Smaller clubs may have to move (Age)

[one-eyed]

Richmond gets a lobbed in as one of the clubs relying on AFL financial support  .

Smaller clubs may have to move: Cook
Jon Pierik
January 24, 2012

GEELONG chief executive Brian Cook says the short-term future of clubs is all but guaranteed, but relocation could be on the agenda once the new broadcast rights deal ends in 2016.

Relocation remains a dirty word, with clubs adamant they have a healthy financial future in their current zones.

However, an analysis of the annual reports of several clubs shows just how much of a fight it is to simply balance the books.

Some clubs are labelled as a ''going concern'' by auditors. This does not mean they are insolvent but if not for certain financial guarantees, including the support of banks and the AFL, they would face immense difficulties in staying afloat.

St Kilda, Brisbane Lions, Adelaide and North Melbourne all posted heavy losses in the last financial year. Port Adelaide claimed a profit of $887,971 but that only came after $4 million of special assistance from the AFL and SANFL.

The Western Bulldogs posted a profit of $121,762 but received $1.7 million from the AFL's annual special distribution fund. The AFL has also provided a bank guarantee of $5 million to the club's bankers as security for its borrowing.

Several other clubs, including Melbourne, Richmond and Carlton, also relied on AFL support, and will continue to do so under the league's new funding and equalisation strategy.

The AFL's $1.25 billion broadcast deal, which kicks in this year, means there must be nine matches per round through its duration, almost certainly guaranteeing all clubs remain in their current homes.

But Cook says some tough decisions may be made before the end of the decade.

''You have got the AFL underwriting the competition, basically, that's what is happening,'' he said.

''That's off the back of the five-year broadcast rights that guarantees nine games. Clubs to a large extent have a guarantee for at least five years but [when that expires] where they are located now - that's another issue. You can have your 18 sides but whether everyone stays in the same location is another issue.''

Does he see the day approaching when there will be a forced relocation?

''Over time, maybe. There are probably some crucial trigger dates,'' he said.

''One is the next broadcast rights agreement, whether the AFL will continue to be able to afford to underwrite as many clubs as it can at the moment. We won't know that for five years.

''If the AFL have to choose [a club], it will be interesting who they choose. If they can't underwrite everyone … the AFL may have to pick and choose a bit in terms of what they do.''

North Melbourne, set to begin a three-year contract to play two home matches in Hobart, is adamant this is not the first steps towards relocation. The Kangaroos had originally hoped to broker a deal to play seven matches a season in Launceston and Hobart but that was stymied by Hawthorn, which extended its deal playing home matches in Launceston.

Cook, who presided over a $1 million profit for the Cats last season, said ''cost control'' would be the biggest issue facing administrators.

''The AFL is disequalling distribution in order to make up for that [clubs losing money]. But it is a cost expenditure model that is being promoted in some respects. In trying to reduce the gap between the haves and have-nots, you are actually increasing expenditures to do that. The AFL providing more money to the have-nots is in order for them to catch up so the industry model is very much a cost-expenditure-incentive model which I find a bit intriguing.

''Admittedly, it's balanced up by better management and that is happening all the time. But not everywhere.''

Cook said clubs needed to improve controlling costs and revenue raising.

''Raising revenue is much harder than what people say. The thing about raising revenue is there is this fallacy or belief that you have got to go outside footy to raise more dollars. But none of us are good at it,'' he said.

''I don't know a club that is great at non-core revenue raising. Unless you want to go big on gaming, and that becomes an ethical issue for a lot of clubs, including us, it's not that easy.

''If you can't raise revenue as quickly, you have got to control your expenditures.''

http://www.theage.com.au/afl/afl-news/smaller-clubs-may-have-to-move-cook-20120123-1qdyw.html#ixzz1kIrVSNxl

[WilliamPowell]

Nothing really new in that article except it is the much respected Brian Cook doing the talking about the possibilty of Clubs relocating. And I agree with him would think a Club relocating will happen one day

As for the comment by the journo about Richmond also relying on AFL support; nothing new there either as whether we want to admit it or not we do get help not to the level of other clubs 

We all know we get $$ because of out poor stadium deals and we also know that like a good majority of Clubs we have the AFL giving a guarantee to our bankers re our "borrowings" as it's in the Annual report

[mightytiges]

If we had a stadium deal with the MCG that was reflective of our consistent top 4 attendance status in the AFL then it would be harder for the media to lob us in with the other AFL-money dependent clubs. Obviously if we eventually eliminate our overdraft in full as planned then we presumably wouldn't need the AFL to go guarantor. In any case even if we become a regular finals side and pack out of the 'G most weeks I'm not sure how we'd force the MCG's hand to score a much better and fairer stadium deal as we don't have multiple stadia to play off each other like Collingwood did to get their MCG deal while Docklands chased Essendon hard to be their first signed-up tenant.

As for relocation the AFL seemed to want North to be Tassie's team spliting 11 home games between Hobart and Launceston but while Hawthorn has a deal with the Tassie Government and close to 10,000 Tassie-based members they aren't going anywhere.