Gillon McLachlan took over as AFL Commissioner at a fairly challenging time and has been a skilled media performer to this point, but I felt his recent foray into the discussion over a Tasmanian team seemed a little insincere.
I’m far from a passionate advocate of a Tasmanian team
in the AFL, but recently I couldn’t help feeling Gillon McLachlan was treating
me for a fool, as he glibly spoke about how Tasmania deserved its own team but
couldn’t have one. His regret about the
issue rang a bit false for me. At least
he was being candid in saying that we couldn’t have a team, which was better
than dancing around the issue as has been done in the past, but no need to dress it up with consoling language to make me think he shared my disappointment.
Now, I haven’t done the maths and maybe a Tasmanian team wouldn’t be viable, but McLachlan’s handwringing about it seemed a little forced and patronising- like an adult trying to soothe a petulant child without giving them what they want- considering he has the power to make it happen if he thought it was important. When you have just signed a TV deal for 2.5 billion dollars, there is probably a little in the kitty to support another expansion team if you believe they deserve to be there. Going back to the parenting example, if you don’t want to give a child an ice cream, you don’t say, “I’m sorry, you deserve one, but we can’t afford it.” You just tell them flat out they can’t have one.
An expensive game
Football is an expensive industry. McLachlan estimated that running an AFL club cost around $45M a year. Obviously being an interstate club could be even more expensive because the team has to travel more often, although I imagine clubs work hard to reach agreements with airlines and hotel chains to reduce these costs.
Economic modelling into the future is always extremely difficult (just ask the federal government) with many complex variables that interact unpredictably. The major argument given for why Tasmania does not have an AFL team is that it would not be financially sustainable. Now I have deliberately steered away from doing much research here because statistics can be used in a number of ways depending on the wish of the person using them.
But it’s worth noting that North Melbourne has been regularly drawing big crowds to its matches at Blundstone Arena. Assuming whoever was running the team didn’t stuff up the agreement with the stadium, like the South Australian teams did with Adelaide Oval, one would think this would be a better source of revenue than for some other teams.
Sponsors and Members
Membership and sponsorship are vital to financial viability and they are pretty big unknowns, so I can only make assumptions here (yes people can complete very detailed business plans that will be much more thoroughly researched, but will still be based on assumptions). I actually believe AFL membership of any club is an exploitation of fan loyalty, so would be unlikely to join myself, but I can see a considerable number of people joining up, based on Tasmania’s love of footy.
It is probably fair to assume that a regional team like Tasmania is going to struggle to attract as many sponsorship dollars as its more metropolitan counterparts, but as a part of the national competition the team could still represent value to local and national sponsors, although they may not attract as high a dollar value.
On the other hand, a Tasmania team could probably rely on another backer outside of the corporate world. The Tasmanian government is already playing millions of dollars to Hawthorn to play four games each year, while the Hobart City Council combines with state-owned business, TT line, to underwrite the North Melbourne deal. I haven’t been sold on the claims that these deals are worth considerably more to the Tasmanian economy, but that is the line all parties involved push pretty hard. Wouldn’t it be reasonable to assume there would be more money available to have a Tasmanian team playing 11 games in a year? Personally I would be a little concerned about the cost to other parts of the state budget, if the Tasmanian Government were to over commit here, but they don’t actually listen to me.
Would it be enough?
What does this mean? I don’t really know. I am fairly dubious of anyone that can say definitively that a Tasmanian team would be financially viable, but I am equally unconvinced by anyone who would dismiss it out of hand. If they did run at a loss, they wouldn’t be the only ones. Perennial strugglers such as the Bulldogs have relied upon regular support from the AFL to maintain their own bottom line, with the Australian Financial Review finding that a majority of current clubs made a loss last year. To an organisation that has just signed a record new TV rights deal for over half a billion every year (double the previous one), the AFL could afford to admit a Tasmanian team, even one that needed similar financial support to some the other struggling teams, if it wanted to.
Little to gain.
A more significant issue is that any gains in the Tasmanian market would be coming at the expense of existing clubs. A lot of membership would probably come at a cost to less membership for existing for existing teams. Equally, the money going to North Melbourne and Hawthorn would likely be redirected to the state team as well, creating revenue shortfalls for two of the teams who would be most affected by a drop in membership. This would be particularly concerning for the Kangaroos who already receive financial support from the AFL.
