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Hawthorn and St Kilda: different sides of the equalisation debate

When the vexed subject of equalisation is discussed, Hawthorn and St Kilda represent different factions. The Hawks are part of the moneyed class, while the Saints have found themselves among the soup kitchen clubs.

The Hawks won their 11th flag and made $3.1 million. The Saints finished 16th and will shortly confirm a loss of more than $1 million – a figure that includes the payout to discarded coach Scott Watters. Hawthorn, once broke and almost merged, is the AFL's foremost nouveau riche club. It has assets and cash. The Saints have neither and their anticipated debt will be upwards of $5 million.

You want to get the big decisions right every time. 

It's tempting to look at this year's ladder – and the historic premiership ratio (Hawthorn has won 10 premierships since the Saints saluted in their solitary flag of 1966) – and jump to the lazy conclusion that the rich club always wins and the poor one loses.

But the scoreboard doesn't explain the widening gap between the clubs that shared both Allan Jeans and Waverley Park. It's also easily forgotten that St Kilda did not have a losing season from 2003 until 2012. During that decade, the Saints played finals in seven seasons, reaching the top four five times. They won more games than the Hawks; twice, they were a bounce away from a flag.

St Kilda doesn't have much to show for what was, in terms of games won, one of the club's most successful periods. They didn't get a flag and they didn't make money; Hawthorn, which was receiving priority draft picks in 2004 and 2005, vaulted itself from a marginal operation to one of the game's wealthiest clubs.

The comparison is compelling because there have been stages when these clubs' supporter bases were comparable. There were even periods – if you go back to the '90s and arguably even 2004-5 – when the Saints might have owned the larger base (in 2005-06, the Saints' membership was larger). In terms of historic support over the past few decades, these clubs have largely been in the middleweight division, alongside Geelong. Hawthorn, in fact, probably started behind the geographically concentrated Cats and Saints.

But the Hawks, by dint of a few key decisions, have pumped themselves up to the ranks of financial heavyweights and their support has mushroomed to the point that they have a membership of 60,000-plus , with an average MCG crowd of 52,000 last season. The Saints, conversely, are in a similar boat – or deep water - to the Bulldogs, Demons, North and Port Adelaide, despite clearly superior support to those small teams.

How did the Hawks put on so much fiscal muscle, while the Saints – in spite of winning games lately – withered or remained skinny?

There's a number of factors and explanations for the chasm, but the upshot is a small number of decisions made by the clubs. Like all clubs, Hawthorn and St Kilda have made blunders over the past 15-16 years. St Kilda did quite a bit right – they hired Ross Lyon, for instance, when he was an untried assistant coach. They ran a lean, low-cost operation that produced profits in the mid-2000s. The difference is that the Hawks got a few big ones right. In a couple of instances, they gained strength from grasping opportunities that the Saints didn't pursue.

Mostly, it's about venues – where you play, train and put poker machines.

“You're not going to get all the decisions right all the time,” said Hawthorn president Andrew Newbold, who joined the club board in 2003. “But you want to get more right than you get wrong and you want to get the big decisions right every time.

“And I think over the years we've got the big ones right and that goes to the quality of your decision-making process and the quality of the people sitting around the table.”

While Newbold didn't nominate one big-money shot Hawthorn nailed, he made plain that the choice of venues for home games was significant.

“I don't think you can point to any one decision, I think it's a combination of investment in certain commercial enterprises, I think it's an investment in Tasmania and I think it's obviously playing our games at the MCG when other clubs went to Etihad,” he said. “It's a combination of all those factors. It's also reflective of the hard work of successive administrations in the footy club.”

1. Tasmania

A goldmine for Hawthorn, while St Kilda turned its back on Launceston.

Tandberg

St Kilda and the Hawks both began their Launceston experiments in 2001; each played home games – predominantly against the non-Victorian clubs – at Aurora Stadium. The Saints left Launceston in 2006, shortly after the notorious “Sirengate” game in which the AFL handed the premiership points to Fremantle days after the game.

St Kilda didn't enjoy Launceston, believing that it didn't perform well at the ground, and vacated. St Kilda was then making healthy profits with a lean business operation and had been close to the flag in 2004-05.

Then St Kilda president Rod Butterss acknowledges that “as a club we probably didn't embrace the move”. The decision to leave was largely football-based, not financially driven. “The football department struggled to embrace it,” said Butterss, whose once-fraternal relationship with senior coach Grant Thomas had soured by this stage.

