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Grand final at the MCG til 2057 shows limits of AFL's power

The grand final is moving to a twilight fixture (Charles Van den Broek/flickr)
Roar Guru
9th July, 2018
130

On the morning of April 13 2018, Victorian premier Daniel Andrews confirmed on ABC Radio Melbourne what had already been revealed via a carefully targeted leak to The Footy Show the previous evening – the AFL grand final was extending its stay in Victoria for a further 20 years, to 2057.

In addition to this rather advanced booking, he went on to catalogue a vast list of upgrades to facilities and grounds in regional Victoria.

All in all, his government was spending around $500 million. $20 million for Ikon Park to turn it into the home of AFLW. Whitten Oval got an upgrade as well. A $64 million redevelopment at Parkville Netball facility, $60 million for community sporting grants, and a lot of spending on other sporting precincts around the state and funding for sporting events in regional Victoria. The big ticket item was $225 million for upgrades and redevelopment of Docklands stadium.

But nothing announced in terms of government upgrades to the MCG. No need! The MCC was paying for that itself – it was going to fund the redevelopment of the entire Great Southern Stand and other sundry ground upgrades courtesy of a guaranteed 43 home and away games each season from its five tenant clubs – Collingwood, Essendon, Richmond, Melbourne and Hawthorn – and by retaining exclusive rights to the grand final for a further 39 years.

The announcement caught the AFL and the MCC by surprise – they actually hadn’t signed off on the deal yet within their own organisations, and had to hastily convene board meetings to complete the necessary validations on the morning of the 13th.

But given how outstanding the news was from Andrews’ point of view, you can perhaps understand his rush to get it out and bask in the political accolades.

When you consider the WA state government just dropped $1.6 billion of taxpayer money on a new stadium, SA spent $650 million upgrading Adelaide Oval, and Gladys Berejiklian is enmeshed in a two billion dollar trap of her own making over proposed stadium demolitions up in Sydney – well, Andrews had just pulled off one of the great feats of pork barrelling at a bargain price of 225 million dollars for the stadium component, given that two stadiums were being redeveloped and he (and the Victorian voter) was only paying for one of them.

Against a backdrop of increasingly straitened public finances and proposed GST redistributions that will undoubtedly leave Victoria worse off financially, locking in a stadium redevelopment on the cheap combined with plenty of handouts for grassroots infrastructure – well, that’s both superb politics and sensible economics.

But where Andrews reaped the benefits, the pushback against the AFL was swift and immediate – and not unsurprising. The grand final occupies a highly visible location in the Australian calendar, and is one of those convenient scratching posts for anyone with a grudge over governance of the game, given that it sits at the conjunct of a number of strands running through our game – equalisation, fairness, national spread.

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Even people with only a passing interest in football have noticed that the past four grand finals have seen Victorian clubs defeat interstate teams ranked higher on the AFL ladder.

The decision to announce the MCG would remain the home of the grand final for another 20 years on top of the existing 20 years it already was booked in for, rankled with a lot of non-Victorian fans, with plenty of vitriol being directed at the AFL for selling out, shafting their interstate clubs for decades in exchange for their 30 pieces of silver to redevelop Docklands.

Articles swiftly appeared in various publications and sites from the states west of Warnambool, bemoaning the decision as a VFL relic, and a decision made solely with the interests of 10 of the 18 clubs in mind.

The AFL undoubtedly anticipated this sort of reaction, given how ready Gillon McLachlan was with the planned restitution – in-season training sessions on the MCG, providing greater MCG access during grand final week, allocating more grand final tickets to interstate supporters and chartering flights for interstate clubs to the grand final, announced almost in the same breath as the statement that four more decades of MCG grand finals were contractually set in stone.

Since that announcement in April, the VFL grumblings have simmered on – perhaps mercifully for the AFL it has been muted somewhat by Richmond’s head and shoulders existence above the rest of the competition this season.

Given that they seem likely to feature heavily in September, it would undoubtedly be a relief to McLachlan and the AFL if they were playing at the MCG either in their own right, or against a fellow Victorian side.

