"Handing the keys to the AFL" - Carlton's situation

[The_Wookie]

Just read the 2014 financials. Why anyone would be an accountant beats me. All you have done is quoted from the report without showing any real understanding of the figures. Paying off the loans has made Carlton cash poor. Are any of the trade receivables outstanding memberships? If so, I don't think there is enough provision in case of lapsing memberships. Your current debts and trade payable is $1.15m higher so your gearing is deteriorating. My point is 2015 financials will be worse with paying out Malthouse's contract from a cash poor position and likely lower sponsorship. With the 2016 draw disclosed, Carlton will not be as visible on FTA. Have you done any financial modelling to project figures to October 2016. Also, in 2002 when you came last, membership only dropped by 4%. Last year, membership dropped by 9%. Obviously there are other factors at work.

I didnt quote anything, and I havent read the report in a few weeks - Ive seen it enough to know what it says, and despite your patronising, I understand the figures perfectly well, thanks, and Im well aware that this years figures will be worse. You arent delivering any revelations here. As for memberships, there are far more casual memberships to drop off - ie. 3 games memberships than were on offer in 2002, when that phenomenon didnt exist - we'll know more when the revenue for membership figures are released.

Are you admitting the number of games in Victoria per season has reached a saturation point and marginal benefits are negligible when clubs play 17 games in Victoria? Not all games at 4pm on Sunday at Etihad involve non Victorian teams.

Im saying that all three things are factors in poor attendances. Whether its fixturing against non victorian sides with little latent support, poor timing or a stadium they dont want to go to. At no point do I say anything about saturation. I said people will simply go to their preferred games, because they have more choice.

Firstly, I always thought Footscray should play out of Simonds making better use of the stadium which only hosts 8 games per season.

Didn't anyone at the AFL do a proper analysis and modelling of revenue and costs and distribution to the clubs before it started. I've met Mike Fitzpatrick. He's a smart man. What sort of capacity rate did they expect in order to turn a profit? At one stage the average crowds at Etihad was 70% capacity. I'm sorry but the clubs should not have agreed to it.

Mike Fitzpatrick wasnt even a Commissioner in 1997 when the deal was signed. Fitzpatrick came to the Commission in 2003. According to the 1997 Annual Report, the AFL reported that from its modelling clubs would be better off to the tune of "between $160,000 to $850,000 a season" not including signage and pourage income. The Annual Report lists no breakeven crowd.

Aahh, the land of milk and honey financed by television rights money. I wouldn't get too reliant on this cash cow.

Theres at least 8 more years of this cash cow. We'll see what happens after that. Much depends on Commission policy as well.

Does this mean 15k cheering for the Tassie Devils at Blundstone is more profitable than 35k at Etihad watching Carlton? Interesting. The Wookie has already admitted the number of games in Melbourne has reached saturation point

No I didnt. I said that AFL fans in Melbourne have a choice when there team plays 17 games in Melbourne a year - they dont have to see teams they arent interested to, at times they dont like, in stadiums they least prefer. At no point did I say anything about saturation.

 

[Rob]

Have you got anything to support that, or are you just throwing mud?

Well, i'd have most teachers of English on my side.

A hypothetical scenario cannot be a fact.

 

[Rob]

In a lot of cases clubs never had the choice, they didnt own the facilites, funding for ground improvements came from the AFLs Ground Improvement Fund and the state government. Profitability of the clubs wasnt a factor in the stadium rationalisation program.

They didn't have a choice because they didn't have the money to do otherwise. Because they weren't profitable enough. And if you want to be really frank, most weren't profitable at all.

IIRC the AFL's ground improvement fund didn't actually start until mid last decade. Well after ground rationalisation occurred.

According to the AFL, they told Carlton in the strongest terms that Carlton had to move, told Elliot not to build the new Grand Stand because the Blues wouldnt be playing there to pay it off. Ian Collins - who was a former AFL General Manager before being Carlton President, moved Carlton to Docklands...and then became Docklands CEO. No shenanigans there.

Your first sentence doesn't make any sense. Why would the AFL sign a deal with Carlton guaranteeing 16 games a year at the ground if they opposed the redevelopment? They were under no obligation to do so.

