Player salaries and revenues in the Australian Football League 2001-2009: theory and evidence.
Booth, Ross ; Brooks, Robert ; Diamond, Neil 等
Introduction
In April 2011, the Australian Football League (AFL 2011) signed a
new $A1.253 billion broadcasting rights deal for the five year period
2012-2016. This significant increase in broadcasting rights revenue
provided additional impetus for increased salary requests on the part of
the players and the AFL Players Association (AFLPA) for the 2012-2016
Collective Bargaining Agreement (CBA). The specific request was for a
fixed share of revenue of 25-27 per cent as salary payments and other
benefits, a request that was rejected by the AFL. Subsequently, the
league and the players reached agreement in December 2011 (AFL and AFLPA
2011) for increases in player payments and benefits, with a review after
three years.
The aim of this article is twofold. First, we explore some
theoretical models from the sports economics literature as to their
predictions of the trends in player salaries. In general, this
literature predicts falling salaries in the static case, and by
extrapolation falling salary shares in the dynamic case as league
revenues grow over time. Second, we provide a framing to the recent
salary debate by analysing AFL revenue and expenditure data over the
period from 2001 to 2009 which shows a falling player salary share. We
then discuss spending strategies on alternative talent investments (at a
club level) and game development (at a league level).
The plan of the article is as follows. Section two discusses some
of the theoretical sports economics literature in the settings of both
profit-maximising and win-maximising clubs. Section three describes the
data source for the empirical analysis of the changing composition of
AFL clubs' (Section four) and the league's (Section five)
revenues and expenditures over the period from 2001 to 2009. Section six
compares total football revenue with total player payments and benefits.
Section seven provides some concluding remarks.
Player Salaries and Salary Caps
The sports economics literature contains extensive analyses of the
impacts of salary caps on competitive balance across a range of sporting
leagues in the settings of both profit-maximising and win-maximising
clubs. In the AFL context these impacts have been analysed by Booth
(2004, 2005) who finds that the combination of a salary cap and player
draft has improved competitive balance in the AFL. Hone (2005: 14) finds
that in the period 1993-2003 in the AFL that there was '... a
significant increase in the payments to coaches and support staff
relative to player payments.' Hone (2005: 14-15) concludes that
'... this trend is consistent with player list restrictions and
salary regulations limiting the growth in player payments.' In the
present article we focus our attention on AFL player salaries in the
period 2001-2009 in the setting of salary caps and revenue sharing
arrangements that are characteristic of league level broadcast rights
deals. Pinnuck and Potter (2006), in their analysis of the impact of
on-field success on the off-field financial performance of AFL football
clubs, obtained data from the AFL and derive an (average) profit and
loss statement for AFL clubs for the period 1993-2002.
Dietl, Lang and Rathke (2011) explore the impacts of revenue
sharing and salary restrictions on competitive balance, club profits and
player salaries in a model where the clubs are profit maximisers. They
explore these impacts in four different regimes. In their terminology
the regimes are: regime A--no binding salary restrictions; regime B--a
binding salary cap restriction for large clubs; regime C--a binding
salary floor restriction on small clubs; regime D--either the salary cap
or salary floor restriction is binding. In their Tables 1 and 2, Dietl,
Lang and Rathke (2011) summarise the impacts of increasing the levels of
salary restrictions and increasing the levels of revenue sharing on
competitive balance, club profits and player salaries across each of the
four regimes. While the AFL is best characterised by a win-maximising
assumption rather than a profit-maximising assumption, their results in
regime B where there is a binding salary cap restriction for large clubs
are interesting to our research on explaining the share of player
payments in total revenue. In essence, the AFL has moved to a regime of
greater revenue sharing in the last decade as larger broadcasting rights
deals have increased total AFL revenues and the share of total club
revenues provided by the AFL. Thus, if the Dietl, Lang and Rathke (2011)
results generalise to a win-maximising setting, their analysis supports
the finding that the increasing share of club revenues being derived
from revenue sharing via the AFL would be associated with a declining
share of player payments.
Dietl, Franck, Lang and Rathke (2011) explore the impact of a
percentage of club revenue salary cap in a league where the clubs behave
as win maximisers. Their analysis is in the setting of European football
(soccer) in which the clubs in different countries have vastly different
revenue potentials. As such, the salary cap in their analysis is based
on a percentage of club revenue. They find that such a salary cap in the
context of win-maximising clubs promotes greater club financial
stability and reduces player salaries.