But all it will take is another high flying interstate side to be shot down by a MCG resident come the last Saturday in September, and those croaking voices will be back in full roar.

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While the criticism of the AFL shafting the interstate clubs is undoubtedly accurate, what I believe has been lacking from the debate is the realisation or acknowledgment among fans that the outcome was not something the AFL desired or conspired to achieve from the outset.

What is not being discussed is that the AFL did not have a realistic alternative, and that powers far greater than them arranged the events that transpired.

We have been conned, duped, into turning on our own code, when in point of fact it’s our own code that has become the political football for bigger, meaner players than ourselves.

Let’s go back prior to April 13 2018 – over two years prior, to March 2016.

It was around then that Eddie McGuire first bobbed his head up with a radical idea to construct a second stadium adjacent to the MCG, a 60,000 seater with a retractable roof, called Victoria Stadium.

Hisense Arena would be relocated, Richmond station moved underground, and Etihad Stadium demolished and sold off.

At the time I found it a baffling outburst, even by Eddie’s standards – I mean, surely it had no chance of getting up, particularly given who it was being suggested by, and the eye-watering cost of well over a billion dollars, to be funded in part by the sell-off of Etihad. Ryan Buckland called it “Bold thinking, but completely crazy in practice.”

What time has revealed is that of course it was crazy in practice – because it was never meant to be put into practice.

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In addition to his other talents, McGuire is an accomplished politician – the mere suggestion that the AFL might, however unlikely, be able to stitch together a deal to redevelop stadium infrastructure without needing any assistance from the state government was enough to accomplish the true goal of the suggestion – to get the AFL, the Victorian government and the MCC all in the same room to talk about money.

Which they did, throughout much of 2017. Quietly, discreetly, but with deadly serious intent.

It’s important not to underestimate the political clout of McGuire in all of this – as both a high profile media personality and the president of one of the biggest tenant clubs at the MCG, with plenty of phone numbers and contacts in his rolodex, he played a key role in bringing all of the parties to the table.

Eddie McGuire Collingwood Magpies AFL 2015

(AAP Image/Tracey Nearmy)

We had McLachlan, representing the AFL as CEO, who desired to upgrade (not demolish) Etihad Stadium, relocate AFL House from Docklands, and also wanted money to fund further upgrades to facilities for the AFLW.

Coming into the negotiations, he and his new chairman, Richard Goyder, a prominent Western Australian, were reluctant to discuss extending the grand final further than the 20 years it was already assigned to the MCG.

We had Steven Smith and Stuart Fox, chairman and CEO respectively of the MCC, who were insisting that there was no way that the Victorian state government or the AFL could commit to any sort of long-term funding arrangement for stadiums in Victoria without including the MCC as part of it.

Their demand was for a long-term commitment for the grand final to remain at the MCG beyond 2037, and the financial surety that would provide.

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In exchange for this, they would undertake to pay for the redevelopment of the MCG, without any need for assistance from the Victorian government.

They were armed with a bounty of $8 million a year to be split between the five tenant clubs if their terms were met, roughly $170,000 for each of the 43 home games during the regular season, a not inconsequential sum of money to be handing out to football clubs.

And finally, we had Justin Hanney, Lead Deputy Secretary from the Victorian Department of Economic Development, negotiating on behalf of his boss, Daniel Andrews.

He was armed with plenty of authority – and inducements – to get their desired outcome, which was to avoid a situation where the grand final jetted off interstate and the government had to chip in to rebuild the MCG. A happy coincidence that avoiding this situation happened to be the desired outcome of the MCC as well.

Amongst these inducements in Hanney’s bag of tricks were an offer of freehold land under the Bolte Bridge for the AFL’s new headquarters, valued at around $75 million, and the vast array of funding commitments listed above, that would both assist the AFL with its desire to upgrade facilities for AFLW as well as pouring funds into key marginal electorates for the Andrews government.

Against all of this vested interest and shared desire – what hope did the AFL have of resisting? Despite both Goyder and McLachlan being reluctant to give into the MCC’s demands, knowing as they did that it would provoke consternation and condemnation from the interstate clubs within the AFL, they were thoroughly outmatched by the sheer weight of the numbers.

