Revisiting the Fitzroy and Brisbane merger
“Those who cannot remember the past, are condemned to repeat it” – George Santayana. With that in mind, let’s run through the Fitzroy debacle of 1995 and some of the background that younger followers of the AFL may not remember or may have missed.
Fitzroy was one of the VFL/AFL founding clubs, created in 1883, and for most of their existence carried the nickname “the Lions”. They won a flag in the VFA and a further 8 to 1944 before merging with the Brisbane Bears in 1996.
The Fitzroy saga is a sad story of a club that struggled through the 80′s and 90′s and a league that did everything possible to eliminate the club for its own designs. The lesson appears to have been learnt at AFL headquarters with masses of money now being thrown at struggling clubs, and the league seems determined to keep all clubs operating and viable.
Fitzroy were behind the 8-ball from the late 70s. In 1978 they reported a loss of $120,000 at a time when that was not an insignificant amount of money. They weren’t alone, South and St Kilda also reported 100k+ losses, while Richmond and Melbourne reported somewhat lesser financial troubles. By 1983 at least four clubs reported capital issues and were technically bankrupt – Collingwood, Footscray, Fitzroy and Geelong.
By July 1980, Fitzroy was announced as technically bankrupt and $300,000 in debt. Fitzroy began looking at alternatives, these plans included possibly moving to Sydney. This was defeated by the members and a fundraising campaign and instead the option was taken up by South Melbourne the following year.
From 1984 Fitzroy became something of a nomadic team, playing at 4 home grounds, including Junction Oval, Victoria Park, Princes Park and finally, the Western Oval. According to some accounts, Fitzroy made no money from their time at Princes Park, held to a somewhat onerous arrangement by the grounds manager, the Carlton Football Club.
In 1986, Fitzroy again began looking at a merger, this time with Melbourne, and while talks were advanced, Melbourne later withdrew from the arrangement. This was again proposed in 1994 with an in principle agreement to form the Melbourne-Fitzroy football club, operating as the Melbourne Lions for the 1995 season. Around the same time Fitzroy evidently looked at a merger deal with Hawthorn which failed to get anywhere due to the in principle agreement with Melbourne.
In the end, the merger was defeated by the Melbourne board due to the limited benefits they perceived they would get from a Fitzroy merger. Its understood that even if the Melbourne board had agreed, the membership was absolutely against the merger.
Little publicity has ever been given to St Kilda considering a merger as reported by The Age in 1986, where top St Kilda people believed Fitzroy presented the best option for the struggling club, ahead of privatisation or moving interstate. Around the same time Richmond may have presented a merger option.
In 1986, Leon Wiegard, then Fitzroy president, stated that there was a 50% chance the club would fail to survive. The VFL proposed a relocation to Brisbane (ten years before the merger) which the Lions approved of. However this became a non starter when Hecron offered enough money to keep the Lions viable in Melbourne. The Lions stayed and began playing at Princes Park.
The joy was short lived however as the VFL refused to allow Hecron to take part ownership of the club as was part of the deal, leading to a smaller sponsorship.
In 1989, Fitzroy directors evidently agreed to merge with Footscray who were also in dire financial trouble. The proposed merger would massively favour Fitzroy who held all the aces (according to The Age). Fitzroy people even wrote opinion pieces in the paper assuming the deal was all set and done offering commiserations to the Bulldogs fans.
“Now Footscray is dead and Fitzroy lives,” wrote Ken Merrigan in The Age.
While Footscray members ratified the deal, some including one Irene Chatfield refused to give up, obtaining a three week injunction to raise funds for the embattled Footscray. In the end she and her supporters staved off the arrangement by amassing enough donations to keep the Footscray club going. The VFL then staged a secret meeting with Footscray where the clubs voted to allow the Footscray to remain in the league in its own right. Fitzroy weren’t told, according to the Age, who quoted Leon Wiegard.
To add insult to injury, according to The Age, Fitzroy eventually lost sponsors to Footscray the following year. Where Footscray came about debt free as a result of its Save the Dogs campaign, Fitzroy were left with $700,000 in the hole and perceived to be haemorrhaging money and support.
In 1991, the Lions experimented by going to Tasmania for four home matches over 1991 and 1992, but evidently lost money in the process. Fitzroy people allege that there was no financial help from the AFL for this, that travel and accommodation for the club were paid for by Fitzroy. In 1994, Fitzroy finally moved to the Western Oval – the club’s fourth home ground in a decade.
In 1995, Fitzroy took on West Coast in Canberra in the first ever AFL game in the capital. Fitzroy people allege that the AFL later declined to go ahead with a deal between Fitzroy and the ACT to play up to 7 games a year in an arrangement which may have given the club a firm financial footing.
