Resource 2017 Financial Results

[Rob]

When the AFL bought the ground, they paid $200M, clearly they thought that was a fair/good price.

If they hadn't paid that, they would have got the ground anyway at the 'cost' of playing 8*45=340 games there.

Therefore, we can assume the AFL thought that the price per game was at least $200M/340=$588K each (more when you consider interest and that the ground was going to have to be significantly refurbished before then as per the contracted handover condition).

Forgive me if I've missed something, but disequal funding doesn't seem to match those sums, therefore the clubs are bearing higher costs than they're being compensated for in order for the AFL to acquire the ground.

Incredibly simplistic analysis. Ignores other events held at the stadium (which is a significant number) and assumes revenue streams are a cost to the club - Medallion club in particular. Per event each MC seat is probably worth $100 or so in revenue to the stadium, but it's hardly a cost to most AFL teams because they're seats that they wouldn't be selling anyway. Certainly not to the extent that the stadium is making money off them.

Never mind that there's no real reason why AFL clubs should be compensated for the cost of using a venue that the clubs themselves make money out of. Why shouldn't it cost them money? They're the bloody tenants!

 

[telsor]

Incredibly simplistic analysis. Ignores other events held at the stadium (which is a significant number) and assumes revenue streams are a cost to the club - Medallion club in particular. Per event each MC seat is probably worth $100 or so in revenue to the stadium, but it's hardly a cost to most AFL teams because they're seats that they wouldn't be selling anyway. Certainly not to the extent that the stadium is making money off them.

Never mind that there's no real reason why AFL clubs should be compensated for the cost of using a venue that the clubs themselves make money out of. Why shouldn't it cost them money? They're the bloody tenants!

and all those other revenue sources would have been factored in when the AFL was buying the ground, from both the buyers and sellers perspective.

Why do you think the AFL paid $200M for a ground they were going to get in years for $1 (after a full refurbishment)?


As for compensating the clubs...Well, the AFL gains from them playing there, and the AFL forces them to play there, when they would make far more money if they didn't....

 

[Rob]

and all those other revenue sources would have been factored in when the AFL was buying the ground, from both the buyers and sellers perspective.

Why do you think the AFL paid $200M for a ground they were going to get in years for $1 (after a full refurbishment)?

Because of the revenue they were going to get. That doesn't equate to costs for the clubs.

As for compensating the clubs...Well, the AFL gains from them playing there, and the AFL forces them to play there, when they would make far more money if they didn't....

Far more money? How?

Please, tell me more about the sort of deal North Melbourne would command if they were on their own in finding a ground to play at. They'd have virtually zero bargaining power.

 

[Kwality]

and all those other revenue sources would have been factored in when the AFL was buying the ground, from both the buyers and sellers perspective.

Why do you think the AFL paid $200M for a ground they were going to get in years for $1 (after a full refurbishment)?


As for compensating the clubs...Well, the AFL gains from them playing there, and the AFL forces them to play there, when they would make far more money if they didn't....

Many fans believed purchasing the facility would result in a windfall for tenant clubs, they were wrong .....

 

[Great8]

Many fans believed purchasing the facility would result in a windfall for tenant clubs, they were wrong .....

Doesn’t the current contracts with Etihad run until 2024?
I know we still have a 7/4 split in home games between Etihad and the MCG but are desperately trying to get that to 6/5.
Was mentioned at our forum the other night that the club is negotiating the new Etihad stadium financial deal but the current deal ends in 2024. I’d seriously hope we are still going to get a better deal than the other tenants still. Ideally though with the rate our membership is growing we would still be looking at moving back to the MCG unless we get a deal too good to refuse

 

[Kwality]

Doesn’t the current contracts with Etihad run until 2024?
I know we still have a 7/4 split in home games between Etihad and the MCG but are desperately trying to get that to 6/5.
Was mentioned at our forum the other night that the club is negotiating the new Etihad stadium financial deal but the current deal ends in 2024. I’d seriously hope we are still going to get a better deal than the other tenants still. Ideally though with the rate our membership is growing we would still be looking at moving back to the MCG unless we get a deal too good to refuse

If both parties to a contract want to end a contract they can.

