2019 Financial Results

[Rob]

No, I don't "know it"

You are the one trying to assert something that is directly at odds with a publicly stated policy.

You don't have any basis to do so beyond "naaaah go on.............the AFL just does hand outs willy nilly, everyone knows that"

The competitive balance policy and associated funding model was agreed by the 18 clubs after substantial negotiation



Your "yeah....naaaaah.....yeah nah" up against....

The "poor stadium deal" and "inequities in the fixture" has been completely debunked. Clubs get no changes in funding based on the fixture, otherwise it would vary wildly year to year. The Bulldogs for instance, who have had commercially positive fixtures for the last few years, remain one of the largest recipients of AFL funding. Funny, my club hasn't had a Friday night game since Adam was a boy (and rightfully so given on field results), yet is one of the lowest funding beneficiaries. Clearly the fixture is not relevant.

Likewise, when the AFL took over Docklands we were all told how great the stadium deal was going to be for tenants. The effect on AFL distributions? Zero. Docklands tenant clubs did not roundly get their funding cut.

Everything else is based on financial factors.

Given we know what goes to each club, it's pretty easy to draw the conclusion that it's based on financial necessity. Amounts paid by the league go up and down based broadly on how shitty their financials are. Look at Brisbane and St Kilda as 2 extreme examples - both clubs that have drawn huge amounts in funding from the AFL at the same time as their financial situation deteriorated badly. Nothing else changed.

Now I know that correlation does not necessarily equal causation, but what other possible conditions could there be? Have you got an example of a club's funding getting directly affected by another factor?

is it really? You haven't really made any sort of a case. Just assertion again

The model the AFL has adopted is going gang busters. Absolutely gang busters. Surely that puts the onus of proof on someone asserting otherwise?

I'm not suggesting the model is wrong. Only that it's based on large amounts of money coming in. If that stops, then the model will break.

On the stadiums issue, do you think it's reasonable that the AFL arrange the stadiums for some clubs but not others? And based almost exclusively on geography? Given the AFL isn't the one that hosts games, it's difficult to see why every single stadium deal in the country isn't between the club and the stadium operator. The AFL, other than setting minimum standards for stadiums and ensuring they comply, has no business being involved. They certainly shouldn't be owning a stadium when they don't host games (except finals, and ironically the stadium they own is probably the least likely regular venue to host a final).

 

[NoobPie]

The "poor stadium deal" and "inequities in the fixture" has been completely debunked. Clubs get no changes in funding based on the fixture, otherwise it would vary wildly year to year. The Bulldogs for instance, who have had commercially positive fixtures for the last few years, remain one of the largest recipients of AFL funding. Funny, my club hasn't had a Friday night game since Adam was a boy (and rightfully so given on field results), yet is one of the lowest funding beneficiaries. Clearly the fixture is not relevant.

No, "advantages and disadvantages of fixtures" are clearly just one element. Also Freo get a derby guaranteed each year and get nearly every game broadcast live on FTA into its home market

more broadly, pertinent elements of the publicly stated policy that might see freos distribution being lower than the bulldogs include:

§ Recognises the relative strength of each Club’s supporter base and the widely varying markets in which each Club is based
§ Recognises the financial advantages and disadvantages of current stadium agreements held by AFL Clubs
§ Boosts or reduces AFL Distributions to Clubs to reflect differences in Club income
§ Works to provide all Clubs with the capacity to pay 100% of total player payments & additional service agreements
§ Works to provide all Clubs with the capacity to fund a level of non-player football department expenditure to be competitive on field while remaining profitable
§ Aims to control growth in non-player football department expenditure through a soft cap on non-player football department spend.

Likewise, when the AFL took over Docklands we were all told how great the stadium deal was going to be for tenants. The effect on AFL distributions? Zero. Docklands tenant clubs did not roundly get their funding cut.

If and when the docklands tenants receive a big rent reduction from the AFl ownership, I am sure it will parlay into a lower distribution. I don't know on what basis you can conclude that isn't going to happen?

