I'm interested in the way that the AFL justifies these clubs, it often sells these clubs as "cash cows", yet in its arguments it also admits that they are loss leaders.
But this subject hasn't really been discussed at length.
Here is what I mean. In terms of cash cows, they would generate huge amounts of money themselves.
Clearly this is not the case. In the case of these new clubs, they are question marks at best. Even if the AFL's Auskick is successful, they may even be categorised as "Dogs".
Now the AFL is prepared to wear millions in losses and pump millions into them for lucrative TV rights, but at the same time you get the sense it expects them to be well supported clubs in the future by some process of magic brainwashing or conversion or progressively buying fans over several generations.
For anyone who doesn't know what a loss leader is (from wikipedia):
Now does anyone really believe that these clubs will ever be the real deal ?
I mean self-sufficient passionate clubs. Not just pawns in some game of national domination.
How will fans of these clubs feel about supporting a club that is essentially nothing more than a TV rights bargaining chip. Personally I would feel pretty hollow about it. I guess am not one of these people who thinks they are actually getting a mobile phone for free.
Then their is some hypocricy about the way the AFL goes about things. I mean the AFL doesn't want to promote its product internationally, because it doesn't believe it has the product, yet, they are somehow innately convinced that they have a better product than rugby league, something that people like myself grew up with from a young age.
Even after years, the Brisbane Lions and Sydney Swans still have half as many members in Melbourne. The STorm arguably have more supporters outside of Victoria who want to see them succeed so that league can remain competitive against Aussie Rules.
Tassie sits right in the middle of the Growth Share matrix, and doesn't present anywhere near the risk.
So are these new clubs simply loss leaders (in which case, passionate footy fans are being left in the cold in some business war) or legitimate AFL clubs in their own right ?
In terms of business logic, are the AFL any more responsible to their stakeholders (in this case us, the average footy fan) than Alan Bond or Christopher Skase were to their shareholders in the 1980s.
discuss.
But this subject hasn't really been discussed at length.
Here is what I mean. In terms of cash cows, they would generate huge amounts of money themselves.
In business, a cash cow is a product or a business unit that generates unusually high profit margins: so high that it is responsible for a large amount of a company's operating profit. This profit far exceeds the amount necessary to maintain the cash cow business, and the excess is used by the business for other purposes.
Clearly this is not the case. In the case of these new clubs, they are question marks at best. Even if the AFL's Auskick is successful, they may even be categorised as "Dogs".
Now the AFL is prepared to wear millions in losses and pump millions into them for lucrative TV rights, but at the same time you get the sense it expects them to be well supported clubs in the future by some process of magic brainwashing or conversion or progressively buying fans over several generations.
For anyone who doesn't know what a loss leader is (from wikipedia):
A loss leader or leader[1] (also called a key value item in the United Kingdom) is a product sold at a low price (at cost or below cost)[2] to stimulate other, profitable sales. It is a kind of sales promotion, in other words marketing concentrating on a pricing strategy. The price can even be so low that the product is sold at a loss.
Now does anyone really believe that these clubs will ever be the real deal ?
I mean self-sufficient passionate clubs. Not just pawns in some game of national domination.
How will fans of these clubs feel about supporting a club that is essentially nothing more than a TV rights bargaining chip. Personally I would feel pretty hollow about it. I guess am not one of these people who thinks they are actually getting a mobile phone for free.
Then their is some hypocricy about the way the AFL goes about things. I mean the AFL doesn't want to promote its product internationally, because it doesn't believe it has the product, yet, they are somehow innately convinced that they have a better product than rugby league, something that people like myself grew up with from a young age.
Even after years, the Brisbane Lions and Sydney Swans still have half as many members in Melbourne. The STorm arguably have more supporters outside of Victoria who want to see them succeed so that league can remain competitive against Aussie Rules.
Tassie sits right in the middle of the Growth Share matrix, and doesn't present anywhere near the risk.
So are these new clubs simply loss leaders (in which case, passionate footy fans are being left in the cold in some business war) or legitimate AFL clubs in their own right ?
In terms of business logic, are the AFL any more responsible to their stakeholders (in this case us, the average footy fan) than Alan Bond or Christopher Skase were to their shareholders in the 1980s.
discuss.