Hoops

PAFC runs out of cash, SANFL may take over

HO, I don't know the exact figures, or how it happens, but my understanding was that an ongoing payment is made to the AFL as part of the process. This may be a SANFL cost as part of the licence agreement.

HO, my understanding from discussions is that AFL Clubs pay a fee to the AFL, much like a "standing charge" or "period cost", that any organisation charges it sub-branches. This is to cover the corporate function of the AFL. If you work for a large organisation with several branches, whenever a budget is prepared, the overhead costs are usually the first line on a budget. Ask a McDonalds franchisee about it!
Someone please correct me, but from what I understand, the cost to compete in the AFL is around $6M/yr per club and this is what each AFL Licencee is invoiced annually by the AFL. (this could be an old figure, but this is what I have been told)
This is part of the total Club budget, but then there's Club admin costs, player costs etc

The AFL Licence for the Crows is held by the SANFL and this is where the accounting gets interesting. The SANFL are the landlords of AAMI stadium, so they charge the AFL Club a match day fee for the stadium rent. However, they also own the AFL Licence and so in effect any monies they receive from the AFL in stadium rent was theirs to start with. Confused?

At the end of the day, there is a nett cashflow loss from SA.

For regular posters, you may know I have an extremely cynical approach to the AFL in general. I believe it is one of the most biased sports played in this country. Uneven draws, uneven rules, uneven distribution of funding, and an attempt by the AFL to expand the game at all costs and at the same time, maintain a heavy Victorian bias only denigrates the game to an extent that it is the poorer for it IMO.

The SANFL has been hit by poor attendances in the SA League since the introduction of the Crows and Power, however, this shift in attendances has, over the years, not really affected the local clubs as they receive a dividend out of the club's profits and everything has been balancing out.

AFL attendances have plummeted over the last few years for many reasons. From what I understand, the SANFL pay the AFL from the game, then "hire" out AAMI stadium to the Club for matchday, but also look for monies from the gate and from food and drink. What this has meant is that the accountants have had a field day shuffling monies between accounts and the only really winner has been the AFL who have been sucking money from each game with some games running at losses.

The SANFL's decision to keep Port as two clubs has placed strain on that organisation and now they are "one club" this has helped, but was it too late?

The SANFL is probably at it's limit of assets to liabilities ratio and as people have pointed out, it can't keep funding by borrowing against ageing, rundown assets. The WAFL and the two WA teams operate differently than the SA Model, so it may be time to look at how they do it.

So long as SA cash is heading to Victoria to fund expansion of the AFL in NSW and Queensland, the AFL seems happy. Perhaps the AFL needs to consider how it can protect it's cash cow before the grassy paddock of SA Footy turns into a muddy quagmire.

Not quite correct Moses, the SANFL is not broke. They are carrying debt of $27,000,000, including $4,000,000 it borrowed last year to bail Port Adelaide out. They are not in a position to borrow any more or have their line of credit extended. This debt would be the loans they have for extensions, upgrades, etc to AAMI Stadium and would normally be managed payments back to the banks.

Port Adelaide is not attracting enough sponsors and not enough spectators to games to give them cash flow. You can only run on a weekly loss cycle for so long before it comes unsustainable.

In regards to the SANFL and its nine member clubs, they have been bleeding the Crows and Power dry for the last 13 years by their required "dividend" payments back to the SANFL. The Power have never or hardly ever made these payments as they have seldom made more than a minimal profit. However, the Crows have some years made around a $2,000,000 operating profit, only to see 80% of it paid back to the SANFL.

This and the Stadium hiring deal is the reason both teams are suffering, to the financial advantage of the nine SANFL teams. The WA teams have a clean stadium hire with the WAFL for several years which means that they pay a fixed amount to the WAFL for stadium hire and all profits from advertising and other revenue go to the clubs after daily operating costs.

Well spotted Moses, the SANFL is in dire straights