With the AFL on the verge of seeing its $100 million investment in the GWS Giants reach its peak within its fifth season, it has all but confirmed that it made the wrong location choice for its 18th team.
This is both from a fan and business perspective.
The case for choosing a second Sydney side over Tasmania has always been justified as a business decision.
Western Sydney’s superior population, local corporate market, and capacity to provide a stronger TV presence in Australia’s largest city meant that Tasmania stood no chance in the eyes of the AFL.
Tasmania is a captive AFL market, which in business terms can be considered a negative when you are looking to grow your product. Businesses striving for growth are addicted to new markets like Western Sydney that have four times the population of its counterpart and growing. But this addiction has proven to be a trap for many.
The AFL’s foray into Western Sydney is similar to those international based engineering firms looking to grow by capitalising on the Australian mining boom while their homeland was in recession.
Many of these ventures failed due to the timing, arriving when the boom was in decline, and an overestimation the demand for their services with the market already saturated.
The timing of the Giants was challenged with the unexpected arrival of the Western Sydney Wanderers, which in turn saturated with the city with football code franchises.
Further, the AFL wrongly ignored the positives of the captive market and completely overestimated the potential of its product in Sydney.
This was highlighted by contributing to a $65 million upgrade to a stadium that has still not attracted a crowd that has exceeded its previous capacity of 21,500. Western Sydney also was not a new AFL market as the Swans have been there since 1982, meaning it is very easy for someone with a basic level of understanding of Sydney to know big the Giants could be, and we are seeing it right now.
They are destined to be the Australian sporting equivalent of the London Broncos in the English Super League, but with significantly more money wasted.
The conditions could not have been more ripe for the Giants fan-base to break out to its peak and justify the AFL’s ambitious investment.
This September, Sydney will record its lowest ever aggregate attendance for NRL finals matches (just 50,000 over two matches) and most of the western Sydney NRL clubs performed poorly this season.
Based on the ticket sales this week and TV viewership to date, it is now apparent the appetite for the Giants club is as underwhelming as many originally anticipated.
It is difficult to see how the AFL have or will ever make any profitable return on their investment in the Giants.
Claims that the addition of GWS has resulted in in a $1.2 billion TV rights contract are overblown given it is hard to see how Tasmania would have significantly compromised that figure, especially to the extent of covering the difference of the $100 million investment.
The NRL also secured a $1 billion contract with one less match per round, only one team in Melbourne and without a market presence in Adelaide and Perth.
The provision of two teams in non-traditional markets doesn’t appear to be the secret recipe for making significant increases to TV revenue. Rather it is the product that you put to the markets you are in.
TV ratings for Giants games in Sydney are so low you would imagine they would be the same if they were watching a Tasmanian side.
You could argue that if it were not the Giants but Tasmania hosting the Bulldogs at Spotless Stadium for this preliminary final you would get the same crowd on Saturday night.
A Tasmanian AFL side presented an opportunity to create an Australian version of the Green Bay Packers, or at least another Geelong Cats, being a regional based side with a fan-base that could rival the capital city markets.
A club that could have been everyone’s second team to support and one that would not require any near the amount of financial life-support from the AFL, enabling the game to provide better support to other struggling aspects of the game like Queensland and grass roots.
The biggest sporting story in Australia this year could well have been the Tasmanian AFL side making a charge to the AFL grand final if the Giants were based there in 2012.
It would have been priceless to see the whole of Tasmania joining Bulldogs members scrambling to get their hands on the 25,000 tickets available at Blundstone Arena.
Sports fans across the nation would be glued to watching what would be historic and palpable scenes in Hobart. Tasmanian AFL merchandise would be appearing across the nation from ex-pats who have settled on the mainland.
Instead, we have Bulldogs fans lining up to outnumber Giants fans at a soulless sporting venue in Sydney. While this is a great moment for the game, it is mostly driven by the story of the Bulldogs, not the Giants as sporting fans are in the most part intelligent enough to know what is fake and what is real.
Passionate fans with critical masses are the main ingredients for successful sporting franchises and business models should operate with the approach of the more the merrier.
The GWS Giants have proven that they will never be able to replicate anything of the magnitude of what a Tasmanian side would bring to the AFL.
Timmuh
Roar Guru
The difference is that Tasmania would deliver roughly the same revenues as GWS to begin with, maybe marginally more to the club and less to TV rights. And zero capacity for growth. neither GC or GWS can be seen as failed experiments for at least another 30 years. The AFL has incentive to bankroll GWS, there would be none to do the same for Tasmania. Even with St Kilda or North there is the threat of losing fans. If a Tasmanian team started and folded within five years (almost inevitable if one started) few fans would be lost - and those that would be lost are generally lower income, lower asset base, and of practically zero interest to advertisers. What Tasmania needs is not an AFL team, but assistance to stop local football from dying out completely. State League Mark 2 is on the brink of collapse again, though with Scott Wade and his cronies having finally got the arse maybe there is some chance of a recovery. Suburban and bush leagues have disappeared at a rapid rate, along with their clubs. And more look to be on the way out very soon.
gyfox
Guest
2.387 million viewers for last night's Prelim Final, peaked at 3.65 nationally More important is the increase of kids playing Aussie Rules in Western Sydney area GWS is reaping the benefits for the AFL & increasing the footprint
Matt
Guest
I can't believe I sat and read through this crap. Firstly, I am a GWS fan. I'll lay that out. But, alot smarter men than any of us made critical financial decisions to expand the league into the western basin of Sydney. Expansion doesn't always mean hitting the critical mass of existing clubs. The AFL would have a set criteria, and a long term vision. Something not many people have. Too say the league is playing a war of atrittion is probably a stretch. But, considering rugby does everything it is capable of to fumble it's own opportunities, and League trying very hard to dilute it's market share - it seems a slow burn expansion might be a wise choice by the AFL. I am not saying GWS will be a huge success, but what I am saying is its putting a foot in a value and lucrative market. Something that can't be said about Tasmania. A football team is the hero Tasmania needs, but not the one it needs right now... Duuhhhh dummmmm
tubby
Guest
article makes a few major oversights. The Wanderers play in a summer league so there is almost no competition between them and the giants, and as a fan base they don't overlap to a huge extent. Tasmania I have no doubt would attract the same or larger numbers for a game like this now, but what is it's capacity to grow? Clearly the giants are not at the end-game support levels yet.
