Bail up!
– Infamous Australian outlaw Ned Kelly moments before the Stringybark Creek battle
The AFL has learned it has the strength to change. Fifteen years ago, when the AFL’s attitude and desire were unforgiving, they forced Fitzroy to merge because of debts rumoured to be about $2.7 million. Other reports put the debt at about $4 million.
Due to their complete lack of success, Fitzroy had few supporters and gathered little corporate support as the nineties grew older. Throughout 1996, their home games attracted an average of eight thousand fans. Against Brisbane in round 20, 6,469 fans turned up to watch the slaughter.
Earlier that week, the AFL had announced the merger with Brisbane. It appeared Fitzroy fans simply gave up.
Years after the merger, long-time football fans still struggle to understand the ruthlessness or reconcile with the AFL’s decision to abandon Fitzroy. Fifteen years on it still seems surreal and needless. Clubs had always carried debt. Footscray and Richmond fans rattled cans, begging fans for mercy and money to stave off their deaths about twenty years ago. Both clubs recovered and maintain their licences to play AFL football.
Debt in football is a moveable punishment. Following the mania of Collingwood’s premiership in 2010, the club revealed it was about $10 million in debt, much more than Fitzroy’s debt in 1996, no matter which report is believed. Collingwood’s debt, given their record 70,000 members and their solid corporate support, is said to be manageable.
Most AFL clubs manage debt. Richmond started the season $4.5 million down. North Melbourne did the same. Melbourne is still struggling. Most clubs, with the exception of Adelaide and West Coast, don’t turn much profit. Outgoing costs always exceed the turnover, meaning clubs operate like charities, conducting raffles, offering clothing, beer mugs and memorabilia, anything to convince their fans to give them money.
Many fans routinely spend more than $1000 each year on their club in memberships, memorabilia, attending games and interstate travel. Simply, the more members a club has, the higher it’s potential turnover.
Make no mistake, every clubs wants their supporters cash. Football is and always has been a business. There is little charity, and what charity there was is being eroded by corporatisation, by acts like clubs charging money at family days for photographs or autographs. This is the dark side of corporatisation.
There is another side. Each year the AFL generously props up clubs with small membership bases or those suffering from significant debts. Clubs like the Western Bulldogs, Melbourne, Carlton, North Melbourne and Richmond have all benefited from annual grants between $400,000 and $1.5 million in recent years.
No matter which report you believe, if the AFL gave Fitzroy $1.5 million in 1996, there wouldn’t have been the need for the merger.
Port Adelaide is the AFL’s new Fitzroy. Rumoured to be more than $4 million in debt, the Power’s real liability may be twice that. Supporters and corporate influence have crashed since the 2007 grand final. The club hasn’t been able to recover, on any level, from that 119-point thrashing by Geelong.
In 2011, Port Adelaide is worse than they’ve ever been, second last on percentage to the Gold Coast, in real danger of claiming the wooden spoon. The AFL has offered help, emergency funds to continue the existence and assistance with the bid to redevelop the Adelaide Oval.
Port’s recovery has been linked with the opening of the redeveloped Adelaide Oval in 2014, when the club will have a better stadium deal, and supporters won’t have to travel as far to watch football. Despite the benefits switching grounds may bring, it might take Port years longer than three to become a viable financial entity off the field and a competitive team across the white line.
It won’t matter how long it takes for Port to recover. As the second club in South Australia, they’re strategically important to the AFL. Given the new $1.25 billion broadcast rights deal, the AFL has to guarantee, among other things, 18 clubs for the duration of the five year deal and a game each weekend during the season in Adelaide.
Port Adelaide is central to the AFL’s vision. Beyond the five year deal, no club is guaranteed of a licence to play in the AFL, but no matter how bad Port Adelaide become, the AFL won’t abandon its second South Australian club. Port is seen as strategically important.
Back in 1993, the Sydney Swans were bad, huge debts and an awful list. The Swans were worse than Fitzroy ever were, their debts bigger and their membership smaller. When the situation degenerated into farce, the AFL sent Ron Barassi and Tony Lockett to Sydney in one of the biggest rescue missions ever seen in football history. The AFL followed those two men with millions of dollars, propping up the club and Lockett’s salary, according to various reports.
Three years later Sydney played in their first grand final since 1945. In 2005, when the Swans were benefiting from salary cap concessions, they won their first flag in 72 years. The rescue mission Barassi and Lockett started took 12 years.
No one went in to rescue Fitzroy. The Lions got nothing. Twelve years after they should’ve been rescued they’re an afterthought. The Nauru Government, Fitzroy’s major creditor, called time on a $1.25 million loan. The Lions merged because of that $1.25 million debt.
On Monday night, Carlton president Stephen Kernahan was a guest on Seven’s One Week At A Time. A two-time premiership player, Kernahan captained the Blues to two flags and is fondly and rightly remembered as a club legend. Now he’s leading the club off the field, trying to set things right.
The Blues haven’t won a final since 2001. In 2002 they were penalised for cheating on the salary cap and hammered with a $1 million fine and draft penalties. Since 2002, times have been tough, three wooden spoons and debts that built to $15 million.
