population: 2.2m (2014)
AFL teams: 1
Other major sports teams: 4 (NRL, SR, AL, BBL)
4. Perth
Population: 2m (2014)
AFL teams: 2
Other major sports teams: 4 (AL, BBL, SR, NBL)
5. Adelaide
Population: 1.3m (2014)
AFL teams: 2
Other major sports teams: 3 (AL, BBL, NBL)
6. Gold Coast
Population: 614k (2014)
AFL teams: 1
Other major sports teams: 1 (NRL)
12. Geelong
Population: 184k
AFL teams: 1
Other major sports teams: 0
As you can see, the AFL has representation in the six largest markets of Australia. From a population view point, Melbourne is clearly over represented and Sydney is clearly under represented. The AFL is taking notice of these markets. Simply put, the city of Sydney is the biggest market in Australia and that's why the Giants were started. The AFL also tried to remove North Melbourne from the flooded Melbourne market and successfully removed Fitzroy.
The potential of the Sydney market is enormous with an even market share of 2.4m between the Giants and Swans. Now obviously the Swans are far more popular than the Giants at the moment but the point I was trying to get across was that you have a market of 4.8m people to share between 2 teams. No other market offers anything close to the potential Sydney offers the Giants and the Swans. Unsurprisingly, it's also the most competitive market in Australia with a total of 17 major professional sports teams. Getting your share in a market that competitive is hard enough but when you add in the lack of historical support for Aussie rules in Sydney and the Giants still being in their infancy, it becomes a difficult task to generate interest from nothing.
The Melbourne market isn't overly hard to read into. If there was an even split of supporters to each of the 9 teams in Melbourne then you would have under 500,000 supporters for each club. Outside of Geelong, that's the worst even market share in the AFL. Of course we know there isn't an even share in Melbourne which makes it really hard for the less popular teams. Add to that another 7 major sports teams in Melbourne and things are getting extremely hard, which would explain why some of the Melbourne teams need to travel interstate to top up their earnings. The logical statement to make when it comes to the Melbourne market is that there is simply too many team based in Melbourne.
The Brisbane market is an interesting one because it offers just under the market share of Sydney with 2.2m people assigned to the Lions. Adding to that is the idea that the market doesn't appear to be overly competitive with only 4 other major sports teams based in Brisbane. However, Brisbane's historical links to the two rugby codes has made it very hard for the Lions to get a shoe in and it almost took three consecutive premierships for the city to actually embrace the team, even if it was just a temporary embracement. Brisbane does appear to be a fickle market it when it comes to their interest in AFL and could be classed as fair weather for the most part.
Although one has a larger population, both Perth and Adelaide are very similar markets when it comes to the AFL. They both do well considering their even market share and other major sports teams based in the cities. The Perth even market share of 1m per team is the third largest in the league while Adelaide's 650k sits just above the Gold Coast's market share. Similar amounts of other major sports teams in the two cities don't appear to have a huge affect on the four AFL teams.
The fast growing region of the Gold Coast-Tweed was particularly appealing to the AFL because they believed they already had a 40% share of the market and recognised it would be an investment that would pay off in the future when the market grows considerably. Having said that, the 614k market the Suns have is already larger than that of the Melbourne even market share and just slightly behind that of the Adelaide clubs. The AFL will feel a lot more comfortable with their investment on the Gold Coast in 10-15 years time when the city is expected to reach 1m people.
Geelong is by far the most interesting market in the AFL. Just 184k people live in Geelong yet they regularly pull crowds in excess of 20,000. That is more than 10% of a city's entire population going to the games every two weeks but we know that isn't really the case. There are plenty of Melbourne-based Cats supporters and, in my experiences, country Victorians seem to have a soft spot for Geelong which is understandable. There are no other major sports teams in Geelong which allows the Cats to have complete domination of the city's market and perhaps even define the city in some ways.
So you've got Melbourne and Sydney who are undoubtedly big markets in Australia while Brisbane, Perth and Adelaide probably fall into the middle category. Gold Coast and Geelong are the small market teams in the AFL. So what does it all mean? Big markets offer more opportunities for players and teams to make money. The Melbourne market can offer players like Chris Judd large third party deals that suddenly make it much more appealing. Now the AFL offers marketing contracts for players that are willing to play in Queensland and New South Wales so they can be competitive when it comes to player recruitment/retention.
It's always interesting to see how a medium/small market team is able to remain competitive in the AFL. Let's take my team for example:
Port Adelaide
Market size: 5/7 or =15/18
Memberships: 4/18
Home crowds: 4/18 (2014)
So very competitive despite being based in one of the smaller markets in Australia and the Crows numbers are even better so the SA teams do very well in the AFL. Anyway, reading into a city's market potential is probably a good indication of what the AFL will do next. They appear to view the markets of Hobart, Launceston and the rest of Tasmania as one which results in a market of a little over 500k. Does that warrant an AFL team? You need to consider growth rate which isn't on the Tasmanians side BUT if the opportunity to remove another Melbourne-based club arose the AFL would have to at least think about it. Take from that what you will.
