Kennett's letter to Hawks members

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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.)

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.
You are correct that some guarantees were due at Apr 30 2020, & they were to the NAB, the providers of the line of credit.


I've linked the 2019 AFL Annual Report & cherrypicked relevant paras of AFL club guarantees that dont simply slide in under the line of credit, e.g not the NAB/ANZ, & expiry date of any relevant guarantee. I've not included guarantees to NAB/ANZ that expire in 2020.

The detail listed makes boring reading, dont bother unless you have some reason.

5. Contingent liabilities
i. The Company has entered into an agreement with the AFL Players’ Association Inc. for a period of six years commencing on 1 November 2016 whereby the Company has an obligation to assume liability for all amounts due to players of a club where the club has lost its licence......offset by any amounts payable to the players in respect of future employment as a player.

ii. The Company has entered into an agreement with Westpac whereby the Company guarantees the obligations of the Carlton Football Club Limited to Westpac to a maximum of $5.0 million. This guarantee expires on 31 January 2022.

iii. The Company has entered into an agreement with Westpac whereby the Company guarantees the obligations of the Melbourne Football Club Limited to Westpac to a maximum of $3.5 million. This guarantee expires on 31 January 2022.

iv. The Company has entered into an agreement with Westpac whereby the Company guarantees the obligations of the North Melbourne Football Club Limited to Westpac to a maximum of $3.0 million. This guarantee expires on 31 January 2022.

....
viii. The Company has entered into an agreement with NAB whereby the Company guarantees the obligations of the Essendon Football Club Limited to NAB to a maximum of $8.0 million. This guarantee expires on 30 April 2021
.....
x. The Company has entered into an agreement with National Australia Bank whereby the Company guarantees the obligations of GCFC Limited to National Australia Bank to a maximum of $1.19 million (Transactional Facilities). This guarantee expires on 30 April 2021.

.....
xii. The Company has entered into an agreement with National Australia Bank whereby the Company guarantees the obligations of the Western Sydney Football Club Limited to National Australia Bank to a maximum of $1.53 million. This guarantee expires on 30 April 2020.
xiii. The Company has entered into an agreement with National Australia Bank whereby the Company guarantees the obligations of the Australian Football League (Victoria) Limited to National Australia Bank to a maximum of $0.35 million. This guarantee expires on 30 April 2020.
xiv. The Company has entered into an agreement with National Australia Bank whereby the Company guarantees the obligations of the AFL Queensland Limited to National Australia Bank to a maximum of $0.15 million. This guarantee expires on 30 April 2020.
xv. The Company has entered into an agreement with National Australia Bank whereby the Company guarantees the obligations of the AFL (NSW/ACT) Commission Limited to National Australia Bank to a maximum of $0.15 million. This guarantee expires on 30 April 2020.
xvi. The Company has entered into an agreement with National Australia Bank whereby the Company guarantees the obligations of the AFL Northern Territory Limited to National Australia Bank to a maximum of $0.15 million. This guarantee expires on 30 April 2020.
xvii. The Company has entered into an agreement with National Australia Bank whereby the Company guarantees the obligations of Football Tasmania Limited to National Australia Bank to a maximum of $0.06 million. This guarantee expires on 30 April 2020.
 

Kwality

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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.
June 6, 2002 — 10.00

The Victorian government will make up a funding shortfall of $77 million for the MCG redevelopment following a dispute with the federal government.
The Premier Steve Bracks said the money, combined with $13 million from the Melbourne Cricket Club, would cover $90 million in federal funds for 2006 Commonwealth Games facilities.

Mr Bracks said the new funding arrangement gave MCC members a further 1000 seats above the 1200 they had been allocated in the $400 million redevelopment of the ground.


Gave seats, in kind payment?

2200 seats at the GF on the taxpayer !!!
 
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The_Wookie

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June 6, 2002 — 10.00

The Victorian government will make up a funding shortfall of $77 million for the MCG redevelopment following a dispute with the federal government.
The Premier Steve Bracks said the money, combined with $13 million from the Melbourne Cricket Club, would cover $90 million in federal funds for 2006 Commonwealth Games facilities.

Mr Bracks said the new funding arrangement gave MCC members a further 1000 seats above the 1200 they had been allocated in the $400 million redevelopment of the ground.


Gave seats, in kind payment?