Dietl, Grossman and Lang (2011) develop a contest model of a sports
league that provides new insights regarding the effect of (gate) revenue
sharing on talent investment incentives, competitive balance and club
profits where it is assumed club owners maximise a weighted sum of
profits and wins. The authors suggest that for further research the
model can be extended to analyse the effect of salary caps and floors on
competitive balance, talent investment and club profits in sports
leagues with utility-maximising clubs.
Vrooman (2009) suggests evidence now points to the four major North
American sports leagues club owners as win-maximising sportsmen--the
sportsman effect--with internal competition among sportsman owners
resulting in players now sharing about 60 per cent of revenues, much of
which is generated by broadcast rights (and public venue subsidies).
Thus, the theoretical modelling makes clear that in both the
profit-maximising setting and the win-maximising setting the combination
of revenue sharing and salary caps leads to reduced player salaries in
the static case. In the dynamic case, as league revenues grow over time
this can be expected to produce a declining share of player salaries in
total revenue. In the setting of profit-maximising clubs that
characterise North American sports leagues, this raises club profits.
Further, in the profit-maximising club setting this produces the need
for salary floors in the case of pooled revenue sharing. Using a
theoretical model Chang and Sanders (2009) find that the pool revenue
sharing arrangements in Major League Baseball (MLB) in North America
produce a reduction in player talent spending and competitive balance
unless they are accompanied by requirements for a minimum payroll spend
on players.
Booth (2004) argues that AFL clubs are win maximisers which stems
from the nature of club ownership with 11 of the 18 clubs owned by their
'paid-up' members. Four AFL clubs are 'owned' by
their respective state football bodies, and the remaining three are
'owned' by the AFL. Clubs typically act as win maximisers
subject to a break-even budget constraint and the financial accounts are
consistent with the objective of win maximisation, revealing profits (if
any) to be very small proportion of revenue. While AFL clubs are win
maximisers and not subject to the same incentive structures as
profit-maximising MLB clubs, there is some evidence that in the
mid-1990s before the merger of Fitzroy and the Brisbane Bears, Fitzroy
adopted a low payment strategy as a survival option. This led as Booth
(2004) describes to requirements of a minimum team salary in the AFL of
95 per cent from 1999, later reduced to 92.5 per cent from 2002. Under
the new 2012-2016 CBA, negotiated between the AFL and the AFLPA, each
club must now pay a minimum 95 per cent of the combined total player
payment/additional service agreements limits. In a league such as the
AFL, with strong competition from other football codes, other sports and
other forms of entertainment, there is a desire to expand the
competition and grow the code. Competitive balance and club financial
stability are important ingredients for this expansion, so the
negotiated salary cap outcome whilst limiting the ability of the
financially-strong clubs, must be generous enough to attract/retain
talent, be affordable by the financially-weak clubs, and still leave
enough revenue for the league to underwrite the expansion into new
markets.
The imposition of the AFL team salary cap from 1985 was to enable
teams to reduce their player costs below those that prevailed during the
1980s. The intention was to prevent clubs from overspending in order to
win a premiership and to restrict the wealthy clubs from securing a
disproportionate share of player talent. Moreover, Macdonald
(forthcoming) makes the point that both the AFL and the AFLPA have
recognised the reasonableness of any restraint of trade in reaching
their CBAs. Thus, the wage outcomes are by definition below the market
clearing cost of talent, and shown as such in Booth's (2000)
two-team league model depiction of the AFL salary cap in Figure 1, where
it is assumed that the clubs are win maximisers and the league wishes to
use the salary cap to achieve equal playing strengths and to allow the
weaker teams to break even financially. The market clearing cost of
talent in the absence of the salary cap would be at the intersection of
the clubs' average revenue (A.R) curves, but with the salary cap to
restrain the financially-strong club yet within the reach of the
financially weaker club, the unit cost of talent under the salary cap is
lower, at the intersection of the average cost (AC) curves.
[FIGURE 1 OMITTED]
In the setting of win-maximising clubs that characterise European
football (soccer) salary caps produce greater financial viability for
clubs as the modelling of Dietl, Franck, Lang and Rathke (2011) links
salary caps to club revenue and reduce the incentive for win-maximising
clubs to spend all of their revenue while still producing an incentive
to increase revenues. In the AFL setting the scenario is different as
the club level salary caps are set by the league and the players'
association and do not bear as strong a relationship to club revenues.