 

[BringBackTorps]

Clearly, you believe otherwise. The disequal funding is given in part for precisely that reason, and is the reason why the AFL is saying "you want compensation? we already GAVE you compensation, you greedy twats".

The compensation wasn't enough. The AFL FORCED NM, St K, & Footscray to play a minimum no.of games at Docklands, thus TRASHING their bargaining power with the Docklands owners. How can these Clubs have a NET LOSS if they attract crowds under 21,000 -but Melb. Victory (who were NOT forced to play games at Docklands, thus had genuine bargaining power!), make good guaranteed financial returns with crowds under 21,00 -or over. Without these onerous requirements/minimum game nos. placed on NM, St K & Footscray, Docklands wouldn't have been built -& the AFL would not own a $1.25-1.5 billion asset.

I am sure that NM, St K, & Footscray would like the FREEDOM (ie not compelled to play at any stadium) to negotiate stadium deals as they see fit -as per Tas., Cairns, Darwin, Alice, Canberra, Ballarat games (all FAR better than Docklands). Footscray, IIRC, for its 11,000 crowd at Ballarat, makes a net profit of $300,000+ for its games there.

The AFL knows that Docklands becomes an attractive financial position for NM, StK, & Footscray only if they attract c.40,000 -but the AFL "scuttles" their financial viability by not allowing them:-
. much more needed games in Prime Time (Th., Fri., & Sat. nights - bigger crowds, also very attractive for advertisers/Club sponsors)
. Public Hols. games eg Good Fri, Easter Mon, Queens Bthd.
. Blockbuster games ie Season Rd1 evening Th. game, Fri Rd1, Th. before Good Friday, Anzac Day/Dreamtime etc.

NM introduced Fri. nights when other Clubs thought it too risky -after it became a phenomenal success, the AFL ripped it off NM.

The NM, St K & Footcsray Presidents have long publicly complained about the inequity of their Docklands financial arrangements. I am not aware that the AFL ever publicly refuted their complaints. The AFL has never called them "greedy".

Indirectly, the AFL has also significantly reduced the competitiveness (& thus, obviously, related wealth) of the poorer, smaller Clubs by not having in years past an effective & much reduced cap on non-player football dept. spending. Everyone knows the benefits of having "bloated"football dept. spends -an army of additional coaches/better facilities & training camps etc.
The richer Clubs have better leverage - TPA's/"connections"/wealthy benefactors/ secret job offers after football is over -eg.Judd/Pratt/Visy TPA "ambassador" farce.
We all know the dice was loaded in favour of the richer Clubs since the 70's -see who won, disproportionately, the most GF's!

 

[Mitchell54]

Hawthorn doing extremely well financially.
Well above most of the competition in terms of assets.

 

[The_Wookie]

The compensation wasn't enough. The AFL FORCED NM, St K, & Footscray to play a minimum no.of games at Docklands, thus TRASHING their bargaining power with the Docklands owners.

North did have a deal at Docklands until 2007, St Kilda until 2008. I presume the Dogs had one until about the same time.

How can these Clubs have a NET LOSS if they attract crowds under 21,000

because the NET loss is only factored on the matchday gate, and doesnt include its membership or corporate revenue for the match at all. Net losses claimed by clubs are bullshit.

-but Melb. Victory (who were NOT forced to play games at Docklands, thus had genuine bargaining power!), make good guaranteed financial returns with crowds under 21,00 -or over. Without these onerous requirements/minimum game nos. placed on NM, St K & Footscray, Docklands wouldn't have been built -& the AFL would not own a $1.25-1.5 billion asset.

Dont forget Essendon, Carlton and every other Melbourne club that had to play games there over the years. Even if Essendon and Carlton were the only ones actively pursued by Docklands.

