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SBD Global/March 6, 2014/Leagues and Governing Bodies
AFL CEO Andrew Demetriou Talks Competition Between Codes, Scandal, Concussions
Published March 6, 2014
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Q: The AFL is Australia's No. 1 sports league based on attendance and revenue numbers. What is the league doing to stay ahead of its competitiors such as the National Rugby League or A-League?
Andrew Demetriou: First thing I would say is that we actually relish the competition among the other sports. We are probably one of the most unique countries for sport in the world. We’ve got four football codes operating in one country with a population of 23 million. So that makes it really competitive, particularly in places like New South Wales and Queensland where we don’t dominate as we currently do in the other states. From our perspective, the competition is a good thing for us. It makes us work harder, be more innovative and continue with our growth trajectory. We are in a very strong financial position. We put around about A$40 million ($36M) a year into grassroots development. That’s talent identification, kids, schools and community football facilities. We are also debt-free with a very strong balance sheet; we got cash in the bank. We believe that if it isn’t broke, fix it anyway. We want to get better every day.
Q: In what areas do you see the biggest growth potential for the league?
Demetriou: Certainly broadcast rights. We also see more growth in those areas I mentioned before, New South Wales and Queensland, where we’ve got two teams in each state there. We hope we can grow more participation, more memberships and more revenue from our corporate partners. And I think we can grow internationally.
Q: The investigation into the Essendon drug scandal overshadowed the '13 AFL season. What impact did the scandal have on the league, especially in terms of participation, attendance and sponsorships?
Demetriou: I guess we will know more this year. But at the end of last year, even after the year we had, on everything we measure ourselves, we had record years. Participation, junior Auskick numbers, revenues, our profit, our memberships, our attendances were all touching nearly on records except for attendances, which were our third highest on record. And sponsorship revenues were up, too. It didn’t seem to be the impact that I think one would expect or could expect, but that doesn’t mean that we certainly didn’t test the resolve of our supporters. We suffered some brand damage and certainly how that plays out will be determined this year and how we’ve responded. I think we’ve got enough equity in our brand, built up over a long period of time, that our supporters actually got great faith in the game. The game is quite resilient. It doesn’t mean that our brand isn’t damaged, but I think it can recover. And I think the game itself, which is what people are most interested in, much more so than what happens off the field, we are expecting to see great growth because our early indicators on our membership numbers are record again. We are tracking ahead of revenues again.
Q: How does the AFL make sure such a scandal will not happen again?
Demetriou: We already had our very sophisticated integrity unit, which we learned a lot from Major League Baseball. Subsequently to the scandal, we quickly, last year, implemented a serious investment furthering our integrity unit, so we moved ours up to probably one of the most sophisticated units in the world outside of Major League Baseball. We’ve invested in surveillance, IT and data processing. We’ve invested heavily in resources; we have 14 full and part-time investigators. We are doing absolutely everything we can. We approved new rules to ban things like the use of IVs and injections. We’ve got protocols now, where we have done audits on all the clubs.
Q: Australian Rules football is a heavy contact sport and its players are therefore susceptible to brain damage. The AFL has reached out to U.S. sports leagues to gather information on their revenue-sharing models and salary caps. Have you also talked to the NFL about the issue of concussions?
Demetriou: I think all contact sports have got to learn things from each other. The good thing about working with the NFL is that we are all prepared to share information and research. We happen to think that there are some things we are doing that the NFL can learn from. We are a game that hasn’t got helmets; we are a game that’s already had rules in place about players, who get injured with a concussion, about being off the field and missing weeks. We held the first global research conference into concussion last year, where people came from around the world to attend it. I think it’s in everyone’s interest; players, clubs and leagues, to continue to share as much information as possible about what is a very, very serious issue.