And i'm not suggesting there wasn't a massive conflict of interest with Collins, nor was it necessarily the correct decision. But it was still Carlton that made the call.

 

[telsor]

Well, i'd have most teachers of English on my side.

A hypothetical scenario cannot be a fact.

If I stand in front of a moving train, I will get very badly hurt.

Are you suggesting that this hypothetical scenario isn't factual?

 

[The_Wookie]

They didn't have a choice because they didn't have the money to do otherwise. Because they weren't profitable enough. And if you want to be really frank, most weren't profitable at all.

IIRC the AFL's ground improvement fund didn't actually start until mid last decade. Well after ground rationalisation occurred.

No. Youve got it mixed up with the current facilities development funds and reserve - which started around 2007. It is not the same thing. The Ground improvement fund began in the 70s, it was a levy on all adult general admission ticket - $0.25 from all Adult admissions during Home and Away matches

South Melbourne were loaned money from it on the condition they went to Sydney -

• 1981 - November 18. The VFL agrees to loan South $400,000 from the Ground Improvement Fund on condition that the club plays its games in Sydney for at least two years.

Your first sentence doesn't make any sense. Why would the AFL sign a deal with Carlton guaranteeing 16 games a year at the ground if they opposed the redevelopment? They were under no obligation to do so.

Went back to the sources to check the veracity of my own comments here -

Ross Oakley in the Phoenix Rises -

Likewise, moving Carlton from Princes Park was a project most appropriately described as long term, particularly after John Elliott spent the best part of $20 million on building the Elliott Stand at the ground against commission advice. At least Princes Park in the pre-Docklands days had the advantage of a reasonable capacity and level of amenity. We were happy enough for Carlton to play there on the basis that its major games were played at the MCG.

The Princes Park deal was signed before Docklands was on the cards - and when Hawthorn, Fiztroy and others still used the ground.

And i'm not suggesting there wasn't a massive conflict of interest with Collins, nor was it necessarily the correct decision. But it was still Carlton that made the call.

Im glad you arent suggesting it. Because there was a massive conflict of interest at a time when the entire board got turned over to a Collins faction, and Collins more or less controlled the Blues....and then wandered over to take the reins st Docklands.

 

[Rob]

If I stand in front of a moving train, I will get very badly hurt.

Are you suggesting that this hypothetical scenario isn't factual?

Well, technically no. If you want to be correct, you have a very very very high probability of getting hurt. Something isn't a fact until it actually happens.

In any case, your analogy sucks. If the Dogs went back to Whitten Oval and did absolutely no work on the ground, costs would reduce, yes. But revenue would also go through the floor. A lot of people, especially families, aren't going to buy a membership to stand in the weather.
You seriously overestimate the hardness of your average 21st century footy fan if you think they'd still get the same numbers through the gate (never mind they probably couldn't fit more than 10k or so with modern H&S standards anyway).

In the end, would they make more money? Maybe. But it's hardly a foregone conclusion.

 

[The_Wookie]

Tim Lane in The Age in 2002 had some interesting remarks on the Princes Park situation too

Another interesting coincidence is that, only 20 days ago, the football community celebrated the opening of a new grandstand at Geelong. Frank Costa and Brian Cook were hailed as heroes who had saved their club. A little over 45 minutes from Telstra Dome they may be, but the Cats had thrown big bucks at developing their boutique stadium and everyone approved.

Yet for trying to realise the same dream at Carlton during the 1990s, John Elliott was derided. Indeed, it's arguable that the demise of Princes Park as an AFL venue is largely attributable to the antipathy, some but not all of it justified, that Elliott drew towards himself and his club.

Why it is sound economics for Geelong, but not Carlton, to consolidate and play matches at its home ground remains unclear. What clearly isn't sound economics is to spend something of the order of $20 million of football money on a stadium and then close it down. Perhaps it has more to do with the fact that John Elliott isn't president of Geelong.

It's worth noting that the Cats will play nine televised night matches (seven of them free-to-air) this season. Yet Carlton, we were told, would have cut itself out of a night-time television profile had it maintained its home base.