Taking the impact on other clubs into account, the inclusion of Tasmanian team could be almost bee viewed by the AFL as a zero-sum game, with little net increase. Similarly, even with the continued growth of soccer in Tasmania, the AFL still maintains a strong hold in the state. It is unlikely that admission to the national league would lead to significantly increased junior or adult participation.
To some extent then, the AFL would look at expanding into Tasmania as a risk that brings little reward. Even if the team were financially successful, it creates holes in the budgets and membership quotas of other Melbourne-based clubs. So I’m not surprised that successive AFL administrations have been reticent to do so.
I don’t disagree with McLachlan’s opinion that we won’t see a Tasmanian team in the next 10-15 years. From a business sense for the organisation, it makes more sense to concentrate their expansion efforts into rugby league heartlands such as Queensland and Western Sydney. I totally get that, but if that is the reason they don’t want to expend resources in Tasmania, be honest about it and skip the platitudes about what you think we deserve. Given the comparatively decreased cost, it is probably more likely to see an A league, W league or Women’s AFL team in Tasmania and if one of those things happens I’ll gladly get behind them too.
What would it take to change the AFL’s mind?
If less Tasmanians were already involved playing and supporting AFL, would the region be a higher priority for expansion. Business cases based on economic viability and the state’s appetite for football can be put forward over and again, but they ignore the fact that the AFL is already getting the benefit from that. It seems the most likely way that it would happen is if Tasmania experienced a significant drop in participation rates, television audiences, membership and attendance for the fly-in games. I’m not actually suggesting this as a strategy, although it is an interesting counterfactual to consider.
It is this cynical approach, viewing us as a captive market, that rankles me, combined with a mock-sadness at the situation. Don’t tell me you think my state deserves a team and that you are very sorry that it can’t happen, Mr McLachlan. Your organisation has just signed a new record TV rights deal and have recently shown that when you want to put a team somewhere- even when there is no interest in the game in that location- you will make it happen. The reason there is no AFL team in Tasmania is that we are not worth it to you. Just have the honesty to say so.
My final say
Do I think Tasmania should have its own AFL team? I’m not sure. People with more business acumen than me would need to spend a lot more time thinking about it that I have to even make a truly educated guess. I’m not telling the media-savvy AFL commissioner he is wrong on this one. But I am calling out the stage-management of his message. Get rid of the emotive language of what we deserve and how much you regret it, because it doesn’t dull your message and I don’t like being treated like I am stupid. If it is not worth it to the AFL to expand into Tasmania, just be honest about it.
Now, I haven’t done the maths and maybe a Tasmanian team wouldn’t be viable, but McLachlan’s handwringing about it seemed a little forced and patronising- like an adult trying to soothe a petulant child without giving them what they want- considering he has the power to make it happen if he thought it was important. When you have just signed a TV deal for 2.5 billion dollars, there is probably a little in the kitty to support another expansion team if you believe they deserve to be there. Going back to the parenting example, if you don’t want to give a child an ice cream, you don’t say, “I’m sorry, you deserve one, but we can’t afford it.” You just tell them flat out they can’t have one.
An expensive game
Football is an expensive industry. McLachlan estimated that running an AFL club cost around $45M a year. Obviously being an interstate club could be even more expensive because the team has to travel more often, although I imagine clubs work hard to reach agreements with airlines and hotel chains to reduce these costs.
Economic modelling into the future is always extremely difficult (just ask the federal government) with many complex variables that interact unpredictably. The major argument given for why Tasmania does not have an AFL team is that it would not be financially sustainable. Now I have deliberately steered away from doing much research here because statistics can be used in a number of ways depending on the wish of the person using them.
But it’s worth noting that North Melbourne has been regularly drawing big crowds to its matches at Blundstone Arena. Assuming whoever was running the team didn’t stuff up the agreement with the stadium, like the South Australian teams did with Adelaide Oval, one would think this would be a better source of revenue than for some other teams.
Sponsors and Members
Membership and sponsorship are vital to financial viability and they are pretty big unknowns, so I can only make assumptions here (yes people can complete very detailed business plans that will be much more thoroughly researched, but will still be based on assumptions). I actually believe AFL membership of any club is an exploitation of fan loyalty, so would be unlikely to join myself, but I can see a considerable number of people joining up, based on Tasmania’s love of footy.
