AFL

AFL season 2016: It's money time as clubs seek a greater share of TV riches

The fight for a greater share of the record $2.508 billion broadcast rights spoils has begun, with AFL clubs pushing for the league to follow the NRL and markedly increase the amount distributed to each club.

The NRL clinched a deal with its teams late last year, which will see rugby league clubs receive 130 per cent of the player salary cap annually in central grants.

Photo illustration: Dorothy Woodgate
Photo illustration: Dorothy Woodgate 

AFL clubs believe that adopting a similar approach - covering the salary cap plus 20-25 per cent is one idea that has been floated - will alleviate the financial pressure on them, especially those struggling under the burden of less generous stadium tenancy deals.

It would also reverse the trend of recent years where central funding does not cover the salary cap for some clubs, a figure that will reach about $10.3 million this year.

Some clubs, including those such as St Kilda, Brisbane Lions and Western Bulldogs, receive additional funding to boost their finances, while expansion clubs Gold Coast and Greater Western Sydney get even bigger funding packages.

Negotiations between the league and the clubs are expected to dominate the first half of the AFL season, which begins in March, in concert with talks with the players for a new collective bargaining agreement.

Advertisement

AFL Players Association chief Paul Marsh is seeking a set percentage of revenue for the players - something the AFL refused to consider in their last round of CBA negotiations.

"On the back of the significant new broadcast deal secured by the AFL, the opportunity exists for the AFL, the clubs and the players to deliver a new model that ensures the interests of all parties are aligned such that we are all focusing on growing the game, and in turn all parties benefit from the growth," Marsh said.

"We believe a model whereby players receive a fixed percentage of the game's revenues, and clubs are fairly rewarded for their contribution to the game, will deliver this alignment and the AFLPA is very focused on achieving this outcome through the negotiations."

Ray Gunston, the AFL's general manager of finance, corporate and major projects, has been meeting with clubs to gauge opinion on what a new financial deal could look like. Some clubs believe the AFL may prefer holding back large amounts of money and instead dole out funds for particular projects, such as infrastructure improvements or major commercial plans.

Also at stake is the future of the unpopular "luxury tax" levied on wealthier clubs such as Hawthorn and Collingwood, but which was also levied on clubs such as Geelong and Carlton who made net losses in 2015.

"It is the biggest discussion point between the clubs and the AFL and there is a fundamental need to find a model that ensures the financial sustainability of the clubs," Port Adelaide president David Koch said.

"To get to that stage there needs to be a fair distribution of the revenue but also the need to find a way for the AFL and the clubs to work to grow the overall income of the game together." 

Collingwood chief executive Gary Pert said he would prefer a model under which the more successful clubs were not taxed on the amount of revenues generated.

"The current model of redistributing revenue between the clubs only has the effect of taking the profitable clubs and putting them back into a debt situation, which is counter intuitive to the purpose of the process," he said.

Geelong president Colin Carter said the equalisation tax had been "poorly designed" and that, if the league compensated for fixture and stadium cost disadvantages, the issue would be mostly solved.

"The AFL's equalisation tax is problematic in that it excessively hits the 'middle class' rather than the wealthiest," he said.

"We aren't that far off – about $3 to 4 million per annum to a few clubs would do the trick. Remember, if a club receives a cheque for $3 million, that substitutes for them having to find a business that delivers $30 million or more in revenue and which may leave them [with luck] around $3 million in profit."

Much of the issue about stadium deals revolves around the clubs playing at Etihad Stadium.

The AFL will take control of the stadium by 2025 from its current ownership consortium of superannuation and investment funds, but some AFL club executives believe a deal could be struck this year for an early sale.

- Jon Pierik and John Stensholt