AFL Close to Purchasing Etihad

[The_Wookie]

AFL buys Etihad Stadium for $150-200 million
Date October 7, 2016 - 11:09AM

FIRST ON 3AW

The AFL has officially taken ownership of Etihad Stadium.

The AFL would have taken ownership of the stadium for just $30 in March 2025, but decided to jump early.

Just a few weeks ago, AFL CEO Gillon McLachlan told 3AW that plans were in the works to make a move.


"There's a chance. There was a chance six months ago and a chance a year ago," McLachlan told Neil Mitchell.

"We just keep chipping away."

And early on Tuesday, The Rumour File predicted the sale would be completed imminently.

The price is believed to be between $150 to $200 million.

It is hoped tenant clubs St Kilda, Western Bulldogs, Carlton, Essendon, and North Melbourne will benefit from the deal.

Current deals with the stadium require these clubs to reach a crowd of around 26,000 to break even, a much higher threshold than other grounds.

North Melbourne Chairman James Brayshaw once branded the deal the "worst in the history of world sport".

 

[bombersfan4000]

AFL buys Etihad Stadium for $150-200 million
Date October 7, 2016 - 11:09AM

FIRST ON 3AW

The AFL has officially taken ownership of Etihad Stadium.

The AFL would have taken ownership of the stadium for just $30 in March 2025, but decided to jump early.

Just a few weeks ago, AFL CEO Gillon McLachlan told 3AW that plans were in the works to make a move.


"There's a chance. There was a chance six months ago and a chance a year ago," McLachlan told Neil Mitchell.

"We just keep chipping away."

And early on Tuesday, The Rumour File predicted the sale would be completed imminently.

The price is believed to be between $150 to $200 million.

It is hoped tenant clubs St Kilda, Western Bulldogs, Carlton, Essendon, and North Melbourne will benefit from the deal.

Current deals with the stadium require these clubs to reach a crowd of around 26,000 to break even, a much higher threshold than other grounds.

North Melbourne Chairman James Brayshaw once branded the deal the "worst in the history of world sport".

Still won't change the fact North, saints and bulldogs have always and will be financial basketcase cases

 

[mikeg4]

Still won't change the fact North, saints and bulldogs have always and will be financial basketcase cases

At least we arent systematic cheats....

 

[NoobPie]

That and decoupling the 'development' of the game from which teams they seem to be favoring, be that reality or perception.

Having it all under the one umbrella means they can shuffle too much around without explanation or scrutiny.


I don't think the WAFC system is perfect, but it does seem to be better. Certainly better than what happens in Vic.

I agree Telsor, though the answer is not necessarily full separation but at least a far more transparent separation of functions and clearly defined and observed principles, guidelines and protocols that guide these functions...

 

[bombersfan4000]

At least we arent systematic cheats....

at least Essendon has always been financially stable & inderpendant & not blamed everyone else for their financial situation
through out their history the roos, dogs and staints have been pathetic financially. the purchase of Etihad will not automatically solve all their finances

 

[The_Wookie]

Still won't change the fact North, saints and bulldogs have always and will be financial basketcase cases

I hope the league enforces your games contract at Etihad right to the bitter end.

 

[bombersfan4000]

I hope the league enforces your games contract at Etihad right to the bitter end.

apparently it is meant to be a pretty good do. Essendon negotiated the deal it self. roos, dogs & saints did not. didnt the roos even move their home away from the MCG

 

[Kwality]

apparently it is meant to be a pretty good do. Essendon negotiated the deal it self. roos, dogs & saints did not. didnt the roos even move their home away from the MCG

How close are the Bombers to achieving seasons seating tickets being sold out?
48k is what I understand any club max seating, what is it at the G?

 

[Our Game]

AFL buys Etihad Stadium for $150-200 million
Date October 7, 2016 - 11:09AM
The AFL has officially taken ownership of Etihad Stadium.


Looks like the AFL have struck a good bargain as the stadium cost $460 million to build back in the late 1990s It would cost a lot more to build or replace it now

I actually went to the first match there in 2000 Essendon v Port Adelaide the Dons won easily in front of 43,000

Largest ever attendance Jehovah's Witnesses 19 October 2014 *70,059 people "Etihad Stadium Records".
*A large part of the crowd were seated on the arena

The biggest "sporting" crowd? is
WWE at the stadium on 10 August 2002 as part of the WWE Global Warning Tour. The event attracted 56,734 fans.

Biggest football code crowd is Rugby Union Test 56,771 in 2013

Largest AFL attendance Round 14, 5 July 2009 St Kilda vs Geelong 54,444 people

 

[Gigantor]

Jehovah Witness conventions look like a good money spinner.

