Why Andrew Demetriou is worth every penny

The_Wookie Roar Rookie

By The_Wookie, The_Wookie is a Roar Rookie

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    It was recently announced that Andrew Demetriou had recieved a pay rise from the AFL Remuneration Committee as a reward for keeping the AFL on the straight and narrow these last few years.

    In 2010, he received $2.2 million for his work. So what exactly has he been doing thats so great?

    Let’s look back over the last five years.

    First, the bad news.

    NRL proponents are fond of saying that the AFL’s TVs viewership is down, and from the AFL’s own annual reports, they are right. While the 2010 Annual report has not been released yet, the figures up until the 2009 report aren’t ones to be making us all warm and fuzzy.

    TV viewership in 2006 rated an average 5.1 million cumulative viewers weekly, with 4.15 million watching the Grand Final.

    Over time, that number has steadily decreased to a low of 4.5 million per week in 2009 (an 11% drop). Grand Final viewing has been on the rise again to 3.8 million in 2009, from a 2007 low of 2.57 million.

    In any case, it represents a drop of 350,000 viewers (down 8%).

    Those things will reduce the chances of the AFL getting its potential billion dollar deal for TV rights.

    Now the good news.

    Attendances are up from the 2005 benchmark of 6,763,852 to this year’s 7,146,604. An increase of around 6%.

    Big increases have been in the membership department – in 2005 there were 506,509, the 2010 figures are up 21% to 614,251.

    Still, the largest increase lies in the particpation area, where the 539,526 benchmark has been truly obliterated with a 39% increase in participants since 2005.

    Now, the very good news.

    Revenue is up in a big way, helped along by the massive deal signed in 2006 for $690 million in cash, and $90 million in contra, as well as $60 million in internet and new media rights, and a further $8 million in radio rights.

    Finally the sale of Waverly Park also contributed in a big way to the league’s bottom-line. In 2005, the league generated 203.7 million in revenue. Last season, that figure reached 335.8 million.

    That’s a massive 57.2% increase in revenue.

    Distributions to clubs are up, from a total of $92 million in 2005, up to a whopping $142 million in 2010. (Incidentally, in 1987 the league returned a whole $12 million to the VFL clubs.)

    The increase to the clubs is 54%, which corresponds reasonably well to the revenue increase for the same period. Clubs must be pleased.

    League debts were obliterated in 2008, with the repayment of all outstanding moneys completed and $50 million in cash on deposit.

    League profits after distributions and grants have varied wildly over the years as the league funds various projects, but the AFL has gone from generating 1.7 million in operating profits in 2005, to a high of 26 million in 2007.

    In 2010, after the establishment of the GWS and Gold Coast team setups reduced profit in 2009, profits returned to a very decent $23 million.

    Then there’s the rise in assets.

    With the leagues sale of Waverly reducing its assets to effectively zero, league assets in 2009 were reported to be in excess of $100 million, with the prospect of assets coming under its control in the next 15 years.

    Stadium and infrastructure investment is at an all-time high, with the AFL supplying funding to a large number of football related developments around the country.

    The AFL has committed to funding developments in:

    Blacktown, NSW (2.5 million in 2006)
    Carrara, QLD (10 million in 2010-11)
    Sydney Showgrounds, NSW (10 million in 2011)
    Aami Stadium, SA (300k in 2009)
    TIO Stadium, NT (2 million in 2009)
    Thuringowa, QLD (2007)
    Maroochy Sports Complex, QLD (2007)
    North Dalton Park, NSW (2007)
    Nth Narabeen Oval, NSW (2007)
    Noranda Sports Complex, WA (2007)

    The 2007 Annual report shows more than 230 Community football projects worth more than $104 million were approved.

    In addition, the AFL now plays premiership matches in every state and territory. In 2005, this was not the case.

    At the NRL, David Gallop has followed an almost identical path over a similar period of time.

    Demetriou started off as the CEO of the Players Association in 1998, before taking the reins in 2003. Gallop started in the Legal and Business side of things in 1997, before taking over the NRL in 2002.

    I lack the data from the NRL to make an objective comparison between the two, and beside the article is long enough as it is.