Mark
Guest
The AFL's ship has long sailed from Canberra. The AFL missed the chance to put a club in Canberra in the 70s/80s when Canberra was an AFL town full of Melbourne ex-pats. The NRL, in a very unusual move for them, had the foresight to get in first by introducing the Raiders in 1982. Canberra has well and truly been a rugby city for some time now and the Giants' 3 games per year here have done nothing to change that. Similar to their games in Western Sydney, their games in Canberra are attended by travelling fans and locals with free tickets from Auskick or their school. There is plenty of media/public attention for the Raiders' prelim final on Saturday night. On the other hand, there is next to no interest at all in the Giants' prelim on the same night.
clipper
Guest
The Swans may have soaked up all the AFL fans, but they made little impact out west - hence there has been no decrease in Swans membership or attendance since GWS started - they have actually both increased, opposed to what happened in QLD. In regards to the difference with the codes is that there is indifference in Melbourne to the Storm, despite all their success - at the moment there is hate for GWS, but I know which one I'd prefer.
Republican
Guest
....& you will be saying the very same in respect of GWS when we are having the same discourse over the AFLs next plastic expansion.
Republican
Guest
......there are many many failed attempts throughout the business world, to grow respective 'brands' in an uncaptured market, while closer to home sporting eg's include GC, Melbourne Storm and potentially GWS - to mention a few. Romantic you re not AR because you clearly see the future of our game at the elite tier as exclusively a commercial business. I suggest that while these are indeed businesses selling a product a yin and yang that ensures a semblance of virtue of what is essentially a sporting cultural institution, is maintained. One of the ways to realise this would be to acknowledge and yes even partially subsidise, respective heartlands i.e. Tasmania to this end. The AFL already throw good $ after bad in the name of what you purport to be a sound business acumen, so why the hell not?
Republican
Guest
Hobart as an outsider because Hobart is the capital of that state - sorry Lonnie.
Republican
Guest
.....this is a very soul destroying criteria akin to what Woolies and Coles use. I do not support this philosophically because real support should not be compromised unconditionally when growing a cultural institution i.e. Australian Footy. A balance must be struct unless we are resigned to being simply consumers of a product.
Bruce
Guest
Age old question Lonnie or Hobart and no-one will answer that>....
Bruce
Guest
No-one said that you primary school analyst - people get Foxtel to have added value thru the year - I can pull out on e game numbers from anything and prove nothing - the bottom line is the AFL revenue per year is $322m and the NRL less than 200m so they are obviously know how to spend their money for expansion. The NRL owns" Newcastle, GC and Dragons (a merger) doesn't it by the state of their finances but no-one talks about those subsidies and the fact the clubs are in heartland
Republican
Guest
RA, do the AFL have evidence in kind re GWS viability? I don't think so in fact they have punted extravagantly on a commercial whim on a market that offers no footy DNA to speak of and you reckon Tasmania is risky business - a tad like the double standard that the AFL trot out incessantly re Canberra and Tasmania.
The_Wookie
Roar Guru
Riding Capper fever and the Edelston publicity machine. By 1988 they were averaging half that, and by 1990 they were averaging 9,000 a season.
VivGilchrist
Guest
They may have to put there differences aside if they want a team. If they can't then the status quo will continue.
Republican
Guest
.......this pales compared to trying to get WS - ites to cheer for GWS Ian but then this criteria is no longer relevant is it? I mean television as opposed to bums on seats is the crucial criteria for growth today and this is why GWS exists at all.
Republican
Guest
.....empathise BigAl but such is life - there is nothing new under the sun really........
Republican
Guest
I am sick to death of hearing this baseless stereotypical nonsense re Tas as an unviable AFL demographic. If the AFL are willing to punt and indeed squander obscene amounts of lucre and resources on GWS et el at the expedience of grassroots and other dynamics of the game, then this argument is an abject double standard, nothing more.
Republican
Guest
.......this also gives weight to the monster i.e. GWS success being prematurely counter productive. The culture of sport has devolved so contrived and constructed that I only trust the AFL begin to wake up to themselves and indeed learn that value exists beyond what is myopically commercial.
Republican
Guest
Absolutely spot on but alas the multinational culture of avarice inherent of the AFL and all sporting governing bodies at this tier today, place no value whatsoever on a social criteria in expanding and indeed growing respective codes. The symbiosis that exists with Channel 7 and the AFL in this respect has rendered any cultural or historical DNA obsolete and as such has disenfranchised generational support for the code, instead obsessively prioritising the fickle and feckless consumer culture of footy et el. It will be very interesting indeed to realise the insatiable AFL's next plastic concoction, while I would also take this opportunity to suggest that Canberra is by far a more worthy and indeed viable demographic, evoking a powerful symbology for the indigenous code being the nations capital, than is WS, for all the criteria and rationale so succinctly stated here - but not before Tassie.