AFL 2023 funding

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It's ironic that it's the increased broadcast revenue and commercial returns from having 18 clubs instead of 16 that's enabling the AFL to sustain so many clubs. Would the AFL be forking out as much money to the Saints, North, and yes, Brissy, as they are now if the Suns and Giants weren't around? I doubt that extra 50 million would even exist to distribute to them, let alone the money they already get.
I think the AFL had enough money with 16 clubs to be able to spend a fortune creating 2 teams that don’t have the supporter bases to sustain themselves.
 
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I think the AFL had enough money with 16 clubs to be able to spend a fortune creating 2 teams that don’t have the supporter bases to sustain themselves.
The question is, do they have enough money with 18 clubs to be able to spend a fortune creating another 2 teams that don’t have the supporter bases to sustain themselves yet?
 

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The question is, do they have enough money with 18 clubs to be able to spend a fortune creating another 2 teams that don’t have the supporter bases to sustain themselves yet?
Usually the top league of a sport doesn’t spend a fortune creating teams that don’t have supporter bases to sustain themselves.
 
And do expansion clubs of any sporting code have good supporter bases to sustain themselves from day dot?
An example would be the NFL wanting to expand into London, but before London can get an NFL team they need to have a fan base of 6million people. You need to have fans first before you get a team in the top league.

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An example would be the NFL wanting to expand into London, but before London can get an NFL team they need to have a fan base of 6million people. You need to have fans first before you get a team in the top league.

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Right.

So it's not so much new franchises versus traditional old clubs that's the concern i.e. Eagles and Crows worked out well despite not being WAFL and SANFL clubs, it's the fan base.

"With its popularity increasing, the QAFL began to seek a VFL licence."

They pulled the trigger too soon on this.

Did NSW even have a league back in the 80s? I think it was part of the AFLACT. I can't name any Sydney team other than their Sydney University one which I'm not sure was even playing in that league. Definitely too early on a Sydney team in the 1980s.
 
St Kilda and Melbourne to merge forming the St Melbourne Demon Saints.

North to Tasmania

Bulldogs to Ballarat.
Gold Coast to Brazil
Port to China
Bulldogs to USA
St Kilda to England
Fremantle to Nigeria
Melbourne to New Zealand
Giants to India

AFL, the World Game.

North Melbourne saved as there’s no kangaroos found anywhere else in the world.

Wait.

Kangaroo fossils found in Papua New Guinea.

Nek minnit, North moved to PNG.
 
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It's ironic that it's the increased broadcast revenue and commercial returns from having 18 clubs instead of 16 that's enabling the AFL to sustain so many clubs. Would the AFL be forking out as much money to the Saints, North, and yes, Brissy, as they are now if the Suns and Giants weren't around? I doubt that extra 50 million would even exist to distribute to them, let alone the money they already get.

I think the AFL would have been in a stronger position financially had it remained the VFL. It would have had some lean years for a bit longer but pay-tv is what changed the fortunes for the AFL, not an expanded number of teams. Whilst the numbers are larger as an AFL as they would be as the VFL, the value per club is significantly less and that is primarily due to there being a critical mass in terms of valuable time slots to broadcast the game.

These timeslots drive everything from attendances, broadcasting revenue, advertising revenue, sponsorship revenue, etc. What we are doing is just generating more low value games and it is hurting clubs that get pushed into those low value markets due to oversaturation.

The average AFL game generates lower ratings than a rerun of Better Homes and Gardens, yet prime time advertising slots during AFL games cost a premium because that advertising market is more valuable for certain products, like beer, utes/cars, etc. We have already captured the high value timeslots, what are now becoming available are lower value time slots.

Based on the AFL's 2021 Annual Report, for C7 all metro matches:
Melbourne: 16.916m @ 223k per game
Adelaide: 6.57m@ 77k per game
Perth: 6.355m@ 73k per game
Sydney: 2.489m@ 28k per game
Brisbane: 2.435m@ 27k per game

C7 broadcasts all NSW and QLD games to FTA because it is a condition of the broadcasting rights agreement, but they dump them on secondary digital channels which are far less lucrative than the primary channel in terms of advertising value. Before digital TV, we actually got lower broadcasting revenue because it cost C7 to play AFL in Sydney and Brisbane.

