South Australian football - where is it at?

[Woodpecker Warrior]

Woodpecker,

Before you try and play silly buggers legally, think about the concequences of the AFL expelling Port Power and inviting Port Adelaide to move from the SANFL to the AFL.

Thats the big hammer, and you dont really have much in reply to it.

Yes that is potentially a hand that could be played, however with the One Club and all , I'm not sure how that all works.

However Max Basheer is a very intelligent lawyer and I would be confident that the two licence agreements the SANFL has with the AFL would be water and air tight.

 

[Portia]

LOL , that would be the deal of the century , unfortunately us Eskimo's don't need any more ice.

Well, lets try and determine the market value.

* The SANFL were only granted authority from the AFL to sub-license to an SA-based team; the AFL won't shift on that. The only available bidders are SA clubs. Port is still the best one of those.

* Even if they wanted to sell their AFL license, they would need to buy back the sub-license from one of the SA clubs at whatever cost those clubs demand. The same cost as the prospective sale price seems reasonable.

So in determining a fair market value, based on the market of potential bidders that the SANFL could sell an AFL license to can sell to, they have almost no choice in the matter, and Port is overwhelmingly the most suitable bidder, able to more than match any other bids due to the SANFL's need to buy back their sub-license.

 

[Woodpecker Warrior]

Well, lets try and determine the market value.

* The SANFL were only granted authority from the AFL to sub-license to an SA-based team; the AFL won't shift on that. The only available bidders are SA clubs. Port is still the best one of those.

* Even if they wanted to sell their AFL license, they would need to buy back the sub-license from one of the SA clubs at whatever cost those clubs demand. The same cost as the prospective sale price seems reasonable.

So in determining a fair market value, based on the market of potential bidders that the SANFL could sell an AFL license to can sell to, they have almost no choice in the matter, and Port is overwhelmingly the most suitable bidder, able to more than match any other bids due to the SANFL's need to buy back their sub-license.

That's a very good point, I'm not totally familiar with the sublicense agreements and whether they are whole of life, if they are then yes that would be plausible , depends on if there is an agreed mechanism tied up within the agreement to value the sublicense.

 

[Rob]

Keep in mind AFL licences are not transferable. The SANFL couldn't just revoke their sub licence to Port and give it to Norwood (for example). That's why AFL licences aren't included as assets on any balance sheet - be it the SANFL or AFL clubs. They realistically have no resale value and arguably no market value as a consequence.

 

[PykeDream]

For example, in terms of the juniors, only three of the top 30 from this draft were South Australians. Four in 2010.

Hopefully we can have a reasonably mature discussion about this.

2011 AFL Draft:
7 from SA in Top 50
11 from WA in Top 50

2010 AFL Draft:
9 from SA in Top 50
7 from WA in Top 50 (incl Pick 1&2)

SA has approximately 60% of WA's population. Over these two years it has had 8/9 (89%)of the amount of draftees WA has had. Wouldn't be ringing the alarm bells just yet in regards to the amount of draftees being drawn from the state.

However I agree that the SANFL have far too much influence on both the Crows and Power, and will forever restrict their ability to become financial powerhouses like Freo/West Coast while they retain the license.

EDIT: There were 6 SA players in the 2010 Top 30.

 

[Woodpecker Warrior]

Keep in mind AFL licences are not transferable. The SANFL couldn't just revoke their sub licence to Port and give it to Norwood (for example). That's why AFL licences aren't included as assets on any balance sheet - be it the SANFL or AFL clubs. They realistically have no resale value and arguably no market value as a consequence.

However if the AFL would like the SANFL to "handover " the licenses back to them then a financial settlement could be an inducement.

 

[Rob]

However if the AFL would like the SANFL to "handover " the licenses back to them then a financial settlement could be an inducement.

Maybe. But i'd suggest the AFL would more likely just leave Port Adelaide in the lurch and force the SANFL to either prop them up solely with their own millions, therefore leaving the SANFL with a huge financial shortfall, or simply force Port into insolvency. The latter being a breach of the licence conditions and it gets returned anyway.

The issue here, from the AFL's perspective, is that Port and Adelaide are used by the SANFL to artificially prop up the SANFL salary cap. This is all fine when both clubs are raking in millions, but when at least one of them is struggling and the AFL has to step in and assist financially, then the AFL is essentially funding the SANFL's desire to be able to pay more money to 2nd rate hacks.

It is thoroughly understandable that the AFL finds this objectionable. If the SANFL want to have a huge salary cap then that's their business. But if they are funding it by bleeding AFL clubs while at the same time expecting the AFL to pick up some of the bill for that, then that's not sustainable.

