Kennett's letter to Hawks members

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blue harvest

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If Melbourne had Hawthorne's schedule they would probably be around $10m per year better off, and Hawthorne would probably be 10M worse off. How would Jeff like that?

If Kennett agrees to swap annual fixtures with Melbourne, I will 100% back him.
Pretty sure last year we had more Sunday games than you guys and fewer free to air night games too, haven't done an exact count though.
 

cb16

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I think the most revealing part of this letter is that state of finances for the AFL, and how f’ed they potentially are in the year(s) ahead. As part of the covid “war panel” or whatever it is, I’m sure that Jeff has pretty thorough knowledge of the exact condition of the leagues finances. That combined with other hints by others in footy and media, including Gil who refused to immediately guarantee survival of all 18 clubs.. I think we are in for a rough ride.
 

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Kwality

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I would take that, the AFL gives Hawthorn the distribution currently Melbourne receives, so an extra $7M. Hawthorn also gets their football department paid for by the AFL and receives the poverty tax money indigent clubs get because their sh*t.

Also, Hawthorn gets Melbourne's draw with the Queens Birthday blockbuster. I think this melbourne supporter would soon find that the club he support goes from being an AFL franchise to bankrupt.
The Hawks made their nest ..... remember the sneering 'selling games' types. Who has the Balance Sheet ?
 

bluespooner

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The Hawks made their nest ..... remember the sneering 'selling games' types. Who has the Balance Sheet ?
Exactly, but there is so much more virtue in putting your hand out to the AFL and getting them to make you viable; because at least then you can say our club got rid of its poker machines.
 

Demonic Ascent

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Pretty sure last year we had more Sunday games than you guys and fewer free to air night games too, haven't done an exact count though.
My fellow Melbourne supporter is on the right track but his target is off I think - the Hawks don't tend to benefit from favoured draws as much as other teams. I agree with his sentiment that teams need to be given an opportunity to stand on their own before trying to cast them off as paupers with their hands out but I am also conscious that it will be difficult to overcome decades of inequities in 2 or 3 years particularly with the current economic climate.

The Hawks are really the only club who has been able to grow from a small-mid tier club to one of the largest in the comp and this is on the back of an unprecedented period of success spanning two golden eras of premierships. Even then it is still to be seen whether this will hold if they experience a prolonged period of non-performance.

Several years ago the AFL asked all clubs to provide submissions around equalisation. Only two were ever made public, those from Geelong and the Bulldogs. I asked MFC for a copy of theirs yet had no response despite being a member for over 20 years at the time (currently a 31 year member).
 

Inferno

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Most clubs don't have home grounds.
:rolleyes::rolleyes::rolleyes:

Which competition are you following?


Still I think $168M of public money would go a long way to helping Hawthorn develop Dingley. What do you think there chances are?
Dingley is planned to be a training facility - you're comparing it to a ground which has held VFL/AFL matches consistently since WW2.

Meanwhile the Hawks play their home matches at the MCG and Launceston, which you can correct me if I'm wrong but they've contributed a far smaller amount (I'm presuming none) compared to what we have to Kardinia Park.
 

bluespooner

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:rolleyes::rolleyes::rolleyes:

Which competition are you following?

The AFL and what is it with the dumb-arse emoticons.

Hawthorn does not own the MCG or York Park. Hawthorn ceased to have a home ground when it moved from Glenferrie and now it plays at AFL sanctioned stadiums which it enters into agreements with via the AFL and the owners of the grounds.


Dingley is planned to be a training facility - you're comparing it to a ground which has held VFL/AFL matches consistently since WW2.

Meanwhile the Hawks play their home matches at the MCG and Launceston, which you can correct me if I'm wrong but they've contributed a far smaller amount (I'm presuming none) compared to what we have to Kardinia Park.
Hawthorn contributed to the re-development of York Park, I couldn't tell you how much but lets hope it was more than the sub 7% the major beneficiary contributed in the re-development of Kardinia Park.
 

Kwality

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:rolleyes::rolleyes::rolleyes:

Which competition are you following?




Dingley is planned to be a training facility - you're comparing it to a ground which has held VFL/AFL matches consistently since WW2.

Meanwhile the Hawks play their home matches at the MCG and Launceston, which you can correct me if I'm wrong but they've contributed a far smaller amount (I'm presuming none) compared to what we have to Kardinia Park.
Just another example of how confused many are, over home/away games ...
 

Inferno

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The AFL and what is it with the dumb-arse emoticons.

Hawthorn does not own the MCG or York Park. Hawthorn ceased to have a home ground when it moved from Glenferrie and now it plays at AFL sanctioned stadiums which it enters into agreements with via the AFL and the owners of the grounds.
Firstly if we want to go by your strictly literal terms then we don't have a home ground either. The Cats don't own Kardinia Park and never have.

Secondly you're arguing that a Hawthorn matches at the MCG and Launceston are all neutral? I hope they're splitting all of the attendance revenue with the other team they play against. Is this the case?

