an NRL club needs to generate around $12m per year to stay afloat. The Giants are spending $33m in 2012. Do you reckon the AFL can afford another baby club suckling at its teat?
Now for AFL austerity measures June 28, 2012
THE AFL has embarked on a severe campaign of cost cutting to slash $5 million from its annual budget and is encouraging clubs to follow suit in tightening their belts.
The AFL's acting chief executive, Gillon McLachlan, last night confirmed the austerity campaign but refused to say which football and competition initiatives would be hardest hit.
McLachlan denied the cuts were related to alleged blowouts in funding for Gold Coast and Greater Western Sydney, despite some scepticism from the existing clubs. He stressed that the $220 million originally committed over six years for the Suns and the Giants would not increase.
''We're having a look at our cost base like most businesses are at the moment,'' said McLachlan. ''We've had sustained periods of growth but we are looking at all departments and programs and we're reviewing that cost base and reviewing the budget structure for the 2013 budget process.
''It's the right time after a period of widespread growth and development to consolidate and maybe spend less in more areas across all departments.''
All AFL departments including football, game development, strategy and club support, and marketing and commercial operations are looking at cost cutting and must report back to the league's financial boss, Ian Anderson, by August.
It is now unlikely there will be an exhibition game played in London in October, as previously forecast - although McLachlan said that game was a separate issue - and, while unrelated, Richmond will not contest a pre-season game in India next year. No budget has been put in place by the AFL for that game and the Tigers have put their plans off for a further 12 months.
While McLachlan would not put a figure on the cuts, The Age believes the AFL aims to cut $5 million from its budget forecasts each year for the next three years. This is despite the competition expecting better-than-forecast results over that time, largely thanks to corporate and sponsorship agreements.
The AFL has recently struck impressive new 10-year deals with Carlton United Breweries, the ACT government and, before that, NAB.
McLachlan denied the substantial pay rise afforded the players in the five-year $1.144 billion wage deal secured by the AFL Players Association led to the austerity measures.
The players won a rise of 7 per cent in clubs' total player payments for next season, 4 per cent in 2013 and just over 5 per cent in 2014.
However, many of those increases have been absorbed by the clubs, including next year's 40 per cent increase in marketing payments outside the salary cap, an increase in rookie payments of up to 20 per cent and additional injury payments.
The clubs were also horrified - and some kept in the dark until February - to learn they had to budget for an extra $100,000 to cover AFL-related expenses including footballs and development technology.
Ian Anderson has again warned clubs about failing to meet budgets, with the AFL increasingly concerned at Brisbane's abysmal off-field performance and looking closely at Port Adelaide and St Kilda, to name two.
AFL chairman Mike Fitzpatrick recently stated that the AFL CEO Andrew Demetriou's ''unfinished business'' included working with close to half the clubs still failing to break even, with many of those still in multimillion-dollar debt.
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