AFL likely to buy Etihad stadium in the next 12 months - Brian Cook

[Axcellence]

AFL mismanagement at the highest level. Here are couple of extracts from history..

There are, however, some challenges on the horizon. When the Saints swapped Waverley Park for Docklands as their home base, the AFL agreed to pay the club $600,000 a year in compensation. That deal runs out at the end of this season.
A similarly attractive deal must be renegotiated with Ian Collins at Telstra Dome or the club will be severely out of pocket next season.
Butterss knows that Docklands isn't paying its way for his club. He says that to break-even at the new home requires a crowd of about 30,000, compared with 14,000 when the Saints played at Waverley. According to Butterss, those bigger overheads mean "$150,000 a week going out of footy".
St. Kilda remains bitter about being forced to move from Waverley. Butterss claims the club has lost 20,000 members, who have not re-signed, since moving its home ground to the edge of the CBD.
Stan Alves asked Butterss last weekend whether it gives him a "stomach ache when you drive past Waverley and see the thing pulled down?"
Butterss response was succinct: "Ulcers."

. . .
League fails clubs on stadium agreements
Caroline Wilson | May 10, 2009

IT IS more than six years ago since the AFL gathered senior journalists to a media briefing in a bid to put some positive spin on the stadium which seems to have now become its mortal enemy.

The AFL bosses, including then heir apparent Andrew Demetriou and the game's financial boss Ian Anderson, poured scorn on home clubs at the then named Telstra Dome — specifically St Kilda and the Western Bulldogs —- for complaining about poor match-day returns from the stadium. Wayne Jackson, Demetriou, Anderson and co made a mockery of St Kilda president Rod Butterss' complaint that a 30,000 crowd at the Docklands earned his club a meaningless five-figure sum of money and that such a deal would send his club broke. Not true said the AFL, which proceeded to produce a working paper on the issue claiming St Kilda actually made roughly $300,000 from a 30,000 crowd, insisting the club take into account membership, signage, corporate money and reserved seat sales from such a game. The figures produced by the AFL fooled some people and rightly enraged Butterss, who publicly wondered why the AFL didn't throw in sponsorship and gaming money as well.

Butterss and his board then realised there was no point taking on the competition's governing body because the AFL would only publicly belittle you in return and potentially punish you as well. Bulldogs president David Smorgon said nothing, but he, too, was aghast at such a tactic, choosing to fight his battle in private.

How ironic that the AFL is now the champion of these clubs, even going so far in recent days as to hit out at the high cost of food at Etihad Stadium — something it has been happy to let the punters suffer for decades. And how ridiculous for the league to give credence to a suggestion that Bulldogs fans might have to travel to Geelong next season to watch its home games rather than at Etihad simply because the AFL did a terrible deal for its clubs and is unwilling to compensate as much as it probably should for the shortfall now being suffered by a frightening amount of clubs given that Etihad has thrown away any pretence of fair play and refuses to even renew what were not particularly good deals for clubs like St Kilda in the first place.

The AFL should be severely embarrassed by the manner in which it has let down its clubs. It has attempted to blame the poor deal it extracted for the MCG tenant clubs on the fact that the agreement was reached in 1992 and the league could not have estimated then just how impressive its attendances would become. But it had a far better idea by the start of this decade when the stadium decided to rebuild the ground's northern side and needed AFL assistance to build it. Despite 18 months of fragile, costly and occasionally heated negotiations which ended in 2002 with the Melbourne Cricket Club and the MCG Trust, the league failed to extract a better deal for tenant clubs.
...

The equation is all wrong. The AFL is rich, the players are rich and close to half the clubs are dangerously poor. For Wayne Jackson, the former league boss to attack the administrations of some of those clubs as long-term failures was outdated and cruel when you consider what an organisation like the Western Bulldogs has achieved.

