by Dutchy » Fri Nov 28, 2014 10:22 pm
David Penberthy:
Quote:
Will SANFL become a compliant vassal of Melbourne’s AFL House?
DAVID PENBERTHY
The Advertiser
November 27, 2014 9:00PM
IT still has its critics, and they obviously have the right to be critical, but the vast majority of South Australians clearly regard the new Adelaide Oval as one of the best things to have happened in our state.
I am firmly in the latter camp. Forget footy, cricket and the Stones, you would go there to watch two Russians play chess.
The new Oval is also a cash cow. Where there’s cash there is often also a fight, as is now the case between the SANFL and the AFL clubs over the twin issues of board representation on the Stadium Management Authority, and revenue sharing.
Attendances this year told the story. Even while playing frustrating footy, the Crows managed an average home crowd of 48,000. Port, the best story in sport over the past two years and playing the most exciting brand of football, were predicted to have an average home crowd of 36,000, but averaged 44,000.
A lot of people, and a lot of dough. The question being asked is: Where is it all going? As the AFL conducts its stadium review, to which all parties have reached a somewhat laughable confidentiality agreement amid a torrent of leaks, there is a view that it’s the SANFL which is reaping too great a benefit from that revenue.
The purpose of this column is not to explore the arguments around the revenue split, but to record the financial realities facing the SANFL which have been shunted aside.
There was a jaw-dropping revelation made to the nine SANFL league directors at their meeting on Tuesday night. The league directors represent the eight non-AFL SANFL clubs, with the 9th director, former Premier Rob Kerin, representing community football.
SANFL chairman John Olsen told the directors that earlier this year Westpac, the SANFL’s bank of more than 40 years, refused to let the SANFL bank with them any more over fears about its cash flow.
Westpac called in McGrath Nichol, a consulting firm specialising in insolvency issues, to run the ruler over the SANFL. They didn’t like what they saw. Westpac told the SANFL it would have to do its banking elsewhere. The cost of the McGrath Nichol review was $420,000 and the bill for that was passed on to the SANFL, too.
The chief reason for Westpac’s concern was whether the SANFL could meet its cash flow requirements. Unlike SACA, which had its debt wiped clean when it agreed to the Adelaide Oval upgrade, the SANFL remains lumbered with debt due in large part to its previous multi-million dollar bailouts of the formerly shambolic Port Adelaide Football Club.
The SANFL-owned land at Footy Park which has been rezoned may not be sold at a rate high enough or a speed quick enough to cover the cost of servicing that debt.
There is one passage in the report to the directors which helps explain why relations between the SANFL and Port in particular are so frosty. It reads:
“It should be noted that SANFL in May 2014 paid the PAFC a further $1.5m to enable it to repay its AFL creditors and start as an independent club with no more than $500,000 creditors, in other words with a clean slate. This took total PAFC funding from SANFL to $16.25m and increased SANFL debt to approximately $37m.”
So almost half the SANFL’s debt comes from helping Port. In addition, the SANFL is still incurring a cost of about $1.3 million a year to maintain Footy Park for Crows training.
To its credit, the Bendigo Bank stepped up to the plate and has taken on the SANFL as a customer. It is a five-year deal but the local league is still worried about cash flow, particularly given that the annual service fee it pays to the SMA will increase markedly next year.
This year the SANFL paid only eight months of that fee, for a total of $2.1 million; next year it rises to $3.4 million. In addition, the SANFL has also lost all the revenue it once made from catering at Footy Park, with the AFL clubs now enjoying that revenue from the new Oval.
As a lover of the Crows and an admirer of Port, I want nothing more than to see those clubs make as much money as they can from the new Oval.
Equally, we need to respect and remember the heritage of footy in this state, and recognise too that it’s the SANFL which props up regional and community footy, runs the Auskick clinics, created legions of great young players who became the game’s elite.
My suspicion is that this issue is less about any apparent greed on the part of our two AFL clubs, but more a covert desire on the part of those AFL federalists to recast our SANFL as the AFL (SA), in the same way the other non-Victorian states are the compliant vassals of Melbourne’s AFL House.
