Financial survival of the AFL and its' 18 clubs

Which AFL clubs are in the most financial danger due to the Coronavirus situation?

  • Adelaide

    Votes: 5 3.2%
  • Brisbane

    Votes: 36 23.1%
  • Carlton

    Votes: 17 10.9%
  • Collingwood

    Votes: 6 3.8%
  • Essendon

    Votes: 10 6.4%
  • Fremantle

    Votes: 9 5.8%
  • Geelong

    Votes: 12 7.7%
  • Gold Coast

    Votes: 81 51.9%
  • Greater Western Sydney

    Votes: 48 30.8%
  • Hawthorn

    Votes: 8 5.1%
  • Melbourne

    Votes: 53 34.0%
  • North Melbourne

    Votes: 96 61.5%
  • Port Adelaide

    Votes: 38 24.4%
  • Richmond

    Votes: 12 7.7%
  • St. Kilda

    Votes: 108 69.2%
  • Sydney

    Votes: 16 10.3%
  • West Coast

    Votes: 6 3.8%
  • Western Bulldogs

    Votes: 55 35.3%

  • Total voters
    156

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Kwality

Brownlow Medallist
Aug 14, 2011
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If I was a player agent? "You signed a contract in good faith, the club can get funding or support from the AFL, you have every right to get paid what you signed up for. Do you reckon Gil's pay cut is going to be permanent?"
How is your professional indemnity, I'd recommend legal advice, it even covers my back.

Many (not the big_e) on here seem to believe all will be forgiven, dont pay, not a problem ....
 

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big_e

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How is your professional indemnity, I'd recommend legal advice, it even covers my back.

Many (not the big_e) on here seem to believe all will be forgiven, dont pay, not a problem ....
Can't think there'd be any PI issue with telling someone their employer should honour their contract. But I'm not a lawyer...

You'd hope this will end with the AFL and AFLPA agreeing to a slower increase in the TPP, perhaps a gradual increase in draft age and a slow decrease in list sizes. No player has to take a pay cut, but the next contract might not be as big. No mass cull of players, rather the regeneration of lists won't be as rapid as not every departure will be replaced.

There's a real risk in making long-term solutions to short-term problems. Culling teams, massive cuts to list sizes or the salary cap when we really have ten to 20 years to recover this year's losses would be silly. Just do whatever you can to get through this year, and then re-group. But I do think it is a good time to take a step back and think "is this really how we want to continue?" And that's more a long-term, strategic question, and as such it doesn't need a quick answer.
 

LordLucifer

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Mar 20, 2002
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you have some players on long term deals who had massively front ended deals, and a long cheap tail pending. Others are massively back ended, and are yet to receive any of the benefit they signed on for
This is not THE reason but it certainly is another side issue as to why I absolutely hate this front & back-loading of contracts.

No-one could have planned for the situation we find ourselves in but it sure would be a lot easier to come up with a suitable short-term solution if all player contracts were equal set amounts (may have small increments per annum).
 

big_e

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This is not THE reason but it certainly is another side issue as to why I absolutely hate this front & back-loading of contracts.

No-one could have planned for the situation we find ourselves in but it sure would be a lot easier to come up with a suitable short-term solution if all player contracts were equal set amounts (may have small increments per annum).
That assumes the expected output of the player would be consistent.

It would make sense for, say, Sam Walsh's contract to be back-ended as he will probably be a vastly better player in the last year of his contract than in his first. Whereas Todd Goldstein, who turns 32 this year, will probably fall away and maybe not even be number one ruck by the end of his contract in 2022, so it would make sense to be paid more this year than in his last. (No idea about how their contracts are structured, just offering an observation.)
 

RedV3x

Club Legend
Dec 14, 2015
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it sure would be a lot easier to come up with a suitable short-term solution if all player contracts were equal set amounts (may have small increments per annum).
I'd imagine that a simpler and fairer solution would be a retainer and and a margin for experience.
That margin could be a set percentage of the contract.
 

jatz14

Norm Smith Medallist
Dec 13, 2011
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I'd imagine that a simpler and fairer solution would be a retainer and and a margin for experience.
That margin could be a set percentage of the contract.
Front and back ending contracts has more to do with managing the cap than player output.

If you cannot fit a player in now, but have some stars due to retire, backend the contract, so more of his pay is later when you will have room.