For instance Carlton - who, after the inititial 2.5m payment for signing on had a deal no better than North or the Bulldogs - played 7 matches a year at Etihad until 2014, and 6 from then on. Most other Melbourne clubs have played 1-2 matches a year at Etihad since 2000.

I am sure that NM, St K, & Footscray would like the FREEDOM (ie not compelled to play at any stadium) to negotiate stadium deals as they see fit -as per Tas., Cairns, Darwin, Alice, Canberra, Ballarat games (all FAR better than Docklands). Footscray, IIRC, for its 11,000 crowd at Ballarat, makes a net profit of $300,000+ for its games there.

Cairns, Darwin, Alice Springs and until GWS, Canberra matches, are underwritten by the AFL. As was New Zealand. And Norths various moves around Gold Coast and Sydney in the early part of the 2000s.

The AFL knows that Docklands becomes an attractive financial position for NM, StK, & Footscray only if they attract c.40,000 -but the AFL "scuttles" their financial viability by not allowing them:-
. much more needed games in Prime Time (Th., Fri., & Sat. nights - bigger crowds, also very attractive for advertisers/Club sponsors)
. Public Hols. games
. Blockbuster games ie Season Rd1 evening Th. game, Th. before Good Friday, Anzac Day/Queens Birthday/Dreamtime etc.

Which is another reason they get compensation. Takes more than money to grow a traditionally small supporter base.

Not to mention that North and the Bulldogs had each received between 20 and 24 million in assistance funding from 2002-2014. (im not entirely sure what the assistance funding was for the last two years of the last tv deal) Thats about 5 times what other Melbourne clubs received in the same time.

And its this that makes it laughable when the likes of North, the Saints and the Dogs demanded further compensation as well as the estimated million this year in improved returns per club.

NM introduced Fri. nights when other Clubs thought it too risky -after it became a phenomenal success, the AFL ripped it off NM.

Despite their bleating North were never promised exclusive rights to Friday night matches.

The NM, St K & Footcsray Presidents have long publicly complained about the inequity of their Docklands financial arrangements. I am not aware that the AFL ever publicly refuted their complaints.

It was pat of the stated reasons for them recieving tens of millions in ASD and diequal funding over the last 15 years.

Indirectly, the AFL has also significantly reduced the competitiveness (& thus obviously related wealth) of the poorer, smaller Clubs by not having in years past an effective & much reduced cap on non-player football dept. spending.

clubs making money shouldnt be penalised by those that have never been able to - and Im talking going back to the 80s. I despise the soft cap crap.

We all know the dice was loaded in favour of the richer Clubs since the 70's -see who won, disproportionately, the most GF's!

Wasnt really until the mid 80s that the fixture was a factor. All clubs played on Saturday at 2.10pm at various grounds across Melbourne. It wasnt until 1987 that the fixture became problematic with the introduction of new clubs but no expansion of the fixture.

 

[telsor]

Because of the revenue they were going to get. That doesn't equate to costs for the clubs.

Far more money? How?

Please, tell me more about the sort of deal North Melbourne would command if they were on their own in finding a ground to play at. They'd have virtually zero bargaining power.

They have zero bargaining power as it is, because the AFL FORCES them to play at that ground.

Remember there have been efforts from clubs to play games in Geelong, or even at Western oval (in addition to the games sold interstate which the AFL allows because it gives games to markets too small to have their own team).


You might also recall the report from several years back that outlines the percentage of revenue from each ground that went to the clubs.

 

[Kwality]

They have zero bargaining power as it is, because the AFL FORCES them to play at that ground.

Remember there have been efforts from clubs to play games in Geelong, or even at Western oval (in addition to the games sold interstate which the AFL allows because it gives games to markets too small to have their own team).


You might also recall the report from several years back that outlines the percentage of revenue from each ground that went to the clubs.

The AFL simply dont buy that the clubs playing at Docklands dont suffer financially & given the absence of incessant whingeing from the clubs since the AFL took over ... remembering the AFL underwrite games sold by some of the these clubs.

