AFL boss Andrew Dillon wants to build a $100 million football war chest to grow the game and protect it from potential natural disasters and health crises.
Dillon’s five-year plan is intended to run in line with the first five years of the AFL’s new seven-year $4.5 billion media rights agreement and would also see the game’s head office look to expand its investment portfolio beyond the highly profitable Marvel Stadium and the statistical data provider Champion Data.
Andrew Dillon fronts the media to explain the AFL’s rescheduling of the Queensland games in opening round.Credit: Getty Images
Dillon and the commission have begun to cautiously unveil the $20 million per year, five-year investment plan to the club presidents.
The war chest would amount to the re-establishment of the future fund first created by then AFL boss Andrew Demetriou in 2007. That fund is now empty – first significantly drained with the 2016 purchase of Marvel and later emptied during the COVID pandemic.
The AFL is in the first year of the new, record seven-year broadcast rights deal with Seven and Foxtel but must renegotiate its pay deal with the players much sooner because the current collective bargaining agreement expires in 2027.
The Dillon plan is to initially direct $20 million this year to re-establish a nest egg not only for the aforementioned rainy day threats but also to ensure Australian rules football remains the dominant code nationwide.
Demetriou was the AFL chief executive in 2006 when he first floated the prospect of a war chest for the game to some initially doubtful club presidents; the same year that the then federal treasurer Peter Costello established the Australian government future fund, now worth $230 billion.
The AFL had just signed a five-year $780 million media deal – up $280 million on the previous agreement. Not all the clubs believed the game needed future-proofing when their own finances were in strife. There was scepticism also from the players’ union, which was fighting for a larger share of the game’s revenue.
By 2011 the AFL future fund was worth $200 million and had grown significantly by the end of the 2016 season when the game, under Gillon McLachlan’s leadership, dipped into the fund to purchase Marvel Stadium – then Etihad Stadium – for an estimated $200 million.
The move to buy the stadium early and at a significant cost bought the league freehold ownership and management rights to the Docklands ground which now generates multi-million profits for the AFL.
The stadium ownership provided significant protection for the AFL when the COVID pandemic hit, and the league sought a line of credit from the banks worth between $500 million and $600 million and created a receivership model allowing clubs to borrow from head office to meet cash flow demands.
Only $60 million remained in the future fund at the start of 2020 when the season shut down for eight weeks and the game ultimately relocated to Queensland and Western Australia, but that was spent during the pandemic.
The AFL’s investment plans took a further hit in June 2020 as the grim financial demands of COVID continued to impact the game. McLachlan was forced to offload a prime piece of central Melbourne real estate originally earmarked for redevelopment around Marvel Stadium. The Latrobe Street property was sold for about $60 million and the AFL broke even on the deal.
The AFL has spoken to clubs about forming joint ventures to create new business opportunities away from the game. Last month the league advertised for an experienced investments senior manager “to join the AFL team and support its efforts to drive future growth and diversification … responsible for identifying, evaluating and executing business acquisitions and divestments, new ventures, investments and other related strategic initiatives … The role will be involved in strategic initiatives across a range of industry sectors including – property development, consumer/retail and technology.”
Andrew Dillon was contacted for comment.
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