Gold Coast, Darwin, Alice Springs, Tasmania, etc are all in the regional market bin that aren't part of the main ratings index, these are low value markets because of low density and dispersal of the market, it still has advertising value but is lower value, much lower. In terms of how lucrative the markets are, Sydney is marginally higher than Melbourne, then a big gap to Brisbane and then Perth and Adelaide, this assumes you comparing the main channel. If you tried to purchase advertising space during an AFL games, the city it is broadcast to has very different costs even at the exact same timeslot.

This is primarily why there is a huge disparity in terms of sponsorship revenue for clubs, this is valued based on the amount of access they have to the various markets, the clubs that the AFL give preferential scheduling to generate substantially more for sponsorship deals. The Crows in particular have been very vocal about getting greater access to games broadcast into Melbourne as it would substantially improve their bottom line.

Live and exclusive games is what drives value for subscription based services, it is why Foxtel pays a fortune for it's share of the broadcasting revenue, it doesn't benefit Foxtel much to run games against C7 which are also playing the games live, delayed more valuable than live. Foxtel residential subscribers (down 9%) to 1.481m subscribers, Kayo Sports (up 22%) to 1.293m, winter sports is the peak value period for Foxtel. This is primarily why the AFL has been pushing to get WA and SA to suffer the same fate as Victoria and lose FTA access to games to improve the value of it's broadcasting revenue.

AFL generates half it's revenue from broadcasting revenue, if they just returned broadcasting revenue to clubs and ran it's administration from other revenue then it would be distributing more than $30m per club annually. AFL retains too much of the revenue and barely covers the TPP for most clubs.

What the AFL doesn't disclose is non-arm's length transactions. When they say they give Giants $20m a year, this doesn't include the ludicrous amount of money the AFL gives AFL ACT so that they can purchase half of the Giants home games. AFL hid payments like these and other grants for the Swans for more than a decade (thankfully they no longer need it). AFL needs to stop hoarding the broadcasting revenue and distribute it evenly to the clubs, they wouldn't need to be asking the AFL for help if the AFL didn't withhold the vast majority of the revenue.
 
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I think the AFL would have been in a stronger position financially had it remained the VFL.
Yeah, and why didn’t it? Because the VFL kept trying to poach players from the WAFL and SANFL, putting clubs into debt.

Of course, interstate players were always going to be lured in by the money, but no one was forcing the VFL to try and pump up its league by taking some cream off the top of WA and SA.

South Melbourne were moved to Sydney to move the debt away from Melbourne and palm it off into Sydney’s lap. That said, the addition of the Sydney Swans to the VFL has probably done more for the growth of the game in NSW than anything else.

The VFL still have the same mentality today. Vic club struggling on or off field, let’s try and ship them off. * this little state down south calling itself Tasmania with a strong footy history, let’s shove a Melbourne team down their gob. Glad Tasmania Kangaroos never happened.

But if you could go back, it’d be better if instead of the AFL we had have had a Champions League style competition between the best 8-16 clubs around the country each year, keeping the state leagues as they are.

But the VFL ****ed that up because they knew their league wouldn’t be as good as it was without interstate imports.
 

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Yeah hawks are fine didn’t say they were plebs.
Just reciting a couple narratives the clubs put out in recent past.
Obviously if you play home games interstate your no powerhouse.
Especially with your amazing and admired on field success.
To be honest, I think stand alone clubs should be given a set number of prime time games, to add more incentive to clubs to get their books in order.

We currently don’t get many, and I would think we had continued to be pushed to Sunday because of our mouthy ******* President that we just turfed was picking fights with the AFL and other clubs along the way, so I will wait to see if that change has an impact on our fixture in 2024 and beyond(as much as you’d like to think that it wouldn’t).

It’s pretty undeniable now that Hawthorn is a financial powerhouse, regardless of their need to play 4 games in Tassie to recoup the major sponsorship.
 
Yeah, and why didn’t it? Because the VFL kept trying to poach players from the WAFL and SANFL, putting clubs into debt.