2200 seats at the GF on the taxpayer !!!
Yes 77 million out of 400m budgeted for the Northern Stand. That along with 70m in refurbishment costs for the Southern Stand since it was built and its a total of 140m of more than 700m spent on the stadium by the MCC.
 

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Demonic Ascent

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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.
In addition to that, I haven't heard anyone from the AFL come out and swat Kennett's comments away. For me the silence is deafening.
 

Demonic Ascent

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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.
As Whately pointed out on SEN on Saturday afternoon, it is not relegation Kennett is talking about, it is expulsion from the league. He is saying if clubs can't meet some financial KPI's (he hasn't said what they are nor would he elaborate when asked by Maher/Murphy on Friday) within a 3 year deadline (to coincide with the extended rights deal I presume) they should be kicked out of the AFL. They won't return and their licenses won't be made available to other clubs/franchises in their place (not immediately anyway).
 

Toump Ass

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Jeff and I walk our dogs in the same local park.
My dog does this thing where he humps random dogs but unlike most, my dog goes for the other mutts face, not their arse.
Every time I go to the park I hope my dog mounts Jeff's dog's face. Hasn't happened just yet but i live in hope. Will let everyone know if this situation changes.
 
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big_e

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In addition to that, I haven't heard anyone from the AFL come out and swat Kennett's comments away. For me the silence is deafening.
Probably don't want to give it legs. It was a one-day talking point in the media, and everyone has moved on. Neither the first nor the last time someone will make such comments.

Answering it would have led to questions like "well, are there any KPIs on this money that's been lent to clubs? If not, why not? And if so, what are they? How long will clubs be the beneficiary of this money?" Suspect the AFL would rather all of that be kept in-house.
 

Kwality

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Probably don't want to give it legs. It was a one-day talking point in the media, and everyone has moved on. Neither the first nor the last time someone will make such comments.

Answering it would have led to questions like "well, are there any KPIs on this money that's been lent to clubs? If not, why not? And if so, what are they? How long will clubs be the beneficiary of this money?" Suspect the AFL would rather all of that be kept in-house.
It would need a journo across their facts .....
 

NoobPie

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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.

As Demonic Ascent pointed out, he is purely talking about financial viability, suggesting the purging of financially unviable clubs. The AFL is an equalised league. It has been what soccer fans would call a "closed League" since it broke away in 1897 and has had equalisation measures of some description for most of its history. Promotion and relegation based on "sporting merit" is simply incompatible with an equalised league like the AFL

I don't think he is taking his "lead out of other leagues". Jeff Kennett doesn't come across as as someone who studies the governance and commercial models of other sporting leagues. He is just a blue blood tory who is currently the president of a relatively financially secure club wanting to put extra pressure on the less financial (self)viable clubs by threatening excommunication

I think his use of the term "relegation" may have lead your thinking astray a bit
 

NoobPie

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Probably don't want to give it legs. It was a one-day talking point in the media, and everyone has moved on. Neither the first nor the last time someone will make such comments.

Answering it would have led to questions like "well, are there any KPIs on this money that's been lent to clubs? If not, why not? And if so, what are they? How long will clubs be the beneficiary of this money?" Suspect the AFL would rather all of that be kept in-house.
Yeah I certainly wouldn't think it is going to go anywhere. At best they are trying to put the wind up smaller clubs to act more prudently.

What is annoying about Kennett is he likes to undermine the efforts of smaller clubs trying to make a buck - prime example being Port and Saints in Shanghai. It is a bit rich of him now to be talking about KPIs for smaller clubs if he is going to publicly undermine their commercial efforts.
 

big_e

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Yeah I certainly wouldn't think it is going to go anywhere. At best they are trying to put the wind up smaller clubs to act more prudently.

What is annoying about Kennett is he likes to undermine the efforts of smaller clubs trying to make a buck - prime example being Port and Saints in Shanghai. It is a bit rich of him now to be talking about KPIs for smaller clubs if he is going to publicly undermine their commercial efforts.
Remarkably tin ear for a guy who was in advertising.
 

Demonic Ascent

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Probably don't want to give it legs. It was a one-day talking point in the media, and everyone has moved on. Neither the first nor the last time someone will make such comments.

