Gold Coast Suns AFL Funding - Return on value

[justlookingaround]

The AFL makes heaps of money. They have a large operating surplus.
They can afford to prop up teams and the AFLW for the contributions they make to other indirect gains.
They fund GC, GWS, small Melbourne teams, the entire AFLW and still make a surplus of $30m.

 

[errant bounce]

GWS is the issue.

Better team on field but the Suns have done what the AFL intended: engage a new audience.

Quite a few players are coming through from that area and the crowds are better and more engaged.

GWS crowds look and feel like a bunch of curious one-timers who jagged free tickets or it's a few ex southern state ex pats. most of their academy players come from some of the most established footballing areas in the country down near Wagga and the Riverina.

The only guy to come through from a truly league town was Heeney and that was at the Swans...

 

[Freomaniac]

They've made some massive growth in grass roots football in the Gold Coast since the team was created, so they're obviously doing a great job of creating more lifeline fans of football over there.

Its about Gold coast making finals .

Gold coast hosting and winning a home final will bring in more local fans. they would get 15-20,000 each week if they did.

Dockers 1st final was in 2003 and dockers fan base slowly increased from there.

 

[Freomaniac]

GWS is the issue.

Better team on field but the Suns have done what the AFL intended: engage a new audience.

Quite a few players are coming through from that area and the crowds are better and more engaged.

GWS crowds look and feel like a bunch of curious one-timers who jagged free tickets or it's a few ex southern state ex pats. most of their academy players come from some of the most established footballing areas in the country down near Wagga and the Riverina.

The only guy to come through from a truly league town was Heeney and that was at the Swans...

The AFL wont care. Swans average 30,000 to 40,000 at the SCG when they are good.

AFL wont complain if GWS pulls in half of that. If GWS pulls in 15,000 to 20,000 in that 25,000 giants stadium, the AFL are happy.

 

[HairyO]

Having an extra game a week is worth a lot more through TV rights than the cost of subsidising a couple of teams.

That is the claim but is it true? How much money is made on the lowest rated game each week ?

What is the long term costs of watering down the talent pool and distributing less to the clubs which need it ?

 

[Freomaniac]

That is the claim but is it true? How much money is made on the lowest rated game each week ?

What is the long term costs of watering down the talent pool and distributing less to the clubs which need it ?

Remember a few years back I quoted you about me being happy the AFL pouring 10 million dollars a year producing 1 or 2 AFL hopefuls from Queensland? I still stick by that statement.

If the state of Queensland produces 3 or 4 AFL draftees a year, that's still 30 or 40 AFL players drafted in 10 seasons.

 

[Jirik13]

The AFL wont care. Swans average 30,000 to 40,000 at the SCG when they are good.

AFL wont complain if GWS pulls in half of that. If GWS pulls in 15,000 to 20,000 in that 25,000 giants stadium, the AFL are happy.

Problem is that while GWS are top team and play finals they don't pull 15-20K. They did not even sell out finals this year. What do you think would be crowd numbers if they finish like Suns?

 

[Freomaniac]

Problem is that while GWS are top team and play finals they don't pull 15-20K. They did not even sell out finals this year. What do you think would be crowd numbers if they finish like Suns?

If GWS finish bottom 6 or Bottom 4, I will assume 6 or 7 thousand a game.

There is 2 or 3 million in Western NSW and that covers a good 60 to 100 kilometres.

Gold Coast I am more curious on how many will rock up if they make and won finals

 

[Jirik13]

That is the claim but is it true? How much money is made on the lowest rated game each week ?

What is the long term costs of watering down the talent pool and distributing less to the clubs which need it ?

That extra game apparently was bringing 50M extra in media deal 5 years ago according to McLachlan.

10 teams in Melbourne is crazy. Not expanding AFL in QLD. BTW, my guess it's probably only 5-6 teams that would survive without subsidies.

If GWS finish bottom 6 or Bottom 4, I will assume 6 or 7 thousand a game.

There is 2 or 3 million in Western NSW and that covers a good 60 to 100 kilometres.

Gold Coast I am more curious on how many will rock up if they make and won finals

I can't imagine Suns not selling out finals games.