There are often some simplistic takes on a complex topic than can obfuscate what happened at the time, I think control of spending was one issue but there were numerous and it doesn't do it justice to just pick one blade of grass in the field and say this is the problem.

Spending was an issue, but it was the rapid change of pace, clubs had to basically double their revenue every 5 years and this was a big ask if you happened to be in a cycle where you sucked on-field.

I think it was a turbulent period as clubs were trying to transform from low revenue amateur clubs into higher revenue professional clubs, Richmond almost died, Collingwood had major problems and most clubs ran into significant problems and there was a lack of qualified football people to undertake the transition, clubs often had to hit existential crisis points to get better qualified people from outside to come in and address major problems.

It was at this time also that the VFL abandoned suburban stadiums, this was potentially a big win if you could consistently fill out a major stadium but for most clubs, a low cost smaller suburban ground was more economical and better suited to lower drawing games. AFL is only rediscovering the problem of the suburban ground problems now that it is faced with AFLW and it's much smaller crowds.

Salary cap came into the competition in 1987, along with West Coast, Brisbane and the national draft. Cap was $1.25m back then when it first came in so there were efforts put into trying to constrain costs. We only underwent measures to control spending until after the league had committed to nationalisation and the measures to curb spending was more about protecting new interstate clubs. This was also when the U19 league was abolished and list sizes substantially reduced so interstate teams wouldn't be disadvantaged. Even then it wasn't until decades later that ballooning costs would slow down only after football department caps were introduced.

All the measures that were introduced to equalise talent and slow down the cost of running a football club would all have been effective if the league remained a VFL instead of nationalising.

Foxtel didn't launch until 1995 and wasn't in a position to be part of a bid until 2001. This was when things turned around in terms of broadcasting revenue, it has seen rapid growth as has NRL as well, which for the most part is played in NSW and QLD. This kind of revenue stream just didn't exist during the VFL era.

AFL broadcasting rights per year:
1986: $3.5m
1987: $1.5m
1988: $6m
1992: $17m
1998: $40m
2001: $100m (Fox/C9/C10)
2006: $150m (Fox/C7/C10)
2011: $250m (Fox/C7/Telstra)
2016: $417m (Fox/C7/Telstra)
2020: $473m (Fox/C7/Telstra) adjusted for covid
2022: $643m (Fox/C7/Telstra)

Of course, interstate players were always going to be lured in by the money, but no one was forcing the VFL to try and pump up its league by taking some cream off the top of WA and SA.

Are you talking way before nationalising? There wasn't a national league based draft until West Coast and Brisbane came in, it wasn't the "league" chasing players from outside of Victoria, it was clubs. My club had a long association with players from SA and WA because we were given one of the worst metro recruitment regions since we came into the VFL. It only became a problem after we got one of the more lucrative regional zones and a handful of clubs dominated the VFL.

They had to change things because of how the competition was going. Between 1967 add 1989 there were 22 flags, 7 to Carlton, 6 to Hawthorn, 5 to Richmond, 2 to North and 2 to Essendon. To 2000 another 11 flags were added for a total of 8 Carlton, 7 Hawthorn, 5 Richmond, North and Essendon 4 each, 2 West Coast, 2 Crows and 1 Collingwood. This is pretty much three generations of players and there wasn't a whole lot of good times for the vast majority of clubs. It can take more than a decade for some changes to take full effect.

Victoria just had the critical mass or population of the AFL states. There is 6.67m people in Victoria with a 29.0 density, 1.85m in SA with a 1.7 density, 2.77m in WA with a 1.0 density. The disparity between Vic and the next largest WA would be akin to having 16m people in WA vs Victoria currently. That is the critical mass difference. If there were 16m people in WA today and it was that significantly larger than Victoria and it was in the heydey of VLF/SANFL/WAFL then the national competition would have been the WAFL and that size would make WA dominate in terms of ratings, etc and you would get maybe 3 or 4 clubs out of Victoria to join. It is just the natural evolution of a significant size disparity.

Had we not played rugby in Australia and you had NSW and QLD as AFL grassroots states, the AFL would have been radically different. It is the same draw that makes players leave their suburban leagues for their state leagues. The best are just in demand and there is more attraction where the market size is the biggest.