This raises an interesting research question of what the league and
clubs do with the additional revenue in this setting.
AFL and AFL Clubs' Revenue and Expenses Data 2001-2009
We now explore in greater detail what occurred to league (AFL) and
AFL Clubs' revenues and expenses from 2001 to 2009 to understand
the dynamics of player salary shares and other forms of expenditure. We
obtained data from AFL annual reports (various), AFL Club Financial
Reviews--Survey Results 2001-2009 and Club Summary Financial Information
Spreadsheets 2004-2009.
There are two main revenue streams: league revenue and club revenue
(although it should be noted that club revenue also includes a
distribution from the league operating surplus). In Figure 2 and Table 1
we show the time series of league and club revenue and expenses, and the
league operating surplus. The time series shows significant growth in
club revenue and expenses over the period in both nominal and real
terms, as well as nominal and real growth in league revenue and league
expenses, and the operating surplus of the league (from which the league
makes a distribution to the clubs).
[FIGURE 2 OMITTED]
AFL Clubs' Revenue and Expenses Data 2001-2009
At the club level, data on the composition of revenues is available
from two different sources--the AFL Club Financial Review--Survey
Results provide data on the composition of club revenues for the period
from 2001-2007 which we summarise in Panel A of Table 2, while the Club
Summary Financial Information Spreadsheets provide data on the
composition of club revenues for the period 2004-2009 which we summarise
in Panel B of Table 2. The data show that Marketing activities are the
largest component of club revenues followed by distributions from the
AFL. The distributions from the AFL are approximately 1/5 of club
revenues and show the importance to the clubs of league revenue sharing.
Pinnuck and Potter (2006) reported for the period 1993-2002 that on
average around 18 per cent of club revenue was sourced from the AFL.
Data on the composition of expenses at the club level is also
available from two different sources: the AFL Club Financial
Review--Survey Results provide data on the composition of club expenses
for the period from 2001-2007 which we summarise in Panel A of Table 3,
while the Club Summary Financial Information Spreadsheets provide data
on the composition of club expenses for the period 2004-2009 which we
summarise in Panel B of Table 3. The results at the club level show that
football department expenses (which include player payments) are the
major expense item for the clubs in the past decade, averaging 46.3 per
cent in the 2001-2007 Panel A Survey Results, and 44.8 per cent in the
2004-2009 Summary Spreadsheets. Marketing, membership and fundraising
was the next most important expense but trended downward over the
period, whereas non-football expenses grew. Pinnuck and Potter (2006)
report that football department expenses of AFL clubs in the period
1993-2002 averaged 49.6 per cent.
The interesting question is not only what has happened to football
department expenses as a share of AFL club expenses, but what has
happened to both football department expenses and player payments as a
share of both club revenues and expenses. We report these results in
Figure 3 and Table 4. Player payments are defined in two ways, the total
player payments (TPP) limit (commonly known as the team salary cap) and
gross player payments (GPP). GPP are comprised of the TPP limit plus
further payments such as allowances for finals (payments for finals
matches), retention and cost of living (to Brisbane in a non-football
city, and to Sydney for its high cost of living), and for over 30
year-old veterans (only 50 per cent of a veteran's salary is
included in the TPP limit). There is a longer span of data here since
the AFL Club Financial Review Survey Results in 2003 included data for
the previous five years back to 1998. Not only are football department
expenses as a percentage of both club revenue and club expenses trending
downward during the period (least until 2008), the results also show a
declining player salary share until 2008. Specifically, GPP comprised
28.8 per cent of total club revenue in 1998, but only 23.3 per cent in
2009. The TPP limit comprised 24.2 per cent of total club revenue in
1998, but only 21.4 per cent in 2009. We note that Hone (2005) reports
'player payments' as rising from 27 per cent of total club
revenue (from all sources according to Hone) in 1993 to more than 32 per
cent by 2001. Whilst the definition of player payments used by Hone is
ambiguous (in the sense that it is not clear whether Hone is using GPP
or the TPP limit), what is clear is the rising share of player pay in
this earlier period. Turning to total club expenses, GPP comprised 30.3
per cent in 1998, but only 25.0 per cent in 2009. The TPP limit was 25.5
per cent of total club expenses in 1998 and only 22.9 per cent in 2009.