Kernahan has a big job, but he’s pragmatic because things are good, on the field at least. When asked about Carlton’s debt, he didn’t flinch.
‘It’s about $7.5 million,’ he said.
That’s massive debt. Years ago it was worse. Former president Dick Pratt died while he was trying to save Carlton. In one night, at a function Pratt organised, the Blues set about trying to restore their arrogance and repay the debt.
‘He got a few of his mates there,’ Kernahan said. ‘He tapped them on the shoulder for $50 or $100,000 each. We raised about $1.2 million and at the end of the night he (Pratt) matched it.’
Kernahan, without bravado, without looking uncomfortable, said the debt didn’t matter. ‘It doesn’t worry me,’ he said. ‘I’ve been there when we’ve been $15 million in debt.’
Try and compare Carlton’s debt of $15 million with Fitzroy’s paltry debt, and it’s hard to find a comparison. This is the best example of how corporatisation has helped the AFL’s clubs. Debts, which have always been tolerated, are now met with a fatalistic shrug of the shoulders instead of a dismissive shake of the head.
Carlton’s debt is largely based on two grand stands built at Princes Park. The construction set the club’s debt. When the AFL stopped playing games at the venue, there was no way to repay the loan. Despite the huge debts, Kernahan said it’ll be paid off inside three to five years.
There are two ways for a football club to rid debt of that magnitude. Having the panache to convince millionaires to part with their cash is one way, but Pratt died while in office. Kernahan mightn’t have the same connections to draw on or the same ability Pratt had at extracting cash.
The other way to help rid a club of debt is success on the field, which attracts the corporate sponsors needed to swell the bank accounts.
AFL boss Andrew Demetriou refused to use the new $1.25 billion TV rights deal to pay the clubs debts, describing that suggestion as a lazy way to do business.
There is no doubt the AFL could’ve fixed Fitzroy in 1996. Former AFL boss Ross Oakley was too determined to reduce the number of Melbourne clubs to understand the damage he would do to thousands of fans and the scant disregard, beyond the name, Brisbane fans pay to the club they merged with.
Fitzroy, though, had nothing, no money, no facilities, no fans and no corporate support. Had the AFL propped them up in 1996, there is no guarantee the handouts would’ve stopped by now. Beggars work hard for their money, without any semblance of dignity. Fitzroy, if they’d survived for the last 15 years, might have missed out on the finals each year, or they might’ve tanked for three years, saved their draft picks and challenged Brisbane for the premiership in 2001 or 2002.
What if, huh???
What if the AFL told Carlton five years ago, when their debt sat at $15 million, they had to merge or move to Tasmania??? What if the AFL, three years ago, gave Melbourne six months to raise $4 million or take the option of merging or moving to Western Sydney???
Corporatisation hasn’t exactly ruined football. The AFL has shown remarkable patience with most clubs, offering cash, salary cap concessions, altering the rules and ignoring tanking. The game is richer than it’s ever been. It is the best supported code of football in Australia. To attain that level of excellence has been tough. That it is now widely sanitised, often without humour, is a by-product of corporatisation.
The death of Fitzroy is a shameful episode in the AFL’s history, a lesson they’ve learned from, because the axe could’ve been forced onto many clubs since 1996.
There is no way of knowing if Demetriou would’ve culled Fitzroy in 2006, but he has led an empire that seems much more sympathetic to the parlous state of some clubs. Under his reign, the AFL has signed the richest broadcast deal in the history of Australian sport. Clubs are being added instead of subtracted. None have been culled, not even North Melbourne, who spurned a $100 million deal to move to the Gold Coast. Demetriou moved on from that rejection and let the Kangaroos keep playing.
That’s a forgiving attitude.
In Ross Oakley’s last year as AFL boss, he oversaw the merger of Fitzroy and Brisbane, finally getting rid of a Melbourne club after previous failed attempts in 1989 to merge Fitzroy and Footscray and a chance at merging Melbourne with Hawthorn in 1996. Under Oakley’s guidance, the VFL added three clubs and expanded to four states. He left a neat legacy. His failure is Fitzroy.
Demetriou has been AFL boss since 2003. If he lasts the span of the new five-year TV deal, he’ll have been in the job 14 years. While the new deal guarantees 18 clubs for the next five years, there is no guarantee beyond that. Certain Victorian clubs, Melbourne North Melbourne, the Western Bulldogs and Carlton have a five year contract.
Each of those clubs is expendable, at the right price. Demetriou’s attitude, across the next five years, might harden.
In 1996, the price of Fitzroy’s failure was $2.7 million. In 2017, clubs with debts of $10 million could be forced to merge, relocate or cease to exist.
Some Victorian clubs are on bitter notice. They must understand the AFL’s strategy, that interstate clubs are more strategically important. Millions of dollars will be spent propping up the Gold Coast and Western Sydney. It’ll be money well spent, just like the millions Demetriou has spent on many clubs in the last decade.
Some Victorian clubs have five years to prove their existence, or Demetriou mightn’t be so forgiving.
Matty
Tips as follows:
W Bulldogs
Carlton
Freo
Geelong
Sydney
Brisbane
Collingwood
North
Cheers
AJ