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SANFL and AFL build financial bridge to Adelaide Oval

  • Thursday, June 30 2011 @ 08:32 pm ACST
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General News

The SANFL and AFL today announced a funding plan to see South Australian football through to 2014 when the financial picture is expected to brighten considerably with both the state's AFL clubs moving to Adelaide Oval.

Key features of the deal are:

  • A grant to the Port Adelaide Football Club from the AFL of $1 million for each of the three years (2011, 2012 and 2013)
  • A loan to the SA Football Commission from the AFL of $2 million per year for each of the three years (2011, 2012 and 2013) to be provided as grants to the Port Adelaide Football Club, representing a total grant to the club of $9 million over three years
  • The AFL to provide a facility for the SA Football Commission to draw up to $1.5 million per year for three years (2011, 2012 and 2013)
  • The SA Football Commission will provide a financial package valued at $1 million per year to the Adelaide Football Club over three years (2012, 2013 and 2014), representing a total contribution to the Crows of $3 million.

AFL CEO Andrew Demetriou explained that "Football in South Australia needs two strong clubs in Port Adelaide and the Adelaide Crows competing strongly on the national stage and the AFL competition wants both teams to have every chance to bring success to their supporters."

For traditional Australian football look no further than South Australia.  With possibly the first ever league (1877), a consistent top three in interstate carnivals, a big contributor to AFL drafts and regular statistics showing Australian football participation as good as anyone, the sport has been a key part of the state and the state a key part of the sport.  But somewhere over the last few years things have deteriorated.

The two AFL clubs started to slide down the ladder, the crowds started to fall, the finances fell quicker, TV ratings have slipped.  The SANFL began to bail out Port Adelaide and even the Adelaide Football Club posted a 2010 loss.  The SANFL reached the end of its credit line, Port's situation worsened, a low point was reached.

Things look set to change.  A key state election battle was over future stadia - whether to build a new one or move footy back to Adelaide Oval, its SA home for most of its first 100 years and still home to cricket.  The Labor Party won, and a half billion dollar upgrade of Adelaide Oval is about to begin with the aim of the Crows and Power moving all home games there from 2014.

The deal also guaranteed the SANFL to keep AAMI Stadium and allow a sell off of associated surrounding land, with the intention of securing the League's future.  It was also a given that the two AFL clubs would get more favourable stadium deals at Adelaide Oval compared with what the SANFL gave at AAMI Stadium, thus fixing a lot of their issues.  But a major problem remained - it's 2011 and with Port losing millions each year and its license holder the SANFL stretched tight, making it to 2014 was looking tough, especially with AAMI Stadium now somewhat of a damaged brand from the stadia debates.

The funding package announced today has two primary components - an annual grant to Port of $1 million for three years from the AFL and a grant from the SANFL for $2 million per year over the same period.  The key being that the AFL will effectively loan the SANFL the money which will only be repaid in several years time once the Adelaide Oval move has occurred.  So the major contributor is the SANFL, but not until they have the means.

The announcement allows the SANFL to save Port, which itself makes money for the SANFL such as through stadium fees, and bridges the gap to Adelaide Oval.  The AFL will not be significantly out of pocket as most of the money is to be repaid and its 3 years of grants are on the lower end of the scale when considering some of the handouts to clubs it has made in recent years.

Port Adelaide President Brett Duncanson said "We are grateful to the SANFL and AFL for this contribution which we see as an investment not only in Port Adelaide, but in the future of football in South Australia.  It provides certainty surrounding our future financial position as we plan for the new era at Adelaide Oval. There, we can stand proudly and continue the contribution our Club has made to the sport throughout its 141-year history."

Also benefiting are the Adelaide Football Club.  Crows CEO Steven Trigg has for several years lamented the inability to grow their business and limits such as AAMI not being a "clean" stadium to sell corporate packages.  The new deal makes available $1 million per year which appears to be designed to allow the SANFL to not be out of pocket as they hand back some control to Adelaide which can then in turn start to build their business along the lines that will be in place at Adelaide Oval.

Trigg stated that, "... it is done strategically so it gives us the opportunity to mimic here, as best we can, what we are going to go to Adelaide Oval with in terms of access to corporate inventory, the way membership is set up, signage, etc.  It’s a great outcome for us because it will incentivise the club and get us ready for the Adelaide Oval to the best of our ability in terms of the structure of the financial package that awaits us in the city."

As part of the gradual move to Adelaide Oval, Port Adelaide will host the Round 24 game against Melbourne at the ground.  That game should go close to a sellout due to the novelty of the move and be a financial boost to Port in itself.
 
Also of great interest but harder to read is that Mr Demetriou said the AFL and the SA Football Commission had also held discussions around further off-field support for the clubs in South Australia and their governance structure.
 
As part of these discussions:

  • The SA Football Commission and the AFL will review both the Adelaide and Port Adelaide Football Club licences to determine the best governance structure for both clubs ahead of a move to a redeveloped Adelaide Oval; and,
  • The SA Football Commission and the AFL will work with Port Adelaide and Adelaide to finalise the revenue-sharing and rental model for matches at Adelaide Oval, with a deadline of December 31, 2011.

Will the SANFL relinquish the licenses for Adelaide and Port?  Has the new funding been arranged with no guarantees about how these subsequent talks will result?  Many South Australians will be sceptical despite public assurances from Demetriou and the SANFL's Leigh Whicker.