Clubs set for $6m dividend
Lyall Johnson
The Age
September 9, 2006
THE AFL is set to offer each club $6 million over the next five years as part of the financial distribution from the new $780 million media rights deal.
The $1.2 million a year is an increase of $200,000 over the amount offered to clubs last month and an additional $1 million on what was originally offered, and rejected by clubs, earlier in the year.
The Age has been told the AFL will begin meeting clubs next week to outline the deal, but it was unclear yesterday what the breakdown of the distribution would be.
A number of club presidents and chief executives contacted yesterday said they would be pleased with such an amount but would reserve public comment and even acceptance until they saw a breakdown of the composition of the money.
In principle, all agreed the revised amount would be a positive result for clubs, who told the AFL at last month's presidents' meeting that they would have significant extra costs next year as a result of the new collective bargaining agreement.
As outlined to the AFL Commission last month, clubs are concerned the money would not be enough to compensate for some of the new aspects of the agreement, which have been estimated to cost clubs an additional $800,000 over the next five years, that fall outside the total player payments.
These include additional service arrangements for player promotions — which amount to about $400,000 and increase in line with total player payments but are not funded by the AFL — and other total player deductions such as living allowances, travel allowance for draftees and rookies and their families and rookie wages.
In addition, the $250,000 previously given to clubs as a separate annual grant for being part of the Telstra AFL internet network — which involves the AFL running the clubs' websites rather than them doing it themselves, as Essendon does — is also likely to be included in the financial dividend. This means the clubs effectively lose $1.25 million over five years but would make it up from money in the dividend.
"That'll mean you make about a $900,000 net, so that's going to be pretty good," said Geelong chief executive Brian Cook, whose club president Frank Costa led the push last month for a greater dividend by outlining to the AFL Commission club costings of the new bargaining agreement.
But Cook said the devil might be in the detail, as a number of issues were being debated with the AFL, such as whether some of the money would be earmarked for balance sheet items such as debt repayment or capital improvements or whether it could all just go into clubs' general revenue to be spent how they saw fit. "We haven't heard the finalisation of those things, they were just discussion points," Cook said.
Western Bulldogs president David Smorgon agreed with Cook, saying judgement on the offer could not be made until the details were spelled out to clubs.
"I think we have to wait for it to be fully explained because there was some other aspects in terms of funding to clubs that was going to be discussed that, although there may be one lump sum, there are going to be other areas of assistance coming in from the AFL and that was going to be looked at on a club-by-club basis," Smorgon said.
One such assistance aspect being discussed was whether the AFL might help clubs with heavy debt cut interest costs by paying a large lump sum up front in the first two years.
Kangaroos chief executive said most clubs would be "delighted" with $1.2 million a year, but said the club was yet to have discussions on what it might spend the money on.
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