Jackson should be embarrassed, too, having overseen the dreadful Docklands deal he spent so many years defending. It was Jackson who was still in charge — just — when those ridiculous figures were rolled out in an attempt to belittle the Bulldogs and St Kilda back in 2003 and which were faithfully reported by some sections of the media. Demetriou was there that day, too, and he also owes Butterss and Smorgon an apology. The AFL seems confident it will achieve some resolution with the MCG, but a new deal with Etihad Stadium seems out of the question in 2009 at least.

Demetriou knows he will have to dig into his own coffers to fix this, at least for the 2009 season. Only Collingwood and Essendon are immune at Etihad — the AFL also oversaw the Carlton deal the Blues are trying to get out of.

That club has even asked the MCG to buy it out of the stadium that its former president put it into for a short-term pay-off.

At least seven clubs, if you include Port Adelaide, rightly deserve special assistance because of their dreadful stadium agreements and all the PR in the world from the clubs cannot disguise the fact the AFL has failed them.

And now the AFL is openly at war with its second most popular venue. What a mess.
. . .

 

[Scotland]

And what will they do if they don't like it? The ground is being built with an agreement that you'll play your home games there, so they'll have to play there regardless. Here's the deal, sign it and we might use lube.

Nothing is built and nothing is demolished.

It's counter productive to try and screw over the WAFC and AFL clubs. We can simply just not support the stadium. The WA govt aren't going to spend $1b out of spite and there no other tenants in the same ballpark of revenue generation.

WAFC can always just take more dividends out of the clubs it owns.

They can, yes - but they take royalties on profits. Subiaco Oval is a revenue stream. If we make $10m profit, the WAFC take a big slice of it. In getting to that figure, we have costs and revenues - including rent and operating expenses for Subiaco Oval. We could make a $1m loss and the WAFC would still pocket their Subi Oval money. That is the revenue stream that may disappear for them. Again, it's in their best interests for us to be profitable. The more we make, the more they make.

 

[telsor]

Nothing is built and nothing is demolished.

It's counter productive to try and screw over the WAFC and AFL clubs. We can simply just not support the stadium. The WA govt aren't going to spend $1b out of spite and there no other tenants in the same ballpark of revenue generation.

I'm sure everyone in SA thought the same thing.

I'm not saying it'll happen, but your comment about your club's admin reading the contract was just silly.

They can, yes - but they take royalties on profits. Subiaco Oval is a revenue stream. If we make $10m profit, the WAFC take a big slice of it. In getting to that figure, we have costs and revenues - including rent and operating expenses for Subiaco Oval. We could make a $1m loss and the WAFC would still pocket their Subi Oval money. That is the revenue stream that may disappear for them. Again, it's in their best interests for us to be profitable. The more we make, the more they make.

So one way or another, they'll get their money...

 

[nohairandfair]

Trying to deflect the Cats financial loss this year?

Nah, the books have been slightly "Cooked"... all is well down at Catland.

 

[Smoocher]

The clubs playing at Etihad are building the AFL's net worth. Having the stadium owned by the AFL will mean it has a 600 million dollar asset in effect owned by all the clubs. So all clubs will benefit from this despite North, Saints and Bulldogs taking the main hit financially in current deals.

 

[Kwality]

Dont leave out that the number of games was increased as part of the negotiations that delivered an extra $100,000 per game in returns for the life of the deal, that deal would not have come about had the original terms not been better.

Incidentally the original deal as written in the AFLs 1997 Annual Report can be found [here] and [here]

Correct Wookie - some posters are denying the AFL has an agreement with Etihad.

Are you aware of the result of the legal action taken by the AFL over pourage rights. I've searched unsuccessfully

 

[Kwality]

The clubs playing at Etihad are building the AFL's net worth. Having the stadium owned by the AFL will mean it has a 600 million dollar asset in effect owned by all the clubs. So all clubs will benefit from this despite North, Saints and Bulldogs taking the main hit financially in current deals.

Be fair, Essendon are making profits that the other clubs underwrite. The AFL could fix it just dont.

 

[Kwality]

Nothing is built and nothing is demolished.