On moto g(6) plus using BigFooty.com mobile app
 

Redline

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Jul 18, 2006
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Given the huge wastage and salaries at clubs it is embarrassing to hear how bad the financial position of certain clubs is. The AFL is responsible as much as anyone for not holding them accountable.
 

Mr north man

Club Legend
Mar 12, 2016
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Given the huge wastage and salaries at clubs it is embarrassing to hear how bad the financial position of certain clubs is. The AFL is responsible as much as anyone for not holding them accountable.
Name the club?
North Melbourne
St Kilda
Melbourne
Western Bulldogs
 

Kwality

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Given the huge wastage and salaries at clubs it is embarrassing to hear how bad the financial position of certain clubs is. The AFL is responsible as much as anyone for not holding them accountable.
Its the not for profit model, I dont have to put something away for a rainy day, not just footy.
 

Redline

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I think all 18 clubs, perhaps I would let a few clubs like Gold Coast off the hook as I don't think they had the option. I just find it hard to believe clubs were allowed to get into the position they were in when many were spending for the sake of it.
 

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big_e

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I think all 18 clubs, perhaps I would let a few clubs like Gold Coast off the hook as I don't think they had the option. I just find it hard to believe clubs were allowed to get into the position they were in when many were spending for the sake of it.
Most clubs are profitable most years.
 

Kwality

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Most clubs are profitable most years.
Technically correct but:

From Caro's article*.
And to underline the increasing differences between the ''haves'' and the ''have nots'', the wealthier clubs such as West Coast, Richmond and Collingwood - disenchanted at having to follow receivership rules - have achieved a special clause in the new agreement. This will exempt them from having to regularly open their books to head office.
........
The fact that only one-third of the 18 clubs boast bank balances that could take them through to the end of July has underlined the false nature of the profits announced by the majority of the clubs at the end of last season.

.....
* I've cherrypicked the article, there is much more in REHs post.

There is some doubt about the veracity of those profit claims. For good reason imho.
 

RussellEbertHandball

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Nov 16, 2004
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Technically correct but:



* I've cherrypicked the article, there is much more in REHs post.

There is some doubt about the veracity of those profit claims. For good reason imho.
I thought of you K when I quoted it in the other thread. One of the good things that could come out of this is the AFL forces clubs to get rid of the BS spin around financial results. Announce the bottom line first, then explain one offs.
 

big_e

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Technically correct but:



* I've cherrypicked the article, there is much more in REHs post.

There is some doubt about the veracity of those profit claims. For good reason imho.
I read that but I can't see why there is any doubt about the profits being reported. What has happened in the last month has no bearing on last year's results.

Not many businesses with high fixed costs can survive with an almost total removal of revenue which occurs literally overnight. There's an interview between the NMFC media manager and Brady Rawlings out today in which they discuss finding out about the postponement of the season DURING our round one game.

Perhaps there has been too much focus on turnover and membership numbers instead of liabilities - it's always the liabilities that gets you in the end - but that in no way devalues the reported profits, imho.
 

RussellEbertHandball

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I read that but I can't see why there is any doubt about the profits being reported. What has happened in the last month has no bearing on last year's results.

Not many businesses with high fixed costs can survive with an almost total removal of revenue which occurs literally overnight. There's an interview between the NMFC media manager and Brady Rawlings out today in which they discuss finding out about the postponement of the season DURING our round one game.

Perhaps there has been too much focus on turnover and membership numbers instead of liabilities - it's always the liabilities that gets you in the end - but that in no way devalues the reported profits, imho.
Because most of the clubs make announcements about bullshit operating profits before depreciation and other expenses.

Depreciation is a normal operating expense so why separate if from normal operating profits?? PR spin. Same with some other expenses that a few clubs like to report as abnormal when they happen every year and somehow the clubs don't consider them to be part of normal operating activities.

Oh but depreciation is not a cash expenses. Indeed, but if you look at the cash flow statement, when clubs aren't spending monies on new facilities, their purchase of capital equipment is similar to their depreciation expense. Why? because the footy department arms race and all those laptop, tablets and other devices are written off over 2 or 3 years and same with software that is attached to those electronic devices.
 

Kwality

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Because most of the clubs make announcements about bullshit operating profits before depreciation and other expenses.

Depreciation is a normal operating expense so why separate if from normal operating profits?? PR spin. Same with some other expenses that a few clubs like to report as abnormal when they happen every year and somehow the clubs don't consider them to be part of normal operating activities.

