Crowds down as financial disaster looms over Kennett stadium dream

You don’t get many stories comparing state taxes, state spending levels, benefits for state politicians and the list goes on and on.

Well the same applies to the disasters unfolding in various state-funded sporting stadiums. Remember how most states had disastrous state banks. Well the losses on sports facilities could yet approach the billions lost in state banks 10 years ago.

ACT chief minister Kate Carnell lost her job over Bruce Stadium blow outs, the Olsen government in SA is afflicted by stadium woes, the new Gallop government in WA is already in pitched battle with Multiplex over a new stadium for Perth Glory, Stadium Australia is effectively insolvent and the Beattie government is considering spending a couple of hundred million redeveloping Lang Park. (Wouldn’t Rupert appreciate that for his Super League.)

But Melbourne’s privately owned Docklands stadium is shaping up to be an absolute disaster. Jeff Kennett should never have offered the financial inducements to the AFL and injected $70 million of state funds to get this $500 million project up as a kick-start to his broader $10 billion dream for Docklands.

Malcolm Maiden had a good piece in the Saturday Age about Docklands which covered the recent $45 million lifeline from the Seven Network at an effective 20c in the dollar. But there are plenty of other facts that have fallen off the back of a truck outside Crikey’s place.

The original financial revenue projections were based on the stadium being entirely booked on reserve seating – and premiums would apply of course.

On top of that there would be the Medallion Club (limited to 5000, paying $20,000 over 4 or 5 years). Crikey looked at this back in 1999 but decided $400 a month on the direct debit was a bit steep.

They also assumed 3000 Access members who pay about $60 a month.

Last year the 48 AFL attendances averaged 29,000 a game (not 20,000 as Mal said in his Age piece). Yet the original projections were based on 32 games at 44,000, (not 30 at 40,000 as Mal said). Anyway, the AFL claim that the overall annual total exceeded what was projected ignores the uncomfortable economic reality of the hugely increased cost factors in opening up the stadium 16 more times to get basically the same annual crowd.

The Docklands shareholders threw out the venue managers from Spotless (which has AFL supremo Ron Evans as its CEO and one of the major shareholder) last year but this cost them about $20 million in the process.

Running costs of the stadium have been much higher than expected. Apparently the “break even” point for the clubs – the point where they start to get their match receipts – was 30,000 last year compared to 20,000 at the MCG and Waverley.

The AFL had to fork out big bucks to compensate a lot of the clubs that played home matches there last year. Melbourne, Richmond, Geelong and Collingwood then pulled back on the number of games they would play there in the future, which means that only 43 games are scheduled this year.

Reserved seating premiums

It only took a few rounds last year for the “fully reserved” ticketing system to be abandoned. Now the top tier which holds 22,000 people is sold on a walk up basis. However it is well known around the fan fraternity that it is easy to slip into an empty premium level 1 or even level 2 seat once you’re inside the ground. This must be having some effect on the sales of the premium seats.

The Medallion Club did not fill the 5000 quota last year and was heavily advertised again at the start of this season. We’re told that the Medallion Club area is often less than half full. There have been rumours going round of a drop off in Medallion Club membership. On Crikey’s figures, $400 a month seems a lot to pay for a single reserved seat at every AFL match played there – plus the dining room, bar and your own individual baby TV screen on the seat. You don’t even get car parking!

The one day cricket three dayer played last August between Australia and South Africa drew crowds of less than 35,000 – instead of being the sellout they were hoping for – and is not likely to be repeated this year.

The Barbara Streisand concert turned into a debacle because the acoustics in the stadium are simply dreadful – which must be one of the reasons why the expected heavy entertainment bookings have not materialised.

But the interesting thing is what’s happened this season. And that is up until last Saturday, of the nine matches at Colonial that had corresponding matches last year. (Bulldogs v St Kilda , Essendon v Port Adelaide, Collingwood Freemantle, St Kilda v West Coast, Bulldogs v Collingwood, Bulldogs v Hawthorn, St Kilda v Sydney, Essendon v West Coast and Geelong v St Kilda) EIGHT have dropped in attendance by an average of 6000 per match. The only match up that bucked the trend was Geelong v St Kilda in round 2 that went up by 4800. The total crowd loss so far on corresponding games last year was 46,265. It seems as though the fans are voting with their feet.

And last year by round 9, there had been three 40,000 plus crowds at the stadium compared with none this year. So there was a lot riding on the Essendon v Hawthorn match at the weekend. Which is why the AFL didn’t shift the match to the MCG despite all that criticism.

In the event they got 50,700 – a record crowd and about 3,700 more than the Essendon v Hawthorn match there last year. So now they are talking the ground up (see Mike Sheahan, former AFL mouthpiece, in Monday’s Herald Sun.) But on the trends, this will be a one off – and at the end of the year Colonial could well show a drop in crowds.

If Colonial did go to the “wall” so to speak – sure its all bricks and mortar – but Crikey does wonder what the financial effect would be on the tenant clubs, especially St Kilda and the Western Bulldogs which are already struggling financially. What would be the effect on the AFL having to continually pay out compensation? Who would buy the stadium in the firesale? Murdoch and Packer? Would they then “own” the AFL just like they “own” rugby league. And what a fine job they did with that too.