Etihad Stadium (Docklands)

Name: Etihad Stadium (formerly Telstra Dome, Colonial Stadium)
The Docklands Stadium is located in the Melbourne CBD, near Spencer Street Railway Station and sits in the heart of the Docklands discrict. It has an AFL capacity of 53,000.
It is the headquarters of the Australian Football League and it is the home ground, or partial home ground of several Australian Football, Big Bash and A-league teams.
Current home sides (2016)
  • AFL – Essendon, Carlton, North Melbourne, St Kilda, Western Bulldogs
  • BBL – Melbourne Renegades
  • Aleague – Melbourne Victory
Development
The development of what has now become a first class international acclaimed venue was first discussed more than 10 years before its development. There was a view that soccer and rugby league required a new stadium but costs made the concept prohibitive. As a result, planning turned to the idea of developing a privately funded stadium which could accommodate a number of sports including AFL, soccer, rugby league and union, cricket as well as entertainment acts.
The AFL’s 1997 Annual report says that the Seven Network had formed a partnership with Baulderstone Hornibrook, Merril Lynch, Westpac and News Limited to form the Docklands Stadium Consortium which was to build an operate the stadium. This was announced by the Premier of Victoria, Jeff Kennet in September 1997. The joint company was known as Stadium Operations Limited.
The concept of building a stadium with a closing roof and retractable seats was raised. When locations were discussed, Melbourne Park was given first consideration, but the Docklands’ precinct was also in the mix. The Victorian Government wanted to open up the Docklands area, bridging the CBD and Spencer Street Station, now known as Southern Cross Station.
A build, own and operate scheme was the theme of the original plan, but after some negotiation the AFL entered into agreement to buy the future ownership of the stadium for $30 at the expiry of a 25 year lease period.
Originally projected to cost $385 million, on March 9, 2000, after two years of construction and $450 million, the venue was handed to the operators.
The 2000 AFL Annual Report states that indiustrial action delayed the opening until just a few days prior to the season start. Preseason games had to be moved to other grounds, and testing was unable to be conducted before the season started. The AFL notes that there were a number of major operational issues including an inability to properly access the stadium and book tickets.
Different types of grass were used on the playing surface at times, leading to an unsatisfactory playing surface and the round 14, 2000 game between Carlton and St Kilda was moved to the MCG with just 24 hours notice.
 
The AFL Discussion
According to the AFL’s 1997 Annual Report, the league believed it had a choice. It could upgrade Waverly Park – which would be nearly 30 years old in 2000 and which would require an immediate capital injection of between 14 and 60 million dollars. In  return the league said the transport situation showed no hope of improving, and there was a prospect of little financial return for investment. The league would also have to increase its debt.
On the other hand, the league could transfer its equity in Waverly to Docklands, and for that price would own the stadium in 25 years with no further investment needed during that time.
Ownership
The AFL contributed $30 million from broadcast revenue, and signed a lengthy contract in order to take ownership in 2025 for just $30.00.
Upon completion Channel 7 took control of the Stadium, before selling out for $330 million in 2006 to a consortium consisting of National Australia Bank Group’s staff super fund and industry funds such as Retail Employees Superannuation Trust, Western Australia’s Westscheme and South Australia’s Statewide, and managed by a joint entity of Mirvac/Leighton Holdings – Melbourne Stadiums Limited.
In 2011, Etihad Stadium made a loss of $19.1 million, but had an operating profit of $630,000 on revenues of $69.9 million.
The financial report of the stadium’s owner, Stadium Operations Limited, revealed net operating profit reached about $4.8 million in 2013, up from $3.9 million the year before. Total revenue rose by about 10 per cent to $79 million. However, the stadium’s net loss after about $21 million worth of interest expenses was $16.7 million, down slightly from the $17.3 million loss recorded in 2012. The Stadium Operations balance sheet showed its owners have a loan of about $199 million outstanding.
Land Ownership
According to the 1997 AFL Annual Report, the League said that it concluded negotiations with the Docklands Auithority for the freehold title to the land in March
According to the 2015 Concise Annual AFL Report, The AFL paid an Option Fee of $30 million to the Docklands Authority in 2001. This gives them the option to take the freehold land title on the land for $30.00 anytime within 6 months of the end of the present lease arrangment. Essentially the AFL will pay $30,000,030.00 for the freehold title to Docklands.
