Talking Footy

$50m bill for Carlton rescue
By Greg Denham
March 10, 2006
http://foxsports.news.com.au/story/0,86 ... 11,00.html

CARLTON's financial problems could cost the competition more than $50 million over the next 30 years.

One of the options available to the AFL to bail out the Blues is to subsidise the maintenance cost of their Optus Oval training headquarters.

A cash-strapped and debt-riddled Carlton revealed this week it cannot afford the ongoing cost of servicing the ground, at $1.8 million a year.

Blues chief executive Michael Malouf said yesterday that should the AFL adopt the ground management rescue, he expected a deal to be struck for at least the duration of the present lease arrangement, to 2035.

"It could go beyond that, depending on the state Government and the Melbourne City Council," Malouf said.

The bail-out proposal has already been opposed by several rival Melbourne clubs who have labelled the proposal outrageous and estimated, with inflation, the real cost to the competition would be close to $100 million.

"The AFL said that the Carlton ground was never going to be used again," one club chief executive said.

"So it's a drastic about-face and something the competition can't afford.

"There are better ways around Australia to spend that money."

Malouf was reluctant to declare how much financial assistance Carlton required and in what time frame, but said: "Sooner rather than later, it's a high priority."

Carlton president Ian Collins said this week retaining the Blues' independence was the chief reason his club would not immediately apply for the AFL's annual special distribution fund which assists the Western Bulldogs, the Kangaroos and Melbourne.

The Blues this week announced a group (combined football club and social club) loss of almost $1m and confirmed their debt to be $7m.

The club wants Optus Oval to be available as a back-up third AFL venue in Melbourne, and has received support from league chief executive Andrew Demetriou.

Demetrious said this week the league would help the Blues, admitting Optus Oval had to be maintained in case either the Melbourne Cricket Ground or Telstra Dome were unavailable during the home-and-away season.

"Carlton is one of the few clubs in the competition that has its own ground, it costs them about $1 million to $2 million to maintain, and they are not deriving any revenue from it," Demetriou said.

"That is a pretty heavy burden for a football club because all our other clubs are either renting grounds or if they have got their own grounds are deriving revenue from (them), such as the Brisbane Lions (at the Gabba) ... in this state we play about 100 games a season and we need a fallback for the MCG and Telstra Dome."

The AFL has intimate knowledge of Carlton's books and three-year business plan and it expects to be in a position to provide an outcome in two to three months.

The league is concerned by Carlton's financial position and, along with independent auditors, will work closely with its administration and advise if its business model is sustainable.

Malouf said about 35 football games were played at Optus Oval each season, including the VFL grand final, amateur games, women's football and AFL practice matches, as well as it being used as a training facility by rugby league club Melbourne Storm, which pays rent.

The Blues are also negotiating with the AFL, the state Government and the Melbourne City Council for a $12 million redevelopment of the ground as an elite training facility with new administration offices and community infrastructure.

But Carlton has so far been unable to secure federal Government funding, and the Blues need to find an additional $2 million for the project, which is separate from their day-to-day cash-flow needs.

The Western Bulldogs secured $8 million in federal funding in October 2004 for their Whitten Oval redevelopment, while Geelong attracted $2m in federal funding for its completed Skilled Stadium redevelopment.

The last AFL game was played at Carlton's historic home ground last year.

Instead, the Blues were paid $2.6m up front by Telstra Dome/Channel Seven to sign a 10-year arrangement to play the bulk of their home games at Telstra Dome.

Malouf said that Carlton's poor season last year, in which it won four games and finished on the bottom, had forced "readjustments" to the second year of its three-year business plan.

He said this year's budgeted loss was a confidential figure, but that he still expected the club to reach a positive cash-flow position by 2008.

After a record membership figure last year of 33,535, the indication is that the Blues will struggle to reach 30,000 in 2006.

Figures have membership numbers down by as much as 12 per cent on last year's corresponding figure.

The league deemed Optus Oval too derelict as a viable alternative AFL venue for this season while the MCG is reconfigured after the Commonwealth Games.

Rather, fixtures that would have been played at the MCG in the first month of the season have been relocated to Carrara on the Gold Coast, at Launceston's Aurora Stadium and to Telstra Dome.