 

[HairyO]

That extra game apparently was bringing 50M extra in media deal 5 years ago according to McLachlan.

10 teams in Melbourne is crazy. Not expanding AFL in QLD. BTW, my guess it's probably only 5-6 teams that would survive without subsidies.

I can't imagine Suns not selling out finals games.

Id be ok with 1 or 2 teams from Melb merging or disappearing.

18 teams is too many. It thins out the talent too much.

That $50m is over the life of the deal or per year? I dont believe it if the claim is per year. Noone attends the games and next to noone watches the games.

The only ones who dont care who is playing is the gambling companies. Because addicts bet on anything.

 

[errant bounce]

Suns would absolutely sell out a final. make it a Collingwood and it's a hot ticket.

Giants just get no attention, most of the people I know in Sydney who attend their games are from other states and go to Swans matches as a 'second team' thing and just go watch GWS when they're bored or it's a 'big' game.

Know a few people who live in Queensland and they're always going to Lions and Suns games to the extent they're unsure if they still support their native Hawthorn or Carlton.

 

[Bunk Moreland]

Ive gone down a rabbit hole I gotta admit here. Being self-employed and very easily distracted leads me to research stupid things. Yesterday I got sidetracked by Gold Coast and the funding the AFL gives them via distribution of income. In particular I was comparing 5 clubs. Gold Coast, Brisbane, West Coast, Fremantle and North

Since creation Gold Coast Suns has received about 520 million dollars in AFL grants + distribution of income. West Coast Eagles in that same time frame has received about 170 million and Fremantle about 220 mill. This is a 300-350 million dollar difference all up. Gold Coast have also received about 150 million dollars more then North Melbourne. As a example, if North had received the same funding as Gold Coast, they would be the richest sporting club in the AFL.

Now I know what people say. "We are trying to grow the game, participation is up so its worth it" and so on and so forth. In businesses like this you refer to each member as a customer acquisition cost. Its basically all that matters. The rest is just fluff. Its interested converted into nothing

Gold Coast received about 34.2 million dollars from the AFL to produce 23,000 members. This is a cost of 1,486 bucks per member. West Coast Eagles on the other hand received around 11.8 million (minus automatic WAFL redistribution) for 103,275 members at a cost of 114.25 per member. Fremantles is around 220 bucks per member themselves so track well.

The question is simple. Can the AFL afford to maintain 34 mill+ a year on a club whose return is the creation of 23,000 members? Unless each member Gold Coast has is contributing 1,500 bucks per year into the AFL income, the rest of us are taking a loss on this, a big one at that. One aspect to understand is this problem isnt getting better, its getting worse. Since 2016, AFLs need to increase Gold Coasts income is only getting bigger and bigger as we go on. Costs are growing faster then the own income they generate. They made 2.2 mill extra in revenue by themselves (so excluding AFL handouts) but costs grew by over 5 million dollars (so they short 2.8 mill in 2023)

At what point of this experiment is enough going to be enough? I think its past the point and with Tasmania coming onboard, the time has come to merge them/move them to Tasmania. The cost is too high to contnue on

Doubt it ever stands up to any sort of sober / rational business plan.

Every time the AFL is asked or approaches discussing that it’s just “it’s a generational thing, we won’t know the answers for 50 years”.

It’s essentially a leap of faith.

 

[Upgrayedd]

Gold Coast received about 34.2 million dollars from the AFL to produce 23,000 members.

23,000 members

Now lets assume We're ******ed and the AFL take back every dollar off a team membership, Rather then assuming like OP that club membership revenue goes to the club.

Say like, 250 per membership, 5.7 Million dollars, OP lets say, You are having "A deep think" (No, you are not) assuming thats 5.7M of dollars the afl is making, Thinking like you are, CLUB memberships are dollars going straight to the AFL bank and not the club, that clubs are returning every cent of profit back to the AFL.

AFL sends as you said, 35M to them, So lets assume the AFL is now about 29M short on the GC this year


4,500,000,000

TV rights were worth 4,500,000,000

Per Season, Thats about 643M per year (It's higher)

Lets me silly and go, the AFL finals would be worth 100m a season of that

Removing GC to then lose a game per round is about a 60M dollar loss.