 

[The_Wookie]

almost 50,000 there last night and a big crowd coming this way this weekend, league would be spewing it doesnt take over for another month or so.

 

[Garlic muncher]

almost 50,000 there last night and a big crowd coming this way this weekend, league would be spewing it doesnt take over for another month or so.

Doesn't soccer pay a peppercorn rent anyway, sounds good but it would be interesting to know how much the stadium would make out of a either a victory or socceroos game like last night.

 

[NoobPie]

Not "peppercorn" (as in a an amount of token value of no relationship to value of the good or service) but certainly something in line with incremental cost.

So the contract with the Melbourne Victory would be based on the mark up of the extra costs of them playing there rather than leaving the ground lie idle (eg ground preparation, staffing, cleaning, insurance and incremental maintenance). What is that mark up? Surely far less than the mark up facing the AFL clubs under the 25 year February to September contract that underwrites the initial capital investment

What about the socceroos match? Well, you've got to wonder how much "fat" was in that agreement for the stadium manager given an Australia versus Japan world cup qualifier is pretty high up there in terms of meaningful socceroos matches in australia that every stadium in the country would like to host

Don't think the AFL will be that concerned...also, presumably the negotiated price would implicitly factor the timing of the handover

 

[bombersfan4000]

I hope the league enforces your games contract at Etihad right to the bitter end.

im sure if the League forces Essendon to stick to its contract it will do the other Etihad tenants including your mob Carlton

 

[The_Wookie]

im sure if the League forces Essendon to stick to its contract it will do the other Etihad tenants including your mob Carlton

Im sure they will. Given that Carlton, North, the Dogs and Saints havent currently got signed contracts at Etihad Stadium, only the leagues overarching arrangement with the venue. Carltons contract expired in 2014. "Your mob" wanted the benefits of early tenancy, and have enjoyed a better deal than the other clubs based at the stadium.

 

[bombersfan4000]

Im sure they will. Given that Carlton, North, the Dogs and Saints havent currently got signed contracts at Etihad Stadium, only the leagues overarching arrangement with the venue. Carltons contract expired in 2014. "Your mob" wanted the benefits of early tenancy, and have enjoyed a better deal than the other clubs based at the stadium.

if that is the case with the other tenants & they are busying whinging about their deal, why haven't they put an agreement in place such as Essendon did. the dogs, saints & north have always been financial basket casses only the last decade and a bit the blues have been, yet only have jumped up n down & whinged about it & never really ben proactive in signing a contract like Essendon did! North Even left the MCG for Etihad, the dogs left the western oval & the saints have just been pathetic with their decisions and directions.

 

[The_Wookie]

if that is the case with the other tenants & they are busying whinging about their deal, why haven't they put an agreement in place such as Essendon did. the dogs, saints & north have always been financial basket casses only the last decade and a bit the blues have been, yet only have jumped up n down & whinged about it & never really ben proactive in signing a contract like Essendon did! North Even left the MCG for Etihad, the dogs left the western oval & the saints have just been pathetic with their decisions and directions.

You simply cannot be this ignorant about it.

No one else was even able to get Essendons foundation tenancy deal. Docklands wasnt chasing small fish - for want of a better term - they got Essendon on some whiz bang founders deal, and they got Carlton by paying them 2 million up front and having a ringer in Collins as CEO. Most other club contracts expired around 2007. From 2007 on, the stadiums management at both Docklands and the MCG point blank refused to deal with the clubs because they had over-riding AFL deals in any case, and the AFL decided where the clubs could play.

 

[Kwality]

Not "peppercorn" (as in a an amount of token value of no relationship to value of the good or service) but certainly something in line with incremental cost.

So the contract with the Melbourne Victory would be based on the mark up of the extra costs of them playing there rather than leaving the ground lie idle (eg ground preparation, staffing, cleaning, insurance and incremental maintenance). What is that mark up? Surely far less than the mark up facing the AFL clubs under the 25 year February to September contract that underwrites the initial capital investment

What about the socceroos match? Well, you've got to wonder how much "fat" was in that agreement for the stadium manager given an Australia versus Japan world cup qualifier is pretty high up there in terms of meaningful socceroos matches in australia that every stadium in the country would like to host

Don't think the AFL will be that concerned...also, presumably the negotiated price would implicitly factor the timing of the handover

Victory have a contract in place to 2025, & its CEO Ian Robson has been involved with the stadium across a couple of different codes & clubs.

Interesting guess on the business model Noobz, informed? The same questions face the new Perth stadium ....

 

[NoobPie]

Victory have a contract in place to 2025, & its CEO Ian Robson has been involved with the stadium across a couple of different codes & clubs.

Interesting guess on the business model Noobz, informed? The same questions face the new Perth stadium ....