No sooner had the Saints left Launceston, than the Hawks pounced. They would turn the stadium into a gold mine, worth several hundred thousand dollars a game, receiving a hefty sponsorship from the Tasmanian government. Jeff Kennett renegotiated the deal, in defiance of the AFL's wish to make Tassie the second (seven-game) home of North Melbourne, in late 2010.

Today, the Hawks have four home games in Launceston, in an arrangement that earns them close to $3.5 million. Moreover, the impact is far greater when considering the spin-offs, and the fact that they've had the market to themselves (until North landed two games in Hobart).

2. MCG/Etihad

The Hawks play almost exclusively profitable games, while the Saints have struggled with their deal at Etihad.

Tandberg

By playing predominantly lower-drawing games – what Butterss called “less attractive” matches – in Tasmania, the Hawks were able to turn potential loss-makers into hefty profits.

To compensate for giving up three (and now four) games to Tassie, they devised an arrangement in which regular (11-game) members were given three (and now four) “away” games on their membership. Almost invariably, these away games were blockbuster-type matches – principally Geelong and Collingwood, sometimes Carlton and Essendon or Richmond – at the 'G. Far from hurting Hawthorn's Victorian base, the Tasmanian deal has enabled it to grow dramatically.

In the modern AFL, there are two types of high-earning games: blockbusters that draw large crowds to the MCG, and the boutique games at smaller venues, in which the home team – with a “clean stadium” – reaps massive returns from relatively small crowds.

Geelong is the Victorian apotheosis of the boutique money machine (West Coast, with a higher-capacity home ground, does even better), while Collingwood is almost entirely reliant on a blockbuster model.

Hawthorn is perhaps the only club that has the luxury of both models – combining blockbusters at the G, with high-yielding boutique-busters in Launceston. St Kilda has had neither. Butterss said there was a “double whammy” for the Saints in leaving Tasmania – they gave up profitable games in Tassie that don't make money in Melbourne.

The Saints have been a major agitant for an improved deal at Etihad Stadium – which has bettered its returns to tenants, but remains a long way from what MCG teams receive, much less the astonishing deals at Geelong and Tassie. In 2011, the Saints estimated they were more than $2?million the worse for playing at Etihad compared to the MCG.

Hawthorn, under Ian Dicker's leadership, had fought the AFL to remain at Waverley. The Saints, having endured the tumult of shifting their home games from Moorabbin to Waverley, were less inclined to fight head office.

Butterss' long-serving and popular predecessor Andrew Plympton suggested that the AFL gave the Saints little choice about where they would play games once Waverley was slated to be sold off as housing and replaced by a Docklands stadium. Plympton said St Kilda's arrangement at Docklands (now Etihad) was then considered favourable – second only to Essendon's – when it moved there in 2000. “The deals have obviously changed in many ways.”

And, as some Saints insiders noted, football department costs subsequently escalated dramatically. One could add that clubs such as Geelong and Collingwood also redefined what a club could earn on game days.

3. Waverley/Seaford

Hawthorn received the deal of a lifetime at Waverley, while the Saints' move to Seaford hasn't brought commercial or on-field benefits.

Tandberg

While St Kilda shifted from Moorabbin to Seaford – a highly contentious move that has not yet brought commercial or on-field benefits – the Hawks had already moved from their home base at Glenferrie. But they didn't travel quite as far – to the old Waverley Park, which was being carved into lucrative real estate by Mirvac.

Under the terms of the deal, the oval and immediate surrounds were to remain for sporting purposes. Mirvac needed a club to occupy the oval. The Hawks, under the board of president Dicker, struck a deal that could be football's answer to Kerry Packer selling Channel Nine to Alan Bond – ie, it happens only once in a lifetime.

Hawthorn paid $1 and, in return, received the freehold on the entire oval and a portion of what is now the administrative buildings. Thus, the club gained millions of dollars of real estate – a freehold that gave the club serious assets on the balance sheet, a buffer for bad times and no rental costs – for nothing. The Hawks also bought the gymnasium at Waverley and receive a tidy return of about 8 per cent a year.