It is probably fair to assume that a regional team like Tasmania is going to struggle to attract as many sponsorship dollars as its more metropolitan counterparts, but as a part of the national competition the team could still represent value to local and national sponsors, although they may not attract as high a dollar value.
On the other hand, a Tasmania team could probably rely on another backer outside of the corporate world. The Tasmanian government is already playing millions of dollars to Hawthorn to play four games each year, while the Hobart City Council combines with state-owned business, TT line, to underwrite the North Melbourne deal. I haven’t been sold on the claims that these deals are worth considerably more to the Tasmanian economy, but that is the line all parties involved push pretty hard. Wouldn’t it be reasonable to assume there would be more money available to have a Tasmanian team playing 11 games in a year? Personally I would be a little concerned about the cost to other parts of the state budget, if the Tasmanian Government were to over commit here, but they don’t actually listen to me.
Would it be enough?
What does this mean? I don’t really know. I am fairly dubious of anyone that can say definitively that a Tasmanian team would be financially viable, but I am equally unconvinced by anyone who would dismiss it out of hand. If they did run at a loss, they wouldn’t be the only ones. Perennial strugglers such as the Bulldogs have relied upon regular support from the AFL to maintain their own bottom line, with the Australian Financial Review finding that a majority of current clubs made a loss last year. To an organisation that has just signed a record new TV rights deal for over half a billion every year (double the previous one), the AFL could afford to admit a Tasmanian team, even one that needed similar financial support to some the other struggling teams, if it wanted to.
Little to gain.
A more significant issue is that any gains in the Tasmanian market would be coming at the expense of existing clubs. A lot of membership would probably come at a cost to less membership for existing for existing teams. Equally, the money going to North Melbourne and Hawthorn would likely be redirected to the state team as well, creating revenue shortfalls for two of the teams who would be most affected by a drop in membership. This would be particularly concerning for the Kangaroos who already receive financial support from the AFL.
Taking the impact on other clubs into account, the inclusion of Tasmanian team could be almost bee viewed by the AFL as a zero-sum game, with little net increase. Similarly, even with the continued growth of soccer in Tasmania, the AFL still maintains a strong hold in the state. It is unlikely that admission to the national league would lead to significantly increased junior or adult participation.
To some extent then, the AFL would look at expanding into Tasmania as a risk that brings little reward. Even if the team were financially successful, it creates holes in the budgets and membership quotas of other Melbourne-based clubs. So I’m not surprised that successive AFL administrations have been reticent to do so.
I don’t disagree with McLachlan’s opinion that we won’t see a Tasmanian team in the next 10-15 years. From a business sense for the organisation, it makes more sense to concentrate their expansion efforts into rugby league heartlands such as Queensland and Western Sydney. I totally get that, but if that is the reason they don’t want to expend resources in Tasmania, be honest about it and skip the platitudes about what you think we deserve. Given the comparatively decreased cost, it is probably more likely to see an A league, W league or Women’s AFL team in Tasmania and if one of those things happens I’ll gladly get behind them too.
What would it take to change the AFL’s mind?
If less Tasmanians were already involved playing and supporting AFL, would the region be a higher priority for expansion. Business cases based on economic viability and the state’s appetite for football can be put forward over and again, but they ignore the fact that the AFL is already getting the benefit from that. It seems the most likely way that it would happen is if Tasmania experienced a significant drop in participation rates, television audiences, membership and attendance for the fly-in games. I’m not actually suggesting this as a strategy, although it is an interesting counterfactual to consider.
It is this cynical approach, viewing us as a captive market, that rankles me, combined with a mock-sadness at the situation. Don’t tell me you think my state deserves a team and that you are very sorry that it can’t happen, Mr McLachlan. Your organisation has just signed a new record TV rights deal and have recently shown that when you want to put a team somewhere- even when there is no interest in the game in that location- you will make it happen. The reason there is no AFL team in Tasmania is that we are not worth it to you. Just have the honesty to say so.
My final say
Do I think Tasmania should have its own AFL team? I’m not sure. People with more business acumen than me would need to spend a lot more time thinking about it that I have to even make a truly educated guess. I’m not telling the media-savvy AFL commissioner he is wrong on this one. But I am calling out the stage-management of his message. Get rid of the emotive language of what we deserve and how much you regret it, because it doesn’t dull your message and I don’t like being treated like I am stupid. If it is not worth it to the AFL to expand into Tasmania, just be honest about it.