It's counter productive to try and screw over the WAFC and AFL clubs. We can simply just not support the stadium. The WA govt aren't going to spend $1b out of spite and there no other tenants in the same ballpark of revenue generation.



They can, yes - but they take royalties on profits. Subiaco Oval is a revenue stream. If we make $10m profit, the WAFC take a big slice of it. In getting to that figure, we have costs and revenues - including rent and operating expenses for Subiaco Oval. We could make a $1m loss and the WAFC would still pocket their Subi Oval money. That is the revenue stream that may disappear for them. Again, it's in their best interests for us to be profitable. The more we make, the more they make.

If the size of the pie in WA footy diminishes so does the spend on junior footy possibly resulting in less quality footballers for the AFL pool - WA & SA continually have more players in the pool than their clubs require.

The business model of WA footy has been self sufficent since the turn of the century & we dont need any AFL inspired back room deals that are clouds over our game at Etihad & Adelaide, in one case until 2025.

 

[Kwality]

You need to get over this. Seriously. Its not going to happen.

The Taswegian taxpayers might end up calling the tune here.

 

[Rob]

It'll be fun watching the WA fans complain about the s**t deal their clubs will probably be getting at the new stadium over there.

I'll tell you what. If we start getting 20k a game and come on here and bitch about the bad stadium deal as the reason why our clubs are going broke, then you're welcome to come on here and tell us we're full of s**t.

 

[telsor]

The clubs playing at Etihad are building the AFL's net worth. Having the stadium owned by the AFL will mean it has a 600 million dollar asset in effect owned by all the clubs. So all clubs will benefit from this despite North, Saints and Bulldogs taking the main hit financially in current deals.

I said years ago that the clubs who have home games there should each get the rights to a share in the ground for each home game (rights become actual shares after handover)...Which would add up to a bit over 1000 shares in the end.

If the AFL wants they ground, then they can buy those shares off those clubs.

Similarly, if the clubs have financial issues (resulting from playing there or otherwise), then they can sell those shares or, presumably, borrow against them (I would limit who they can sell to...the AFL or other clubs...We want it to be 'in house' eventually after all).

 

[The_Wookie]

I said years ago that the clubs who have home games there should each get the rights to a share in the ground for each home game (rights become actual shares after handover)...Which would add up to a bit over 1000 shares in the end.

If the AFL wants they ground, then they can buy those shares off those clubs.

Similarly, if the clubs have financial issues (resulting from playing there or otherwise), then they can sell those shares or, presumably, borrow against them (I would limit who they can sell to...the AFL or other clubs...We want it to be 'in house' eventually after all).

Its not how the AFL works though. See the sale of Waverly where proceeds were distributed to all clubs in the league despite the interstate clubs not really having a great deal to do with the place. Importantly while some clubs have suffered financially from playing at the stadium, they've had their finances enhanced by subsidies from the rest of the competition.

 

[The_Wookie]

I'll tell you what. If we start getting 20k a game and come on here and bitch about the bad stadium deal as the reason why our clubs are going broke, then you're welcome to come on here and tell us we're full of s**t.

How about you wait until you actually have a new stadium deal before talking tough. The new deal will be interesting, especially if the WAFL have to pay real rent.

 

[Rob]

How about you wait until you actually have a new stadium deal before talking tough. The new deal will be interesting, especially if the WAFL have to pay real rent.

I'm not talking tough. I'm just making the point that clubs that make a big loss perhaps look at their average crowds dropping 15,000 per game over the last 4 years before trying to blame other factors for their financial woes.

To put that in context, 162,000 less people through the gates @ $30 a head is nearly $5 million less revenue a year. Not hard to see why some clubs are in financial poo.

I don't know how the new stadium in Perth is going to work out, but I reckon if clubs are selling out every game or close to it then it's hard to see how they won't make a huge amount of money unless the WAFC do a SANFL and rip out revenue streams in return for doing f**k all.