Not directly informed, but you'd certainly call it an educated guess

-We know the Victory make money with crowds that would see AFL clubs lose money...though this is likely in part explained by other factors as well such as longer game times etc
-We know that the stadium was built on the basis of a long term contract with the AFL
-we know from business economics that such business models work this way - that is, capital investment / return is recouped to meet demands of (a) major clients / cash cows and other business lines are priced at more moderate mark-up above marginal cost

I assume it will be similar for Perth stadium, my understanding was that the "who pays for it" question was a factor for the delay in building it

I think there'll be little change in the circumstances of Victory at etihad...if anything it might simplify things

 

[bombersfan4000]

You simply cannot be this ignorant about it.

No one else was even able to get Essendons foundation tenancy deal. Docklands wasnt chasing small fish - for want of a better term - they got Essendon on some whiz bang founders deal, and they got Carlton by paying them 2 million up front and having a ringer in Collins as CEO. Most other club contracts expired around 2007. From 2007 on, the stadiums management at both Docklands and the MCG point blank refused to deal with the clubs because they had over-riding AFL deals in any case, and the AFL decided where the clubs could play.

they play the Blues up front then the Blues still sign what is considered a bad stadium deal? thats only the fault of the club? thats after next to bank rupting the club to build that legends stand at princess park
North left the MCG to play at Etihad and play under what is a apparently a terrible deal

how is that the faults of any one else's beside their own poor management

 

[The_Wookie]

they play the Blues up front then the Blues still sign what is considered a bad stadium deal? thats only the fault of the club? thats after next to bank rupting the club to build that legends stand at princess park
North left the MCG to play at Etihad and play under what is a apparently a terrible deal

how is that the faults of any one else's beside their own poor management

Right. Thats what it is. Nice shift of the goalposts there.

 

[Demonoid]

Some answers to the questions and comments above is here:

How the AFL will make money from other sports and events at Etihad Stadium

Read more: http://www.afr.com/business/sport/how-the-afl-will-make-money-from-other-sports-and-events-at-etihad-stadium-20161014-gs29tl#ixzz4NcmRfG6M

 

[Kwality]

Skimpy on detail, I've been looking for the Vic Govt involvement to be clarified, so I found these comments of little value:

Victorian premier Daniel Andrews is leading a ministerial stadium taskforce that meets for the first time in November, which will examine the future venues around Melbourne and what funding they may want and ultimately receive.
The government will also want to ensure the AFL allows concerts and other lucrative events to still take place at Etihad Stadium as part of its major events strategy to attract big names and tours to town and lure tourists from interstate and abroad.



Read more: http://www.afr.com/business/sport/how-the-afl-will-make-money-from-other-sports-and-events-at-etihad-stadium-20161014-gs29tl#ixzz4Nh5P0Ni3
Follow us: @FinancialReview on Twitter | financialreview on Facebook

 

[Kwality]

Not directly informed, but you'd certainly call it an educated guess

-We know the Victory make money with crowds that would see AFL clubs lose money...though this is likely in part explained by other factors as well such as longer game times etc
-We know that the stadium was built on the basis of a long term contract with the AFL
-we know from business economics that such business models work this way - that is, capital investment / return is recouped to meet demands of (a) major clients / cash cows and other business lines are priced at more moderate mark-up above marginal cost

I assume it will be similar for Perth stadium, my understanding was that the "who pays for it" question was a factor for the delay in building it

I think there'll be little change in the circumstances of Victory at etihad...if anything it might simplify things

From the AFR article:
.... the Victory last year clinched a 10-year extension to its current contract with Etihad Stadium – one of the most lucrative in Australian sport given it guarantees the Victory a return from the first fan who walks in the venue – which was understood to safeguard the team's future there if and when the AFL took early control.

Read more: http://www.afr.com/business/sport/how-the-afl-will-make-money-from-other-sports-and-events-at-etihad-stadium-20161014-gs29tl#ixzz4Nh6cVhqZ
Follow us: @FinancialReview on Twitter | financialreview on Facebook

 

[NoobPie]

From the AFR article:
.... the Victory last year clinched a 10-year extension to its current contract with Etihad Stadium – one of the most lucrative in Australian sport given it guarantees the Victory a return from the first fan who walks in the venue – which was understood to safeguard the team's future there if and when the AFL took early control.

Read more: http://www.afr.com/business/sport/how-the-afl-will-make-money-from-other-sports-and-events-at-etihad-stadium-20161014-gs29tl#ixzz4Nh6cVhqZ
Follow us: @FinancialReview on Twitter | financialreview on Facebook

Yep, saw that. They've done particularly well given, with that, they have effectively shifted attendance risk on to the stadium...obviously not a lot of detail there though. Usually the shifting of risk comes with an acceptance of a lower yield