When the AFL took over from memory there wasn't much by way of rent reduction for the tenant clubs anyway. The AFL has said it wants to pay down the loan it took out before it starts making large changes to rental agreements

Everything else is based on financial factors.

Given we know what goes to each club, it's pretty easy to draw the conclusion that it's based on financial necessity. Amounts paid by the league go up and down based broadly on how shitty their financials are. Look at Brisbane and St Kilda as 2 extreme examples - both clubs that have drawn huge amounts in funding from the AFL at the same time as their financial situation deteriorated badly. Nothing else changed.

St Kilda and Brisbane are the two clubs that have clearly been funded beyond the formula. This, if you like, is the "discretionary funding' beyond the funding model. Clearly "element 6" of the new measures introduced in 2014 relate to this situation

The new competitive balance measures consist of six key elements:

6. Stronger accountability and performance management – help smaller Clubs which benefit from increased distributions from the AFL to improve performance, grow revenues and to be accountable for delivering on key targets.

So clubs that find themselves needing discretionary funding go into quasi administration from head office. Realistically, this extra funding probably accounts for about $10M of the $300M distributed each year.

For instance, the other three small melbourne clubs all receive between $4.8M and $5.4M above the Collingwood baseline where as st klilda received $7.3M.

Now I know that correlation does not necessarily equal causation, but what other possible conditions could there be? Have you got an example of a club's funding getting directly affected by another factor?

No, how would I? There are several factors in the policy - that all the clubs signed off on and would have oversight of - but the funding allocation "formulas" aren't made public - as most reasonable people wouldn't expect them to be.

I'm not suggesting the model is wrong. Only that it's based on large amounts of money coming in. If that stops, then the model will break.

But I have demonstrated that it isn't at all. In fact it is designed very well to respond to a drop in revenue

On the stadiums issue, do you think it's reasonable that the AFL arrange the stadiums for some clubs but not others? And based almost exclusively on geography? Given the AFL isn't the one that hosts games, it's difficult to see why every single stadium deal in the country isn't between the club and the stadium operator. The AFL, other than setting minimum standards for stadiums and ensuring they comply, has no business being involved. They certainly shouldn't be owning a stadium when they don't host games (except finals, and ironically the stadium they own is probably the least likely regular venue to host a final).

The answer and response to this mix of questions and assertions is - it is commercially better in the pragmatic circumstances of Australia that it does so.

Given the funding model compensates for stadium advantages and the football department cap removes inflationary resource competition from undermining the codes sustainability, the AFL's ownership and involvement in stadiums has almost certainly been beneficial for the game overall. The average quality of stadia in an average AFL round is probably superior to every outdoor team sport in the world outside of the NFL.

 

[Rob]

The answer and response to this mix of questions and assertions is - it is commercially better in the pragmatic circumstances of Australia that it does so.

Given the funding model compensates for stadium advantages and the football department cap removes inflationary resource competition from undermining the codes sustainability, the AFL's ownership and involvement in stadiums has almost certainly been beneficial for the game overall. The average quality of stadia in an average AFL round is probably superior to every outdoor team sport in the world outside of the NFL.

That would be because the AFL has huge average crowds by world standards and that governments are prepared to fund the infrastructure. There's no reason a few Melbourne clubs couldn't get together and sign virtually the same deal the AFL has with the MCG. The AFL merely guarantees games, yet doesn't actually put the games on. National sporting bodies that own stadiums are generally used for events actually put on by the body itself - national team games and the like.

I agree with your first sentence - but that's contrary to the AFL's role as administrator of the league. Clearly it compromises integrity, and IMO to an unacceptable level.

 

[Ned_Flanders]

That would be because the AFL has huge average crowds by world standards and that governments are prepared to fund the infrastructure. There's no reason a few Melbourne clubs couldn't get together and sign virtually the same deal the AFL has with the MCG. The AFL merely guarantees games, yet doesn't actually put the games on. National sporting bodies that own stadiums are generally used for events actually put on by the body itself - national team games and the like.

