AFL's ticking time bomb
Sydney Swans chairman Richard Colless. Photo: Paul Rovere
SYDNEY chairman Richard Colless has questioned the AFL's commitment to 10 clubs in Victoria in calling for a wide-ranging review of the competition and its structure.
Describing the disparity between rich and poor clubs as ''a ticking time bomb in the AFL universe'' the game's longest-serving chairman has called on the game to ''stop pussyfooting about the problem and put it on the table''.
The AFL Commission and executive has responded to Colless' strongly worded proposal and has confirmed it will hold a two-day summit before the start of the 2013 season bringing together the 18 presidents and chief executives.
It is believed Colless has already put some of the wealthier clubs offside by proposing taking profits from blockbuster games and distributing them among the poorer clubs. He has also raised capping football department spending. In a letter obtained by The Age and distributed to all club presidents and the AFL, Colless has written: ''It is not being alarmist to state that in our view more than several clubs could be considered technically insolvent without the financial guarantee of the AFL.''
He described the Swans, 2012 premiers, as ''perpetually one bad season away from serious financial difficulty''.
Colless stressed yesterday he was not pushing for a reduction of clubs but wanted the AFL to clarify its position on retaining 10 clubs in Victoria. ''As a business model I'm interested to hear how the AFL sees the competition in five years,'' said Colless, ''not 30 years as they have looked at in their models.
''Do we want a team in Tasmania? Are we wedded to 10 clubs in Victoria? Is that set in stone because if not that changes the debate. Personally I would walk over broken glass to retain all our clubs but I want to hear where the AFL sees it.
''I'm not pushing any particular line but I'm not sure if the AFL has any firm answers on how Port Adelaide, Brisbane and the Western Bulldogs for example continue to defy gravity when capital and current expenditure in football costs continue to jump.
''The poorer clubs are being seen as a drag on the wealthy clubs. Do we just allow the market economy to rule and everyone take care of their own or do we continue with the socialistic approach. Do AFL subsidies take away creativity?''
Colless' push for a summit was applauded by most fellow presidents increasingly frustrated at attending AFL ''information sessions'' rather than debating the growing concerns over the games lopsided structure - a structure Colless warned in his letter would ''ultimately have an adverse impact on supporters, sponsors and media rights''.
''This is not a debate over whether we have one or two substitutes,'' Colless told The Age. ''That is not something we need to be interested in. If we are to have a two-day summit without pushing our own agendas we need to put it on the table that half the AFL clubs are struggling to survive.
''If their results on field continue to increasingly mirror their bank balances then we have a very big problem.'' Earlier this year Commission chairman Mike Fitzpatrick described the financial burdens carried by struggling clubs as ''unfinished business'' for AFL chief executive Andrew Demetriou.
In terms of Victorian clubs North Melbourne, the Bulldogs, Richmond and St Kilda are all still battling varying degrees of seven-figure debts while the Kangaroos, Saints, Bulldogs and Melbourne would all lose significant amounts of money this year without AFL subsidies.
North Melbourne tried - but failed - two years ago to reach a deal to play seven home games in Tasmania. It currently has a two-home-game deal with Hobart, Hawthorn plays four home games in Launceston and St Kilda is looking to relocate an increasing number of home games to Wellington.
''We've had a decade of unbridled growth and good news,'' said Colless, ''but the question now is that still the case? I'm not so sure. You can't have clubs losing $3 million a year, as is the case with Port Adelaide without some alarm bells ringing.
''An option that should be debated is a return to full equalisation of match-day ticket revenues which would compensate for the accepted inequities in the draw (accentuated by having two expansion teams) and assist in addressing the burgeoning financial divide.''
Colless added yesterday that the clubs needed to revisit the debate of capping increasing football department costs - a push strongly opposed by wealthier clubs such as Collingwood, West Coast and Hawthorn. The spiralling costs of football staff has raised concerns at AFL headquarters and the commission table.
The full email
From: Richard Colless
Sent: Friday, 14 September 2012 5:08 PM
To: 'Tony Peek
Cc: 'Andrew Ireland'; 'Mcmaster, Andrew N'
Subject: PRESIDENT'S MEETING AGENDA
Our club believes that there is a ticking time bomb in the AFL universe. Namely the growing disparity amongst the "haves and have nots."
There's a real bifurcation developing. Say 9/10 clubs in the first category and 8/9 in the other.
None of this is revelationary.
However, given the additional costs that need to be borne by clubs eg compulsory ASAs, Rookies (plus them now being optional), Career ending Insurance, inequitable commercial fixtures due to preferred draw for clubs in blockbusters, the gap is inevitably going to widen.
I can't speak with authority about any clubs other than mine. But we are perpetually one bad season away from serious financial difficulty. We have no working capital or reserves. We'll turn a profit this year because we've got into a preliminary final and we've deferred/cancelled various programs. It is not being alarmist to state that in our view more than several clubs could be considered technically insolvent without the financial guarantee of the AFL.
The rich club set the standard with the ability to offer high payment to staff. There is also real pressure on clubs to upgrade facilities often with debt. As the AFL is aware we have decided that this is something our club will not do. Rather we will manage with much lower cost refurbishments which while frustrating we think is prudent given the circumstances.
All of that said, there is no simple solution that is likely to be instantly acceptable for all Clubs, but make the point that maintaining a competitive football department is increasingly problematic for roughly half the competition. If on-field performance mirrors off-field financial clout, the outcome will be a lopsided competition which will ultimately have an adverse impact on supporters, sponsors and media rights.
An option that should be debated is a return to full equalisation of match day ticket revenues which would compensate for the accepted inequities in the draw (accentuated by having 2 expansion teams) and assist in addressing the burgeoning financial divide.
From a more strategic perspective, and perhaps for another time, we would also urge the AFL to again consider addressing match day ticketing arrangements that impact all clubs. The impact of current match day “clipping the ticket” arrangements are taking a massive amount out of the game on a weekly basis, and we have the experience whereby Ticketek make more revenue in some games than we do from match day ticket sales.
The preceding should not be construed in any way as a criticism of the AFL or of the financially stronger clubs but rather the basis of a discussion as to where, based on current trends, the competition might be in say 5 years time.