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AFL Winners and Losers – which club is set to win the premiership for best financial management?

In the lead up to the 2018 AFL season opener, IBISWorld has explored the 2017 financial results of the AFL clubs vying for this year’s premiership, providing a score card on their fiscal performance. Leading the charge in terms of end-of-year revenue, Collingwood’s revenue of $77.7 million was up 9% from 2016. In total, 14 of the 18 AFL clubs posted an operating profit in 2017, up from 10 in 2016.

Hospitality and Pokies Revenues Lead the Charge

Collingwood, Hawthorn and West Coast retained their position as the top three revenue earners in 2017, maintaining their dominance as financial powerhouses. However, Collingwood and Hawthorn relied heavily on gaming and hospitality revenue.

“The AFL is pushing hard for the clubs to reduce their dependence on hospitality and gaming revenue, but it remains clear that certain clubs rely heavily on their corporate hosting and pokies revenue streams. The three top clubs received the least funding from the AFL. In 2017, 29.4% of Collingwood’s revenue came from hospitality and pokies, with Hawthorn at 26.7%,” said IBISWorld Senior Industry Analyst, Nick Tarrant.

In other revenue highlights, Essendon’s revenue grew by 22% following the end of the doping scandal. The club’s home ground attendances were up 50.6%, with that translating into a 38.8% increase in match-day sales and membership revenue.

Meanwhile, Richmond surged nine places up the revenue ladder following their drought-breaking premiership win.The biggest winner in terms of annual profits, West Coast was at the top of the table, having posted a sizeable profit of $12.4 million in 2017.

“Richmond’s increased revenue grew on the back of a 36% rise in home ground attendances, a 28.3% increase in sponsorship revenue and a full-year’s worth of revenue from Aligned Leisure, the club’s health and recreation business,” said Mr Tarrant.

Highest Profits

At the opposite end of the profit scale, the heaviest loss was Collingwood, which recorded an operating loss of $2.7 million.

However, IBISWorld notes that Collingwood recorded an operating profit of $6.1 million from its function centres and gaming venues alone. “This again highlights Collingwood’s reliance on hospitality and gaming revenue streams,” said Mr Tarrant.

AFL Funding

North Melbourne and St Kilda are the two established clubs that rely the most on AFL funding. North Melbourne received 41.1% of its revenue ($16.3 million) from the AFL, with St Kilda at 43.0% ($20.6 million).

2017 was a particularly tough year for North Melbourne. “The team struggled significantly on and off the field, with attendances down by 19%, the largest fall in the league”, said Mr Tarrant. Membership sales and gate receipts were down by over 12% as a result.

Topping the AFL funding ladder for 2017 was the Gold Coast, a team that received an enormous $24.7 million in funding from the AFL, an increase of $5.6 million from 2016.

“The Gold Coast relies heavily on AFL funding to stay afloat, with the national league propping up the club with over 60% of its revenue,” said Mr Tarrant.

The AFL distributes millions to the clubs each year as part of the return from its lucrative broadcasting rights and sponsorship deals. However, some clubs are clearly more reliant on funding than others. North Melbourne, which abandoned gaming machines in 2008, has become increasingly dependent on the AFL to sustain itself financially. Other clubs, particularly the large Victorian teams, would be in a similar position without the lucrative returns from their gaming assets.

With a push from the AFL to sell their gaming assets, along with recent bans by the government on gambling advertising during live sport, clubs will clearly have to look for new measures to ensure future revenue streams and profitability.

Full Ladder

The information for this project was gathered on 16/3/2018.

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