 

[Rob]

No. Youve got it mixed up with the current facilities development funds and reserve - which started around 2007. It is not the same thing. The Ground improvement fund began in the 70s, it was a levy on all adult general admission ticket - $0.25 from all Adult admissions during Home and Away matches

South Melbourne were loaned money from it on the condition they went to Sydney -

• 1981 - November 18. The VFL agrees to loan South $400,000 from the Ground Improvement Fund on condition that the club plays its games in Sydney for at least two years.

OK, fair enough. Although i'd imagine we're not talking about the sort of money that could construct entire grandstands and the like, even by 1980's standards.

Went back to the sources to check the veracity of my own comments here -

Ross Oakley in the Phoenix Rises -



The Princes Park deal was signed before Docklands was on the cards - and when Hawthorn, Fiztroy and others still used the ground.

Well hang on, 'against Commission advice' is a little different to being told not to and telling Carlton to move. I remember it being done, I couldn't work it out either as an economic decision. It seemed to me to be more about empires than running a footy club soundly. So it wouldn't surprise me at all if AFL insiders would have told them the same thing. That's a world away from the AFL deliberately screwing them over. Unsurprisingly, they got into a fair bit of financial s**t as a result of it.

And I don't think you're right on the Princes Park deal (at least not the one i'm referring to). I recall it was specifically done to try and guarantee games there given the large (by club standards) capital outlay. I wasn't even aware of an league deal prior to that (there may well have been, I don't know).

Im glad you arent suggesting it. Because there was a massive conflict of interest at a time when the entire board got turned over to a Collins faction, and Collins more or less controlled the Blues....and then wandered over to take the reins st Docklands.

Great, but that remains Carlton's fault. Presumably the members voted him in (although i'm guessing elected unopposed).

 

[madmug]

Well, technically no. If you want to be correct, you have a very very very high probability of getting hurt. Something isn't a fact until it actually happens.

In any case, your analogy sucks. If the Dogs went back to Whitten Oval and did absolutely no work on the ground, costs would reduce, yes. But revenue would also go through the floor. A lot of people, especially families, aren't going to buy a membership to stand in the weather.
You seriously overestimate the hardness of your average 21st century footy fan if you think they'd still get the same numbers through the gate (never mind they probably couldn't fit more than 10k or so with modern H&S standards anyway).

In the end, would they make more money? Maybe. But it's hardly a foregone conclusion.

Their crowds would drop, they may make more money, but they would not get home games televised. Channel 9 would tell the AFL that the Bullies are of no value to them as they wont televise games from such a pig sty. The Maribyrnong city council would tell the Bullies they dont have the $50million to fix it up. The AFL would then cut the Bullies TV rights support money. The Bullies could either try to survive on chook raffles & shake the tins like Richmond did.

Or they could just play in the appropriate stadium & hold their hand out for the TV money like everyone else.

 

[Ned_Flanders]

If I stand in front of a moving train, I will get very badly hurt.

Are you suggesting that this hypothetical scenario isn't factual?

Yes

If you're standing 20km in front of a moving train, you won't even get a wind burn

For a guy who obsesses about abs data, I thought you'd know the importance of details?

 

[Demonic Ascent]

I'm not suggesting you're against *ME*, I'm saying the arguments used to justify killing off Vic clubs are inconsistent with those used to support other clubs.

Yes, they're being paid for...That's why these clubs get such crappy returns...and in 10 years, they'll have paid it off, so their returns should be significantly better.



So if the AFL commissions a 50K stadium in Hobart, your club gets forced to play there and is told that they will make more money, and then find that you only make a profit on if you get over 30K, but can't move elsewhere because the league is making lots from the deal, would you agree a Tas team should be dumped if it doesn't fill it regularly, or should the league compensate you for being forced to lose money yourself to help them?

These clubs are getting significantly bigger crowds than they were 15 years ago when they were forced to move, and still can't make money off the deal. I think it's safe to say the deal sucks, and the AFL, as the party who is both benefiting and forced/forces those clubs to play there should pay them accordingly.