 

[Rob]

They have zero bargaining power as it is, because the AFL FORCES them to play at that ground.

The AFL has also negotiated a collective deal. It's hardly a given that the deal the AFL has is necessarily worse than any deal that could otherwise have been negotiated individually. The bigger clubs would have a much, much stronger claim to that argument than the smaller ones. Remember, Docklands main source of revenue is medallion club. North Melbourne games (as an example) do very little in assisting the stadium in selling those compared to Essendon games, so obviously Essendon is going to get a far, far better deal than North. Same story at the MCG, just replace medallion club with MCC members. I doubt the MCC give a rats ass whether the smaller clubs (except Melbourne) play there at all.

Not that i'm in favour of the AFL negotiating deals in the first place. As you probably know, I think the AFL should butt out and let the clubs work it out. But regardless, I think that the small Victorian clubs are most likely better off with the current arrangement.

Remember there have been efforts from clubs to play games in Geelong, or even at Western oval (in addition to the games sold interstate which the AFL allows because it gives games to markets too small to have their own team).

That's all great, but we both know that any Melbourne club based primarily out of either Geelong or some suburban dump isn't going to last long. Have fun selling $500 memberships for 11 games at Kardinia Park.

You might also recall the report from several years back that outlines the percentage of revenue from each ground that went to the clubs.

I do. Which was pretty much useless as no club has a stadium deal that charges them a % of all revenue derived from matchday. Given most clubs get most of their revenue from memberships and no club gets charged a % of that revenue by the stadium, it makes the report you speak of at best misleading, and at worst made up crap.

 

[BringBackTorps]

North did have a deal at Docklands until 2007, St Kilda until 2008. I presume the Dogs had one until about the same time.



because the NET loss is only factored on the matchday gate, and doesnt include its membership or corporate revenue for the match at all. Net losses claimed by clubs are bullshit.



Dont forget Essendon, Carlton and every other Melbourne club that had to play games there over the years. Even if Essendon and Carlton were the only ones actively pursued by Docklands.

For instance Carlton - who, after the inititial 2.5m payment for signing on had a deal no better than North or the Bulldogs - played 7 matches a year at Etihad until 2014, and 6 from then on. Most other Melbourne clubs have played 1-2 matches a year at Etihad since 2000.



Cairns, Darwin, Alice Springs and until GWS, Canberra matches, are underwritten by the AFL. As was New Zealand. And Norths various moves around Gold Coast and Sydney in the early part of the 2000s.



Which is another reason they get compensation. Takes more than money to grow a traditionally small supporter base.

Not to mention that North and the Bulldogs had each received between 20 and 24 million in assistance funding from 2002-2014. (im not entirely sure what the assistance funding was for the last two years of the last tv deal) Thats about 5 times what other Melbourne clubs received in the same time.

And its this that makes it laughable when the likes of North, the Saints and the Dogs demanded further compensation as well as the estimated million this year in improved returns per club.



Despite their bleating North were never promised exclusive rights to Friday night matches.



It was pat of the stated reasons for them recieving tens of millions in ASD and diequal funding over the last 15 years.



clubs making money shouldnt be penalised by those that have never been able to - and Im talking going back to the 80s. I despise the soft cap crap.



Wasnt really until the mid 80s that the fixture was a factor. All clubs played on Saturday at 2.10pm at various grounds across Melbourne. It wasnt until 1987 that the fixture became problematic with the introduction of new clubs but no expansion of the fixture.

The FACTS are that, by being FORCED by the AFL to play games at Docklands, NM, St K, & Footscray had ZERO bargaining power -it is absurd to obfuscate/deny/downplay this.
Being "handcuffed" to Docklands is the reason for their appalling financial deals (AND why the 42 game pa. financial case/profitability for Docklands private owners was so strong that they decided to fund/build it: without the crap deal forced on NM, St K, & Footscray, Docklands would not have been built).

