Unprofitable clubs get millions in aid from AFLMarch 1, 2015
John Stensholt and Jon Pierik
The financial health of the 18 AFL clubs has been laid bare, with only six making profits without substantial help from the league's governing body, an analysis of the competition's finances shows.
While several clubs in Melbourne have announced operating profits for 2014 in the past few months, a Fairfax Media investigation has found the annual reports posted by the clubs or lodged with the Australian Securities and Investments Commission show many did so only with additional funding from the AFL.
Collingwood, Essendon, Hawthorn and Richmond were the only ones of 10 Victorian clubs to achieve profits in their own right, as did the West Coast Eagles and Fremantle. Essendon's $720,000 profit, however, was boosted by about $700,000 worth of donations.
The 10 Victorian clubs are also carrying about $46 million in combined debts, though some of that is related to gaming businesses.
It has also emerged an independent auditor with a strong interest in the league has claimed that only 40 per cent of AFL income is parlayed to the clubs.
Club chiefs are worried about the rising costs they face, and have expressed concerns the players will soon pocket too great a pay rise. This will come in a new collective bargaining agreement, to be brokered once what shapes as a $1.75 billion television broadcast rights deal is completed later this year.
AFL Players Association chief Paul Marsh has made it clear he believes the players remuneration must leap significantly, declaring recently it was an "indictment" that only Gold Coast Suns champion Gary Ablett appeared on BRW's top-50 list of Australian sports earners.
Grand-final winner Hawthorn is considered the strongest of the Victorian clubs, along with Collingwood. Hawthorn recorded a $3.4 million profit last year from about $67 million revenue. It made about $18 million revenue from its gaming business, and another $2 million income from accommodation sources.
Hawthorn has also got $6.3 million invested in equities and term deposits and has a new $250,000 innovation fund established with seed capital from former director and Flight Centre co-founder and BRW Rich List member Geoff Harris.
The 10 Victorian teams made just over $500 million combined revenue in 2014, about 20 per cent of which came from gaming and poker machine incomes.
North Melbourne was the only club in Victoria not to have income from poker machines. While the Kangaroos announced a small operating profit of $420,000 from revenue of about $34 million, the profit was only achieved with $2.8 million in additional funds from the AFL in future fund distributions.
Both Adelaide teams also recorded big losses in 2014, despite attracting huge crowds after moving to a refurbished Adelaide Oval. The Adelaide Crows lost $408,011 even after a 43 per cent increase in crowds, while Port Adelaide lost a whopping $2.5 million.
Adelaide and Port Adelaide are both locked in talks with stadium authorities that should see them gain access to further commercial and match-day revenue from home matches and say their financial positions are sound. Brisbane Lions will also receive additional assistance after recording a $3.5 million operating loss, while Greater Western Sydney and the Gold Coast Suns still require large dollops of AFL funding to remain sustainable.
The Giants dealt with a drop in revenue of $1.4 million last year, with merchandise and membership down by more than $300,000.
AFL chief executive Gillon McLachlan says the league and its clubs face financial "challenges".
"I think we've got challenges at a lot of our clubs in terms of this disparity between the strong and the less strong, GWS is one of those (clubs)," McLachlan said.
"They are a start-up club in a very tough market who's got an extraordinarily talented list, but the reality of their list-build means they've won [nine] games in 66.
"So I'm very confident long-term, we know it's a generational decision and the guys up there are working really hard."
The Western Bulldogs, which announced an operating profit of $329,000, also received $2.8 million in AFL future fund distributions. Melbourne got an extra $2.27 million from the same source, helping it to a $284,000 operating profit.
St Kilda will receive an additional $3.8 million from the AFL in 2014 after recording a $3.91 million loss from $30 million in 2014. Carlton also made a loss in 2014 of $1.6 million as did Geelong, recording a small $280,000 deficit.
The Sydney Swans announced a profit of about $846,000 but received about $12 million in AFL funding, higher than many clubs including the likes of Collingwood, Essendon and Hawthorn.
http://www.theage.com.au/afl/afl-news/unprofitable-clubs-get-millions-in-aid-from-afl-20150301-13rqwm.html