Essendon Football Club chief executive Peter Jackson has described suggestions that Victoria's wealthier clubs were just that because they played 'blockbusters' as simply wrong. Jackson was responding to recent comments in the media relating to the AFL’s announcement that it is to review its equalisation policies across all areas.

Jackson said suggestions that income earned by clubs participating in 'blockbusters' was being generated at the expense of smaller clubs didn’t stack up. He described the comments as ""simplistic"" and said that the money earned from these games was nowhere near the level that has been suggested. He added that too many people making comment didn't understand the issue of equalisation and the contribution Essendon was making to the well-being of the national competition.

""In 2001 our total match receipts from home games was $1.5 million - this was up from $1.1 million in 2000. We paid $588,000 into the equalisation fund in 2001. In 2002 we are budgeting for that figure to be in the region of $607,000,"" Jackson said. ""I think that is a very significant contribution.""

Jackson said a return to gate sharing arrangement could severely disadvantage Melbourne clubs as it had done prior to the AFL changing policy and allowing home clubs to retain 100% of the gate receipt.

""I think people may have forgotten how the previous arrangement (sharing of the gate) was hurting Melbourne clubs,"" Jackson said. ""Clubs such as the Kangaroos and Melbourne with lower membership were being crucified. For example, they would attract a crowd to watch them play Adelaide at the MCG and have to share cash taken at the gate with the Crows. Since most at the game would pay cash on the day this represented their major source of revenue for that game.

“They would then head to Football Park for the return clash later in the season. The cash taken at the gate would be minimal because the ground would be basically filled with Adelaide members. Match day costs would effectively mean the match ran at a loss and the Melbourne club would be asked to split that expense. That situation was unacceptable.""

Jackson also pointed out that there were many other areas in which the AFL’s equalisation policy worked against Essendon and other bigger Victorian clubs to the benefit of the smaller clubs.

  • Most of the profit from the sale of merchandise is equalised with all 16 clubs receiving a share. This is despite the fact that Essendon merchandise makes up about 12% of all merchandise sales. The AFL has addressed the issue in part in recent years by only equalising one third of royalties on sales of authentic gear, but the majority of merchandise profit is equalised.
  • In terms of sponsorship, the AFL negotiates major sponsors for the AFL competition as a whole and thereby severely limits the opportunities for clubs obtain sponsors with competitors of the AFL sponsors.
  • When people talk about the unequal draw, particularly blockbusters, they ignore other matches scheduled in the draw to assist football and other clubs. For each of the last four seasons since 1999, Essendon has been drawn to play Sydney and Brisbane as their home games in an effort to promote football in those states and earn substantial match-day income for these clubs. In that time Essendon has been drawn to play Sydney as a home game twice and Brisbane as a home game once. This promotion of football may also ultimately affect teams ladder positions.

    Jackson said Essendon should not be penalised for managing its business effectively. He said Essendon’s move to Colonial Stadium had underwritten the club’s financial position through increased revenue from membership and reserved seat sales. “It was a move that was not only backed but encouraged by the AFL,” Jackson said. “Essendon has a long-term agreement with the Stadium but I would still be extremely disappointed if the AFL attempted to change conditions under which we made the move.

    “Essendon was the first club to commit to Colonial Stadium. And took the associated risks in making that decision. The fact is that it has been the right decision and it has been effectively managed by this club.

    Jackson then turned to the TV rights – a deal he says was sold to clubs on the basis it would benefit the competition as a whole. However, the ability of broadcasters to select the “big” games and broadcast them on Friday or Saturday night has done significant financial damage to Essendon, according to Jackson.

    “Nine of our 11 home games are scheduled for Friday and Saturday nights in 2002. This has adversely affected our membership and reserved seat sales,” Jackson said. “Family and junior memberships have dropped and it equates to about $400,00 in lost profit.”

    And Jackson hit out at media commentators who suggested the broadcast of games in these timeslots were of substantial benefit in terms of prospective sponsors. “Major sponsorships are by their very nature long-term and our deal with Orange was in place before the 2002 schedule was released,” Jackson said. And secondly, many games are not going into Sydney and Brisbane markets free-to-air in reasonable timeslots so there is limited benefit to major sponsors in those markets.

    “We support the 16-team national competition and we are all looking for fair and reasonable ways to make sure it thrives. But people need to understand the total picture in relation to equalisation, and not look to a simple re-distribution of wealth as the answer. Equalisation policies need to be carefully evaluated. What is at issue is the total income flowing to clubs from AFL policies. A simple re-distribution of existing income could mean clubs like Essendon may also be fighting for survival.”