“Each year for the last 50 years, there have always been several clubs – not always the same clubs – in financial difficulties. Their annual expenditure has significantly exceeded their income.
“This is generally bad business management. But clubs chasing a flag or trying to keep up with the big clubs do silly things. Needs must.”
In the 1970s, the $1 million Kerry Packer paid to stage World Series Cricket matches at VFL Park would be the salvation of poor clubs. “It was gone in a flash,” said Hennessy.
In the 1980s, when TV rights were worth $3 million, individual clubs were turning over up to $6 million each. Hence the introduction of the salary cap and draft. In the ‘90s, the advent of a national competition and fully professional players stretched resources.
“And so it goes. Groundhog year ad nauseam,” said Hennessy. “In 2016, more than 10 clubs reported financial losses. The new $2.5 billion TV rights deal was needed to balance things up.”
Last year, club turnover ranged from $40 million to $85 million. Despite the distribution of $315 million, some clubs still carried significant debt, at least three reported losses and others only tiny surpluses. “The inequality between clubs is frightening,” said Hennessy.
Now coronavirus had knocked all for six, leaving centuries-old clubs fighting for survival. “They have been, and still are, living from hand to mouth year after year, decade after decade, century after century,” Hennessy said.
“Things will never be the same now. The AFL future fund of about $100 million is inconsequential in this context. It would keep the clubs afloat for a month.”
Hennessy said the AFL would be well advised not to regard coronavirus as a freak happening. “What if the coronavirus is not a one-off, but the new normal for the 21s century?” he asked rhetorically. Looming threats included climate change, further pandemics as foreseen by the CSIRO and the still unresolved headache that is concussion.
“What to do?” asked Hennessy. “Well, no good seeking to plan for business as usual! How about if the AFL and the clubs decided to become really serious about the sustainability issue and divert the first 20 per cent of all income to the Future Fund. These funds could be used for ethical investment purposes supporting the community.
“The trap in football is to focus on the urgent rather than the important.
“The AFL commission now needs to spend more time looking at the long-term future of the AFL and ensuring it will be around in 2100.”
After leaving the AFL, Hennessy worked in sports management with former AFL chairman Allen Aylett, also for Toyota. Now he consults privately.
Greg Baum is chief sports columnist and associate editor with The Age.