So WITHOUT putting in realistic dollar figures, Just over-estimating costs in favour of best case scenarios for your argument. Gold coast probably help the AFL create 20M dollars of revenue, Plus the fact that increased viewership through the queensland market DUE to GC being established was a big reason why they can fetch higher $$$ over tasmania, a third WA team


Could another team take their spot? Yeah sure,

Will you get the growth elsewhere? **** no, Gold Coast is the 6th biggest city in Australia, one of the top 10 highest growing area's as well

Come on dude.

 

[GoEaglesGoSGIO]

The argument that they add revenue since more games are player is absolutely nonsensical. Adding another team not only isn’t the only way to create more revenue, it’s just the dumbest way.

You don’t need a new team to make more games, you just need to play more rounds of football and have increased list sizes. Expanding from 22 rounds to 25, increase list sizes from 44 to 50 and by allowing for extra byes, you can slot more games into the lucrative Thursday night time slot as well as Monday’s even

Rather than gathering up 22 games of low crowds and flying to a dump of a stadium you can gather 24 rounds of higher selling, more interesting and more marketable football .

Both teams had nothing to do with more revenue, it was all about marketing. The marketing campaign has failed miserably. Instead of continuing with it, stop the campaign and spend the money elsewhere.

 

[Walshawk]

Remember a few years back I quoted you about me being happy the AFL pouring 10 million dollars a year producing 1 or 2 AFL hopefuls from Queensland? I still stick by that statement.

If the state of Queensland produces 3 or 4 AFL draftees a year, that's still 30 or 40 AFL players drafted in 10 seasons.

Queensland was producing more players 20 - 25 years ago.

 

[Walshawk]

Neither GC nor GWS have added anything to the competition. If Tasmania and Canberra were teams 17 and 18, footy would be better.

 

[Billy ray]

Neither GC nor GWS have added anything to the competition. If Tasmania and Canberra were teams 17 and 18, footy would be better.

 

[Freomaniac]

Queensland was producing more players 20 - 25 years ago.

So why was that dropped then?

 

[Fire]

The argument that they add revenue since more games are player is absolutely nonsensical. Adding another team not only isn’t the only way to create more revenue, it’s just the dumbest way.

You don’t need a new team to make more games, you just need to play more rounds of football and have increased list sizes. Expanding from 22 rounds to 25, increase list sizes from 44 to 50 and by allowing for extra byes, you can slot more games into the lucrative Thursday night time slot as well as Monday’s even

Rather than gathering up 22 games of low crowds and flying to a dump of a stadium you can gather 24 rounds of higher selling, more interesting and more marketable football .

Both teams had nothing to do with more revenue, it was all about marketing. The marketing campaign has failed miserably. Instead of continuing with it, stop the campaign and spend the money elsewhere.

You don't know much about what gives a product value.

The more games you make a team play, the less value those games have. As an extreme, a 48 round season is not worth twice as much as a 24 round season. As a matter of fact, it might even be worth less as you double the fixed costs, but have far less than twice the interest. Because each game is less important, and audience fatigue is a real thing. For teams struggling, which will always be at least a quater of all teams, 22 games is already way too many to keep suporters engagement. There's value in scarcity.

Having extra matches in parallel does not dilute the importance of every other game. You have more content for the audience, while they are at the peak of their interest. You also have more teams representing more people, which adds new interest in the other matches too. They might not start out as sizable in the short term, and yes, 14 years is short term, but thats missing the point entirely. It's about building generational support, and we're bareley half way through one generation.

You are simply wrong on every point.

 

[Freomaniac]

Neither GC nor GWS have added anything to the competition. If Tasmania and Canberra were teams 17 and 18, footy would be better.

Gold Coast suns and GWS have added something to the comp. A 2nd Queensland and 2nd NSW based side.
Thats one NSW and Queensland side palying at home each week in the regular season.

I agree Tassie and Canberra will add something.

If Tasmania had one million people, they would actually have 2 AFL sides if 500,000 lived in Hobart and 500,000 people lived in Launceston.

 

[Freomaniac]

Not enough to cover the financial investment. Not even close. The massive growth in grass roots isnt converting to money in any way. Its just a flat out money pit.

