It had been braced for a potential issue with Virgin, but is confident that the airline’s financial collapse – the company is carrying debt of $5 billion – will not have any impact on the ability of clubs to fly around the country when games resume.
The league and the clubs are increasingly confident that matches will resume, probably some time after July.
AFL chairman Richard Goyder is also the chairman of the nation’s other major airline, Qantas, which can pick up AFL flights. League sources said organising or chartering flights was not a concern for the clubs or the game.
The AFL had been confident of its financial position at the early stages of the COVID-19 spread – before the virus became a global emergency – due to its local, rather than international supply chains – but this optimism was turned on its head when the government’s restrictions saw crowds barred from the first round and then the season shut down, triggering a financial crisis that will see huge revenues lost and costs slashed, with clubs in de facto receivership.
Virgin aside, the AFL has long-term sponsorships that contribute tens of millions of dollars with the likes of Toyota, NAB, Coca-Cola, Coles, BHP and Marsh – by and large, companies that are well-placed relative to much of corporate Australia.
The AFL is still working through the issue of what the game will look like next year, when the soft cap on footy departments is set to be slashed, with the mooted figure of a $3 million dollar reduction, to about $6.7 million – plus a cut in player payments – yet to be confirmed.
In part, the AFL cannot act with certainty on cutting costs and programs until they know how much revenue – from television, crowds and sponsors – has been lost.
Virgin has engaged Deloitte to provide advice on restructuring and is expected to appoint the company as administrator.