All four trends considered were significant at the .001 level when using
a regression test for linear trend, also allowing for autocorrelation.
The same statistical test for trend has been applied for trends
subsequently studied in this article, and in all cases the trends were
statistically significant.
This result is consistent with the predictions of the model of
Dietl, Lang and Rathke (2009). In addition, our results show that player
payments as a share of revenue are consistently lower than player
payments as a share of expenses. This reflects a greater flow through of
club revenue to club profits. Dietl, Franck, Lang and Rathke (2011) in
their analysis of European football (soccer) support the introduction of
salary caps from a league perspective in terms of club financial
stability. Thus, the finding that more AFL clubs returned to profits
over the period from 2001 to 2009 is consistent with the combined
operations of revenue sharing and salary caps producing greater club
financial stability.
[FIGURE 3 OMITTED]
We also consider player payments as a function of club football
department expenses which shows that the player remuneration share has
fallen, while other shares have increased. In Figure 4 and Panel A of
Table 5, which illustrate data from the Club Financial Review--Survey
Results 2003-2007, on average over the period 67.4 per cent of football
department expenses were allocated to players, but falling from 69 per
cent in 2003 to 64 per cent in 2007. One area of growth at the end of
the period was in 'Medical and Fitness' expenses. Figure 5 and
Panel B of Table 5 illustrate data from the Summary Financial
Information Spreadsheets 2004-2009 and shows the players share of
football department expenses averaging 62.5 per cent, and also following
a similar downward trend from a high of 69.0 per cent in 2004 before
reaching a low of 62.1 per cent in 2009. There are notable increases in
the share allocated to 'Team', 'Fitness and
Conditioning', and 'Recruitment and List Management'
expenses in this period. Hone (2005) reports for the period 1993 to 2003
the ratio of player payments to non-player payments (coaches, trainers
and other support staff) which peaked at over 67 per cent in 1995 but
fell to 64 per cent by 2003. Hone (2005) also notes that this has been
accompanied by a rise in the numbers of coaching and support staff, and
that there is some evidence of a trend towards greater emphasis on
investment in training facilities.
[FIGURE 4 OMITTED]
[FIGURE 5 OMITTED]
AFL Revenue, Expenses and Operating Surplus Data 2001-2009
In Section 3 it was noted that league revenue had grown at a much
faster rate than league expenses, leaving increasing operating surpluses
to be disbursed. Regrettably, AFL annual reports since 2005 have no
longer reported in the same detail on the composition of AFL revenues
and expenditures, and as such it is not possible to present the same
analysis of the changing composition as has been done for club revenue
and expenses. We note however that in 2005, sponsorship and broadcasting
constituted 55 per cent of league (AFL) revenue.
At that time, the AFL was under the broadcasting rights deal for
the 5-year period 2002-2006 valued at $A500m (including $A50m contra)
and the AFL (2011) subsequently signed broadcasting rights deals of
$A780m for the 5-year period 2007-2011 (including $A87.5m contra) and
$A1.253b (including A$135m contra) for the 5-year period 2012-2016.
Thus, broadcasting rights continue to remain a major component of
revenues.
As discussed by Macdonald and Booth (2007), previous broadcast
rights were $A24.55m for the 6-year period 1987-1992, and after a
one-year on sell to the ABC, were regained by a Seven for $A30m for the
5-year period 1988-1992. It is believed that revenue in 1993 revenue was
around $A12m, between $A80-85m for the 5-year period 1994-1998,
renegotiated in 1995 to $A150m for the 3-year period 1999-2001, with an
additional $A20m for the first and last bidding rights to AFL
broadcasting between 2002 and 2011.
While we are not able to explore composition of revenues and
expenses at a league level it is interesting to explore what has
happened to the distribution of the operating surplus of the league.
