Why Andrew Demetriou is worth every penny
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.