Just my thoughts - the AFL gave the licence to the SANFL. They can take it off the SANFL and hand it directly to Port Adelaide?

The problem isn't Port and for the Crows' supporters who want to sink the boot in, your club is in strife too. It's the SANFL strangling the two clubs. Time to cut them off and let them stand on their own two feet. Reminds me of the parents who wouldn't let their children grow up, get married and leave home etc. They're too dependent on the board/lodging being paid by the kids. They've grown up, let them go. You're holding them back.

PS. The problem here isn't that Port is out of cash. Read between the lines and you'll see it's the SANFL that is broke. Crows will be next if we're not careful.

Well spotted Moses, the SANFL is in dire straights

I would say both are out of cash.

The AFL has signed a deal guaranteeing TV 9 games a week from next year. PAFC has to survive in the AFL, at least in 2012!

"The league, which has $27 million of debt and borrowed $4m to underwrite the Power last season, says it has no reserves and line of credit to further bankroll Port."

This is what Moses is talking about.

Or is it credit providers saying "yes, we would extend your credit for other things, but to take on debt of a 3rd party, sorry we aren't willing to do so". Would seem weird that with predicted profits of the SANFL that they cant get any further credit. Unless they maxed out their credit card then got the wife to max out hers as well......

Couldnt see the SANFL being able to create another club to hand the license to in time for next season, so expect an AFL bail out (again).

The majority of power "fans" are to blame for this, not attending games unless their club is winning.

Not quite correct Moses, the SANFL is not broke. They are carrying debt of $27,000,000, including $4,000,000 it borrowed last year to bail Port Adelaide out. They are not in a position to borrow any more or have their line of credit extended. This debt would be the loans they have for extensions, upgrades, etc to AAMI Stadium and would normally be managed payments back to the banks.

Port Adelaide is not attracting enough sponsors and not enough spectators to games to give them cash flow. You can only run on a weekly loss cycle for so long before it comes unsustainable.

In regards to the SANFL and its nine member clubs, they have been bleeding the Crows and Power dry for the last 13 years by their required "dividend" payments back to the SANFL. The Power have never or hardly ever made these payments as they have seldom made more than a minimal profit. However, the Crows have some years made around a $2,000,000 operating profit, only to see 80% of it paid back to the SANFL.

This and the Stadium hiring deal is the reason both teams are suffering, to the financial advantage of the nine SANFL teams. The WA teams have a clean stadium hire with the WAFL for several years which means that they pay a fixed amount to the WAFL for stadium hire and all profits from advertising and other revenue go to the clubs after daily operating costs.

SANFL are bloodsucking leeches, return the licenses to the Crows and Power respectively.

What they are doing is akin to inventing cold fusion and then channeling all of your profits into the coal power section of your business. Scum of the earth.

I think maintaining a strong SANFL is very important. The AFL has taken over footy in Victoria and it is not a good thing. They are already threatening to cut funding to all areas of the game.

They should merge and have the name of Adelaide Power Crows :)

I think the Crows are fine as it is KJ ;)

For regular posters, you may know I have an extremely cynical approach to the AFL in general. I believe it is one of the most biased sports played in this country. Uneven draws, uneven rules, uneven distribution of funding, and an attempt by the AFL to expand the game at all costs and at the same time, maintain a heavy Victorian bias only denigrates the game to an extent that it is the poorer for it IMO.

The SANFL has been hit by poor attendances in the SA League since the introduction of the Crows and Power, however, this shift in attendances has, over the years, not really affected the local clubs as they receive a dividend out of the club's profits and everything has been balancing out.

AFL attendances have plummeted over the last few years for many reasons. From what I understand, the SANFL pay the AFL from the game, then "hire" out AAMI stadium to the Club for matchday, but also look for monies from the gate and from food and drink. What this has meant is that the accountants have had a field day shuffling monies between accounts and the only really winner has been the AFL who have been sucking money from each game with some games running at losses.

The SANFL's decision to keep Port as two clubs has placed strain on that organisation and now they are "one club" this has helped, but was it too late?