In 1996, Nauru Insurance called in its debts when Fitzroy were unable to pay, and appointed an administrator. The AFL provided funds for the remainder of its 1996 operations. However, at this time the writing was on the wall for the foundation club. At this time Fitzroy were reportedly 4.5 million in debt, with Nauru owed 1.25 million (and their whole country soon to be in financial strife), and according to an Age article, unable to meet their tax obligations or player payments.
By July 4, 1996, Fitzroy and North Melbourne boards had agreed to terms on everything from playing colours to club song and the merger was set to proceed. Peter De Rouch, former North director, believes one of the reasons the agreement stalled was that Dyson Hore-Lacy was told that he would not be allowed on the board, although Hore-Lacy says he was trying to make sure there would be no further changes to the agreement.
Further, AFL clubs were wary of any such merger, believing that such a combination could form a superteam and voted 14-1 against the merger – Leon Daphne from Richmond believed that the Brisbane merger would create less of an issue in this regard, and other Presidents were concerned with North’s demand that the merged list be for 50+ players, instead of the Lions proposal of 45.
On the afternoon of July 4, 1996, the Administrator of Fitzroy, the AFL Commission and the majority of the AFL clubs voted in favour of a merger with Brisbane. Brisbane CEO at the time, Noel Gordon, believes that the Brisbane deal won out because of a better understanding of corporate law. At the time the administrator was appointed, the effective control of the club passed to the administrator, and was out of the hands of the directors. This rendered any deal the directors made pointless without the consent of the controlling adminstrator. Dyson Hore-Lacy wrote in his book that he believes the time taken by North to quibble over details ultimately cost the Fitzroy board its ability to decide its future.
Footscray later went to court to seek an injunction against the merger due to it breaching the 20-year contract Fitzroy had reportedly signed for home games at the Western Oval. The injunction was denied.
As a result of the process North and Fitzroy directors and members were entitled to feel more than a little disgruntled with the AFL commission. Greg Miller, North CEO, was absolutely sure that the AFL had sacrificed Fitzroy on the altar of northern expansion, accusing the AFL of lying all time, and doing the deal behind the back of both North and Fitzroy.
Fitzroy fans’ opinions were probably summed up by the cheer squad banner according to former director Colin Hobbs, “I think the banner read ‘Seduced by North, raped by Brisbane, and something by the AFL that starts with F’. I was not critical of that, because that’s exactly what happened,” he said.
Allegations from Fitzroy supporters about AFL conduct:
While most of the above was reported extensively, Fitzroy fans have always maintained the AFL and other clubs actively pursued agendas against them. These allegations include:
■refusing assistance to help with options in Tasmania and Canberra
■vetoing essential sponsors (ie. Solo, Galaxy and Schweppes)
■refusing to allow Fitzroy to use AFL funds for debt retirement
■refusing to advance funds critical to Fitzroy’s ability to operate
■leaking of sensitive information to the press and government
■telling creditors and potential merger partners a different story to that told to Fitzroy (i.e. North and Nauru)
■arranging a merger behind the back of Fitzroy directors and board
■actively helping other clubs with recruitment of top Fitzroy players
■actively cheering when receiving the news of the demise of the club
These allegations are presented in books by, and conversations people have with, previous directors and other people associated with the Fitzroy football club who were present.
The Saga Timeline:
■1978 – Fitzroy announce losses of $120,000 for season (St Kilda and Footscray report significant losses)
■1980 – Fitzroy announces its technically bankrupt, debts of 300,000
■1980 – Fitzroy begins looking at playing in Sydney, but the move is defeated by members
■1984 – Last Fitzroy games at Junction Oval
■1985 – Fitzroy plays 2 years at Victoria Park
■1985 – The Victorian Corporate Affairs Commission threatens to send Fitzroy into Liquidation.
■1986 – Last Fitzroy home games at Victoria Park
■1986 – Fitzroy survival chances rated at 50% by Leon Wiegard, looks to Gold Coast but saved by cash injection
■1986 – Fitzroy discusses merger with Melbourne, but Melbourne withdraw
■1987 – Fitzroy plays home games at Princes Park until 1993
■1989 – Fitzroy agrees to amalgamate with Footzray, defeated by Footscray members who begin Save the Dogs campaign
■1991 – Fitzroy plays 4 games over 2 years in Launceston
■1993 – Last Fitzroy games at Princes Park
■1994 – Fitzroy begins playing home matches at the Western Oval
■1994 – Fitzroy and Melbourne officials gain AFL approval for merger, deal scrapped by Melbourne.
■1995 – Fitzroy play West Coast in the first AFL game in Canberra
■1996 – Nauru Insurance calls in debts and appoints administrator
■1996 – Brisbane and Fitzroy merge (see more detailed timeline below)
■2008 – Fitzroy Football Club re-establishes in the VAFA
Timeline of Specific events leading to the Brisbane merger:
■Mar 6, 1996 – Fitzroy board authorises board members Dyson Hore-Lacy, Elaine Findlay and Robert Johnstone to enter non-binding merger agreements with other AFL clubs.
