Dockers entire profit to be wiped out in new AFL tax model
THE AFL has unveiled a Robin Hood-style plan to tax the wealthy clubs in a bid to help the poorer clubs in a controversial increase in attendance levies under which Collingwood, Essendon, Hawthorn and Geelong would be charged an extra $1 a fan at the turnstiles.
The proposal, to be put forward to the commission next month, received a lukewarm response from the Magpies, who estimated the gate tax would cost their club an estimated $300,000 a year.
Fremantle, which has been included along with West Coast in the top gate-takings bracket, is already embroiled in determined negotiations with the AFL to be removed from the group of so-called wealthy clubs.
There is a $2 levy charged for every person attending an AFL game and that money is taken from the home club’s revenue and put into an equalisation fund.
Under the AFL plan, Collingwood, Essendon, Geelong, Hawthorn, West Coast and Fremantle would be taxed an extra dollar a fan in a scaled increase over a three-year period.
A further six clubs – North Melbourne, the Western Bulldogs, Melbourne, Richmond, St Kilda and Port Adelaide – would have their gate-taking tax gradually halved over the corresponding three years.
Carlton, Adelaide, Sydney and the Brisbane Lions would all remain static on a levy of $2 per fan.
The tax is part of a significantly wider push to radically equalise club finances with the AFL increasingly concerned by the multi-million-dollar debts still being carried by five of the above-mentioned clubs, with only Melbourne having drastically reduced its debt through an annual call upon its supporters now in its third year.
Special assistance of $6.8 million in total is being distributed annually to Melbourne, the Bulldogs, North and Port Adelaide but the AFL revealed to its club chief executives last week that it planned to potentially triple its ASD funding under the new broadcasting agreement. It is understood the clubs were told that special assistance, which would be rebranded with a new set of strict conditions, could increase from 2012 to a minimum $16 million and a maximum annual $22 million.
That money would go towards debt reduction and increased revenue streams such as free-to-air advertising and other corporate and membership incentives, preventing situations such as that faced by the Kangaroos last Saturday night where the club baulked at risking a $20,000 fine by playing a footballer not named as an emergency and lost a game by three points that could cost it a place in the finals.
However, the AFL message to clubs was that the league would heavily monitor those clubs in their decision-making processes. The recent unmitigated $500,000 settlement with coach Mark Williams by a cash-strapped and AFL-beholden Port Adelaide being an obvious example of such a decision.
AFL executive Gillon McLachlan said of the proposed gate-tax increase to the wealthy clubs: ”That was one proposal put forward and we have looked at several scenarios where the gate is concerned. We’ve got to have a discussion with the commission before we reach any final decision.”
Collingwood boss Gary Pert chose his words carefully, telling The Age: ”Collingwood gave its opinion on it and wanted to know what the other alternatives were. The proposal came out of the blue and we are hopeful there will be further discussion.”
The Magpies are heading for a record aggregate attendance this season and under this year’s model would be losing an extra $300,000 a year in revenue by 2012, more than half the club’s forecast 2010 profit.
Fremantle addressed its concerns with AFL boss Andrew Demetriou at Sunday’s Etihad Stadium clash with the Bulldogs.
It is understood that the Dockers’ entire 2010 profit would be wiped out by the tax under the AFL model.
Said CEO Steve Rosich: ”We would oppose an increase in equalisation costs on behalf of our members and I feel pretty comfortable that we will not be charged extra at the gate. Our club has already begun to address what is a preliminary proposal and although it’s yet to be addressed by the commission the AFL is aware of our views.”