Financial powerhouse clubs take $8 million hit from AFLJake Niall
The Age
December 10, 2021 — 3.30pmFinancially powerful clubs Collingwood, Richmond, Hawthorn and West Coast will receive only the guaranteed minimum of $8 million per club in 2022, a reduction of $2 million on this year’s allocation, under the AFL’s new funding model.
In adopting a new funding model that reduced the “base” amount for clubs from $10 million to
$8 million, the AFL has singled out those four wealthy clubs to lose all the $2 million per club that the league has put in a pot for redistribution.
Under the new “variable” funding model, industry sources said Essendon were expected to receive up to half - $1 million or so - of their lost $2 million for a total package approaching $9 million, and are in the next band of relatively prosperous clubs who do not get the full $2 million back, while Carlton - a club with the capacity to be a financial heavyweight - expect to be funded to the tune of around $10 million, essentially getting back most or all of the $2 million every club initially loses.
Under the redistribution, expansion clubs Greater Western Sydney and Gold Coast are set to be given a larger share of the allocation to the 18 clubs, compared to 2021 - a measure of the AFL’s investment in those clubs and the time it will take for them to become independent.
The expansion teams have consistently been funded to the tune of more than $20 million, covering their player payments and most of the soft cap, over the past several years, except for the COVID-curtailed 2020, when AFL revenue shrank.
Of the $36 million the AFL has taken from all clubs, more than $26 million will be re-allocated to 14 of the 18 clubs, on a needs basis - a move that has already drawn the ire of Richmond, Collingwood, Hawthorn, the Eagles and Essendon.
The loss of $2 million each to the first four of those four clubs means that, in effect, as one source from a wealthy club pointed out, there will be a gap exceeding $6 million each year between what the AFL provides to the richer clubs and the total player payments (TPP). In the past, the AFL fully funded the player payments.
The AFL will retain between $8 million and $10 million from that $36 million pot, which will be re-directed to clubs that have special needs during 2022 - a plan that is mindful of the unequal and unpredictable impact of the pandemic upon clubs in different states.
The AFL view is that the greatly reduced football department costs (the soft cap is still more than $3 million below the 2019 total of $9.7 million) means the rich clubs have been more profitable in 2021 and can afford the funding cuts.
North Melbourne and Sydney are slated to have their funding slightly increased in 2022.
But most AFL clubs will receive a little less in the first instance. Grand finalists Melbourne and the Western Bulldogs are set to have their overall funding reduced - both clubs having stronger balance sheets than ever before, having enjoyed on-field success and sold their pokie venues for excellent prices, the Demons selling the Bentleigh Club for $23.7 million this year.
St Kilda, which has been easily the greatest recipient of AFL funding of Victorian clubs over the previous four years - topping $20 million in 2017, 2018 and 2019 - will also have their funding reduced compared to the already reduced 2021 outlay. The Saints have, however, cut their debt, which had topped $12 million at one stage.
The Brisbane Lions, who have recovered strongly from a fiscally fraught position and made a profit to $3 million this year, are expected to receive about the same as they did in 2021.
The Swans offer an example of how the pandemic hits clubs differently, depending on whether games are played in their state before crowds. They lost $6.1 million in 2020 due to the COVID-19’s impact on their largely crowd-free home games, but have fared far better to record a small profit this year.
The AFL has shed about $700 million in revenue over the course of the pandemic in 2020 and 2021, forcing major cost cuttings and wiping out their cash reserves and future fund but avoiding any debt.
https://www.theage.com.au/sport/afl/financial-powerhouse-clubs-take-8-million-hit-from-afl-20211209-p59g85.html