Especially if they want to play elsewhere (like Geelong) and are refused.

 

[Papa G]

Moving clubs out of suburban stadiums had nothing to do with club profitability and everything to do with the Victorian Government and the VFL agreeing to ground rationalisation on the grounds that funding was not going to be made available for upgrades for most of them. Its worth noting that the WAFL and WA Government received a report in 1983 that recommended they cut the number of grounds used to four, including Subiaco and the WACA.

Such moves werent favoured by the club administrators in either league. Collingwood held out until 1999, Carlton strung it out right until 2005.

Are you suggesting Collingwood would be as wealthy as they are now if the stayed at Vic Park?

The AFL and the Victorian government are in bed together and the Vic clubs all benefit from it.

 

[Papa G]

I didnt quote anything, and I havent read the report in a few weeks - Ive seen it enough to know what it says, and despite your patronising, I understand the figures perfectly well, thanks, and Im well aware that this years figures will be worse. You arent delivering any revelations here. As for memberships, there are far more casual memberships to drop off - ie. 3 games memberships than were on offer in 2002, when that phenomenon didnt exist - we'll know more when the revenue for membership figures are released.



Im saying that all three things are factors in poor attendances. Whether its fixturing against non victorian sides with little latent support, poor timing or a stadium they dont want to go to. At no point do I say anything about saturation. I said people will simply go to their preferred games, because they have more choice.



Mike Fitzpatrick wasnt even a Commissioner in 1997 when the deal was signed. Fitzpatrick came to the Commission in 2003. According to the 1997 Annual Report, the AFL reported that from its modelling clubs would be better off to the tune of "between $160,000 to $850,000 a season" not including signage and pourage income. The Annual Report lists no breakeven crowd.



Theres at least 8 more years of this cash cow. We'll see what happens after that. Much depends on Commission policy as well.



No I didnt. I said that AFL fans in Melbourne have a choice when there team plays 17 games in Melbourne a year - they dont have to see teams they arent interested to, at times they dont like, in stadiums they least prefer. At no point did I say anything about saturation.

Saturation: A good album by Urge Overkill.

Saturation: 10 Victorian teams, too many, too many games, not enough interest.

 

[western royboy]

As consumers of sport we are being herded to TV - it is inevitable IMO that club memberships will fall eventually placing clubs under further financial stress and more reliant on afl revenue than ever beforehand

 

[The_Wookie]

Are you suggesting Collingwood would be as wealthy as they are now if the stayed at Vic Park?

Probably not. They have a bloody good deal at the MCG by all accounts. If Pokies had been a big thing in the late 90s, Collingwood would never have moved.

The AFL and the Victorian government are in bed together and the Vic clubs all benefit from it.

They werent in the 80s when Cain ruled Victoria and these policies came into effect. Do a little research. And then Define benefit. I can name 6 clubs who dont believe they are benefiting and believe they can make more money playing at smaller and older stadiums than they do now at the modern ones.

Saturation: 10 Victorian teams, too many, too many games, not enough interest.

Sure. Whatever you say.

Please test the theory.

Encouraging people to jump in front of trains. Class act.

As consumers of sport we are being herded to TV - it is inevitable IMO that club memberships will fall eventually placing clubs under further financial stress and more reliant on afl revenue than ever beforehand

Clubs have trended in the total oppoosite of this direction, with a few exceptions that are entirely performance related. Total club memberships rise by almost 50,000 memberships a year on average - and Im not just talking numbers, Im talking revenues from those numbers.

 

[western royboy]

Probably not. They have a bloody good deal at the MCG by all accounts. If Pokies had been a big thing in the late 90s, Collingwood would never have moved.



They werent in the 80s when Cain ruled Victoria and these policies came into effect. Do a little research. And then Define benefit. I can name 6 clubs who dont believe they are benefiting and believe they can make more money playing at smaller and older stadiums than they do now at the modern ones.



Sure. Whatever you say.



Encouraging people to jump in front of trains. Class act.



Clubs have trended in the total oppoosite of this direction, with a few exceptions that are entirely performance related. Total club memberships rise by almost 50,000 memberships a year on average - and Im not just talking numbers, Im talking revenues from those numbers.