NM, St K, & Footscray would have loved the freedom to negotiate where & how often they played.
Why are you implying they could not obtain similar or much better deals to the "fair/generous" financial arrangements of :-
. Melb. Victory at Docklands with a 20,000 crowd
. Melb. Victory & MC Soccer club at AAMI with a crowd of 20,000
(& how much is AAMI paying MC for its average 8,000 crowds at AAMI?).
. NRL Clubs playing home games at ANZ (even though, IIRC, these NRL Clubs receive a minimum of $100,000 NET -even when crowds are as low as 8,000!)

Why do you believe it is appropriate/wise that AF, re AFL stadia financial arrangement differentials, subsidises other sports/events?

Logically, there will always be AFL Clubs that have above average crowd nos., average crowd nos., & below average crowd nos. All have paid crucial contributions to the success of the AFL. AFL is much greater than the "sum of its parts" considered separately.
Or do you think that GR AF, AF culture, the VFL/AFL would have been better if there was only a comp. of Coll.,RFC, EFC, & Carlton playing each other?

Some seem to have trouble with the concept that all AFL Clubs (irrespective of net wealth) should, in theory, have a roughly equal chance of winning a Premiership. We know that, since the 70's, the poorest VFL/AFL Clubs were, by a significant margin, disproportionately unsuccessful in winning flags -they were just "making up the nos.". This is the crucial importance of higher football dept. spending (& is impacted by Stadia returns to Clubs).
Since c.2013, the AFL has officially supported the NFL concept of "Any Given Sunday" ie it should be applied to the AFL as well.
To maximise crowds/ratings/sponsorship/general interest in the game of Gridiron, & in the whole NFL comp. for the full season, it is best if lower placed teams can, and do, reasonably regularly defeat higher based teams; & are close as long as possible in the season to making finals.

 

[The_Wookie]

The FACTS are that, by being FORCED by the AFL to play games at Docklands, NM, St K, & Footscray had ZERO bargaining power -it is absurd to obfuscate/deny/downplay this.
Being "handcuffed" to Docklands is the reason for their appalling financial deals (AND why the 42 game pa. financial case/profitability for Docklands private owners was so strong that they decided to fund/build it: without the crap deal forced on NM, St K, & Footscray, Docklands would not have been built).

For which they have been compensated more than 20 million dollars each. 5 times the average payout to a Mlebourne club. Dont ignore that fact either.

NM, St K, & Footscray would have loved the freedom to negotiate where & how often they played.
Why are you implying they could not obtain similar or much better deals to the "fair/generous" financial arrangements of :-
. Melb. Victory at Docklands with a 20,000 crowd
. Melb. Victory & MC Soccer club at AAMI with a crowd of 20,000
(& how much is AAMI paying MC for its averaging 8,000 crowds at AAMI?).
. NRL Clubs playing home games at ANZ (even though, IIRC, these NRL Clubs receive a minimum of $100,000 NET -even when crowds are as low as 8,000!)

Victorys deal is what it is due to it being a summer tenant which Docklands lacked when the deal was first signed. Any tenant at that time is better than no tenant.

Why do you believe it is appropriate/wise that AF, re AFL stadia financial arrangement differentials, subsidises other sports/events?

I dont - and Ive never said so either.

Logically, there will always be AFL Clubs that have above average crowd nos., average crowd nos., & below average crowd nos. All have paid crucial contributions to the success of the AFL. AFL is much greater than the "sum of its parts" considered separately.
Or do you think that GR AF, AF culture, the VFL/AFL would have been better if there was only a comp. of Coll.,RFC, EFC, & Carlton playing each other?

In truth, certain clubs should not have made it above VFL level to the national competition. Certain clubs have not been profitable without bonus AFL assistance since the 80s.

 

[BringBackTorps]

In truth, certain clubs should not have made it above VFL level to the national competition. Certain clubs have not been profitable without bonus AFL assistance since the 80s.

Aaaah...now I understand your perplexing views.

 

[The_Wookie]

Aaaah...now I understand your perplexing views.