Hawthorn contributed to the re-development of York Park, I couldn't tell you how much but lets hope it was more than the sub 7% the major beneficiary contributed in the re-development of Kardinia Park.
I'd like to know how much if you can find it. Can you find any team which has contributed more to an "AFL sanctioned stadium" than Geelong?
 

The_Wookie

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$25m last year from pokies. Not many clubs would be 'non-assisted' if you took that out of their revenue.

He has a point about the AFL raking in gazillions for years then everything going to sh*t in no time at all.
Does he though? No one saw this coming. There isnt a professional sporting competition in the world that isnt losing buckets of money over the pandemic.


Yes, the BASE distribution is a share of things like TV rights. That's not 'assistance', it's just revenue the clubs have earned. (similar to signage and pourage at Docklands, and AFL members).

Pretty sure there is a contract somewhere where the clubs signed the TV rights over to the (then) VFL to negotiate collectively in return for even shares of said revenue. If you really want to get rid of this, I doubt it would turn out very well for the clubs that are less popular with the media.
its guaranteed under the franchise system that all clubs signed from 1985 on. The AFL cant refuse to provide it to the clubs.

Actually, they can, and did, for a number of years (the 'future fund'), but they spent it (on GWS & GC mostly, but anything left over would have gone on AFLW).
It was turned into general revenue with which they then bought Docklands - essentially what the future fund was for anyway - then started a new fund which by the end of last year was up to around 100 million.

Hawks are not unaided. They are propped up by the Tassie Govt.
Hawthorn are SPONSORED by the Tasmanian Government in an arrangement that the Tasmanian Government believes is profitable. All clubs could say they are propped up by sponsors under the same reasoning.
 

Demonic Ascent

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My fellow Melbourne supporter is on the right track but his target is off I think - the Hawks don't tend to benefit from favoured draws as much as other teams. I agree with his sentiment that teams need to be given an opportunity to stand on their own before trying to cast them off as paupers with their hands out but I am also conscious that it will be difficult to overcome decades of inequities in 2 or 3 years particularly with the current economic climate.

The Hawks are really the only club who has been able to grow from a small-mid tier club to one of the largest in the comp and this is on the back of an unprecedented period of success spanning two golden eras of premierships. Even then it is still to be seen whether this will hold if they experience a prolonged period of non-performance.

Several years ago the AFL asked all clubs to provide submissions around equalisation. Only two were ever made public, those from Geelong and the Bulldogs. I asked MFC for a copy of theirs yet had no response despite being a member for over 20 years at the time (currently a 31 year member).
Here are the proposals from Geelong and the Bulldogs that were made public
 

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big_e

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Potentially Jeff knows the consequences of the KPIs in the covenant covering the line of credit. Call it what you like, a target, a hurdle, a KPI. The point where a club gets no more additional money (because the lender says so), the place is insolvent, the CEO & the Directors become personally & criminally liable.
That is not a matter of judgement, its black & white.
If you've ever been in the situation yourself, you'd know there is a hell of a lot of grey in determining solvency, particuarly around safe harbour provisions. It's why so many administrators' reports say the company has been insolvent since x, but directors are pursued only on very rare occasions.

Clubs' loans to banks are currently guaranteed by the AFL, so in the event that they can't make repayments (or renegotiate the terms), the AFL is bound to pay them. Which means the clubs won't be insolvent.

And the AFL's line of credit is secured against an asset that is worth more than the value of the loan, so in the extremely unlikely event of the AFL not being able to repay the debt, the worst-case scenario is the banks will get a share of Docklands.

And the AFL have used that money to onlend to clubs - that is the only place where any Kennett Performance Indicators will come into play. And this is the bit where the reference to receivership might come into play - if the clubs weren't able to repay their debts to the AFL. But the AFL has spent the last 35 years taking every step other than booting a club (with one exception, that went down very, very poorly with fans, and which is still a sore point for many). Sydney got Alan Schwab and Ron Barassi, Brisbane got bits of Fitzroy, Melbourne Peter Jackson and Paul Roos, even North were supported by Brad Scott being given a BS job.

So while Jeff is right that a club's survival is in the hands of the AFL, look at what the AFL has done recently (as in, since the pandemic started). They've allowed more sponsorship on jumpers (higher $$$ for clubs), they're putting more games in good TV slots (more $$$ for broadcasters, and then flowing through to the AFL) they've mandated lower outgoings by reducing player salaries and cutting the fat out of football departments - and frankly, the fact that they've taken out a loan to help the clubs is a big sign in itself that that the league is not in the mood to ditch clubs right now. They've extended the TV rights deal so there is more certainty about finances for the next few years, which means they can build around that.

Everyone needs to calm down - the clubs aren't going anywhere.
 
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Kwality

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Clubs' loans to banks are currently guaranteed by the AFL, so in the event that they can't make repayments (or renegotiate the terms), the AFL is bound to pay them. Which means the clubs won't be insolvent.
Thats why the original press reports on the issue included reference to a receivership model.
The AFL guarantees at last balance date are documented in the Financials. These guarantees are not open ended by term or value. Off the top they total $50 mil & involve banks other than the NAB/ANZ who provided the line of credit.

Guess we disagree on the solvency issue.