I'd be very interested to look at the breakdown of those figures by type and contribution - I think I know what I'd find

 

[The Darkman]

I didnt quote anything, and I havent read the report in a few weeks - Ive seen it enough to know what it says, and despite your patronising, I understand the figures perfectly well, thanks, and Im well aware that this years figures will be worse. You arent delivering any revelations here. As for memberships, there are far more casual memberships to drop off - ie. 3 games memberships than were on offer in 2002, when that phenomenon didnt exist - we'll know more when the revenue for membership figures are released.

Sorry for not responding earlier but my life does not revolve around BF. Firstly it was you who was going to 'walk me through the financials' without any knowledge of my background, education, skills & experience. All I did was take a quick 15 minute look at the financials and I don't pretend to be an authority on the AFL and it's history. BTW, if interest rates increase next year, and if Carlton's loans aren't at a fixed rate, they may have troubles with liquidity.

3 game memberships are 'soft membership' taken out by people who are not fully committed to a club or membership. The club's job is to convert these 3 game memberships to full memberships. More fuel to the 'saturation theory'. Still does not explain the 'Richmond phenomenon' of high membership after so many years of 'ordinary performances'.

Im saying that all three things are factors in poor attendances. Whether its fixturing against non victorian sides with little latent support, poor timing or a stadium they dont want to go to. At no point do I say anything about saturation. I said people will simply go to their preferred games, because they have more choice.

The problem with the fixturing is there are only 2 grounds in metropolitan Melbourne shared by 9 clubs and it's centralised. If 10k at the Western Oval is more profitable than the 258,264 people showing up at 10 Etihad & 1 Cairns home games, why was such a stadium even built if all it does is demand relatively high attendances and pay the clubs so little. I don't think there is any going back but I still think smaller stadiums/smaller crowds will create greater yields.

Again. There are not too many GWS fans in Perth but a crowd of 34,544 showed up to see them get walloped by West Coast. I don't think the WAFC really care the match is against a young club with no local fans. Sure, it was the only game in Perth that weekend

Theres at least 8 more years of this cash cow. We'll see what happens after that. Much depends on Commission policy as well.

TV calls the shots on fixturing if they pay the bills. You can't complain about 4pm Sunday games if the television deals demand it. I doubt the clubs like the scheduling but if there is a television audience...

 

[The_Wookie]

TV calls the shots on fixturing if they pay the bills. You can't complain about 4pm Sunday games if the television deals demand it. I doubt the clubs like the scheduling but if there is a television audience...

TV accounts for less than half the income of the AFL. So when you say it pays the bills, its not the be all and end all you think it is. Its the single largest segment of income, true, but its still only half of the leagues income, and when club revenues are thrown in, its barely just over 20%. For most clubs the AFL distribution represents between 20% and 25% of their income, and for many clubs is surpassed by membership and sponsorship, and lately pokies for some others.

• Total AFL Revenue in 2014 - $524 million
• Total AFL Broadcast Revenue in 2014 (including AFL media) - $248 million.
• Broadcast revenue % - 47%

• Total AFL Broadcast Revenue in 2014 (including AFL media - $248 million
• Total AFL Revenue in 2014 - $524 million
• Total AFL Distributions to clubs in 2014 - $216 million
  
• Total Club Revenues in 2014 - $855 million
  
• Total Club Revenues (minus AFL distributions) - $639 million
• Total Club + AFL Revenues = $1.163 billion in 2014
  
• AFL Broadcast Revenue % - 21%

Theres a reason Gillon Mclachlan came out when the season fixture was announced in 2014 and specifically stated the AFL was as much about attendance as it was about television.

It turns out you can complain - as several clubs did - about poorly timed fixtures in less preferred venues against teams with no appeal to Victorians.

 

[madmug]

TV accounts for less than half the income of the AFL. So when you say it pays the bills, its not the be all and end all you think it is. Its the single largest segment of income, true, but its still only half of the leagues income, and when club revenues are thrown in, its barely just over 20%. For most clubs the AFL distribution represents between 20% and 25% of their income, and for many clubs is surpassed by membership and sponsorship, and lately pokies for some others.

