In 2005, AFL chief executive Andrew Demetriou was paid $780,000 to do his job; last year, his salary rose to $1.4 million. The AFL’s remuneration committee deemed that Demetriou’s performance had been so good over those two years that it warranted an 80% pay hike.
Inflation in that time has been negligible, the CPI running at about 3%. Most other CEOs – even at a time of executive salary blowouts – have had to make do with considerably less. The NAB’s chief executive John Stewart, for example, was rewarded last year with a piddling 5% increase.
Over at The Lodge, the Prime Minister’s salary since 1999 has limped up from $289,000 to roughly $336,000 – or a 15% rise. But that is over eight years.
And yet Andy boy pulls in 80% over two years. Why?
A chief executive in Melbourne who runs a vaguely similar club-based organisation and who is paid a similar amount to Demetriou is the RACV’s Colin Jordan. Jordan has responsibility for seven different businesses, 1700 staff, $2 billion in assets and 1.9 million members. And the RACV runs a profit of at least $100 million a year. On every count, it is a larger concern than the AFL, which recorded a profit of $26m last year. Yet, with fewer staff and responsibilities, Demetriou is remunerated the same as Jordan.
So, the question is begged: what has Andy D done to deserve the dough?
There is no denying the AFL secured a massive broadcast rights deal in January 2006, far in excess of what they had banked on. But it would be cheeky in the extreme for Demetriou and his team to claim credit for that.
Like an auctioneer mediating in the bidding between two people whose hearts are set on buying the same single-fronted terrace in North Carlton or Paddington, Demetriou happened to be in the right place at the right time as two of Australia’s richest men, Kerry Packer and Kerry Stokes, ramped up their own private power play to the tune of $780 million.
That much was revealed by James Packer in the weeks after his father’s death. Packer said that the Nine Network’s AFL bid was as much about making his rivals at Channels Seven and Ten pay top dollar as it was about ensuring his own network snared the lucrative deal. ’’If you get it, it’s OK and if the other guy gets it, you know, it’s going to be hopefully causing a bout of indigestion,’’ Packer jnr said.
All the performance indicators by which Demetriou’s job is judged – crowds, revenue, profitability, junior participation and so on – are up. So, within those narrow parameters, he can be considered to have done his job well.
But what about the intangibles, such as the League’s image? On Demetriou’s watch in the past two years, the AFL brand has taken a battering. The league watched helplessly as the Ben Cousins drug crisis unfolded before it, one PR disaster after another that went unchecked for months. Demetriou’s close links with those in power at West Coast did not help the perception that he was cutting the club too much slack.
The AFL also took a hammering from the former federal government, media pundits and many people within the game for its controversial three-strikes illicit drugs policy. And, after the most unsubtle and ham-fisted attempts at “persuasion”, Demetriou failed to convince the Kangaroos to relocate to the Gold Coast despite a $100 million offer.
So it hasn’t been all beer and skittles for Team AFL. Perhaps fortunately for Demetriou, there’s no KPI dealing with the game’s image and the public’s perception of those running the game.
It is believed Demetriou wanted to be better remunerated than his one-time right-hand man, Ben Buckley, who was enticed to head Football Federation Australia on about $1.2 million a year. And in explaining Demetriou’s pay rise, which included bonuses, Commission chairman Mike Fitzpatrick said the AFL had decided to increase wages for key executives in order to stop poaching from other sports. Well that’s an argument that can be used to justify any pay hike, and is impossible to disprove. Was Demetriou awarded an 80% pay rise, and a $1.4 million salary, because he deserved it or just because the league wanted to deter any would-be suitors?
The AFL chief executive’s new deal was determined by the remuneration committee, comprising Fitzpatrick, Sam Mostyn and Bob Hammond. In 2006, the committee included the late Ron Evans, the then AFL chairman and well-known Demetriou supporter.
Demetriou said people would make their own mind up about the near-doubling of his salary in two years. At the moment the jury is out. Soon enough, though, they’ll come back with a verdict: that the game is succeeding because of Demetriou, or in spite of him.