    However, the main differences appear to be that one inherited a league recovering from the wounds of Super League, the other took over a thriving organisation that went from strength to strength.

    It was pointless to draw comparisons with any other CEO in the same period.

    The FFA’s Ben Buckley is relatively new, and the ARU’s John O’Neill is relatively new in his second stint at the job.

    With all the evidence in hand, there is one real blot on the landscape of Demetriou’s career as a CEO at the AFL and that’s the TV viewership side of things. Everything else is well and truly on the up.

    However, it’s the TV viewership issue that’s going to be causing concerns in AFL circles. By every other benchmark, the game has never been in better shape.

    He has raised revenues, negotiated a massive TV deal in the process, as well as other media deals.

    On his watch, particpation, attendance and memberships are at an all-time high. The league is expanding into new and uncharted territories.

    It must further be pointed out that Demetriou does what he can because of the work of the men who went before him: Wayne Jackson, the first non victorian CEO who saw the second teams put into WA and SA; Ross Oakley, who took the league out of WA and QLD; Allen Aylett, who took the league out of Victoria and into Sydney.

    It was Isaac Newton who wrote: “If I have seen further than other men, it is because I have stood on the shoulders of giants.”

    Notes: All this information is downloadable from the AFL website.

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    The Crowd Says (32)

    • Roar Guru

      March 2nd 2011 @ 9:58am
      MyLeftFoot said | March 2nd 2011 @ 9:58am | ! Report

      Good article Wookie, well written, quite balanced, showing with verifiable facts and figures the highs and lows of Demetriou’s reign.

      A welcome change from some of the biased, speculative rubbish we’ve read on the Roar the last few days.

      This is the standard of writing that all Roar contributors should aspire to.

    • March 2nd 2011 @ 11:08am
      JamesP said | March 2nd 2011 @ 11:08am | ! Report

      Yes very good points and I completely agree Demetriou has been rewarded hansdomely yet deservedly. With regards to TV audiences, we know that Chanlel 9 go live wih the NRL at 7.30pm every Friday ngiht, followed by the 9.30pm replay. Friday night is the big cheese in footy ratings. Why oh why wont Channel 7 go live on Friday nights? Based on the nights they did in 2010, we saw it was good for a 100k – 200k increase in audiences. And why not show the game at 7.30pm in Parth so its only only on a 2 hour delay instead of 3 hours right now (which means the game has finished in Melbourne before its televised into Perth!!) What about Channel 10 on Saturdays? Or Channel 7 on Sundays – although this may be improved if the AFL changes the Sunday afternoon start time to 3.10pm allowing 7 to go live and run straight in to the news…

      Of course, for 7 to go live on Friday, this may mean that they may wish to pay less for the TV rights…evenn though ratings will increase….what?!?!

      • March 2nd 2011 @ 3:32pm
        Ian said | March 2nd 2011 @ 3:32pm | ! Report

        Ratings will decrease further once the rugby league is shown into the protected AFL Melbourne market.

        With proposed changes to the anti siphoning laws, continued hoarding by a sympathetic Channel Nine will not be possible.

        While Rugby League will not be more popular than rules in its heartland, it has shown in the past to provide a good alternative and should give Demetriou’s mob concern.

        • Roar Guru

          March 2nd 2011 @ 4:12pm
          The_Wookie said | March 2nd 2011 @ 4:12pm | ! Report

          showing games live on FTA in NSW and QLD has almost never been done before. Practically every AFL match is delayed coverage. Its an issue that the AFL has taken cash hits on in the past to get done, and may have to again. Last time 10% of the AFL deal was contra, could the NRL do the same. I doubt it.

          • March 2nd 2011 @ 4:19pm
            Andrew said | March 2nd 2011 @ 4:19pm | ! Report

            What rubbish are you talking about? For 30 years the AFL has been shown in NSW live during the day on weekends (Not the Friday night matches, Saturday nights only being a recent addition).

            Really depends if Channel 10 want to continue taking the rating hits in NSW/QLD. And will the AFL take less money to get the games shown on free to air.

          • March 2nd 2011 @ 6:02pm
            Ian said | March 2nd 2011 @ 6:02pm | ! Report

            Wookie

            At least if one lives in NSW or QLD then a foxtel subscription enables one to watch the AFL live.