 

[IanW]

Maybe. But i'd suggest the AFL would more likely just leave Port Adelaide in the lurch and force the SANFL to either prop them up solely with their own millions, therefore leaving the SANFL with a huge financial shortfall, or simply force Port into insolvency. The latter being a breach of the licence conditions and it gets returned anyway.

If the AFL is looking to respond to the SANFL playing legal silly buggers, then it can merely get a vote of all the other clubs the Equalisation Fund etc are only available to clubs with a board elected by their membership, but not for clubs that are set up under the Corporations Act, or in any other way.

Under that cirumstances, the SANFL will be free to support its two clubs, receiving only the usual distributions from the AFL to clubs.

Good luck with that, by the way.

 

[IanW]

Yes that is potentially a hand that could be played, however with the One Club and all , I'm not sure how that all works.

However Max Basheer is a very intelligent lawyer and I would be confident that the two licence agreements the SANFL has with the AFL would be water and air tight.

Port Adelaide is this entity here

http://portadelaidefc.com.au/Portals/0/port_docs/MagpiesAnnualReport.pdf

Before, Port Adelaide have a SANFL licence and a AFL sub-licence, Port Power.

During, Port Adelaide have a SANFL licence, and Port Power is expelled from the AFL.

After, Port Adelaide give up their SANFL licence, and are granted an AFL licence. Port Adelaide no longer play in the SANFL, but do play in the AFL.

Port Adelaide's reserves team, along with Adelaide's reserves team, can play in the NEAFL.

 

[Drugs Are Bad Mackay?]

I'm not sure if my understanding on this is right, so please correct me if this is wrong.

The issue for the SANFL and the SANFL Clubs is not just that they need $$$ to fund their huge salary caps. It is about the ownership of South Australian football, top to bottom.

At the moment, SANFL and the SANFL Clubs are responsible for Auskick, junior club footy, regional academies, coach education... basically all grassroots/development programs. They employ development managers, development officers (country + metro), Talent Managers... to coordinate these program, and the money for these positions comes from the Crows/Power dividends they receive. They own South Australian football.

South Australian football wants to stand on its own two feet and the SANFL/SANFL clubs want to maintain this control. They need the money the two AFL licenses generate to achieve this.

The AFL don't fund grassroots football/development programs in South Australia in the same way they do in other states. The AFL's attitude (quite rightly) seems to be, "If you're getting money off your AFL clubs, then you're not getting money from us too."

Ideally the AFL would like to run South Australian football from top to bottom, the same as they do in (all?) other states. They don't want 'rogue' state bodies with their own ideas on junior structures, pricing, formats, primary school football etc. They want a universal model for grassroots football / development programs trotted out across the country.

The AFL wants to own South Australian football. They will fund all our grassroots/development programs IF the SANFL sells the licenses back to the two AFL Clubs. The AFL will fund it and the SANFL would go back to simply running a football competition for nine clubs, without an over-arching role of running South Australian football.

The SANFL doesn't want a bar of this. They feel that they will lose control and relevance. They are right, too. The question is whether they should.

 

[Woodpecker Warrior]

I wish people would put the "Huge Salary Cap" issue to one side as, $350,000 a year for a club that runs League,reserves and 18 sides is not massive coin.

Its an average of about $7000/year for each player.

The problem is a lot of people think that the clubs shouldn't get a dividend or one as high as currently delivered - $500000-$600000 a year from the assets they own and lease/rent out.

Once the move to Adelaide Oval is done , the Licences will go back to the AFL clubs, nothing more certain.

The SANFL clubs will have security in 50% share of Adelaide Oval Stadium as well as the asset that is the Football Park land precinct.

Then the two AFL clubs can sink or swim in their own right.

 

[Macca19]

The problem is a lot of people think that the clubs shouldn't get a dividend or one as high as currently delivered - $500000-$600000 a year from the assets they own and lease/rent out.

I dont think the dividend is anywhere near that figure. Last I checked it was ~ $350,000 per club.

 

[IanW]

Woodpecker,

Your side should hire better lawyers.

The deal over Adelaide Oval is for only 20 years.

http://www.adelaidenow.com.au/ipad/afl-footy-has-its-opt-out-rights/story-fn6bqphm-1226047654676

After that, the SANFL is going to need to make its own deal, without the AFL.

We'll do you, but it will take a while, and thats fine, because we have time.

