Much has been spoken & written about the deals made to clubs by the Victorian stadiums that house AFL football this season.
AFL CEO, Andrew Demetriou, is taking both Etihad Stadium (Docklands/ Telstra Dome) & the MCC Trust to court over the deals. But are the stadium proprietors the ones to blame for the conundrum the clubs face??
Prior to the 2000 season & the debut season of the new Colonial Stadium, that we now know as Etihad, Victorian clubs & the AFL thrashed out new deals. What’s so hypocritical in these talks is that current North Melbourne CEO, Eugene Arocca, was at Collingwood & Demetriou was the AFLPA President, so it’s quite obvious when you read past the charts to the rationale behind the “scheme that it was doomed to fail” and that Wayne Jackson cannot possibly take all the blame for the current predicament some clubs are in.
Taking into account the price freeze announced by the AFL late 2008 for the 2009 season, & that every crowd number is a paying patron, we compared every Victorian clubs games at Etihad & the MCG in 2008.
The calculation used was as follows:
- Etihad: 2 adults 2 kids @ $49.50. Money made from crowd numbers taking away 35,000 people from each game.
- MCG: 2 adults 2 kids @ $71 40. Money made from crowd numbers taking away 20,000 people from each game.
Models use the new “home gate only” & “gate sharing” models & are in dollars.
Etihad Full gate half home/away difference
- Carlton 900,405 1,007,226 -106,821
- Collingwood 1,012,523 1,125,680 -113,157
- Essendon 1,428,125 1,773,907 -345,782
- Geelong 1,688,198 1,166,121 +522,077
- Hawthorn 0** 919,116 -919,116
- Melbourne 0** -553,212 +553,212
- North Melbourne 1,150,776 782,719 +368,057
- Richmond -286,704 104,272 -390,976
- St Kilda 1,120,680 1,065,562 +55,118
- Western Bulldogs -555,093 301,529 -856,622
- **Haw/Melb no home Etihad games in 2008.
MCG Full gate half home/away difference
- Carlton 14,729,320 13,896,332 +832,988
- Collingwood 27,195,546 22,489,072 +4,706,474
- Essendon 11,126,976 10,737,203 +389,773
- Geelong 0** 5.578,839 -5,578,839
- Hawthorn 16,394,797 11,202,303 +5,192,494
- Melbourne 9,075,940 6,319,471 +2,756,468
- North Melbourne 397,770 2,880,669 -2,482,899
- Richmond 15,692,935 12,701,917 +2,991,017
- St Kilda 0** 2,420,210 -2,420,210
- Western Bulldogs 1,379,448 968,934 +410,514
- **Gee/StK no home MCG games in 2008.
What makes the final totals more interesting is that there are 46 home & away matches played at both stadiums in 2008 with the MCG making nearly $5.6 million more in total for clubs than Etihad.
Each Victorian club makes this amount of profit/loss playing at Etihad/MCG under the full gate system compared to the gate sharing.
- Collingwood +$4,593,317
- Hawthorn +$4,273,378
- Melbourne +$3,309,680
- Richmond +$2,600,042
- Carlton +$726,167
- Essendon +$43,990
- Western Bulldogs -$446,108
- North Melbourne -$2,114,842
- St Kilda -$2,365,092
- Geelong -$5,056,763
You’ve also got to take into account the yearly football department costs that have risen 300% since 2000. After that, I’m certain the AFL keeps them all afloat.
To provide the information on the deals that were set in ink, done away with was the “equal gate” sharing between the two playing clubs. A study by the Economic Society of Australia found that the elimination of gate sharing would upset the equality of teams that drafts & salary caps had already achieved. This is a damning reason why free agency must not go ahead.
The AFL seem to have based these judgments on a certain US sporting model, but the big difference here is that US sporting teams are privately owned, whilst the AFL clubs are a kind of public equity without the profits going to the members, but to the organisation itself.
If free agency ever became a part of the AFL trade system, it would destroy both a teams win maximization & its profits. The more you win, the more money a player would want. But gate sharing would eliminate a wages explosion under free agency & all teams would have an equal chance of acquiring the services of a free agent. The same theory goes for draft nominated players whose “nominated signing fee” must go onto a team’s salary cap, whether the club pays the required fee or not.
Also having an effect from the gate sharing elimination scheme is the ability of clubs to raise enough capital to afford the minimum team payments. This also is destroying some team abilities on both the win & profit maximization forcing clubs into annual losses.
Another noticeable effect has been financially struggling clubs having to trade good draft picks for discarded/disgruntled talent from winning clubs. Gate sharing may effectively end the meat market known as “trade week”.
To prove these last 3 points more conclusively, the average of VFL/AFL competitive balance 1.8282. From 1985-1999, the commencement of salary caps/drafts to the elimination of gate sharing, the ratio was 1.7106, the closest in league history. 7 clubs won flags between 1985-1999.
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May 27th, 2009 at 11:52 am
I don’t understand your logic: “But gate sharing would eliminate a wages explosion under free agency & all teams would have an equal chance of acquiring the services of a free agent.” We have a system in place to avoid a “wages explosion”. It’s called the salary cap. Now if wages are getting too high for clubs to survive then we’ve got to reduce/freeze the salary cap. But I don’t see any relationship between gate-sharing and free agency.
