Marvel Stadium key asset as AFL acts to survive financial calamity amid the coronavirus pandemic


The senior coaches, the public faces of their clubs, quickly agreed to take a pay cut of 20 per cent to help their clubs and the industry weather the coronavirus recession. Significant cost cutting among the large number of assistant coaches is viewed as certain, too.

And the incensed boss of the AFL Players Association, who also have been asked to take a 20 per cent pay cut, has called criticism of the players’ position “disgusting”, given that the players were taking the field at their own personal risk and that whole industry’s viability “depends on them taking the field”.

“To be portrayed as bad guys last week really pissed me off and the players,” said AFLPA chief executive Paul Marsh, responding to criticism of the players’ wish for a 22-round season and the fact that they have not yet agreed to a 20 per cent cut.

“It is disgusting and it is so unfair … the whole industry is depending on these players taking the field.”

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Marsh said the players were “taking a risk” although they were acting on the advice of the government in playing.

He said the players were motivated and working “for the survival of their football clubs”, yet had been “portrayed as greedy” by posing the question of why the season couldn’t remain at 22 games if it stretched over 40 weeks, as the AFL has suggested.

He said players were “really angry with their portrayal” at a time when the AFL were looking at a loss of $400 million in revenue. “That’s been the AFL’s position, the players are aware of that.”

The problem the league has presently is it has no idea how much money will be required to keep clubs afloat until they know how many games will be played and how long crowds will be locked out.

Marvel Stadium is not only a valuable asset but it promises future cash flows for parties willing to offer credit. The league is in a strong credit position to access debt to cover the extraordinary attack on finances as revenues would be expected to quickly rise next year if and when football returns to normal and interest rates are at historically low levels.

The AFL can draw on the Future Fund but that only has about $60 million in it as it was drawn down to buy out Marvel Stadium early. The league has renewed contributions to the fund at the rate of $20 million per year from the latest broadcast rights deal.

The $60 million in that fund would not last long spread across the clubs that need help.

Clubs are also examining the equity in their own assets to be able to draw against, their debt positions and where they can immediately cut costs.

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All clubs rely on the income from gate receipts to balance their books with Geelong president Colin Carter revealing last week that every Cats home game delivered $1 million revenue to the club.

Richmond earned $8 million net on gate receipts last season as they stormed to a premiership in front of packed houses.

Gill McLachlan confirmed on Wednesday that the entire season, which has been reduced to 153 games, might be played without crowds due to government restrictions.

Both clubs and the AFL will be forced to lay off or temporarily stand down non-essential staff and many will be asked to take pay cuts or leave as the financial toll builds.

Collingwood president Eddie McGuire revealed on Footy Classified that the AFL – which earned $793.9 million revenue in 2019 – had already begun discussions with the Daniel Andrews state government to obtain a loan that would enable the competition to keep functioning during the coronavirus restrictions.

It is doubtful the state government would be required for a loan as Marvel Stadium was a more viable first option for accessing finance.

Many clubs are dependent on the AFL’s backing to guarantee loans and receive AFL distributions to stay afloat with clubs unable to legally trade if they are insolvent.

St Kilda, for example, has the AFL guaranteeing a $6.75 million loan from Westpac.

The AFL earned $397,439 million revenue in 2019 from broadcast and AFL media making it imperative they attempt to have games played when possible during the year as long as health authorities deem it safe for them to play.

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