Answering it would have led to questions like "well, are there any KPIs on this money that's been lent to clubs? If not, why not? And if so, what are they? How long will clubs be the beneficiary of this money?" Suspect the AFL would rather all of that be kept in-house.
True, but the fact he sits on the AFLs coronavirus committee or whatever it is called gives his comments a little extra weight and makes it more than just Jeff being loudmouthed again. I think it is a good opportunity for the league to have a mature discussion - not about placing demands on clubs and threatening them with expulsion but how the AFL is going to work with clubs to ensure their financial viability moving forward.

Although the AFL touts equalisation there are plenty of things that work counter to this and these inherent inequities arising from AFL policies make some clubs totally reliant on AFL compensation (or "handouts" as some would refer to them) making their continued existence extremely tenuous.
 

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NoobPie

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True, but the fact he sits on the AFLs coronavirus committee or whatever it is called gives his comments a little extra weight and makes it more than just Jeff being loudmouthed again. I think it is a good opportunity for the league to have a mature discussion - not about placing demands on clubs and threatening them with expulsion but how the AFL is going to work with clubs to ensure their financial viability moving forward.

Although the AFL touts equalisation there are plenty of things that work counter to this and these inherent inequities arising from AFL policies make some clubs totally reliant on AFL compensation (or "handouts" as some would refer to them) making their continued existence extremely tenuous.

There is also the talk of the AFL cutting the base distribution (eg cutting distribution to the big clubs) as it reduces the soft cap substantially.

The AFL's funding model, which is only a few years old, essentially commits to funding all clubs to a level where they can pay the full soft cap.

It is quite possible that Jeff Kennett is preparing to defend the Hawks existing distribution by kicking the smaller clubs (rather than doing the AFL's bidding which - let's be honest - he isn't well known for historically)
 

big_e

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True, but the fact he sits on the AFLs coronavirus committee or whatever it is called gives his comments a little extra weight and makes it more than just Jeff being loudmouthed again. I think it is a good opportunity for the league to have a mature discussion - not about placing demands on clubs and threatening them with expulsion but how the AFL is going to work with clubs to ensure their financial viability moving forward.

Although the AFL touts equalisation there are plenty of things that work counter to this and these inherent inequities arising from AFL policies make some clubs totally reliant on AFL compensation (or "handouts" as some would refer to them) making their continued existence extremely tenuous.
This is the elephant in the room, I think.

It's all well and good for clubs to be "compensated" for the lack of exposure but the result of the lack of exposure run very deep. Football club support used to be hereditary, now it is based on who is seen on TV. Why would a kid support St Kilda - even though their whole family does - when they see Dusty, Danger and Grundy playing big games on TV almost every week? So while smaller clubs get some more money, the amount of supporters they have declines on a relative basis.


There is also the talk of the AFL cutting the base distribution (eg cutting distribution to the big clubs) as it reduces the soft cap substantially.

The AFL's funding model, which is only a few years old, essentially commits to funding all clubs to a level where they can pay the full soft cap.

It is quite possible that Jeff Kennett is preparing to defend the Hawks existing distribution by kicking the smaller clubs (rather than doing the AFL's bidding which - let's be honest - he isn't well known for historically)
Best thing the AFL could do here is make it cheaper to run an AFL club. A list of 30 and draft age of 19 means a smaller wage bill, fewer coaches, fewer development staff, no need for reserves teams (just a relationship with second-tier clubs to house the handful of players who are fit and not in the 22 each week). And none of that requires more money from HQ, and none of it penalises well-run clubs.
 

Rob

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This is the elephant in the room, I think.

It's all well and good for clubs to be "compensated" for the lack of exposure but the result of the lack of exposure run very deep. Football club support used to be hereditary, now it is based on who is seen on TV. Why would a kid support St Kilda - even though their whole family does - when they see Dusty, Danger and Grundy playing big games on TV almost every week? So while smaller clubs get some more money, the amount of supporters they have declines on a relative basis.
To be fair, St Kilda were getting plenty of prime time slots a decade ago when they were contending. In the end it's up to the club itself to be marketable.

But I see your point, there is a clear bias towards certain clubs that isn't explained by TV ratings.