I agree with your first sentence - but that's contrary to the AFL's role as administrator of the league. Clearly it compromises integrity, and IMO to an unacceptable level.

That assumes the MCC wants to deal with clubs direct

Richmond couldn't even get an offer for a new deal

Dealing with the AFL direct makes sense because they control the fixture, and they control the Etihad/mcg split

 

[Rob]

That assumes the MCC wants to deal with clubs direct

Richmond couldn't even get an offer for a new deal

Dealing with the AFL direct makes sense because they control the fixture, and they control the Etihad/mcg split

Every other club outside Victoria seems to deal with it OK. the AFL needs to tick it off as they need to agree to fixture games there, but outside of that there's no reason for them to be involved.

The MCC shouldn't have a choice. If they want product, they should deal with the party actually providing it.

 

[Kwality]

Why is that likely? The system is precisely designed to stop such an outcome

The AFL introduced a soft football department cap a few years back and changed its funding formula to explicitly enable all clubs to be able to spend to that cap.

NoCookies | The Australian

www.theaustralian.com.au

Ultimately if league finds itself, for the first time since a blip in the 80s (when transfer fees were still a thing ironically!), with its revenues declining and a number of clubs are struggling the AFL can just re-balance its funding formula and tighten its football department cap

In terms of the article, it is remarkable that the AFL is expected to pull combined profits of $90 million this year.

What $number comes from media rights?

 

[Kwality]

But the stadium arrangements in Melbourne is a shameful chapter in the evolution of the national league. The AFL have no business renting stadiums for anything other than the grand final and should have weaned themselves off them.

The AFL have been played off the break by the MCC from day one. The latest GF deal is just another example.
No Vic based media are prepared to take it on.

 

[Ned_Flanders]

Every other club outside Victoria seems to deal with it OK. the AFL needs to tick it off as they need to agree to fixture games there, but outside of that there's no reason for them to be involved.

The MCC shouldn't have a choice. If they want product, they should deal with the party actually providing it.

And for them it's the AFL (not that I like it btw)

 

[The_Wookie]

The AFL have been played off the break by the MCC from day one. The latest GF deal is just another example.
No Vic based media are prepared to take it on.

its not just the MCC though, its the Victorian Government. It been this way since 1984. The Victorian Government forced the league into this position originally, and the AFL has made the most of it that it can since.

Every other club outside Victoria seems to deal with it OK. the AFL needs to tick it off as they need to agree to fixture games there, but outside of that there's no reason for them to be involved.

Port Adelaide might disagree.

Both WA and SA stadium deals are based on AFL match exclusiveness guarantees and fixed match numbers. Its why the AFL was party to both stadium agreements being done despite not paying anything.

On the Gold Coast the lease is held by the AFL itselfm and sublet to Gold Coast on its behalf.

The MCC shouldn't have a choice. If they want product, they should deal with the party actually providing it.

Unfortunately in order for the MCC to take out viable financing for stadium upgrades it needs a guaranteed income for a fixed period that can only be guaranteed by the league.

 

[Kwality]

the AFL has made the most of it that it can since.

More like the AFL has been played off the break by the MCC / MCG Trust, the AFL product is where the real value lies yet they continue to sign long contracts for NO gain for the game. How do these long term contracts benefit the game.
Yes the Vic Govt has acted in its own best interest.
No footy at the G, what happens to the MCC membership, it'd be as big as any other suburban cricket club.

 

[Tiger Soze]

‘Our capacity to continue to support our clubs and grassroots football in a financial sense is inextricably linked to our key revenue streams and specifically the AFL Grand Final,” the document says.
“Access to AFL Grand Final tickets is fundamental for clubs to meet their commercial obligations.
“The current economic climate continues to place extreme financial pressure on Victorian and interstate clubs alike, many of which receive increased distributions from the AFL in order to remain viable.’
“The AFL Finals Series generates significant revenue for the AFL, with the AFL Grand Final alone generating $19 million net profit.