The SANFL is probably at it's limit of assets to liabilities ratio and as people have pointed out, it can't keep funding by borrowing against ageing, rundown assets. The WAFL and the two WA teams operate differently than the SA Model, so it may be time to look at how they do it.

So long as SA cash is heading to Victoria to fund expansion of the AFL in NSW and Queensland, the AFL seems happy. Perhaps the AFL needs to consider how it can protect it's cash cow before the grassy paddock of SA Footy turns into a muddy quagmire.

Interesting comment Paul. The AFL are 'threatening' to cut funding to a body they don't control....

i would too....

From what i can see the AFL are building the best model for sport management in Australia, by removing self interested state groups and corporatizing the sport. There was some noise about this a couple of years back. I think Queensland and NSW are already effectively branch offices of the AFL.

All power to them. (sorry for the pun)

Great post Jack Toft .
Other posters say SANFL bleeding clubs dry but sorry guys all our local clubs are working their butts off to stay financial with Pokies, fundraising and few local sponsors keeping them going along with tighter budgets. Not money getting via AFL clubs.
Power have MR Bucky and Mr williams to thank for their current crisis as when losing money badly 3-4 years ago their football dept was in top 3 in expenditure.
Then their 1841 history marketing in last few years was clever wasnt it

The AFL now officially control AFL Victoria, HO. They have unofficially done so through financial means for many years. I dont think the same path would be a good outcome for SA football.

jack and BTM, its easy to say that all the SA $ are leaving the state to go to the AFL, but I'd be interested to know how you substantiate it....

The AFL to my knowledge get no game royalties for any regular season games in any state - only finals.

If the SANFL are making all the cash from gameday then that would be the core reason the Crows and Power might not be doing so well....

HO, my understanding from discussions is that AFL Clubs pay a fee to the AFL, much like a "standing charge" or "period cost", that any organisation charges it sub-branches. This is to cover the corporate function of the AFL. If you work for a large organisation with several branches, whenever a budget is prepared, the overhead costs are usually the first line on a budget. Ask a McDonalds franchisee about it!
Someone please correct me, but from what I understand, the cost to compete in the AFL is around $6M/yr per club and this is what each AFL Licencee is invoiced annually by the AFL. (this could be an old figure, but this is what I have been told)
This is part of the total Club budget, but then there's Club admin costs, player costs etc

The AFL Licence for the Crows is held by the SANFL and this is where the accounting gets interesting. The SANFL are the landlords of AAMI stadium, so they charge the AFL Club a match day fee for the stadium rent. However, they also own the AFL Licence and so in effect any monies they receive from the AFL in stadium rent was theirs to start with. Confused?

At the end of the day, there is a nett cashflow loss from SA.

Jack, a quick glance at PAFC 2010 Annual report shows the AFl distributed 7.45 million to PAFC.

There is nothing in the expenses side of the equation that shows anything like a 6 million payment to the AFL.

After COGs of nearly 8 million (i'd doubt that they'd account for a 6m payment to AFL as a COG mainly because it would only leave another 2 mil in real COG's) the only item on the expenses side is 15 mill to run the football operations - seeing as salary cap is 7 mill +, I also cannot see where the 6m sits here.

Is it possible the SANFL pay this fee on behalf of each club?

Seems to me like any net negative cash flow to the two clubs in Adelaide is a result of SANFL deal on license ownership and on AAMI, not on anything the AFL do. The AFL do not hire stadiums on behalf of clubs. Its well documented that they let clubs do their own deals on stadiums and assist where requested.

And, if all clubs in the AFL are paying the 6m, then no one is being disadvantaged in SA.

I do not find the stadium deal confusing, just negative. The PAFC reports show a net result from game day activities which underlines how poor the deal is.

HO, I don't know the exact figures, or how it happens, but my understanding was that an ongoing payment is made to the AFL as part of the process. This may be a SANFL cost as part of the licence agreement.

This all sounds like something BSA would do.

Give clubs $8M in grants. But charge $10M in running costs.

Why would they not just charge $2M.

Or are they all just stupid?