South Melbourne were moved to Sydney to move the debt away from Melbourne and palm it off into Sydney’s lap. That said, the addition of the Sydney Swans to the VFL has probably done more for the growth of the game in NSW than anything else.

Yeah, there were a lot of problems in the VFL, they just didn't try all that hard to fix any of them. As i said, if the VFL didn't go national and just plodded on, it would have got to the point where it would have hit the years of pay-tv and it would have introduced a lot more revenue into the coffers. They were already motivated to equalise the competition largely because a handful of clubs dominated and it wasn't the clubs with the most political influence.

I don't think what the other states have contributed (broadcasting-wise) comes close to dividing the revenue pool to the extent as it has. Nobody is paying a fortune for broadcasting rights to get sub 30k average viewers on 7mate in Sydney and Brisbane. My club is a complete minnow and probably adds more broadcasting value to the AFL than all of the NSW and QLD clubs combined and we provide more AFL revenue to the AFL than West Coast does due to the way memberships are treated. It is ironic that most people then think we are a frontrunner to turn into another net loss for the AFL to move it to some other unappealing market.

The VFL still have the same mentality today. Vic club struggling on or off field, let’s try and ship them off. * this little state down south calling itself Tasmania with a strong footy history, let’s shove a Melbourne team down their gob. Glad Tasmania Kangaroos never happened.

The VFL is a reserve grade competition, it only exists as a boogeyman to people outside of Victoria.

Nobody is glader that Tasmania Kangaroos never happened than I am. I think if Tasmania can carry its weight financially speaking then they should get a team in their own right. If they can't afford it, then crippling us in the process will just amplify the problem.

Playing in Tasmania wasn't even our idea, it was Richmond's idea, Gale put it together and the AFL said no because Richmond was already selling games somewhere else. The AFL said they would approve it if Tasmania could get us to replace Richmond, we weren't selling any games at the time. The Federal Government wanted Hobart to play AFL games to justify spending taxpayer money on their stadium. If we said no then it would have been a net loss for the Tasmanian people. People keep making out like we went cup in hand to Tasmania asking for favours.

They proposed a business arrangement to us, it was worthwhile us doing in the short-term but it is not a very good long-term arrangement for a state that wants it's own non-relocated team. We are a North-Western Melbourne club and there is plenty of growth potential in the North-West of Melbourne for us long-term. Victoria's population is estimated to grow to 11.2m by 2056 with Greater Melbourne going from 6.67m to 9.0m, that is like shoving WA into Melbourne in 33 years and a big chunk will end up in the NW area. That is a great opportunity for us, Bulldogs and Geelong to grow. Everyone really, but we have a big presence in Wyndham and we have been growing along with them.

If and when Tasmania get a side, it should be both something they desire and it should be based on financial reality.

But if you could go back, it’d be better if instead of the AFL we had have had a Champions League style competition between the best 8-16 clubs around the country each year, keeping the state leagues as they are.

I just said it would be better financially. Nobody wants to play a home game here against Port or GC or Freo, etc. The financial model around equalising stadiums is so we play in two monolith stadiums is to max them out with supporters of both clubs. It is also the model which generates revenue for the AFL. AFL makes no gameday revenue if 100% of the crowd are members of the home team.

Collingwood had one of their best seasons in a long time and could barely scrape 30k against the Giants and 29k against Suns at the MCG which has half the stadium as MCC (150k members) and AFL (100k+ members) to pad the numbers, the year before in a less spectacular year they got 11k against Dockers at Docklands... and that is Collingwood. It can get worse.

We are creating too many mediocre environment games, they would be much better suited to a smaller capacity stadium, spreading 30k people across a 100k stadium is like spreading 15k people across a 50k stadium, it creates a dull atmosphere and it impacts clubs like Collingwood a lot less because their preferential scheduling doesn't give them access to a lot of these home games. It is the smaller clubs that are going to bare the brunt of these games over a long period of time.

