When the AFL own Etihad........

[the big lebowski]

So this will happen in the next 10 years (if not sooner). Aside from owning a billion dollar asset, how will this impact the clubs.

We all hear how Geelong bank big bucks for every game at Simmons. Whereas the same crowd creates a loss for my club and others at the dome. Obviously the costs of running the ground are higher at Etihad, but what will it mean for the bottom line of Victorian clubs.

The consortium that own Etihad now obviously make a profit off it. So will the threat of clubs going out of existence be gone once this momentous event occurs?

 

[theflea]

So this will happen in the next 10 years (if not sooner). Aside from owning a billion dollar asset, how will this impact the clubs.

We all hear how Geelong bank big bucks for every game at Simmons. Whereas the same crowd creates a loss for my club and others at the dome. Obviously the costs of running the ground are higher at Etihad, but what will it mean for the bottom line of Victorian clubs.

The consortium that own Etihad now obviously make a profit off it. So will the threat of clubs going out of existence be gone once this momentous event occurs?

I don't think you make a loss, just don't make much. You also cant compare SS to Etihad as I would think the cost to run both stadiums are vastly different.

 

[Grogg]

The stadium won't pass into AFL hands before the due date is my expectation, and whilst the returns on matches that currently earn sfa for some tenants will improve to a certain extent, there may be various factors that influence just how much of a "clean" stadium it actually is.

As an example North Melbourne with their major sponsor of Mazda has seen it opposed by a Toyota sponsorship of the AFL. Of course the likelihood of these two still being in place in 25yrs is absolutely minimal, although it does provide a good example of club sponsors sometimes falling foul of League wide sponsorships.

I seriously can't envisage an AFL administration throwing open the gates and saying to either North, Dogs or Saints "she's all yours boys, make as much coin as you can..."and relinquishing control of what it will see as a blue chip asset. The most likely outcome will see limited signage allocated to tennant teams on gameday with the AFL retaining the bulk of advertising space to maximise it's exposure and return of investment on behalf of its' league wide sponsors. The result will see a stipend increase on what it deems as fair and reasonable profit for a few of the less influencial organisations in the competition.

In other words, don't hold your breath.....

 

[Freomaniac]

I am assuming the rent will be cheaper than what it is now if the AFL owned docklands

 

[Jim Dixon]

I am assuming the rent will be cheaper than what it is now if the AFL owned docklands

Why would you assume that?

 

[telsor]

Why would you assume that?

Current owner of docklands have masses of debt they need to pay off before they hand it over (and interest, and a desire to make a profit).

The AFL might want the profit slice (arguable considering the clubs in question 'paid' for the ground), but the lack of interest/debt would still mean they're about $10-20M a year better off.

Not unreasonable to suggest a fair part of that would end up in the hands of the clubs that play there.

 

[Jim Dixon]

Current owner of docklands have masses of debt they need to pay off before they hand it over (and interest, and a desire to make a profit).

The AFL might want the profit slice (arguable considering the clubs in question 'paid' for the ground), but the lack of interest/debt would still mean they're about $10-20M a year better off.

Not unreasonable to suggest a fair part of that would end up in the hands of the clubs that play there.

Not unreasonable at all, but the AFL will have different pressures when it comes into its inheritance.

On the one hand, it will want to give generous deals to Footscray, St Kilda and especially Essendon, to keep them sweet and reward them for putting up with less then wonderful stadium deals since 2000.

On the other there will be eight not very sympathetic non-Victorian AFL clubs who will want the AFL as a landlord to squeeze as much coin as they can out of this very lucrative asset. It's a good thing for Essendon, for example, that the AFL don't get the keys to Etihad until 2025 given current relations between the two.

 

[telsor]

Not unreasonable at all, but the AFL will have different pressures when it comes into its inheritance.

On the one hand, it will want to give generous deals to Footscray, St Kilda and especially Essendon, to keep them sweet and reward them for putting up with less then wonderful stadium deals since 2000.

On the other there will be eight not very sympathetic non-Victorian AFL clubs who will want the AFL as a landlord to squeeze as much coin as they can out of this very lucrative asset. It's a good thing for Essendon, for example, that the AFL don't get the keys to Etihad until 2025 given current relations between the two.

If they set the rent so that those clubs get the same stadium returns as the non-vic clubs do at their home grounds, the tenants will still get over twice their current return. I think it would be tough for those club for argue they should be charged more than they get charged themselves.