As always with decisions like this, the simplest explanation is to follow the money. The AFL as an organisation received just over $650 million in revenue in 2017, and after operating expenses and distributions of around $612 million, posted a net operating surplus of $48 million.

McLachlan said at the time of announcing the grand final deal in April 2018, that AFL alone is worth about $3 billion to the Victorian state economy. His own organisation’s annual report for 2017, released in March 2018 claims that nationally, AFL added $6.45 billion to the Australian economy. That means that about 47 per cent of the contribution to GDP for a national sporting organisation is generated for a single state.

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Economist Tim Harcourt claimed in 2015 that the grand final alone made up approximately $125 million of that revenue each year.

These are big numbers, to be sure. But compare them to the Victorian state government budget – which for 2018-19 lists revenue of $69.4 billion, expenses of $68.1 billion and a surplus of $1.3 billion, and they pale into absolute insignificance.

Put simply, I believe that the AFL never had a hope in hell of standing against a state government determined to ensure that it was not their administration that lost the grand final to those shiny new stadiums interstate, even temporarily.

The MCG Melbourne Cricket Ground at night

(Charles Van den Broek/flickr)

Additionally, the government was determined not to make the same mistake as their compatriots in WA and NSW who had to deal with (and are still dealing with) resentment and political firestorms over the easily drawn comparison between spending on projects like stadiums, and the dilapidated state of more humdrum areas of government responsibility, such as transport, schools and hospitals.

Under no circumstances would they allow the AFL to abscond with the grand final and saddle the government with the ensuing costs and opprobium.

The MCC was always going to take a stance alongside the state government, given that the board of trustees are all appointed by the state government, and include such political luminaries as Steve Bracks, Robert Ray, Peter Costello and a host of lawyers and accountants who are dependent on obeisance to the state government for further patronage and ongoing employment.

Those with long memories might remember what happened to the 13 members of SCG trust in 1977 when they dared defy Premier Neville Wran and put their war with Kerry Packer over and above their responsibility to the public.

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The Victorian state government knew full well that it had the upper hand in negotiations right from the get go. For all the talk the AFL makes about its size, spread and influence, this is an organisation that is still utterly dependent on state governments the length and breadth of the country to do the heavy lifting when it comes to stadium infrastructure.

Their contributions towards stadium infrastructure can best be described as token, certainly when compared to the contributions from state and federal governments.

Moreover, once the MCC was able to claim that it would pay for the required upgrades to the MCG over the next decades simply in exchange for a guarantee over the grand final (thus saving the government a messy and damaging high profile spending commitment of somewhere between half and a full billion) we had a confluence of desire that the AFL could either stand in front of, Canute-like, before being washed away regardless, or stand aside and put the most positive spin on it that it could.

Hence we had McLachlan making statements like:

“These sorts of deals means that we’ve got more money going into the clubs … and that means we can work hard to keep the game affordable.”

“”We want as many people to go to the grand final as we can… We’re lucky in this country to have a 100,000-seat venue that is loved by sports followers.”

It reminds me of a line from the movie Sum of All Fears, when the Russian President says to an advisor explaining his decision to claim responsibility for an atrocity he didn’t commit, namely that “These days, it is better to appear guilty than impotent.”

It’s a viewpoint McLachlan and the AFL appear to have taken to heart, being quite prepared to stand out in front of microphones and make flaccid comments like the above.

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Better to claim that the AFL is emphasising tradition and maximising attendance than to admit the ugly truth – for all the talk of a national sporting competition, for all its talk of wealth, power and viewers, this is an organisation that remains as beholden to the Victorian parliament in 2018 as it was in 1986 when it was staggering towards bankruptcy and it was forced to expand and sell interstate licences to the Eagles and Bears – or be shut down by the corporate regulator in Victoria.

They were thoroughly outclassed, outmatched and they knew it. When Hanney and Fox started putting the screws on them and insisting that they were in accord, and the AFL should see it their way – well, the AFL resisted for a time, but the outcome was inevitable, and everyone in all of the boardrooms involved knew it.