[FIGURE 6 OMITTED]
As shown in Figure 6 and Table 6, in percentage terms the AFL
distributions to clubs have fluctuated during the period (89.7 per cent
in 2001 appears to be an outlier) but settled around a low of around
62-63 per cent in the period 2007-2009, whilst new allocations have been
introduced beginning in 2007 such as 'Facilities Development'
(6.4 per cent in 2009), 'New Markets' (6.2 per cent in 2009)
and a 'Future Fund Reserve' (8.1 per cent in 2009). In
addition the allocation to 'Facilities Development Reserve'
begun in 2004 has also increased (6.3 per cent in 2009). This indicates
that the league has taken on a broader game development role than was
traditionally the case. In this context it is worth considering the
findings of Zimbalist (2010) as regards comparing player salary shares
across US sports leagues where in part the lower share for baseball can
be explained by significant game development costs associated with the
minor leagues that do not exist in the other professional US sports.
Total Football Revenue and Total Player Payments/Benefits
As shown in Figure 7 and Table 7, comparisons of total football
revenue, that is the sum of club revenue (excluding the AFL
distribution) and league revenue, with various definitions of player
payments or player benefits reveal that the latter has not kept pace
over the period 2001-2009.
[FIGURE 7 OMITTED]
The TPP limit as a percentage of total football revenue has fallen
from 22.3 per cent in 2001 to 16.3 per cent in 2009, reaching a low of
15.9 per cent in 2008. Total Player Benefits (defined by the AFLPA as
the TPP limit plus Total Deductions plus Injury Allowance plus
Additional Special Allowances (ASAs) plus AFLPA Operating (Education,
Training and Welfare) plus AFLPA Retirement plus Player Licensing and
Merchandising (including Telstra Internet) plus Medical Costs plus
Premiership Prize Money has fallen as a percentage of total football
revenue has fallen from 27.5 per cent in 2001 to 21.3 per cent in 2009,
reaching a low of 20.8 per cent in 2008.
Conclusion
In the AFL, the share of revenue going to the players has been on a
downward trend over the period 2001-2009. Whilst total football revenue
(club and league) and actual player payments/benefits have been growing,
they have not been growing as fast--or, to put it another way, there
have been other expenditures/ transfers which have been growing at a
faster rate--some of these are new expenditures/allocations.
Total club revenue and total club expenses have grown significantly
during the period, but football department expenses as a proportion of
total club revenue and total club expenses fell, especially in the first
part of this period. Not only that, but also the share of football
department expenses going to the players has fallen. So where has the
club money gone? 'Non-Football' and 'Other' are two
categories of club expenses that have grown in proportionate terms.
Moreover, while the players' share of football department expenses
is decreasing, the shares going to 'Team', 'Fitness and
Conditioning', and 'Recruitment and List Management',
have all increased.
Turning to the disbursement of the growing league operating
surpluses (resulting from league revenue growing faster than league
expenses), the share going as payments to the clubs has fallen, which is
important since it is the clubs who pay the players. So where has the
league money gone? There are new and significant allocations to
'Facilities Development' (and increases in the
'Facilities Development Reserve'), 'New Markets',
and the 'Future Fund Reserve'.
These outcomes are consistent with theoretical modelling in both
the profit-maximising and win-maximising settings which makes it clear
that the combination of revenue sharing and salary caps leads to reduced
player salaries in the static case, and in the dynamic case, as revenues
grow over time results in a declining share going to the players.
References
Australian Football League (various), Annual Reports.
Australian Football League, Club Financial Reviews-Survey Results,
2001-2009.
Australian Football League, Club Summary Financial Information
Spread sheets, 2004-2009.
Australian Football League (2011) Media Release on AFL Broadcast
Rights, 28 April.
Australian Football League and Australian Football League
Players' Association (2011) Joint Media Release Collective
Bargaining Agreement, 15 December.
Booth, R. (2000) Labour market intervention, revenue sharing and
competitive balance in the Victorian Football League/Australian Football
League, 1897-1998, Unpublished PhD, Monash University, Melbourne.
Booth, R. (2004) 'The economics of achieving competitive
balance in the Australian Football League, 1897-2004', Economic
Papers, 23(4), pp. 325-344.
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sports leagues: Does a salary cap and player draft measure up?',
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Chang, Y. and Sanders, S. (2009) 'Pool revenue sharing, team
investments, and competitive balance in professional sports: A
theoretical analysis, Journal of Sports Economics, 10(4), pp. 409-428.
Dietl, H., Franck, E., Lang, M. and Rathke, A. (2011) 'Salary
cap regulation in professional team sports', Contemporary Economic
Policy, doi:10.1111/j.14657287.2011.00265.x.