You probably think you do, but i doubt it. You've shown no sign you do so far.

 

[BallaratBulldog]

http://m.westernbulldogs.com.au/news/2017-12-06/dogs-eradicate-debt-with-third-straight-profit

The Western Bulldogs Football Club is set to report a consolidated net profit of $1,643,050 for the financial year ended 31 October 2017, and that its net debt has been extinguished.

The financial result will be the Club’s third consecutive year of profit in excess of $1 million, underpinned by growth in membership and commercial revenue...

 

[Le Grille]

Hopefully, the AFL purchasing the stadium does provide better terms for the tenant clubs because to need to get 41k to turn a gameday profit is pretty steep. Not many sports would need to hit those levels (even less would achieve it). Perhaps the compensation will be not as necessary as previous years, haven't seen many details of the deals.

Keep in mind also, the fixture can have a pretty significant effect on crowd numbers, early sunday games attendances can be affected by junior sports, the late sunday games, which North/St.K/WB played many times makes it hard to attract big crowds (remember Eddie's bleating when the Pies played Carlton). The sunday games are great for the AFL due to TV but not so much for attendances.

There are big clubs and small clubs, and I get that North are in the latter but to say that these lower clubs don't contribute to the AFLs bottom line whilst taking some hits to their own ability to develop is a bit misguided.

 

[Dogs till i die]

The AFL has also negotiated a collective deal. It's hardly a given that the deal the AFL has is necessarily worse than any deal that could otherwise have been negotiated individually. The bigger clubs would have a much, much stronger claim to that argument than the smaller ones. Remember, Docklands main source of revenue is medallion club. North Melbourne games (as an example) do very little in assisting the stadium in selling those compared to Essendon games, so obviously Essendon is going to get a far, far better deal than North. Same story at the MCG, just replace medallion club with MCC members. I doubt the MCC give a rats ass whether the smaller clubs (except Melbourne) play there at all.

This is where I have an issue.

A friend of mine was heavily involved in the management of Etihad, pre AFL sale. That person said that MC / Corporate sales were almost non-existent for 4.40 Sunday games and guess who have had the most 4.40 Sunday games at Etihad in the last 5 years? Classic catch 22.

 

[Our Game]

http://m.westernbulldogs.com.au/news/2017-12-06/dogs-eradicate-debt-with-third-straight-profit

Great news for the perpetual poor cousins of the VFL/AFL

 

[NoobPie]

So with the dogs revenues added in, and using the new median growth rate of 8.05% (weighted average of Pies and Dogs growth rates), the forecast total club revenues are a smidgen over $1B ($1.001278).

Likewise, a smidgen over 7.7% growth for the remaining 8 clubs would get us over the $1B mark

I'm giving it a 71% chance (note: this probability has no quantitative grounding)

 

[Rob]

This is where I have an issue.

A friend of mine was heavily involved in the management of Etihad, pre AFL sale. That person said that MC / Corporate sales were almost non-existent for 4.40 Sunday games and guess who have had the most 4.40 Sunday games at Etihad in the last 5 years? Classic catch 22.

So what are the numbers for that Sunday twilight slot?

 

[Our Game]

Hawthorn doing extremely well financially.
Well above most of the competition in terms of assets.

Take away the millions they take from the poor in their western suburbs pokie joints and it wouldnt look so good!

You have to take your hat off to Nth Melb who dont have any pokies and and are still a viable club and far from broke.

 

[Dogs_r_barking]

Take away the millions they take from the poor in their western suburbs pokie joints and it wouldnt look so good!

You have to take your hat off to Nth Melb who dont have any pokies and and are still a viable club and far from broke.

Considering Collingwood, Carlton and Hawthorn have the monopoly of pokies venues in the west, your comments are wide of the mark.

 

[NoobPie]

Considering Collingwood, Carlton and Hawthorn have the monopoly of pokies venues in the west, your comments are wide of the mark.

I think you'll find he was referring to Hawthorn!