I have no doubt that on Nov1 we will have 18 clubs, Chairman Jeff has suggested 3 years a day after the AFL media dollars have been locked in until 2024. I dont believe the timing is by chance.
 
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big_e

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Thats why the original press reports on the issue included reference to a receivership model.
The AFL guarantees at last balance date are documented in the Financials. These guarantees are not open ended by term or value. Off the top they total $50 mil & involve banks other than the NAB/ANZ who provided the line of credit.

Guess we disagree on the solvency issue.

I have no doubt that on Nov1 we will have 18 clubs, Chairman Jeff has suggested 3 years a day after the AFL media dollars have been locked in until 2024. I dont believe the timing is by chance.
True, but some of those guarantees have expired in the last couple of months, and one assumes they have been rolled over. (If they hadn't been, we'd have heard about by now.)

As an aside, the other guarantee the AFL has in place is with the AFLPA, to pay the wages of players who lose a job if an AFL club was to cease to play in the league. As I've said in the past, the AFL has done some stupid sh*t in the past but willingly opening themselves up to pay millions of dollars in wages vs giving a club some extra support? I'll bet the house on them locking in B, Eddie.
 

Inferno

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Exactly, what is a home game, its not about home, its about wherever the money is.

Time the 1920s term of 'home' game was trashed.
You're completely missing the point.

The MCG was built by the taxpayer and the MCC, Docklands was built by the taxpayer, and Kardinia Park was largely built by the taxpayer with approx $12m from the GFC. Every stadium in the league is at least mostly funded by taxpayers. IIRC we're the only club that's actually directly contributed money to an AFL stadium.

So why supporters of other clubs want to whinge about us and think we're the only club paying and profiting in a largely taxpayer funded stadium is beyond me.
 

Kwality

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True, but some of those guarantees have expired in the last couple of months, and one assumes they have been rolled over. (If they hadn't been, we'd have heard about by now.)
Earliest was end of 2020 is my recollection but I'll have a look & get back. The dates are relevant as go forward.
 

SellarStardom

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What strikes me is that a man sitting on the COVID panel within AFL House is saying we need to consider reducing the competition and bringing in relegation and promotion as the league can't support 18 clubs moving forward. It clearly says that the financial outlook moving forward isn't great and the AFL won't be in a position to provide the same level of handouts in the years ahead.

The caveat to all of this is that it's Kennett.

But considering the AFL has stripped $150m out of its broadcast deal, it's obvious the league won't get back to where it was.
 

NoobPie

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What strikes me is that a man sitting on the COVID panel within AFL House is saying we need to consider reducing the competition and bringing in relegation and promotion as the league can't support 18 clubs moving forward. It clearly says that the financial outlook moving forward isn't great and the AFL won't be in a position to provide the same level of handouts in the years ahead.

The caveat to all of this is that it's Kennett.

But considering the AFL has stripped $150m out of its broadcast deal, it's obvious the league won't get back to where it was.

Well, I don't think he was advocating relegation AND promotion. He used "relegation" to describe putting financially unaccountable clubs back into the VFL
 

SellarStardom

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Well, I don't think he was advocating relegation AND promotion. He used "relegation" to describe putting financially unaccountable clubs back into the VFL
That's the part that is unacceptable, you can't advocate for dumping clubs without a capacity for them to being promoted back into the AFL.

For what it's worth, you can't just judge it on finances either in my opinion, if you advocate for relegation, actual onfield performance should come into account as well.

There is no doubt Kennett is taking a lead out of other leagues where financial measures are in place.
 

big_e

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That's the part that is unacceptable, you can't advocate for dumping clubs without a capacity for them to being promoted back into the AFL.

For what it's worth, you can't just judge it on finances either in my opinion, if you advocate for relegation, actual onfield performance should come into account as well.

There is no doubt Kennett is taking a lead out of other leagues where financial measures are in place.
It's just a thought bubble from a man who suffers from relevance deprivation syndrome. Don't think about it too much.
 

The_Wookie

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You're completely missing the point.

The MCG was built by the taxpayer and the MCC,
The MCG has been completely rebuilt since 1988 was overwhelming built and paid for by the MCC with an AFL agreement that enabled it to get financing. The taxpayer has paid less for the MCG since 1988 than it has contributed to Kardinia Park.

Docklands was built by the taxpayer
Docklands was certainly not built by the taxpayer - it was a wholly private build. The Governments forthcoming 250m for development is the first money theyve ever put into the stadium, and the argument can be made that the bought grand finals not stadium contributions in any case.


Kardinia Park was largely built by the taxpayer with approx $12m from the GFC.
Im pretty sure by the final stage its more than 12m but i dont have those figures to hand.

Every stadium in the league is at least mostly funded by taxpayers. IIRC we're the only club that's actually directly contributed money to an AFL stadium.
See above. Also note that Carlton built an entire grand stand at Princes Park and the league didnt give a damn.

So why supporters of other clubs want to whinge about us and think we're the only club paying and profiting in a largely taxpayer funded stadium is beyond me.
Because in Victoria, you are pretty much the only one playing out of a stadium that is mostly paid for by the taxpayer.
 

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