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balance and revenue sharing in sports leagues with utility-maximizing
teams', Journal of Sports Economics, 12(3), pp. 284-308.
Dietl, H., Lang, M. and Rathke, A. (2011) 'The combined effect
of salary restrictions and revenue sharing in sports leagues',
Economic Inquiry, 49(2), pp. 447-463.
Hone, P. (2005) 'Limiting player lists in sport: Who really
wins?', Working Paper, School of Accounting, Economics and Finance,
Deakin University, Melbourne.
Macdonald, R. (forthcoming) 'Comment on Dabscheck's
"Player shares of revenue", Collective bargaining and the
Australian Football League', Labour and Industry.
Macdonald, R. and Booth, R. (2007) 'Around the grounds: A
comparative analysis of football in Australia' in B. Stewart (ed.)
The Games Are Not the Same: The Political Economy of Football in
Australia, Melbourne University Press, Carlton, pp. 236-331.
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success on the off-field financial performance of AFL football
clubs', Accounting and Finance, 46,
pp. 499-517.
Vrooman, J. (2009) 'Theory of the perfect game: Competitive
balance in monopoly sports leagues, Review of Industrial Organization,
34(1), pp. 5-44.
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caps', Journal of Sports Economics, 11(1), pp. 17-28.
Ross Booth *
Robert Brooks **
Neil Diamond **
* Department of Economics, Monash University, Melbourne, Australia
** Department of Econometrics and Business Statistics, Monash
University, Melbourne, Australia
Notes
(1.) Earlier versions of this Monash research were first presented
at the 2008 Western Economic Association (WEAI) annual conference in
Hawaii, and the 2008 Sport Management Association of Australia and New
Zealand (SMAANZ) annual conference in Fremantle. The authors wish to
thank participants at these two conferences as well as participants at
the 2011 SMAANZ annual conference in Melbourne for helpful comments on
earlier versions of this article. The authors also wish to thank both
the AFL and the AFLPA for providing access to additional data for the
period, and to the AFLPA for funding some additional parts of the
research reported in this article.
Dr Ross Booth is a Senior Lecturer in the Department of Economics,
Faculty of Business and Economics, Monash University. His research
interests are in the Economics of Sport. He can be contacted at
[email protected].
Professor Robert Brooks is a Professor in the Department of
Econometrics and Business Statistics, Faculty of Business and Economics
at Monash University. His research interests are Financial Econometrics,
Asset Pricing, Initial Public Offerings and Hypothesis Testing. He can
be contacted at robert.
[email protected].
Dr Neil Diamond is a Senior Lecturer and Director of Consulting in
the Department of Econometrics and Business Statistics, Faculty of
Business and Economics at Monash University. His research interests are
Experimental Design, Applied Statistics, Time Series Analysis and
Forecasting, Quality Improvement and Statistical Computing. He can be
contacted at
[email protected].
Table 1: AFL and AFL club revenues and expenses 2001 to 2009
$(Millions)--Nominal 2001 2002 2003 2004 2005
Total Club Revenue 306.5 340.6 356.4 383.4 414.8
Total Club Expenses 306.6 345.5 347.2 373.3 410.2
AFL Revenue 116.6 159.7 170.9 186.3 203.7
AFL Expenses 46.2 47.8 52.5 58.1 69.4