BTW..Vic club that only play at the MCG would be the interesting ones...They could be supporting of the non-vic clubs on this, but MCG returns aren't great either, and they could be looking to play more games at docklands (probably leading to a better deal being negotiated there).

 

[theflea]

Not unreasonable at all, but the AFL will have different pressures when it comes into its inheritance.

On the one hand, it will want to give generous deals to Footscray, St Kilda and especially Essendon, to keep them sweet and reward them for putting up with less then wonderful stadium deals since 2000.

On the other there will be eight not very sympathetic non-Victorian AFL clubs who will want the AFL as a landlord to squeeze as much coin as they can out of this very lucrative asset. It's a good thing for Essendon, for example, that the AFL don't get the keys to Etihad until 2025 given current relations between the two.

Essendon wont get anything. The reason why the rest of the clubs get jack is because of the massive deal the dons have.

 

[The_Wookie]

Why would you assume that?

Currently the AFL have access to some revenues - signage and pourage rights in particular - that Melbourne Stadiums Ltd dont. Melbourne Stadiums on the other hand have access to stadium naming rights, catering, car parking, medallion club and corporate boxes, as well ground rental fees from the AFL clubs, Melbourne Stars and Melbourne Victory, as well as other events, that the AFL dont. The combination of revenues that occurs in 2025, plus some decent fixturing at the stadium - watch a lot of mid size games leave the mcg with its bare minimum of 40 games a year from 2025 to 2037 - and the league stands to make some decent money.

There is no chance that the clubs that play there now will recieve part ownership of the stadium when the AFL takes over. Lol at the suggestion Essendon have had a poor deal.

 

[MaddAdam]

When the AFL owns it, they will simply sell it, then cook up another deal pretty much much along the same lines. They'll work with the government and get cheap or even free land further along in Docklands, part of the E-Gate development. Or if the State Govt does bit the bullet and sell of the Port of Melbourne.

Then they'll basically just use the same "PPP" model where they put in bugger all of the actual costs but guarantee X number of games for X years.

They will make a big noise about having learned the lessons of last time and there'll be some big hoopla about a "special distribution" of the funds realised in selling the first one.

But the reality is that GWS will get the same share of that as North, the Dogs and St Kilda.

And we'll go back playing the lion's share of games at Docklands 2.0 and thus paying off the asset for the rest of the comp.

 

[The_Wookie]

When the AFL owns it, they will simply sell it, then cook up another deal pretty much much along the same lines. They'll work with the government and get cheap or even free land further along in Docklands, part of the E-Gate development. Or if the State Govt does bit the bullet and sell of the Port of Melbourne.

Then they'll basically just use the same "PPP" model where they put in bugger all of the actual costs but guarantee X number of games for X years.

They will make a big noise about having learned the lessons of last time and there'll be some big hoopla about a "special distribution" of the funds realised in selling the first one.

But the reality is that GWS will get the same share of that as North, the Dogs and St Kilda.

And we'll go back playing the lion's share of games at Docklands 2.0 and thus paying off the asset for the rest of the comp.

The AFL couldnt do it without the approval of the clubs, and to be honest, I dont think that kind of approval is going to be forthcoming again.

 

[telsor]

The AFL couldnt do it without the approval of the clubs, and to be honest, I dont think that kind of approval is going to be forthcoming again.

Approval, or lack of veto?

Because considering how many licences the AFL effectively owns/controls, I'm not sure they can be vetoed.

 

[The_Wookie]

Approval, or lack of veto?

Because considering how many licences the AFL effectively owns/controls, I'm not sure they can be vetoed.

major expenditure still has to be approved or vetoed by the clubs. Im not sure if the simple majority or 2/3rds rules apply for this. In theory the AFL controls only 3 licenses at this time, but by 2025 that could be as many as 5 or 7 depending on negotiations with the SA/WA clubs.

 

[finders]

I see Patrick Smith today is speculating that the AFL is trying to bring the next TV rights forward and use the extra cash to buy Docklands.

 

[Grogg]

I see Patrick Smith today is speculating that the AFL is trying to bring the next TV rights forward and use the extra cash to buy Docklands.

Founded or unfounded speculation?

2yrs into a 5(6?)yr deal would be a little premature you would think
unless GWS and Gold Coast are posting stronger than expected numbers.

 

[The_Wookie]

Founded or unfounded speculation?

2yrs into a 5(6?)yr deal would be a little premature you would think
unless GWS and Gold Coast are posting stronger than expected numbers.

Not if they are trying to renegotiate for a longer deal, instead of a new deal.