1. Sydney
Population: 4.8m (2014)
AFL teams: 2
Other major sports teams: 15 (NRL, BBL, AL, SR, NBL)
2. Melbourne
Population: 4.4m (2014)
AFL teams: 9
Other major sports teams: 7 (BBL, AL, NRL, SR, NBL)
3. Brisbane
Population: 2.2m (2014)
AFL teams: 1
Other major sports teams: 4 (NRL, SR, AL, BBL)
4. Perth
Population: 2m (2014)
AFL teams: 2
Other major sports teams: 4 (AL, BBL, SR, NBL)
5. Adelaide
Population: 1.3m (2014)
AFL teams: 2
Other major sports teams: 3 (AL, BBL, NBL)
6. Gold Coast
Population: 614k (2014)
AFL teams: 1
Other major sports teams: 1 (NRL)
12. Geelong
Population: 184k
AFL teams: 1
Other major sports teams: 0
As you can see, the AFL has representation in the six largest markets of Australia. From a population view point, Melbourne is clearly over represented and Sydney is clearly under represented. The AFL is taking notice of these markets. Simply put, the city of Sydney is the biggest market in Australia and that's why the Giants were started. The AFL also tried to remove North Melbourne from the flooded Melbourne market and successfully removed Fitzroy.
The potential of the Sydney market is enormous with an even market share of 2.4m between the Giants and Swans. Now obviously the Swans are far more popular than the Giants at the moment but the point I was trying to get across was that you have a market of 4.8m people to share between 2 teams. No other market offers anything close to the potential Sydney offers the Giants and the Swans. Unsurprisingly, it's also the most competitive market in Australia with a total of 17 major professional sports teams. Getting your share in a market that competitive is hard enough but when you add in the lack of historical support for Aussie rules in Sydney and the Giants still being in their infancy, it becomes a difficult task to generate interest from nothing.
The Melbourne market isn't overly hard to read into. If there was an even split of supporters to each of the 9 teams in Melbourne then you would have under 500,000 supporters for each club. Outside of Geelong, that's the worst even market share in the AFL. Of course we know there isn't an even share in Melbourne which makes it really hard for the less popular teams. Add to that another 7 major sports teams in Melbourne and things are getting extremely hard, which would explain why some of the Melbourne teams need to travel interstate to top up their earnings. The logical statement to make when it comes to the Melbourne market is that there is simply too many team based in Melbourne.
The Brisbane market is an interesting one because it offers just under the market share of Sydney with 2.2m people assigned to the Lions. Adding to that is the idea that the market doesn't appear to be overly competitive with only 4 other major sports teams based in Brisbane. However, Brisbane's historical links to the two rugby codes has made it very hard for the Lions to get a shoe in and it almost took three consecutive premierships for the city to actually embrace the team, even if it was just a temporary embracement. Brisbane does appear to be a fickle market it when it comes to their interest in AFL and could be classed as fair weather for the most part.
Although one has a larger population, both Perth and Adelaide are very similar markets when it comes to the AFL. They both do well considering their even market share and other major sports teams based in the cities. The Perth even market share of 1m per team is the third largest in the league while Adelaide's 650k sits just above the Gold Coast's market share. Similar amounts of other major sports teams in the two cities don't appear to have a huge affect on the four AFL teams.
The fast growing region of the Gold Coast-Tweed was particularly appealing to the AFL because they believed they already had a 40% share of the market and recognised it would be an investment that would pay off in the future when the market grows considerably. Having said that, the 614k market the Suns have is already larger than that of the Melbourne even market share and just slightly behind that of the Adelaide clubs. The AFL will feel a lot more comfortable with their investment on the Gold Coast in 10-15 years time when the city is expected to reach 1m people.
Geelong is by far the most interesting market in the AFL. Just 184k people live in Geelong yet they regularly pull crowds in excess of 20,000. That is more than 10% of a city's entire population going to the games every two weeks but we know that isn't really the case. There are plenty of Melbourne-based Cats supporters and, in my experiences, country Victorians seem to have a soft spot for Geelong which is understandable. There are no other major sports teams in Geelong which allows the Cats to have complete domination of the city's market and perhaps even define the city in some ways.
So you've got Melbourne and Sydney who are undoubtedly big markets in Australia while Brisbane, Perth and Adelaide probably fall into the middle category. Gold Coast and Geelong are the small market teams in the AFL. So what does it all mean? Big markets offer more opportunities for players and teams to make money. The Melbourne market can offer players like Chris Judd large third party deals that suddenly make it much more appealing. Now the AFL offers marketing contracts for players that are willing to play in Queensland and New South Wales so they can be competitive when it comes to player recruitment/retention.
It's always interesting to see how a medium/small market team is able to remain competitive in the AFL. Let's take my team for example:
Port Adelaide
Market size: 5/7 or =15/18
Memberships: 4/18
Home crowds: 4/18 (2014)
So very competitive despite being based in one of the smaller markets in Australia and the Crows numbers are even better so the SA teams do very well in the AFL. Anyway, reading into a city's market potential is probably a good indication of what the AFL will do next. They appear to view the markets of Hobart, Launceston and the rest of Tasmania as one which results in a market of a little over 500k. Does that warrant an AFL team? You need to consider growth rate which isn't on the Tasmanians side BUT if the opportunity to remove another Melbourne-based club arose the AFL would have to at least think about it. Take from that what you will.
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