In all likelihood the Grand Final will forever be played where the highest attendance can be obtained.

 

[Kwality]

‘Our capacity to continue to support our clubs and grassroots football in a financial sense is inextricably linked to our key revenue streams and specifically the AFL Grand Final,” the document says.
“Access to AFL Grand Final tickets is fundamental for clubs to meet their commercial obligations.
“The current economic climate continues to place extreme financial pressure on Victorian and interstate clubs alike, many of which receive increased distributions from the AFL in order to remain viable.’
“The AFL Finals Series generates significant revenue for the AFL, with the AFL Grand Final alone generating $19 million net profit.

In all likelihood the Grand Final will forever be played where the highest attendance can be obtained.

Are you arguing that you buy the advantage?

 

[Tiger Soze]

Are you arguing that you buy the advantage?

You suggest NO gain for the game.
That suggests otherwise.
All clubs and the game as a whole benefits from having the Grand Final played at the home of football.
Aside from that it’s a little naive for clubs that joined our competition to think the GF would ever be played anywhere else. And I haven’t heard any player suggest the GF should be played anywhere else either, in fact quite the opposite.

 

[Ned_Flanders]

Are you arguing that you buy the advantage?

no, he's arguing the AFL go where they get the most profit

point is, if perth want to host the GF, their offer will need to be starting at $20m a year

This is probably why these discussions have never gone anywhere but fan forums and radio - its not value for money. Apparently for $15m of "economic benefit" SA/WA/VIC are offering seven figure sums to the NRL for the SOO games. And one is offering $10m to host the NRL grand final

if they are offering $10m for the NRL GF, I highly doubt they are prepared to offer $20m for the AFL GF

 

[NoobPie]

no, he's arguing the AFL go where they get the most profit

point is, if perth want to host the GF, their offer will need to be starting at $20m a year

This is probably why these discussions have never gone anywhere but fan forums and radio - its not value for money. Apparently for $15m of "economic benefit" SA/WA/VIC are offering seven figure sums to the NRL for the SOO games. And one is offering $10m to host the NRL grand final

if they are offering $10m for the NRL GF, I highly doubt they are prepared to offer $20m for the AFL GF

I agree with your general point but there is no way the NRL gf makes half as much as the AFL Grand final.

The point is even the MCC pays $250 per seat in the gf. So there's $5million in revenue and you still have 80k seats left.

You move the gf to Perth and two non Perth teams get there and you wouldn't even have the infrastructure to get the 40k people there.

 

[The_Wookie]

I agree with your general point but there is no way the NRL gf makes half as much as the AFL Grand final.

$19 million is the profit the AFL makes for the Grand Final. $10 million is what the NRL is paid to host it in Sydney. The two figures arent for the same thing.

You move the gf to Perth and two non Perth teams get there and you wouldn't even have the infrastructure to get the 40k people there.

People also seem to believe that the corporates and AFL members would just vanish into thin air. Youd be lucky if you could even get 30,000 club members - all clubs, not just competing ones - into the event.

 

[Kwality]

You suggest NO gain for the game.
That suggests otherwise.
All clubs and the game as a whole benefits from having the Grand Final played at the home of football.
Aside from that it’s a little naive for clubs that joined our competition to think the GF would ever be played anywhere else. And I haven’t heard any player suggest the GF should be played anywhere else either, in fact quite the opposite.

Rubbish, its never been tested, remember 25,000 MCC members attend.