When you look at attendances for home games last year by state:
NSW: 425,069
QLD: 408,276
SA: 672,346
WA: 849,152
VIC: 3,757,588

Despite a massive increase in population and supersizing most of our stadiums we are barely averaging more in crowd numbers than we did in the mid 90s and before the AFL games were played in much lower capacity suburban stadiums. I think if you played the same number of games with just Vic on Vic teams at MCG and Docklands then we would annihilate current crowd numbers and make for better atmosphere games across the entire season. AFL is making Kayo more attractive, no surprise their membership has surged +22% this year.

But the VFL ****ed that up because they knew their league wouldn’t be as good as it was without interstate imports.

Of course it is better to have the best talent from a game spectacle enjoyment but Victoria produces half the players for the AFL, the cost of accessing the best of the best from all states has been to thin out the pool a fair bit. Watching North vs Hawks in the 70s was like watching two state of origin sides play with legends on every line. We capture more of the best players now but at what price? How many potatoes you see running around in sides these days? Guys who literally can't kick or hit a guy 5m away standing still. Have we created a legend of the game since Carey? When you dilute the talent so much it is that much harder for someone to achieve greatness imo. You need great players around you.
 
The Suns and Giants have received a lot of funding so far in a short amount of time. It's not totally unexpected, but at a certain point, Gold Coast in particular, you need to start getting some lift out of that. GWS have at least made a Grand Final and played/won several finals.

Gold Coast never making finals despite the long term high investment is pretty poor.
 
There are often some simplistic takes on a complex topic etc...
Really good post mate, appreciate the detailed response.

I question the talent pool argument, though. That's only convincing if the percentage of people throughout the country playing Aussie Rules at an early age has declined in the last 15-20 years, and if the increase in GC/WS has made up for the difference if it has. Because if participation rates are about the same, then there is enough player talent, because the population growth rate has soared past the expansion rate in terms of people per club. So, maybe it's just that the game is faster these days and there's probably a coaching/development lack of talent more than players. Also, Carey was a one of a kind, it's not surprising we don't have someone like him running around often, although we got Franklin, who I don't think was as good but would still consider to be a legend of the game.

Do you supports limits on expansion, even if the game does grow in NSW and QLD?
 
The Suns and Giants have received a lot of funding so far in a short amount of time. It's not totally unexpected, but at a certain point, Gold Coast in particular, you need to start getting some lift out of that. GWS have at least made a Grand Final and played/won several finals.

Gold Coast never making finals despite the long term high investment is pretty poor.

St Kilda and the Western Bulldogs have received almost as much funding as the two expansion clubs without the excuse of being expansion clubs.
 
St Kilda and the Western Bulldogs have received almost as much funding as the two expansion clubs without the excuse of being expansion clubs.
Yep.

Is there anywhere I can find a debt ladder? I've read that ours is the highest and I think the Saints have the highest debt of any Vic clubs. I wonder what regional Vic market would be worth them selling a couple of games to.
 
Really good post mate, appreciate the detailed response.

I question the talent pool argument, though. That's only convincing if the percentage of people throughout the country playing Aussie Rules at an early age has declined in the last 15-20 years, and if the increase in GC/WS has made up for the difference if it has. Because if participation rates are about the same, then there is enough player talent, because the population growth rate has soared past the expansion rate in terms of people per club. So, maybe it's just that the game is faster these days and there's probably a coaching/development lack of talent more than players. Also, Carey was a one of a kind, it's not surprising we don't have someone like him running around often, although we got Franklin, who I don't think was as good but would still consider to be a legend of the game.

Do you supports limits on expansion, even if the game does grow in NSW and QLD?

It may sound surprising, but I am not against expansion. I just think decisions need to be based on realism. I am 100% in favour of Tasmania getting their own team, I just don't want us to make decisions based on fantasy figures and then run into problems like we did with GWS and GC before the first ball was even bounced. Once you grant the license, it is too late.

As to the talent pool specifically... yeah, I am not sure. I do think the way the AFL has changed rules over the years has made it harder, a lot of natural footballers aren't the best runners and the AFL has made it easier for athletes and harder for natural footballers over the years who aren't elite runners, almost every year they find some way to make it harder to defend and it is a handicap for those without elite endurance. I just think the cream of the crop is spread too thin atm.