AFL Operating Surplus 69.0 110.1 114.7 124.0 130.4
$(Millions)--Real 2009 $
Total Club Revenue 383.7 413.8 423.0 443.6 466.9
Total Club Expenses 383.8 419.8 412.1 431.9 461.7
AFL Revenue 146.0 194.0 202.9 215.5 229.3
AFL Expenses 57.8 58.1 62.3 67.2 78.1
AFL Operating Surplus 86.4 133.8 136.1 143.5 146.8
$(Millions)--Nominal 2006 2007 2008 2009
Total Club Revenue 445.6 512.7 563.5 574.6
Total Club Expenses 429.0 478.7 534.9 537.6
AFL Revenue 215.2 284.8 302.1 303.5
AFL Expenses 72.1 81.0 94.7 89.9
AFL Operating Surplus 140.1 202.5 207.4 213.5
$(Millions)--Real 2009 $
Total Club Revenue 485.7 542.8 575.4 574.6
Total Club Expenses 467.6 506.8 546.2 537.6
AFL Revenue 234.6 301.5 308.5 303.5
AFL Expenses 78.6 85.8 96.7 89.9
AFL Operating Surplus 152.7 214.4 211.8 213.5
Table 2: Composition of AFL Club revenues (%) 2001 to 2009
2001 2002 2003 2004 2005 2006
Panel A: AFL Club Financial Review--Survey Results
Marketing 31 30 28 30 28 29
AFL 19 22 22 22 20 20
Membership 21 20 22 21 20 20
Non-Football 9 9 9 9 11 12
Events 6 6 6
Fundraising 9 9 9 2 3 3
Merchandising 4 4 4 4 5 4
Match Receipts 4 3 5 4 4 3
Other 3 3 3 2 3 3
Panel B: Summary Financial Information Spread-sheets
Marketing 29.3 27.5 27.6
AFL 21.4 20.3 19.9
Membership 20.7 20.4 20.1
Commercial
Operations
Non-Football 8.9 11.3 12.3
Corporate Hospitality
Events 6.3 6.2 6.2
Merchandising 4.2 4.5 4.1
Fund Raising 2.5 3.0 3.5
Match Receipts 4.3 4.0 3.5
Other Football 2.3 2.4 2.4
Related
Abnormals 0.0 0.1 0.1
Marketing and
Communications
Media and 0.4 0.3
Communications
2007 2008 2009 Average
Panel A: AFL Club Financial Review--Survey Results
Marketing 25 28.7
AFL 22 21.0
Membership 19 20.1
Non-Football 13 10.3
Events 6 6.0
Fundraising 4 5.6
Merchandising 5 4.3
Match Receipts 3 3.7
Other 3 2.9
Panel B: Summary Financial Information Spread-sheets
Marketing 25.5 27.5
AFL 22.2 21.3 21.1 21.0
Membership 18.7 18.8 19.7 19.7
Commercial 16.1 17.0 16.6
Operations
Non-Football 12.8 11.7 13.0 11.7
Corporate Hospitality 8.5 6.9 7.7
Events 6.3 6.3 4.7 6.0
Merchandising 4.6 4.1 4.2 4.3
Fund Raising 3.6 6.9 6.6 3.5
Match Receipts 3.4 2.9 3.2 2.4
Other Football 2.4 2.5 2.3 2.4
Related
Abnormals 0.3 0.5 1.1 0.3
Marketing and 0.3 0.3 0.3
Communications
Media and 0.3 0.3
Communications
Table 3: Composition of AFL Club expenses (%) 2001 to 2009
2001 2002 2003 2004 2005
Panel A: AFL Club Financial Review--Survey Results
Football 48 47 47 48 45
Marketing 15 15 14 14 13
Other Administration 11 11 10 11 11
Non-Football 7 7 9 8 9
Other 4 5 5 8 8
Membership 7 7 7 7 7
Fundraising 5 5 5 1 4
Merchandising 3 3 3 3 3
Panel B: Summary Financial Information Spread-sheets
Football Department 45.5 45.2
Membership,
Marketing and 30.4 30.3
Fundraising
Club Administration 12.9 13.0
Non-Football 7.5 9.7
Below the Line 3.7 1.7
2006 2007 2008 2009 Average
Panel A: AFL Club Financial Review--Survey Results
Football 45 44 46.3
Marketing 14 12 13.9
Other Administration 11 10 10.7
Non-Football 10 12 8.9
Other 8 9 7.9
Membership 6 6 6.7
Fundraising 3 4 3.9
Merchandising 3 3 3.0
Panel B: Summary Financial Information Spread-sheets
Football Department 44.8 44.0 43.2 45.9 44.8
Membership,
Marketing and 30.0 28.9 29.1 27.9 29.6
Fundraising
Club Administration 13.6 12.9 13.2 13.6 13.2
Non-Football 10.5 12.1 10.8 11.7 10.4
Below the Line 1.1 1.2 3.7 1.0 2.1
Table 4: AFL Clubs football department expenses and player payments (%)