            In Victoria, the rugby league (important Friday night and finals series) is currently hoarded into the wee small hours by Channel Nine and not on sold to subscription TV.

            • March 2nd 2011 @ 6:15pm
              Koops said | March 2nd 2011 @ 6:15pm | ! Report

              Seriously Ian, you have issues, for years in every newspaper, internet board, you have gone on and on about this, RL was trialled in Perth on Sunday arvo and the ratings were pathetic, so it was canned, if it manages to get on TV in Melbourne on a HD channel at a reasonabale time , good luck, but your personal crusade has nothing to do with this thread.

              Do you actually have anything else to say, without repeating yourself.

              • March 2nd 2011 @ 9:55pm
                Ian said | March 2nd 2011 @ 9:55pm | ! Report

                Hardly a crusade.

                Just merely pointing out the obvious that when you’re the only game in town with competitors snuffed out you will rate well.

                Check out the following;

                http://www.dailytelegraph.com.au/melbourne-rebels-score-television-ratings-record/story-fn6bmf8d-1226009691395

                People in Victoria / Melbourne are looking for an alternative to the local code. Also interesting to note that the Rebels game attracted more attendance than any of the four AFL games played last weekend.

              • Roar Guru

                March 2nd 2011 @ 9:58pm
                The_Wookie said | March 2nd 2011 @ 9:58pm | ! Report

                we’ve never said they arent. in fact we’ve always claimed that melbourne supports all codes if they are half decently run teams, doesnt matter what sport it is.

        • March 2nd 2011 @ 4:26pm
          JamesP said | March 2nd 2011 @ 4:26pm | ! Report

          Ian you have been peddling this agenda for a long time. This is not about whether nine shows live RL into Melbourne, or whether seven does the same with AFL into Sydney. This is about Channel 7 showing a game live into its heartland market. AFL consisitently rates better in Melbourne on Friday nights that NRL does in Sydney. They are the facts. And no one is going to disagree that Channel 7’s ratings would imporve further if they showed the game live.

      • March 2nd 2011 @ 3:42pm
        Andrew said | March 2nd 2011 @ 3:42pm | ! Report

        It’s proven that Better Homes and Gardens is a timeslot winner. I can’t see the AFL rating as high as that show. So it’s not something Channel 7 will give up lightly. Would the AFL take less? I doubt it.

        • March 2nd 2011 @ 4:22pm
          JamesP said | March 2nd 2011 @ 4:22pm | ! Report

          “It’s proven that Better Homes and Gardens is a timeslot winner.”

          You must be joking? The only reason that show rates is due to the football that comes behind it.Check out the ratings of Better Homes and Gardens when there is no Friday ngiht football vs when there is.

          If I recall correctly, Burkes Backyard (similar program) used to be on Friday evenings too. Nine gave it the flick.

      • Roar Guru

        March 2nd 2011 @ 7:08pm
        Redb said | March 2nd 2011 @ 7:08pm | ! Report

        Delayed Friday Night games on Ch 7 is one of the reasons ratings have declined. The NRL goes live to key markets and its no surprise its ratings have improved.

        That’s a no brainer.

    • March 2nd 2011 @ 11:27am
      olrac said | March 2nd 2011 @ 11:27am | ! Report

      There is another thing that I think you may have missed as a blemish, what is the percentage of the revenue that the players get. From what I belive this has gone down over the tenure of AD, surely the players are the driving force behind raised membership/gate receipts and in turn TV rights rather than any administrator alone.

      • Roar Guru

        March 2nd 2011 @ 12:49pm
        The_Wookie said | March 2nd 2011 @ 12:49pm | ! Report

        yes but on the other hand spending on development and infrastructure is way up. I believe players are more than adequately rewarded, and the salary cap rises each year over and above CPI. More importantly the salary cap is presently affordable by the clubs that pay it. When the new pay deal is signed the salary cap will go out over the 10 million mark for the first time. And when that happens the AFL is going to have to increase the ASD grants to some clubs who just wont be able to afford the rise on their own budgets.

        personally, Id rather see the AFL able to spend millions on development, auskick, and ground improvements makling sure there is a viable second tier competiitions, that will reward the 700,000 particpants and 7 million spectators, instead of throwing more money on the 700 senior players.