I am not sure about expansion limits, I just don't think growth of market share or revenue streams should be a performance criteria for executive bonuses. I think if we hit booming revenue and attendance/viewership numbers yet covid is an existential threat to 3/4 of the clubs then you are pretty much just overblowing a balloon. How can we go from broadcasting rights going from $1.25b a decade ago to $4.5b and 3/4 of clubs would have keeled over if members asked for a refund due to a lack of games during covid? Where is the money going?

I care about my club, I don't really care how much money the AFL makes, especially if next to nothing seems to come back to clubs. I don't care how many people in NSW or QLD follow AFL in the future. If they like AFL then that is great, have at it. Do we need 20 or 30 teams in the competition? Will it make the competition better? I am not sure, I feel less invested in AFL than I used to be but not sure how much that just relates to getting older/having other interests.
 
Small update to my tinkering for those of you looking at revenue sharing by crowds

Using this python library : GitHub - RamParameswaran/pyAFL: Python AFL (Australian Football League) library for collecting/analysing AFL data from AFLtables.com
( it scrapes afltables )

I built a jupyter notebook
import pandas as pd

from pyAFL.teams import ALL_TEAMS, CURRENT_TEAMS

result = pd.DataFrame()
for curteam in CURRENT_TEAMS:
print('Current TEAM =', curteam)
pd_team = curteam.games
pd_team.insert(loc=0, column='hometeam', value=curteam)
result = result.append(pd_team, ignore_index=True)

result.to_csv('c:\\temp\\games.csv')

Imported into excel and summarised. Happy to provide the raw data as i make no claims to the accuracy of the data..

Note - this code will pull a warning on the use of deprecated "append"

1675842982457.png

YES - H & A crowds balance. They have to !

EDIT - I gave some thought to the balancing of H&A games and realised that the AFL tables actually gives me each game twice.... i.e. once for the home team, and again for the away. I will give this some more thought before i come back with RunVS request.
 
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Small update to my tinkering for those of you looking at revenue sharing by crowds

Using this python library : GitHub - RamParameswaran/pyAFL: Python AFL (Australian Football League) library for collecting/analysing AFL data from AFLtables.com
( it scrapes afltables )

I built a jupyter notebook
import pandas as pd

from pyAFL.teams import ALL_TEAMS, CURRENT_TEAMS

result = pd.DataFrame()
for curteam in CURRENT_TEAMS:
print('Current TEAM =', curteam)
pd_team = curteam.games
pd_team.insert(loc=0, column='hometeam', value=curteam)
result = result.append(pd_team, ignore_index=True)

result.to_csv('c:\\temp\\games.csv')

Imported into excel and summarised. Happy to provide the raw data as i make no claims to the accuracy of the data..

Note - this code will pull a warning on the use of deprecated "append"

View attachment 1602776

YES - H & A crowds balance. They have to !

Probably not possible but could you do an average list of crowd figures for Victorian teams playing home games in Melbourne against non-Victorian teams as I think that is the best way to determine true support among the Victorian teams, especially if it is done over 10 years or so?
 
When we are even rubbisher we are still carrying everyone else
the likelihood of being rubbish and carrying everyone else is a dychotomy which I won't go into...

it is all an awareness of the rubbish that needs to be tidied up and without anyone knowing about it.. for the sake of
fans, distributors, hock forgivers, and well endowed religious f... ck twitterers.. ..
. the whole sanctity of the entire AFL distribution dynamics is that it is all above board...

Like a cork in the ocean.. we sail along bravely..
 
An example would be the NFL wanting to expand into London, but before London can get an NFL team they need to have a fan base of 6million people. You need to have fans first before you get a team in the top league.

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So ish about10% of the UK population, and it will happen as they play more regular season games there to sell outs
My money would be on the NFL franchise will be London within 5 to 8 years
 
Probably not possible but could you do an average list of crowd figures for Victorian teams playing home games in Melbourne against non-Victorian teams as I think that is the best way to determine true support among the Victorian teams, especially if it is done over 10 years or so?
Should be doable... the summary data is now in excel so its pretty flexible now

Edit - will take a bit longer than i thought.... i will need to hardcode ( in excel ) a lookup for "non vic clubs"... give me a couple of days
 

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