 

[telsor]

Its not how the AFL works though. See the sale of Waverly where proceeds were distributed to all clubs in the league despite the interstate clubs not really having a great deal to do with the place. Importantly while some clubs have suffered financially from playing at the stadium, they've had their finances enhanced by subsidies from the rest of the competition.

I know it's not how things would ever go (the AFL would never let there be a chance they didn't own it outright), but I still think it would have been a better option.

Instead of needing subsidies, they 'just' would have sold their shares... Simpler, more transparent and it avoids having clubs seem like they're 'charity cases'.

 

[telsor]

I'm not talking tough. I'm just making the point that clubs that make a big loss perhaps look at their average crowds dropping 15,000 per game over the last 4 years before trying to blame other factors for their financial woes.

To put that in context, 162,000 less people through the gates @ $30 a head is nearly $5 million less revenue a year. Not hard to see why some clubs are in financial poo.

I don't know how the new stadium in Perth is going to work out, but I reckon if clubs are selling out every game or close to it then it's hard to see how they won't make a huge amount of money unless the WAFC do a SANFL and rip out revenue streams in return for doing f**k all.

When clubs are only getting 36% return, that $30 per head becomes $10 (rounding) so $1.6M lost revenue...Still not good, but also not nearly as significant.

 

[Scotland]

When clubs are only getting 36% return, that $30 per head becomes $10 (rounding) so $1.6M lost revenue...Still not good, but also not nearly as significant.

Do you think the return would be 36% if crowds were bigger and made up of season ticket holders?

Carry on, it's all the stadium deal...

 

[telsor]

Do you think the return would be 36% if crowds were bigger and made up of season ticket holders?

Carry on, it's all the stadium deal...

I have no doubt there are any number of different factors that influence the rate of return. For simplicity, it's easier to go by the average rate, which is a figure we do know.

 

[Scotland]

I don't know how the new stadium in Perth is going to work out, but I reckon if clubs are selling out every game or close to it then it's hard to see how they won't make a huge amount of money unless the WAFC do a SANFL and rip out revenue streams in return for doing f**k all.

As people continue to gloss over, it's in the WAFC's interest for the AFL clubs to be hugely profitable.

The WA govt are the important stakeholder. How much they want to take from footy played at the ground will determine what's on offer to the clubs and WAFC. The notion that they'll go full SANFL and screw all the money out of the clubs and WAFC is silly. The WAFC just won't sign on to it.

 

[Rob]

I have no doubt there are any number of different factors that influence the rate of return. For simplicity, it's easier to go by the average rate, which is a figure we do know.

36% of what though? It's pretty obvious that clubs do not pay 64% of their membership revenue to the stadium. It's not even remotely close to that.

 

[Rob]

As people continue to gloss over, it's in the WAFC's interest for the AFL clubs to be hugely profitable.

The WA govt are the important stakeholder. How much they want to take from footy played at the ground will determine what's on offer to the clubs and WAFC. The notion that they'll go full SANFL and screw all the money out of the clubs and WAFC is silly. The WAFC just won't sign on to it.

Wouldn't have thought so, but i'm not going to pre-judge the result of something I don't know a lot about.

 

[Scotland]

I have no doubt there are any number of different factors that influence the rate of return. For simplicity, it's easier to go by the average rate, which is a figure we do know.

Simplicity is the reason these threads aren't really worth the bandwidth they chew up.

 

[telsor]

36% of what though? It's pretty obvious that clubs do not pay 64% of their membership revenue to the stadium. It's not even remotely close to that.

I'm not having this argument again.

The stadium doesn't let members in for free, they'd go broke if that was the case.

 

[The_Wookie]

I'm not having this argument again.

The stadium doesn't let members in for free, they'd go broke if that was the case.

The exact percentages were linked earlier, but heres the image from the 1997 Annual report from the Docklands deal.

 

[Rob]

I'm not having this argument again.

The stadium doesn't let members in for free, they'd go broke if that was the case.

It's not an argument, it's a question.

36% of what?