 

[Woodpecker Warrior]

Woodpecker,

Your side should hire better lawyers.

The deal over Adelaide Oval is for only 20 years.

http://www.adelaidenow.com.au/ipad/afl-footy-has-its-opt-out-rights/story-fn6bqphm-1226047654676

After that, the SANFL is going to need to make its own deal, without the AFL.

We'll do you, but it will take a while, and thats fine, because we have time.

C'mon you're better than that, don't read headlines and make it a story.
3 Options , with one being the SANFL can walk away, what's the other 2 options prey tell? SACA can walk away or both parties negotiate another deal?
20 years is a long time and I would think the AFL would have more issues by then, more likely trying to determine how they can walk away from NSW.

 

[Woodpecker Warrior]

I dont think the dividend is anywhere near that figure. Last I checked it was ~ $350,000 per club.

$450,000 from last years annual report if I recall, this year it gets divided between 8 clubs due to the One Club agreement.

 

[IanW]

Woodpecker,

20 years ago, the Swans were getting crowds averaging 13 000. The AFL has time.

By the way, here's a scenario for you - in 19 or so years time, the AFL make it clear to the SACA that if they walk, the AFL will negotiate a new deal with them that doesnt involve the SANFL, splitting the SANFL's cut between them.

 

[Woodpecker Warrior]

Woodpecker,

20 years ago, the Swans were getting crowds averaging 13 000. The AFL has time.

By the way, here's a scenario for you - in 19 or so years time, the AFL make it clear to the SACA that if they walk, the AFL will negotiate a new deal with them that doesnt involve the SANFL, splitting the SANFL's cut between them.

Well time will tell, lots of combinations and permutations to be run, but I'll back the SANFL, they always show quads after the river.

 

[Rob]

If the AFL is looking to respond to the SANFL playing legal silly buggers, then it can merely get a vote of all the other clubs the Equalisation Fund etc are only available to clubs with a board elected by their membership, but not for clubs that are set up under the Corporations Act, or in any other way.

Under that cirumstances, the SANFL will be free to support its two clubs, receiving only the usual distributions from the AFL to clubs.

Good luck with that, by the way.

They don't need a vote as the 'equalisation fund', or whatever it's called now, is discretionary. The AFL just makes a call that Port aint getting any of it.

It's unlikely that it would come to that, but i'm sure if the SANFL starts demanding 8 figure sums from the AFL to give the SA AFL clubs their own licences, then it is possible.

 

[BuntonRules]

Is it any co-incidence that the successful SA clubs are the only ones not supporting the Foxlel cup?

Personally - & I was born & bred in SA - I would leave SA to rot until they can sort their own problems out.

SANFL - you own the licences, you pay the bills - no more bail outs.

 

[amer]

I wish people would put the "Huge Salary Cap" issue to one side as, $350,000 a year for a club that runs League,reserves and 18 sides is not massive coin.

Its an average of about $7000/year for each player.

The problem is a lot of people think that the clubs shouldn't get a dividend or one as high as currently delivered - $500000-$600000 a year from the assets they own and lease/rent out.

Once the move to Adelaide Oval is done , the Licences will go back to the AFL clubs, nothing more certain.

The SANFL clubs will have security in 50% share of Adelaide Oval Stadium as well as the asset that is the Football Park land precinct.

Then the two AFL clubs can sink or swim in their own right.

The only entity with a chance of sinking come that day is the SANFL.

 

[Kwality]

Is not the problem that the current model used to run SA footy, including the 2 x AFL clubs is not financially viable.
Those who think you can keep losing money are in cloud cuckoo land.

Its broke, so fix it SA.

 

[MaddAdam]

Does South Australia have the population and economic heft to support two teams? Especially in their current format.

Serious question.

 

[Barry_Badrinath]

Does South Australia have the population and economic heft to support two teams? Especially in their current format.

Serious question.

Adelaide has a population of 1.2 million so there's 600k people per team, more than the ~450k per team in Melbourne. Given it's an AFL state there's easily enough. The main problem is that the 2nd team is named "Port Adelaide", so naturally everyone hates them.

 

[Papa G]

Does South Australia have the population and economic heft to support two teams? Especially in their current format.

Serious question.

 

[Papa G]

Adelaide has a population of 1.2 million so there's 600k people per team, more than the ~450k per team in Melbourne. Given it's an AFL state there's easily enough. The main problem is that the 2nd team is named "Port Adelaide", so naturally everyone hates them.

Actually, the biggest problem at the moment is too many Port supporters hate Port Adelaide, or what it has become.