Oh but depreciation is not a cash expenses. Indeed, but if you look at the cash flow statement, when clubs aren't spending monies on new facilities, their purchase of capital equipment is similar to their depreciation expense. Why? because the footy department arms race and all those laptop, tablets and other devices are written off over 2 or 3 years and same with software that is attached to those electronic devices.
My b*tch has long been failing to report abnormal profits clearly, e.g the Eagles grant as profit in 2019, the land ceded to the Bullies included simply as profit:https://www.westernbulldogs.com.au/news/266253/victoria-university-whitten-oval-precinct-development.
Its misleading, intentionally misleading imho.
 

Prince Imperial

Club Legend
Apr 9, 2003
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My b*tch has long been failing to report abnormal profits clearly, e.g the Eagles grant as profit in 2019, the land ceded to the Bullies included simply as profit:https://www.westernbulldogs.com.au/news/266253/victoria-university-whitten-oval-precinct-development.
Its misleading, intentionally misleading imho.
The club could not have been clearer about this when they announced their 2018 profit.


The Western Bulldogs have announced a total profit of $18.094 million for the financial year ended October 31, 2018.

The result comprises a Profit before Redevelopment Activities of $2,207,274 and a Profit from Redevelopment Activities of $15,887,059.

The profit from redevelopment activities is derived from the recognition in the Club’s accounts of the value of the freehold land assigned to the Club by the State of Victoria at the Whitten Oval precinct, income from the redevelopment grant received for the upgrade of the VU Whitten Oval facilities for AFLW and includes expenditure related to redevelopment activities as detailed in the financial report.
 

Capriati

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Aug 25, 2019
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Does any have any ball park figures of what each club will need from the AFL to get through this year? We know the AFL has withdrawn the dividends and has instead guaranteed to pay the players wages until October 31. TPP was about 13 million, and we know that players have taken a pay cut of 50 percent for 7 months of year, meaning that they will receive about 70% of their overall salary (which is what the AFL will pay) which works out to be 9 million.

If our starting point is 9 million from the AFL and all other AFL funding will be through the AFL's loan facility. Essentially this new model impacts hardest on the clubs that receive above and beyond the base AFL dividend. For a club like West Coast or Hawthorn, the AFL normally gives them a dividend that doesn't even cover player payments, compared to St Kilda who is staring down an 11 million dollar black (2019 dividend of just under 20 million)

Is anyone able to provide ball park figures for how much each club will need from the AFL to make up the funding gap?
 

Kwality

Brownlow Medallist
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The club could not have been clearer about this when they announced their 2018 profit.

Fair comment, the way profits are reported is via press release, if you can read them, most can not.

People talked about the $22m Eagles profit, it was misleading for the ordinary fan. Dont believe the club issued a press release for the 2019 result.

When i suggested deliberate overstatement I was having a shot at the AFL, but the clubs should correct where they are at if the media dart off on a tangent. The Eagles effectively let it happen.
 
Last edited:

Rob

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Does any have any ball park figures of what each club will need from the AFL to get through this year? We know the AFL has withdrawn the dividends and has instead guaranteed to pay the players wages until October 31. TPP was about 13 million, and we know that players have taken a pay cut of 50 percent for 7 months of year, meaning that they will receive about 70% of their overall salary (which is what the AFL will pay) which works out to be 9 million.

If our starting point is 9 million from the AFL and all other AFL funding will be through the AFL's loan facility. Essentially this new model impacts hardest on the clubs that receive above and beyond the base AFL dividend. For a club like West Coast or Hawthorn, the AFL normally gives them a dividend that doesn't even cover player payments, compared to St Kilda who is staring down an 11 million dollar black (2019 dividend of just under 20 million)

Is anyone able to provide ball park figures for how much each club will need from the AFL to make up the funding gap?
I don't think even the clubs know yet.
 

telsor

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More so at the bigger clubs being the root of the problem really.

They have the extra money and decide that getting a full time second assistant nutritionist to give extra help to players in their first year(s) is worth it (and because they can call it 'player welfare', it doesn't count as part of their football dept cap).

Smaller clubs then get forced to find money to get a part timer to do the job so they look like they're on the same level (helps when attracting players for trades/FA) but really it's a pretty pointless waste brought on by the bigger club having nothing better to spend on.
 

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