• Total AFL Revenue in 2014 - $524 million
• Total AFL Broadcast Revenue in 2014 (including AFL media) - $248 million.
• Broadcast revenue % - 47%

• Total AFL Broadcast Revenue in 2014 (including AFL media - $248 million
• Total AFL Revenue in 2014 - $524 million
• Total AFL Distributions to clubs in 2014 - $216 million
  
• Total Club Revenues in 2014 - $855 million
  
• Total Club Revenues (minus AFL distributions) - $639 million
• Total Club + AFL Revenues = $1.163 billion in 2014
  
• AFL Broadcast Revenue % - 21%

Theres a reason Gillon Mclachlan came out when the season fixture was announced in 2014 and specifically stated the AFL was as much about attendance as it was about television.

It turns out you can complain - as several clubs did - about poorly timed fixtures in less preferred venues against teams with no appeal to Victorians.

Given the TV rights is only 47% of AFL revenue, what do you think the sponsorship level would be if the AFL wasnt on TV? That applies to the clubs as well.

 

[The_Wookie]

Given the TV rights is only 47% of AFL revenue, what do you think the sponsorship level would be if the AFL wasnt on TV? That applies to the clubs as well.

Since you have issues with me "knowing it all", I dont know why you would bother asking me questions.

 

[Papa G]

Can you explain to me how Melbourne makes a "profit"?

 

[The_Wookie]

Can you explain to me how Melbourne makes a "profit"?

Dont bother asking me stuff Papa G. Im not responding to you further either.

 

[harmesy 37]

Well, Hawthorn was 20 years ago when they were struggling to come to terms with the financial requirements of playing in the AFL as opposed to the VFL, together with one disastrous investment. God only knows what Carlton have been doing for the past 20 years ..... my guess is living in the past.

Carlton people may not like this, but one big mistake the club continues to make is looking for the quick fix. Buy Judd, that will win us some flags. Buy Malthouse, he'll win us some flags. That sort of stuff is so 1970s and does not work any more. Hawthorn found that out in the mid 1990s.

This is a typical Hawthorn cliché.

ie - Carlton "bought" premierships and
Hawthorn - "shining knights" "family club" never bought an expensive player in their life. (Please ignore Buckenara, Platten, Abbott, Jarman etc)

Hawthorn is at present 10-20 times richer than what Carlton has ever been in its history...but hey, they are the "family club" so we will conveniently forget that fact. Hawthorn have made something like 6 multi-million dollar profits in a row...all on the back of the AFL giving Hawthorn Tasmania as their play thing. 25 million dollar sponsorship...thank you AFL.


eg "quick fix". this is another cliché. Getting Chris Judd was a no-brainer. Carlton needed leadership - please keep in mind that before Judd came to Carlton they had finished either 15th or 16th on regular occasions.

Getting Malthouse...ok I get it you expect me to believe that is an example of a "Carlton quick fix" (getting Ratten - was that a "quick fix" too or maybe that doesn't fit within the tabloid narrative?), whilst when Essendon get Worsfold or Collingwood get Malthouse that ISN'T a quick fix. That is completely different I am expected to believe..cliché after cliché... naïve thinking.

You guys feed into the stereotypes by rehashing nonsense you read in The Age/Herald-Sun.

 

[harmesy 37]

Can you explain to me how Melbourne makes a "profit"?

The same way Hawthorn and North Melbourne makes profits - with assistance from the AFL.

Hawthorn given Tasmania by the AFL...horse has bolted....quick let's give Hobart to North... Too late. 30 million dollars too late.

Melbourne - AFL pays for Roos' wage, gives extra dividends...

All these actions weaken clubs that are also struggling but ignored - eg Carlton.

 

[Hawkk]

Please.

Hawthorn's relationship with Tasmania (which the AFL does not approve of - see the push to remove us in 2010 and Gill's statement on Tasmanian football in 2014) is no different to Carlton's commercial relationship with Hyundai

Heaven forbid where Carlton would be without a major commercial partner