2001-2009
2001 2002 2003 2004 2005
% of Total Club Revenue
Total Football Department Expenses 49.0 48.1 46.4 45.9 44.6
Gross Player Payments 29.0 28.7 28.6 28.3 26.8
Total Player Payments 27.1 26.1 26.7 25.5 24.3
% of Total Club Expenses
Total Football Department Expenses 49.0 47.4 47.6 47.2 45.1
Gross Player Payments 29.0 28.3 29.3 29.1 27.1
Total Player Payments 27.1 25.8 27.4 26.2 24.6
2006 2007 2008 2009
% of Total Club Revenue
Total Football Department Expenses 43.4 41.5 41.0 42.9
Gross Player Payments 25.6 23.7 22.9 23.3
Total Player Payments 23.2 21.7 21.1 21.4
% of Total Club Expenses
Total Football Department Expenses 45.0 44.4 43.2 45.9
Gross Player Payments 26.6 25.3 24.1 25.0
Total Player Payments 24.1 23.2 22.2 22.9
Table 5: Football department expenses (%) per Club, 2003-2009
2003 2004 2005 2006 2007
Panel A: AFL Club Financial Review--Survey Results
Players 69 68 68 68 64
Coaches 9 10 10 10 10
Other Staff 5 5 4 4 5
Other Team Expenses 8 7 9 8 7
Medical and Fitness 5 5 5 5 7
Transfer Fees and Recruitment 4 4 4 4 5
Panel B: Summary Financial Information Spread-sheets
Players 69.0 67.3 66.2 64.3
Team 21.9 24.3 24.4 25.4
Fitness and Conditioning 5.6 5.9 6.4 6.7
Recruitment and List Management 3.5 2.5 3.0 3.6
2008 2009 Average
Panel A: AFL Club Financial Review--Survey Results
Players 67.4
Coaches 9.8
Other Staff 4.6
Other Team Expenses 7.8
Medical and Fitness 5.4
Transfer Fees and Recruitment 4.2
Panel B: Summary Financial Information Spread-sheets
Players 62.5 62.1 65.2
Team 25.7 26.1 24.6
Fitness and Conditioning 7.4 7.6 6.6
Recruitment and List Management 4.4 4.2 3.5
Table 6: Distribution of league operating surplus (%), 2001-2009
Percentage of AFL Operating Surplus (%) 2001 2002 2003
AFL Payments to Clubs 89.7 64.7 69.4
Payments to AFLPA 8.3 5.7 6.7
Game Development Grants 23.9 16.1 14.4
Ground Improvements 2.3 5.5 5.4
Facilities Development
New Markets
Future Fund Reserve
Facilities Development Reserve
Net Surplus -24.3 8.0 4.1
Percentage of AFL Operating Surplus (%) 2004 2005 2006
AFL Payments to Clubs 72.3 70.5 69.0
Payments to AFLPA 6.2 6.0 6.2
Game Development Grants 14.9 14.6 15.3
Ground Improvements 4.1 3.9 4.0
Facilities Development
New Markets
Future Fund Reserve
Facilities Development Reserve 1.2 2.3 2.6
Net Surplus 1.4 1.3 1.6
Percentage of AFL Operating Surplus (%) 2007 2008 2009
AFL Payments to Clubs 62.0 63.5 63.6
Payments to AFLPA 6.0 6.0 6.5
Game Development Grants 12.8 12.5 12.8
Ground Improvements 2.5 2.5 2.3
Facilities Development 2.3 4.2 6.4
New Markets 0.8 1.4 6.2
Future Fund Reserve 8.1 8.3 8.1
Facilities Development Reserve 2.2 0.1 3.0
Net Surplus 2.6 1.2 -3.5
Table 7: Total football revenue, total player payments and total
player benefits, 2003-2009
2001 2002 2003 2004 2005
Total Football Revenue 372.7 427.4 448.5 487.8 535.2
($Millions)--Nominal
Total Football Revenue 466.6 519.3 532.4 564.4 602.4
($Millions)--Real 2009 $
TPP as % of Total Football 22.3 20.8 21.2 20.1 18.8
Revenue--Nominal
Player Benefits as % of Total 27.5 25.9 26.1 25.5 23.9
Football Revenue--Nominal
2006 2007 2008 2009
Total Football Revenue 572.0 683.9 745.5 757.0
($Millions)--Nominal
Total Football Revenue 623.5 724.1 761.2 757.0
($Millions)--Real 2009 $
TPP as % of Total Football 18.1 16.2 15.9 16.3
Revenue--Nominal
Player Benefits as % of Total 23.1 21.3 20.8 21.3
Football Revenue--Nominal