■May 6, 1996 – Fitzroy and North Melbourne hold first merger talks.
■May 11 1996 – A non-binding agreement to merge and the basic terms of name is struck between Fitzroy and North Melbourne. A Heads of Agreement document detailing the conditions of the merge in writing is signed.
■May 13 1996 – A Brisbane merger offer is formally rejected by the Fitzroy board.
■May 20 1996 – First Fitzroy shareholders’ meeting to explain the conditions of a North Melbourne – Fitzroy merge.
■May 28 1996 – Second Fitzroy shareholders’ meeting.
■Jun 14 1996 – First draft document of the merger was completed.
■Jun 18 1996 – A meeting between North and Fitzroy to execute the merger document canceled. Greg Miller, North Melbourne’s Chief Executive Officer (CEO) tells Dyson Hore-Lacy that North Melbourne wanted to change the name of the merged club from the already agreed ‘Fitzroy-North Melbourne Kangaroos’ to ‘North Melbourne-Fitzroy Kangaroos’.
■Jun 20 1996 – The Fitzroy board rejects North Melbourne’s revised conditions.
■Jun 24 1996 – The Brisbane Bears are contacted by Fitzroy and advised to submit their best merger offer to Fitzroy for consideration.
■Jun 25 1996 – A compromise between North Melbourne and Fitzroy is reached.
■Jun 26 1996 – Fitzroy Football Club offers $550,000 plus $100,000 to be paid over the next two years to their only secured creditor the Nauru Insurance Company to settle their debt. This offer is rejected. Nauru wanted $750,000 by the end of August and $100,000 for the next three years to consider their debt settled.
■Jun 27 1996 – Nauru Insurance Company agrees to $750,000 by the end of August and $100,000 for the next two years and $50,000 for the third. North Melbourne board member and one of the chief merger negotiators Peter de Rauch says North Melbourne will not allow any more than $550,000 to be paid.
■Jun 28 1996 – Nauru Insurance Company appoints an administrator (Michael Brennan) to recover their debt.
■Jun 29 1996 – Fitzroy negotiates with Nauru to pay $550,000 by August 1996, $150,000 in 1997 and $100,000 in 1998. Peter de Rauch agrees to put that proposal to the North Melbourne board on Monday 1st July
■Jul 1, 1996 – The Fitzroy board agrees to underwrite all monies owed to Nauru over the sum of $550,000. The AFL commission gives Fitzroy and North Melbourne until Friday 5th July to complete their merger.
■Jul 2, 1996 – North Melbourne’s Greg Miller informs Dyson Hore-Lacy that North Melbourne now wants only four Fitzroy board members on the board of the merged club. Fitzroy refuses to accept that condition.
■Jul 3, 1996 – North Melbourne backs down on their demand of 2nd July, but still wanted none of the current Fitzroy directors on the board. North Melbourne was asked by Dyson Hore-Lacy to give an undertaking to Fitzroy that there would be no more changes to the agreement of 25th June. No such undertaking was given.
■Jul 3, 1996 – Nauru Insurance Company accepts $550,000 paid before August 31st, $350,000 paid before October 31st 1997 and the rest of the balance payable in $50,000 payments annually from 1998 onwards.
■Jul 3, 1996 – The Fitzroy board re-opens merger discussions with the Brisbane Bears. The Bears are told that the merger door with Fitzroy is “open half an inch”
■Jul 3, 1996 – Greg Miller the CEO of North Melbourne informs the media that without 54 players on their 1997 list there would be no merger with Fitzroy.
■Jul 4, 1996 – Fitzroy is informed by the AFL that the merger would be rejected by the other AFL clubs if North Melbourne continued to demand 54 players. Dyson Hore-Lacy informs North Melbourne’s Ken Montgomery and Greg Miller of this fact.
■Jul 4, 1996 – Fitzroy settles last niggling disputes in their proposed merger agreement with North Melbourne and signs a formal document setting out the merger in fine detail, which includes the new agreed name of the club to be the ‘North Fitzroy Kangaroos Football Club’. The merger agreement is set to be signed by the AFL on Friday morning (5th July) subject to the AFL clubs’ endorsement.
■Jul 4 1996 – AFL Presidents’ Meeting rejects the Fitzroy-North Melbourne merger. After a meeting between the administrator of Fitzroy and the AFL commission, the AFL commission recommends a Bears-Fitzroy merger. North Melbourne withdraws from the merger race. A reconvened AFL presidents’ meeting endorses the AFL commission’s recommendation of a Brisbane Bears-Fitzroy merger.
Theres considerable discussion and speculation on this matter, including the AFL’s involvement, in the Fitzroy forum on bigfooty. The Deed of Arrangement for the merger can be located at the viclions website.
Reference links can be found at http://footybusiness.wordpress.com
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