Tasmania "You need 45 million" - Clubs that fail the Tasmanian Revenue Test.

[The_Wookie]

Surprised madmug hasnt weighed in on this yet, but this is a pretty valid point for the Tasmanian camp

"The brutal reality right now, the economy and scale and growth mean they financially can't support its own team playing 11 games," he said. "You need $45 million"

http://www.abc.net.au/news/2015-08-...fl-team-afl-ceo-gillon-mclachlan-says/6708932

“In my view they deserve it. But the brutal reality is with the economy and scale they financially can’t support their own team playing 11 games when you need a return of $45 million.

http://www.heraldsun.com.au/sport/a...n/news-story/c772d872ecc5881c550a3bf32f434335

"The brutal reality right now, the economy and scale of growth mean they financially can't support their own team playing 11 games, you need $45 million," he said.

http://www.theage.com.au/afl/afl-ne...-mclachlan-20150819-gj2qla.html#ixzz44YKGou00

2015 Club Revenues

• Hawthorn – $70,986,527
• Collingwood -$66,259,649
• West Coast – $60,007,059
• Essendon – $58,202,992
• Carlton – $54,052,486
• Fremantle – $52,246,137
• Brisbane – $51,015,088
• Port Adelaide – $50,794,644
• Geelong – $49,652,524
• Richmond – $46,706,020
• Sydney – $45,373,168

-----------------------------------------

• Melbourne – $44,522,144
• Adelaide - $$44,492,629
• W.Bulldogs – $41,321,293
• Nth Melbourne – $37,459,111
• GWS – $35,824,982
• Gold Coast – $34,980,778
• St Kilda – $32,605,028

It does seem to be a little bit of a high standard to ask.

 

[Messenger]

How many teams below the line are regularly profitable?

 

[The_Wookie]

Well its funny you should ask that, because all of them recieve additional "future funds" and grants to get them to be even close to profitable. Except for maybe Adelaide and even then, only recently.

 

[Messenger]

Well its funny you should ask that, because all of them recieve additional "future funds" and grants to get them to be even close to profitable. Except for maybe Adelaide and even then, only recently.

And I imagine a few above the line don't record a profit every year either.

But doesn't that support the premise you need 45m to be a going concern?

 

[Furn2]

That is the whole point.

The standard for new teams isn't the poorest sides unless it's expanding into new areas.

Adding another struggling club in an area that's already AFL territory doesn't make sense.

Another mouth to feed that adds little to the overall pie.

The only way it could work is if you added 2 teams to make a 10th game and those two teams played only on Monday nights or something.

 

[Tyran]

How does Adelaide do relatively so poorly?

 

[The_Wookie]

And I imagine a few above the line don't record a profit every year either.

But doesn't that support the premise you need 45m to be a going concern?

Sure. But its a little rich to ask that of a new club when you havent required it before.

 

[The_Wookie]

How does Adelaide do relatively so poorly?

No alternative sources of revenue. Poor management for 30 years - not just on their part but the SANFL as well. They should be another West Coast.

 

[madmug]

Surprised madmug hasnt weighed in on this yet, but this is a pretty valid point for the Tasmanian camp


http://www.abc.net.au/news/2015-08-...fl-team-afl-ceo-gillon-mclachlan-says/6708932


http://www.heraldsun.com.au/sport/a...n/news-story/c772d872ecc5881c550a3bf32f434335


http://www.theage.com.au/afl/afl-ne...-mclachlan-20150819-gj2qla.html#ixzz44YKGou00

2015 Club
-----------------------------------------

• Melbourne – $44,522,144
• Adelaide - $$44,492,629
• W.Bulldogs – $41,321,293
• Nth Melbourne – $37,459,111
• GWS – $35,824,982
• Gold Coast – $34,980,778
• St Kilda – $32,605,028

It does seem to be a little bit of a high standard to ask.

Geez Wook, you must be slipping. We've discussed this very subject on BF before.

I said the costs of a club here would be cheaper with no stadium costs. The State Gument want footy as part of the growing tourism sector. The figures are arbitrary & dont apply to anyone else in the league. Tassies last approach covered the AFLs criteria. But it was a political decision in the end. A wink & a nod for everyone except Tassie.

Then Telsor & l discuss it. Then telsor ups the 'discussion' then you suspend me For giving it back to telsor. Thats how it goes

 

[Messenger]

Sure. But its a little rich to ask that of a new club when you havent required it before.

Your not comparing apples with apples though. We've never set a team up in an established football market. The Qld and NSW teams are in expansion markets and in theory add to the potential television deal.

 

[The_Wookie]

Geez Wook, you must be slipping. We've discussed this very subject on BF before.

I said the costs of a club here would be cheaper with no stadium costs. The State Gument want footy as part of the growing tourism sector. The figures are arbitrary & dont apply to anyone else in the league. Tassies last approach covered the AFLs criteria. But it was a political decision in the end. A wink & a nod for everyone except Tassie.

Then Telsor & l discuss it. Then telsor ups the 'discussion' then you suspend me For giving it back to telsor. Thats how it goes

yeah, thats not how it goes, and its not how you get threadbanned either.

 

[The_Wookie]

Your not comparing apples with apples though. We've never set a team up in an established football market. The Qld and NSW teams are in expansion markets and in theory add to the potential television deal.

And Tasmania wont add to the deal? The figures speak for themselves, with or without the expansion teams, NSW and QLD tv ratings havent moved an iota, in fact they've gotten considerably worse.