        • March 2nd 2011 @ 1:59pm
          olrac said | March 2nd 2011 @ 1:59pm | ! Report

          Personally I would like to see it as a fixed percentage of the revenue generated so that if the AFL has a bad year so do the players and if they have a great year so do the players. It is important that the players are rewarded as well as held accountable to a certain degree for what happens with the game in general.

      • Roar Guru

        March 2nd 2011 @ 2:02pm
        MyLeftFoot said | March 2nd 2011 @ 2:02pm | ! Report

        It’s a fair point. On the other hand, the Players Assoc have worked obligingly with the AFL to deliver year on year salary increases. It has proven to be a good arrangement, and has allowed the AFL to accumulate the surpluses that are needed to continue looking after the game as a whole.

    • March 2nd 2011 @ 4:31pm
      TW said | March 2nd 2011 @ 4:31pm | ! Report

      It was reported in the media last year by Caroline Wilson that Andrew Demitriou and AFL Commission boss Mike Fitzpatrick had a unofficial pact to to stay in their positions until 2012 the year that GWS enter the comp.
      Now we know that CW is not held in high regard in some AFL circles but on this occasion the lady might be right with her speculation.
      In the same piece CW said that A.D. was fielding some big job offers from the commercial world and M.F. business interests were mainly in Sydney.
      If they do go what will be their legacy – Have they left the game in a better position than they found it.

      • March 2nd 2011 @ 4:35pm
        JamesP said | March 2nd 2011 @ 4:35pm | ! Report

        Have they left the game in better position then they found it? Um….did you not read Wookies article above? Or have you come straight down here to have a rant?

        I have said this before, but I think Ben Buckley will come straight back in. Despite what the soccer fraternity think (Exhibit A Jesse Fink) he is not a bad CEO, and has the NSW/QLD contacts to ensure that the new teams thrive and prosper.

        • March 2nd 2011 @ 5:05pm
          TW said | March 2nd 2011 @ 5:05pm | ! Report

          Your comments about Buckley is that a rant as well. Are you inferring he will replace A.D. if and when he goes.

          • March 2nd 2011 @ 5:47pm
            JamesP said | March 2nd 2011 @ 5:47pm | ! Report

            Yes I am. I know Gil has been the faithfull number 2 for a while now, but BB has experience in perhaps the hardest job of all.

        • Roar Guru

          March 2nd 2011 @ 5:13pm
          The_Wookie said | March 2nd 2011 @ 5:13pm | ! Report

          My money is on Gillon Mclachlan, but wouldnt discount a number of club CEOs from taking over. Trevor Nesbitt would be ideal – and would help deal with the unruly nonvics – but Frank Costa would also be awesome.

          • March 2nd 2011 @ 5:48pm
            JamesP said | March 2nd 2011 @ 5:48pm | ! Report

            Isn’t Frank a little to old πŸ™‚

            Then again, that didn’t stop Lowy I suppose

    • March 2nd 2011 @ 5:04pm
      Koops said | March 2nd 2011 @ 5:04pm | ! Report

      Here in WA, by the time a game starts in WA , it is over in the east, many people who have dream teams will be on the net checking things out, and many will not bother with the TV game, a live game last season between the Dockers and Collingwood rated 315,000 in Perth, compared to around 120,000, on a normal friday night, with 2 non WA teams.

      If they want better TV ratings, the games must be live or close to it.

      BTW nice balanced article.

      • March 2nd 2011 @ 5:54pm
        JamesP said | March 2nd 2011 @ 5:54pm | ! Report

        Koops, as I mention in my post above – even a 7.30pm start (i.e. 1 hour earlier) – will result in better ratings. Yes I recall the Pies v Freo game. Any teams showing WA teams on Friday night (if any) should be live into Perth – Subiaco is sold out anyway.

        Lets also not forget the 200k spike in Melbourne when 663,000 saw Geelong v Pies live as well…

    • March 3rd 2011 @ 7:35am
      ac said | March 3rd 2011 @ 7:35am | ! Report

      The NRL will do very well in 2011 and the AFL know it. Andrew is a very clever CEO thats for sure.

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