AFL warns of a $20m loss in 2016 Caroline Wilson
The Age
December 1, 2015 The AFL has forecast a loss of almost $20 million for next year as the financial woes of the majority of its clubs continues to haunt the competition.
League chief Gillon McLachlan revealed the gloomy outlook for 2016 to club bosses on the eve of last week's national draft, signifying a financial year-to-year downward turnaround estimated at $22 million.
The revelation came as the AFL enters its final year of the current broadcast rights agreement and the second year of the wildly unpopular two-year equalisation measures which look certain to be scrapped and restructured from 2017.
And it has coincided with repeated warnings from the game's new financial controller Ray Gunston that the AFL clubs are overspending and must rein in their budgets next season. The current debt being carried by the clubs is estimated at an alarming $60 million and the $20 million loss has been blamed largely on the clubs' financial woes.
With the AFL being pressured to cover the entirety of club total player payments in the next six-year media rights cycle, the league is looking to next year unveil a totally restructured financial model.
McLachlan refused to comment on the projected loss, expected to be finalised before Christmas, on Monday.
Last year only one-third of the 18 clubs achieved profits without substantial AFL assistance with Collingwood, Essendon, Hawthorn and Richmond the only Victorian clubs to do so along with the two West Australian teams. Essendon this year recorded a $1.3 million loss with Geelong expected to announce a loss of about $1.2 million.
Another one-time league powerhouse Carlton now carries a multi-million dollar debt and has been the cause of some concern to the AFL Commission. Even with assistance the Blues announced a $900,000 loss this year.
While the next broadcast agreement, worth $2.5 billion over six year from 2017 -effectively a 67 percent annual increase on the current deal — should prove a major correction for the competition the issue of closing the gap between the rich and poor clubs continues to dominate debate.
This year equalisation taxes achieved less than $4 million for the struggling clubs with the wealthier Hawthorn, Collingwood and West Coast still determined to seek extra and previously unsourced revenues to aid the poorer clubs without being taxed themselves. The middle-ranked clubs — including notably the loss-making Cats — remain perplexed at paying over six-figure sums to the equalisation pool.
The AFL is expected to achieve marginally ahead of its budgeted $2.5 million profit in 2015 but the ongoing financial headaches provided by its most recent expansion clubs the GWS and the Gold Coast continue to dog the competition with both clubs pushing for greater assistance as they struggle to make an impact on and off the field. In 2015 the league was forced to provide and extra $3.25 million to Greater Western Sydney.
http://www.theage.com.au/afl/afl-warns-of-a-20m-loss-in-2016-20151130-glbvvc.html