 

[Furn2]

And Tasmania wont add to the deal? The figures speak for themselves, with or without the expansion teams, NSW and QLD tv ratings havent moved an iota, in fact they've gotten considerably worse.

They already watch footy in tassie at the same rate as Victoria.

 

[madmug]

And Tasmania wont add to the deal? The figures speak for themselves, with or without the expansion teams, NSW and QLD tv ratings havent moved an iota, in fact they've gotten considerably worse.

Thats because the GC is all about holidays, beaches & retirement. I mean how many sports have failed up their? Its a sports club graveyard. Good luck GC.

GWS were put in a place that has no football heritage at all. Its a strategic move & will probably take decades. It could be the AFL's own Vietnam. But they will throw heaps at to hope it generates players & ultimately enough support so it can sustain itself.

BUT thats footy politics for you.

 

[Rob]

No alternative sources of revenue. Poor management for 30 years - not just on their part but the SANFL as well. They should be another West Coast.

Probably a bit harsh on Adelaide management calling them poor for 30 years. They generally have a record of strong profits, but haven't had the backing of a population of 2 million and a roaring economy like West Coast have.

But on your OP, you've pretty much demonstrated that the $45 million mark is close to spot on. You've effectively separated the viable and non-viable AFL clubs with the exception of Brisbane and Adelaide.

 

[telsor]

But on your OP, you've pretty much demonstrated that the $45 million mark is close to spot on. You've effectively separated the viable and non-viable AFL clubs with the exception of Brisbane and Adelaide.

Pretty much.

The Commission doesn't have the authority to kick clubs out, but they can stop new clubs coming in below that line. My idea for more clubs is in no small part aimed at lowering that line...

Well its funny you should ask that, because all of them recieve additional "future funds" and grants to get them to be even close to profitable. Except for maybe Adelaide and even then, only recently.

This is where profits is a bad term....If the clubs know they're getting that revenue (and generally that revenue is targeted to particular spending), then of course they're going to include it in the budget to spend. If you get $2M from the future fund, and regularly record $2M+ 'profits', then the club is being VERY badly run (and the AFL would probably stop giving you that money as well, leaving you worse off).

 

[telsor]

The State Gument want footy as part of the growing tourism sector.

Genuine question....

As you say, the Tas government pays for FIFO teams so they get games to encourage tourism.

If Tas got their own team, and was thus guaranteed 11 home games anyway, what motivation would the Tas government have to continue to pay/sponsor when they already get what they want?

 

[madmug]

Genuine question....

As you say, the Tas government pays for FIFO teams so they get games to encourage tourism.

If Tas got their own team, and was thus guaranteed 11 home games anyway, what motivation would the Tas government have to continue to pay/sponsor when they already get what they want?

To keep it. That would be the motivation.

 

[telsor]

To keep it. That would be the motivation.

As has come up many times, to your annoyance, once you have a club, it's almost impossible to lose it, so that wouldn't really apply.

 

[Kwality]

And I imagine a few above the line don't record a profit every year either.

But doesn't that support the premise you need 45m to be a going concern?

How did Gil get away with the claim, yeh optics !

What business model was he talking about, North style, expansion clubs .... $45m is gospel for non thinkers.

 

[Kwality]

Genuine question....

As you say, the Tas government pays for FIFO teams so they get games to encourage tourism.

If Tas got their own team, and was thus guaranteed 11 home games anyway, what motivation would the Tas government have to continue to pay/sponsor when they already get what they want?

They would promote games, just as WA will need to do to leverage the new Perth stadium.

 

[telsor]

They would promote games, just as WA will need to do to leverage the new Perth stadium.

True, but they do that already... A fair part of both Hawthorn & North deals is as sponsorship/advertising (although it's all bundled up), so while they can/will keep that part, there is still a lot of money 'lost'.

As for Perth...We'll see. I know that's the stated policy/aim, but lets face it, the Perth market is so under supplied the ground will be sold out without anyone flying in, and while I'm sure the WA government would like more tourism flowing from the stadium in theory, I doubt they'll lock many locals out to ensure there is space for tourists. I suspect the 'away team section' wont be big enough to require a lot of advertising to fill.

 

[telsor]

How did Gil get away with the claim, yeh optics !

What business model was he talking about, North style, expansion clubs .... $45m is gospel for non thinkers.

I imagine it's a matter of how much is required in a heartland market without 'special assistance', I'd say it's a bit high, but if you look 20-30 years ahead and consider the lack of growth in Tas, then it's probably not too far off.

 

[Arwib]

This threshold would appear to be ignoring input costs. GWS having a breakeven of like 7k at their grounds should mean they need less money than clubs with more expensive stadia, for instance.

 

[Messenger]

How did Gil get away with the claim, yeh optics !

What business model was he talking about, North style, expansion clubs .... $45m is gospel for non thinkers.

Well this is an excellent question. Would you use an "expansion model" for Tasmania, a state that has more in common culturally with SA, Vic, WA than NSW and Qld, that doesn't have the population to demonstrate a massive boost in TV revenue (cos they pay for the game) and whose economic indicators are poorer than the mainland states?

It's not really an "expansion" location, is it?

Disclaimer: let's clear up some of the old Victorian/Hawthorn tropes than inevitably arise.

I support the extension of Hawthorn's arrangement with Tasmania and have supported the arrangement since the beginning. But I'd be happy from 2021 for the arrangement to cease so I can get 11 reserved seat games per year. It's run its race.

I lived in Tasmania for a couple of years and worked in the public health system, so I'm not ignorant of the economic challenges of the region.