‘Big five’ oppose AFL on $36m redistribution planBy Jake Niall
The Age
July 27, 2021 — 7.46pmCompetition heavyweights Richmond, Collingwood, Essendon, Hawthorn and West Coast have objected to an AFL proposal that would see every club lose $2 million in base funding next year, with the pool redistributed to clubs hit worst by the COVID-19 pandemic.
In an important meeting between the AFL and club presidents on Tuesday, the AFL was met with clear opposition from those five financially powerful clubs – who objected to another form of redistribution for next year – but was largely supported by the remaining teams, most of which stand to benefit from the “variable funding” model for 2022.
Under the plan, presented to clubs by AFL chief executive Gillon McLachlan, all 18 clubs would lose $2 million from their base funding – the minimum being close to $10 million since the pandemic began last year – and the $36 million would be reallocated according to need, with the clubs most affected receiving more than those who have been making profits.
Hawthorn president Jeff Kennett was again most animated in opposing the AFL agenda – saying that the league wanted to pull down the profits of the financially-able – but he was joined this time by his Essendon, Richmond and Collingwood counterparts.
Sources who attended the Zoom meeting said Essendon president Paul Brasher voiced concern that the Bombers would become a marginal business if the base funding of $2 million was removed.
Collingwood president Mark Korda called for the funding model to remain as it is in 2021, while Richmond president Peggy O’Neal suggested that this proposal should not be introduced next year and that the AFL and the clubs should sit down to work out a solution, as the battle lines were largely drawn according to financial might.
But Adelaide and Geelong – clubs that have typically been fiscally strong, with excellent game-day returns – did not object to the plan, which the wealthy clubs will find difficult to obstruct given that it had majority support and can be simply introduced by the AFL Commission.
Carlton, a club with vast potential in terms of generating money, did not voice opposition either.
The AFL argument is that it does not know what will happen in various states with borders and lockdowns and that it makes sense to vary funding according to those circumstances.
Some smaller clubs have contended that the financial arrangements for 2020 favoured the stronger teams, because they had fixed costs – salary cap and soft cap – slashed across the board by $5.1 million, while the AFL cut their base funding by only $1.2m. This meant those stronger teams had a saving of $3.9 million, and this enabled them to be profitable despite the loss of revenue.
The AFL outlined the financial damage inflicted by the pandemic – and particularly the loss of crowds – saying that the league could lose up to $50 million this year, with a minimum loss of $20 million, depending on what happened in the finals with crowds.
But far more red ink is expected at club level, as clubs have lost revenue on game day due to the loss of spectators and high-earning games.
Melbourne, despite rising to the top four, says it has lost close to $1.8m from the impact of losing a massive crowd at the Queen’s Birthday game (against Collingwood) – the match was shifted to the SCG – and their match in the Northern Territory.
The Sydney Swans were among the worst hit by the pandemic last year, due to the loss of crowds and membership, and posted a loss of more than $7 million.
St Kilda and the Brisbane Lions have the highest debts among the 18 clubs, both exceeding $10 million in borrowings to the AFL and/or their banks.
https://www.theage.com.au/sport/afl/big-five-opposes-afl-on-36m-redistribution-plan-20210727-p58dgq.html