When the club opted to sell the social club building at Glenferrie for more than $2 million, it did so in the knowledge that its future was fortified with bricks and mortar at Waverley. The Saints, on the other hand, have leases at Seaford and Moorabbin and are exploring ways to re-activate Moorabbin, which it left due to a dispute with the local council over poker machines. New president Peter Summers, acknowledging that the club didn't have an asset base or freehold properties such as Hawthorn's, said it was hoped that, in the long haul, the two long-term leases would represent “one of the biggest strengths we have”.

Another critical difference between the wealthy Hawks and impecunious Saints has been poker machines. Hawthorn has a venue at Waverley Gardens that has reaped millions since the early 2000s, providing a crash bag for downturns on the field. Around the same time that the Hawks were getting into business with Bruce Mathieson, the pokies magnate, at Waverley Gardens, St Kilda made a failed application for 101 poker machines in its Frankston venue. “It floored me how it was rejected,” said Plympton, noting the pokies gap between his club and the Hawks.

Today, while rivals have made obscene amounts from the pokies, the Saints don't have that insurance. Hawthorn has insurance, big games at the 'G, lucrative ones in Tassie and from middle-power status is recession proof.

14 comments so far

  • That all sounds like good news for the mighty hawks! I do however,think that the amount of poker machines operating at waverly is disgusting...and i'm not sure i'll re-new my membership...

    Commenter
    jason
    Location
    sydney
    Date and time
    December 14, 2013, 3:10PM
    • You don't have to use them, it's not compulsory!

      Commenter
      Your Choice
      Location
      My World
      Date and time
      December 14, 2013, 4:04PM
    • I hate the pokies too, I've seen first-hand the damage they can do if someone you know gets addicted - but "Your Choice" is right. Choose self-control.

      Commenter
      Stevo
      Location
      Strathpine Qld
      Date and time
      December 14, 2013, 7:28PM
    • You do realise the poker machines aren't at Waverley Park?
      There are 75 and they are in a bar at a shopping centre in Mulgrave about 1.5km away from the Hawks' base on the other side of the freeway.
      Surely the opening comment is a troll.

      Commenter
      Daz
      Location
      Melb
      Date and time
      December 15, 2013, 2:01PM
    • Hey @daz no way am i a troll..no way..And no..i didn't know Hawthorns pokies are in a shopping centre in Mulgrave 1.5k's away from Waverley. I didn't know that tho whats the bloody difference? The profits go to Waverley..! I do know that playing the pokies are a persons own choice..It's the people who have no choice..who are hooked..that concerns me. It's great that the mighty hawks..and other clubs have cash to spend from poke profits..but it's not a good thing..surely you'll agreed..to be gaining from another persons/families loss..sooner they are out of footy the better and hat's off to north melbourne for doing just that. I did call Hawthorn to speak about this..and they did return my call..so thats a great start.

      Commenter
      jasonn
      Location
      sydney
      Date and time
      December 15, 2013, 2:41PM
  • One systemic factor that isn't mentioned is that the Hawks made 14 finals in 15 years between 82 and 95. 8 grand final periods in a 9 year stint for 5 premierships. A lot of the kids wooed by that are now in their 30s and 40s. They are a in a position to buy memberships, coterie packages and merchandise. Some will be in business and in a position to direct sponsorship dollars to the Hawks. And perhaps most importantly of all they are having kids to create a new, large fan base.

    Saints can make perfect decisions from here, they won't match the Hawks over the next 10 years.

    Commenter
    Kris
    Date and time
    December 14, 2013, 4:11PM
    • Too true, the demographics of this are never really picked up on when media analyse the Hawks financial success. It certainly just didn't happen - there was canny decision making behind it all but having all those fans that came on board during the success of the 70's and 80's ready to spend up now is a big factor.

      Commenter
      Barry Damage
      Location
      out west
      Date and time
      December 14, 2013, 7:53PM
  • Bad culture at St Kilda.

    Commenter
    Jeremy
    Location
    West Footscray
    Date and time
    December 14, 2013, 6:41PM
    • ..............and if Stevie Milne had got a favorable bounce, and if Saints had won the flag, and so on, and so on, who knows - the fortunes could be the other way round????

      Commenter
      Stevo
      Location
      Strathpine Qld
      Date and time
      December 14, 2013, 7:30PM
      • And if if if if if blah blah blah

        Commenter
        Herman
        Date and time
        December 15, 2013, 12:59PM

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