Best thing the AFL could do here is make it cheaper to run an AFL club. A list of 30 and draft age of 19 means a smaller wage bill, fewer coaches, fewer development staff, no need for reserves teams (just a relationship with second-tier clubs to house the handful of players who are fit and not in the 22 each week). And none of that requires more money from HQ, and none of it penalises well-run clubs.
That's OK in theory, but you'll see some clubs make mega profits which will really piss the players off. They'll look at those huge cash reserves that they basically are generating and wonder why they aren't getting paid more. Industrial action awaits.

The reality is that no club needs multi million dollar facilities, dozens of coaches, full reserves teams, etc etc. The only thing the AFL requires them to do is pay 95% of the salary cap (I think it's still at that level). If they choose to hire a full time half back flank coach, then that's their decision. If they can't afford it, then it's a bad decision. But there's certainly a culture of 'keeping up with the joneses' amongst AFL clubs. Things like having permanent ice baths built when in reality a sulo bin works just as well.

I've been an advocate of clubs being able to trade not just players and draft picks, but cash as well. Let the clubs work it out from there. It would almost certainly lead to the richer clubs tending to have more success, but that's the price you pay if you want to equalise finances and run a completely viable league. It would test whether clubs really do need an 8 lane swimming pool to themselves.
 

Demonic Ascent

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This is the elephant in the room, I think.

It's all well and good for clubs to be "compensated" for the lack of exposure but the result of the lack of exposure run very deep. Football club support used to be hereditary, now it is based on who is seen on TV. Why would a kid support St Kilda - even though their whole family does - when they see Dusty, Danger and Grundy playing big games on TV almost every week? So while smaller clubs get some more money, the amount of supporters they have declines on a relative basis.
Exactly and that's what I've been on about for ages and alluded to in the OP.

The compensation the AFL give clubs is generally meant to be for the inequities in the fixture. It basically compensates for lost match day revenue. But it doesnt account for lack of exposure leading to reduced sponsorship revenue and it also doesn't account for the long term impacts. These policies have been in place since the early 90s now when the AFL ensured Carlton, Collingwood, Essendon and to a lesser extent Richmond were given home games against each other every season and in the best timeslots. The impact long term is a reduced ability to grow your support/membership base, which also impacts your ability to attract sponsors etc

After decades of this the gap between the richest and poorest clubs widens and it gets harder and harder for the smaller clubs to not even catch up but just to become financially sustainable and not reliant on the AFL distributions (including the additional compensation). And this is without even factoring in things like stadium deals something the Docklands clubs in particular North, Saints and Dogs have had to deal with.

The first thing that should be done is deal with the financial inequities and then look at how each club can regain their financial independence. Of course the biggest barrier to this is the AFL themselves because they want to have control over clubs. There are really only a handful of clubs left willing to publicly challenge the AFL on key issues of which the Hawks are one.

The AFL will need to maximise revenue especially in the wake of coronavirus but also with the spectre of reduced media rights in the future. That is fine and clubs should be on board with that to ensure the survival of the league and clubs. But if the AFL is going to prioritise certain clubs to ensure a larger media rights deal (eg Richmond and Collingwood every Friday night for example) then they should institute a revenue sharing model across the competition.
 

Kwality

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But if the AFL is going to prioritise certain clubs to ensure a larger media rights deal (eg Richmond and Collingwood every Friday night for example) then they should institute a revenue sharing model across the competition.
So some clubs get a benefit & all the competition pay compensation - the winners keep the loot & the other clubs are out of pocket.

Fine aspiration, needs a bit of work. I do remember Eddie claiming a Collingwood sponsorship arounfd Friday might footy.
 

Demonic Ascent

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So some clubs get a benefit & all the competition pay compensation - the winners keep the loot & the other clubs are out of pocket.

Fine aspiration, needs a bit of work. I do remember Eddie claiming a Collingwood sponsorship arounfd Friday might footy.
No, I'm saying that's what happens anyway yet the compensation to clubs is inadequate. The AFL already has a revenue maximisation policy around the fixture, I'm saying if they are to maintain that then they need to institute a revenue sharing policy as well. One goes hand in hand with the other.
 

Kwality

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No, I'm saying that's what happens anyway yet the compensation to clubs is inadequate. The AFL already has a revenue maximisation policy around the fixture, I'm saying if they are to maintain that then they need to institute a revenue sharing policy as well. One goes hand in hand with the other.
What does equalisation mean, e.g crowds or memberships/both?
Take Anzac Day, how would you restructure the current arrangement?
 

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