Patience works isnt really true at all when you are moving further away from your goal. Patience involved moving forward. When you are only moving backwards, patience isnt going to get you far. The club will only cost more and more money. This 34 mill by 2030 willend up at 50 mill. This is 100% best case scenario here also.

It also stems to a ideology of why doesnt this matterto anyone? The priority pick threads for Eagles has hundreds of posts and this very little . The sheer passion of pick 20 as opposed to 350 million dollars extra then other clubs is completely and utterly bizarre. If Eagles have a choice between pick 20 and AFL handing us 350 million dollars im taking the 350 million dollars. Pyke could give every single Eagles member a free membership for the next 5 years. Will help stomach the rebuild for sure...

The need for Gold Coast with Tasmania on board is greatly dimished. They were meant to be financially sustainable by now but have never been further away from it. When Tasmania comes on board and take a bigger slice of revenue while Gold Coasts also needs a huge increase, what happens then? Can AFL really afford to spend 20-25% of its revenue towards 2 clubs?

Gold Coast shouldnt disappear. The answer here is a merge. Doing this is financially sustainable. Spending a combined 20-25% of your revenue on 2 teams in Gold Coast/Tasmania isnt.

I would too.

Given the choice of pick 20 or 350 million dollars in cash, I would be choosing the 350 million dollars.

 

[Walshawk]

Gold Coast suns and GWS have added something to the comp. A 2nd Queensland and 2nd NSW based side.
Thats one NSW and Queensland side palying at home each week in the regular season.

I agree Tassie and Canberra will add something.

If Tasmania had one million people, they would actually have 2 AFL sides if 500,000 lived in Hobart and 500,000 people lived in Launceston.

GC gives Victorian ex-pats the chance to go to the footy every second week. Their kids will be Suns fans. Unfortunately there are very few southerners west of Sydney, so they will always struggle.

When Tassie join, it will seem like they have always been in the comp. Their footy history, passion and full stadiums will bring a totally different vibe to GC and GWS. It will be like when the Crows or WC entered.

 

[Fire]

Doubt it ever stands up to any sort of sober / rational business plan.

Every time the AFL is asked or approaches discussing that it’s just “it’s a generational thing, we won’t know the answers for 50 years”.

It’s essentially a leap of faith.

The AFL just finished its 128th season.

In those years, there have been:
Two clubs withdraw from the competition (1914, 1996). Both clubs still exist and play in the VAFA to this day.
One relocation. It is the same continuous entity in the AFL, playing in a new market.

That's it. An AFL team succeeding does not take a leap of faith. An AFL team failing does. Go and find me a professional league in any sport anywhere on earth which has this level of continuity over a period anywhere near 128 years.

AFL clubs simply do not fail. Exactly because they are generational.

 

[Bunk Moreland]

The AFL just finished its 128th season.

In those years, there have been:
Two clubs withdraw from the competition (1914, 1996). Both clubs still exist and play in the VAFA to this day.
One relocation. It is the same continuous entity in the AFL, playing in a new market.

That's it. An AFL team succeeding does not take a leap of faith. An AFL team failing does. Go and find me a professional league in any sport anywhere on earth which has this level of continuity over a period anywhere near 128 years.

AFL clubs simply do not fail. Exactly because they are generational.

It’s not that they’ll fail or be wound up - they won’t - the AFL will prop them up until the end of time if required.

It’s about the spend - whether it’ll ever “pay off” financially and whether they’ll ever become self-sustaining. They aren’t yet, the AFL pumps endless money into them.

The only reason a club has not fallen over is because the AFL have propped them up. In Fitzroy’s case the AFL could have retained them in the league, they just didn’t want to. So they booted them.

Left to their own devices, many VFL/AFL clubs would’ve gone out of business over the years.

 

[Roylion]

Left to their own devices, many VFL/AFL clubs would’ve gone out of business over the years.

Yep.

Between 2002-2009 the following clubs received extra funds from the Competitive Balance Fund / Annual Special Distribution.

• Western Bulldogs - $8.4 million
• North Melbourne - $5.8 million
• Melbourne - $5.25 million
• Carlton - $2.1 million

Peter Gordon said the Dogs would have been finished as an AFL club without those funds.