 

[Kwality]

no, he's arguing the AFL go where they get the most profit

point is, if perth want to host the GF, their offer will need to be starting at $20m a year

This is probably why these discussions have never gone anywhere but fan forums and radio - its not value for money. Apparently for $15m of "economic benefit" SA/WA/VIC are offering seven figure sums to the NRL for the SOO games. And one is offering $10m to host the NRL grand final

if they are offering $10m for the NRL GF, I highly doubt they are prepared to offer $20m for the AFL GF

Understand your arguments, if it were an open bidding, how much do you think Vic would offer - Dan underwrote the closed door negotiations, remember what happened to Terry O'Connor when he dared question. Both WA & SA (not sure about NSW) had expressed interest, they were locked out for a reason?

 

[Ned_Flanders]

Understand your arguments, if it were an open bidding, how much do you think Vic would offer - Dan underwrote the closed door negotiations, remember what happened to Terry O'Connor when he dared question. Both WA & SA (not sure about NSW) had expressed interest, they were locked out for a reason?

From experience in other industries, they wouldn't have been locked out. They would have had discussions to assess level of interest, and that would have driven their decision

The AFL is always driven by coin.

 

[Tiger Soze]

Rubbish, its never been tested, remember 25,000 MCC members attend.

And probably never will be tested, why would we want to take the game away from the home of football. The only way it will ever be played elsewhere is if a redevelopment of the G meant less numbers than another stadium. Same when it was played out at Waverley Park one year.

 

[Kwality]

My experience too - Adelaide was reported to have asked how the GF decision effected their request.

It was a fait accompli, only the encumbents had a seat at the table.

 

[Ned_Flanders]

My experience too - Adelaide was reported to have asked how the GF decision effected their request.

It was a fait accompli, only the encumbents had a seat at the table.

i keep coming back to the why, people dont ask this enough

and its not "the great vicco conspriacy", the afl is forcing vic teams to "host" port adelaide in china remember, and their relocation of north by stealth has hardly been subtle

reality is the $20m number sums it up. It is worth much more to the vic govt to overpay to keep the GF in melbourne than it is for other states to pay to get it on a random basis. money kept it in melbourne, blaming it on vicco conspiracies is a cop out

 

[Kwality]

Why, because its a national comp , winner take all. We use merit for other finals.

The non Vic States had expressed interest, were not given the opportunity to bid. IF the other States put a number on it, would the MCC have improved its offer, its business model would be in disarray.
Would the Vic Govt paid the AFL (think F1), the other States would.

You seem to need to make it about Vic bias understandably. The 3 encumbents sitting in the room to nut out an extension of a contract ......

 

[Ned_Flanders]

Why, because its a national comp , winner take all. We use merit for other finals.

The non Vic States had expressed interest, were not given the opportunity to bid. IF the other States put a number on it, would the MCC have improved its offer, its business model would be in disarray.
Would the Vic Govt paid the AFL (think F1), the other States would.

You seem to need to make it about Vic bias understandably. The 3 encumbents sitting in the room to nut out an extension of a contract ......

you seem to think it should have been an open public tender, that was never going to happen. Do you think the NRL has open tenders when its selling the SOO games? Of course not, it has private discussions with potential options, eliminates those with no chance, and then concludes behind with closed doors those with a shot.

The reality is all of WA, SA, and VIC would not want this going to an open public tender. Losing it looks bad, but so does winning (ie why is govt underwriting a private professional competition for $$$ when the hospitals are s**t?)

This stuff is always done on the quiet. I have no doubt the perth stadium opened discussions with the AFL, but they never got past the coffee and a chat phase, because they were not able to commit to close to the money the MCC already had on the table

 

[Kwality]

The base distribution to clubs is very roughly 2/3rds of the TPP

The discretionary handouts are minimal. The funding model distributes higher amounts to smaller clubs based on "structural inequities".

The base distribution is determined to ensure every club can meet the football department soft cap.

There's no methodology used outside of which club needs more money. And you know it.

You don't have any basis to do so beyond "naaaah go on.............the AFL just does hand outs willy nilly, everyone knows that"

Clubs get no changes in funding based on the fixture, otherwise it would vary wildly year to year.

Is there really a funding formula ? A clear formula?