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SBD Global/August 5, 2016/Leagues and Governing Bodies

Australian Football League Moving To Bridge Wealth Gap With Competitive Balance Measure

Two-thirds of Australian Football League clubs "will be significantly refinanced" by a A$20M ($15.3M) cash injection from the league to "compete equally with the big boys in a new competitive balance measure," according to Smith & Denham of NEWS LIMITED. As the league’s two-day conference with club CEOs wound up, the "general feeling was that the gap between the rich and poor would be greatly reduced over the next three years." Next year a current A$14M ($10.7M) "shortfall at 12 less-affluent clubs will be addressed under the new equalisation measure so that all 18 clubs will be on equal footing in their football departments, including player payments." Prior to '15, there had been "an unhealthy and self-destructive imbalance in the competition" with as much as a A$6.5M difference between the biggest and lowest spenders in '14. Footy departments grew 10% to 12% between '10 and '14 inclusively, but the introduction of the soft cap, and its 37.5% tax in the dollar, "slowed spending to just" 2% in '15. The league told clubs there was currently a A$92M ($70M) combined club debt of which A$66M ($50.3M) is in operating debt and A$26M ($20M) "in gaming debt." Also, eight to 10 clubs will "this year report operating losses" of a combined A$9M ($7M) to A$12M ($9M). The A$20M AFL adjustment into the annual club distribution "will be used to ensure all clubs can pay to the legal limit on total player payments" of A$10.4M ($8M), additional serv­ices agreements of A$1M ($760,000) and football department ceiling of $9.3M ($7.1M). The league "assured all clubs this week that any increase in salary cap payments, including marketing, coming from the new collective bargaining deal with the players would be met fully by the AFL" (NEWS LIMITED, 8/5).
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