Even within the AFL most of the interstate clubs were already happy to see the grand final remain at the MCG in the short term – their main objection was to the 40-year timeframe, which perhaps was beyond everyone’s expectations of what was considered ‘long-term’.

It does seem an awfully long time to demand surety in a rapidly changing world. But that’s a problem for another generation to deal with.

AFL CEO Gillon McLachlan

(AAP Image/Julian Smith)

In writing this article, my aim was to try dig beneath the superficial reasonings around the grand final, knowing that this debate will roll on for years, if not decades.

I feel that the real reasoning behind how the decision was made, and why, has been lost amidst the hue and cry about home ground advantage, best of threee grand finals and the debate about how much of an advantage playing at home actually contributes to the eventual outcome.

People are analysing this decision in terms of its impact on the fortunes of clubs on the field – whereas I feel that the discussions that led to the decision were couched far more of terms of money, budgets and power off the field.

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This is upheld I feel, by some of the minutiae from the discussions, where Richmond’s plans to redevelop Punt Road were rejected by the Victorian state government, and Hawthorn didn’t even bother to put in a submission for funding for their Dingley base.

The Victorian state government doesn’t really care who wins the premiership, and they certainly don’t care who plays in the grand final so long as it remains Melbourne.

While it remains there, it contributes around $125 million to the state economy at best estimate, and more importantly, funds a highly visible spending commitment and avoids a potentially messy political stoush.

To supporters of interstate clubs who are perhaps feeling bereft or angered by this piece – I simply point out that this state of affairs is not set in stone – but I would add that the status quo regarding the grand final will never change without a corresponding state government purchasing the rights to the grand final in advance for a particular year.

I only see Perth bothering to do this – Sydney seems unlikely to make a pitch for it, Adelaide is too small and Queensland doesn’t care.

But regardless, I see a grand final purchase as a vanity project that would extremely unlikely to occur outside of another iron ore earnings spendapalooza by the WA government in coming years – and even then, I maintain the politics of it would make it prohibitive, given it would probably come with a price tag of tens of millions of dollars.

Some might argue the other states have only themselves to blame by constructing stadiums much smaller than the MCG – I don’t give this argument much credence, given that other states don’t have the financial advantage of bootstrapping the stadium size and costs to the grand final.

Vast white elephant stadiums with seats in the upper echelons aren’t a good look for governments battling budget cuts – anyone with a passing interest in Homebush can testify to that.

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The states themselves perhaps realised the futility of making a realistic pitch at time of construction – certainly they have since then, with Mark McGowan making off the cuff comments earlier this year that the grand final should be played in Perth as a sop to the GST rip-off endured by West Australians.

What’s more interesting than his rampant idiocy in trying to link a decision within the remit of the AFL to one within the remit of the Federal Government is the fact he made these comments in January 2018, meaning that he had to be unaware of the negotiations occurring between the AFL, the MCC and the Victorian government over the preceding year and a half that were busy placing the grand final firmly out of reach of any interstate rivals.

If he was, he’d have said nothing about it, rather than look foolish and ignorant a few short months later. But then again, they were solely aimed at reminding people of the unfair deal on GST, rather than actually advancing the cause of a grand final in Perth.

In my view, based on the evidence available and presented here, I feel that the AFL has chosen to claim responsibility for the decision to retain the grand final in Melbourne for a further 40 years, rather than admit that they had no alternative against such a collected assembly of vested interests, power and money in Victoria.

The AFL certainly would have liked the flexibility to be able to throw a grand final interstate as a sop within the next decade, but now this has been denied to them for several decades, they have switched their PR machine to discuss continuity, tradition and maximising attendance for all.

Hopefully this piece has given people some food for thought, and perhaps encourages people to think beyond the easily framed narrative that the AFL are the bad guys in all of this. I know doing the research and assembling the facts from various news sources and articles has given me a lot of pause, and a far greater understanding of what I feel are the true circumstances behind this decision. Any thoughts or perspectives people have on this matter in a similar vein are most welcome.