May 27th, 2009 at 12:34 pm
I guess Craig may be looking at that with the more money you get from gate-sharing (bigger clubs), means you can pay your player more ‘outside’ the salary cap. Its no secret that Pratt’s money was a huge (if not the biggest) reason Judd wanted to go to Carlton over other clubs.
Me and Craig talked about this before on twitter but I think the best solution for clubs like Melbourne, Bulldogs & the Roos is to play their ‘lesser’ games at a smaller ground like Optus Oval. I am sure you would get a better gate deal with 15,000 odd spectators at OO than the Dome or MCG. They could still play their big draw card games at the Dome & MCG but against non-victorian clubs play at OO.
May 27th, 2009 at 4:15 pm
Geoff
Gate sharing was part of the model along with drafts & salary caps, but the AFL rid the gate sharing against expert advice.
Home gates will increase the ability of the powerful clubs to pay maximum TPP. Now, if powerful winning & profitbale clubs want Pavlich under free agency, he can demand high payment knowing those teams want to win while making profit.
This comes at the expense of the poorer clubs.
You can reduce the cap, but powerful teams can still afford the highest end.
I hope this explains this better.
May 28th, 2009 at 9:29 am
I think yes players need to have more freedom in swapping clubs if they want to especially after a period of time, the trade week is becoming a farce. However total free agency where they can move over without any compensation for the old club is wrong.
May 28th, 2009 at 10:46 am
Jermayn
Not looking at this in the form of payments outside the cap. Looking at this from a perspective that the AFL & teams are furious with stadiums, but yet they have virtually signed some clubs death warrants by doing it.
On free agency, check out the Herald Sun website today. Things are going to get worse.
May 28th, 2009 at 7:39 pm
But that’s what free agency is. If there’s compensation involved, then presumably someone can kick up about it and scupper the deal — think Nick Stevens and Port Adelaide. Free agency with compensation is like being just a little bit pregnant.
aussierulesblogs last blog post..Free agency vs loyalty vs footy socialism?
May 29th, 2009 at 10:10 am
I understand what Free Agency is about but I would prefer the club got some sort of compensation. I like the idea of how clubs can be compensated for loosing a player to the Gold Coast. That could be a good option….
May 29th, 2009 at 2:04 pm
So the point is, Jermayn, it’s not FREE agency. Call it something else. The key word is ‘free’ — if compensation is involved, the player’s freedom of decision is constrained in some way, so it’s not a free decision (not to be confused with the value of the compensation).
Thus your view expressed above as “total free agency where they can move over without any compensation for the old club is wrong” is really “I don’t agree with free agency”.
aussierulesblogs last blog post..Free agency vs loyalty vs footy socialism?
May 29th, 2009 at 3:46 pm
The way I see it, we already have limited free-agency in place. Can somebody please tell me of any out of contract player in the last few years who did not go to a club (or city) of there choosing. Stevens wanted to go home to Melbourne and did, Judd wanted to go to Carlton and did. Free Agency should only be for out of contract players and most out of contract players these days end up where they want to go.
May 29th, 2009 at 10:46 pm
Stevens wanted to go to Collingwood and O’Keefe wanted to go to Hawks but they did not. However most players do get to go the place they want to. I think its more that the trade week needs relaxing rather than introducing free agency.
btw AussieRulesBlog your just being picky
Yes its technically not free agency but I would rather that than ‘total’ free agency where players can just walk away.
May 30th, 2009 at 7:20 am
But O’Keefe was still in contract, he signed the contract, he should have to honour it. Yes if a trade could be found Sydney would have traded him but you can’t expect Sydney to give away a contracted player for nothing. If he was out of contract do you think no Melbourne team would have picked him up in the draft for nothing (and because Sydney would have got nothing they would have worked doubly hard for a trade prior to the draft, like West Coast did for Judd).
I thought Stevens just wanted to come back to Melbourne but if he preferred Collingwood fair enough, I will stand corrected.
May 30th, 2009 at 7:21 am
I just realised we are arguing the same point. lol
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May 30th, 2009 at 9:21 pm
That’s fair enough if BOTH parties to the contract are similarly bound. As we know with Trade Week and sundry other delistings at each club (it’s immaterial that the AFL requires a certain number of delistings), clubs don’t always regard the contracts the way we, or the players, would like them to.
@Jermayn: Yes, I’m guilty of being picky. I think it’s important to the discussion to call things by the right name to avoid misunderstanding and confusion.
The other point to make is that players CAN just walk away once they’ve fulfilled their contract — Stevens at Port, for example — but they have to submit themselves to the vagaries of the draft. And they can put a price on their services that most clubs won’t pay, in an effort to get to the club of their choice (not always successfully).
Logically, free agency would mean that an out-of-contract player, after a certain term of service to a club or clubs, could avoid the draft and do a deal direct with the club of their choice, perhaps with that club losing a draft pick.
For what it’s worth, I agree with you. I don’t think the game needs free agency. There are Scott Wests and Robert Harveys who retire without a Premiership medallion and are heroes of their clubs and the sport. Would they be regarded in the same way for deserting their club in search of a Premiership medallion? I think their reputations would be just a little bit tarnished.
aussierulesblogs last blog post..Free agency vs loyalty vs footy socialism?