In 2012, The Age would report that the Kennett Government had been giving land in the Docklands away for a song. One of the first land deals orchestrated by the Kennett government in 1999 in an effort to kickstart the Docklands precinct saw the 136,970 square metre New Quay precinct, roughly five city blocks in size, sold to developers MAB Corporation for $3 million. The deal priced the land that came with harbour access at $22 per square metre. (A Brunswick workers’ cottage in 1999 cost $991 per square metre.).
The AFL deal
The AFLs prospective deal is reported in the 1997 Annual report.
As part of the final arrangement –
  • Docklands is entitled to a final if there are two or more finals in the first week, otherwise they must be compensated with extra matches the following year.
  • 46 games a year contracted until 2013, then 40 games a year until 2025
  • best endeavor clause requires at least 30 games to have a  potential crowd of at least 40,000 or more.
  • Stadium returns for crowds of 40,000 are believed to be about half that of a similar crowd at the MCG.
  • No third stadium can be built before 2025
  • The AFL and clubs receive 36% of match revenue.
Renegotiations
Stadium management have explained that since Etihad recieves no government funding, the rent is higher than that expected at the MCG, limiting returns. Management also point out that scoreboard advertising at Docklands is paid to the AFL whereas at the MCG advertising is paid to the MCC.
In response to club and AFL concerns, in 2011 a new deal was negotiated where all clubs recieve a guaranteed $100,000 per match.
The leagues concern was revealed in its 2011 Club Funding Presentation where it showed that of all the clubs, North, St Kilda and the Bulldogs had the worst stadium deals of any of the AFL clubs.
On December 7, 2015, The Age reported that Geelong are unhappy being forced to play 2 games at Etihad saying that its not fair they have to pick up the slack for clubs playing games interstate, like Hawthorn, claiming it could cost the club between 1 and 1.5 million in 2016.
“We support taking the game around Australia and beyond,” said the former AFL commissioner. “We support games in Cairns and Darwin and Wellington and Launceston and Hobart, but we’ve developed a business model to play games at Geelong. And our clear preference for Melbourne games is the MCG.
“It’s like building your own house and being asked to rent for two weeks. Why two games at Etihad? Hawthorn play seven games at the MCG and four in Launceston where they’re paid a bundle. Good luck to them, they’ve done a great job but why are we being asked to pick up the tab?”
Soccer, Docklands and the AFL.
Stadium Management sided with the AFL in its dispute with Football Federation Australia citing the AFL as its major tenant with existing rights expected to be honored, and completely rubbishing the idea of being compullsorily required. Many in the soccer community blamed the absence of Docklands on the AFL, and perhaps the subsequent failure of the World Cup bid as well.
This is covered in more detail here.
In May 2015, tensions flared again briefly when Sydney FC  branded the AFL “a disgrace” for refusing to allow Etihad Stadium to host the A-League grand final, forcing it to be played at the 30,000-capacity AAMI Park.
Naming rights issues
Initially the rights to Docklands were sold to Colonial Mutual for 32.5 million over ten years. When Colonial was bought by the Commonwealth Bank, those rights were sold to Telstra for $50 million. Colonial Stadium became Telstra Dome.
In 2009, Etihad Airways paid $25 million for the naming rights to the stadium, triggering legal action by the AFL as this conflicted with its major sponsor, Qantas. The AFL said that its contract gave it veto rights over naming rights sponsorship, and threatened to not allow its various arms to refer to the stadium as Etihad. That legal action is detailed here. The situation was settled out of court, and the deal was renewed in 2012 until 2019.
The Age reported in September 2015 that the Stadiums operators were considering leasing various sections of the stadium out for marketing purposes. In an Australian first, Etihad has introduced an ambitious strategy to lease to corporate Australia the dome’s internal and external real estate for mega-size marketing installations, giving carte blanche to full ground-to-ceiling branding of the venue’s internal seats and walkways.
Surface issues
There have been some issues raised over the condition of the surface, particularly after an ACDC concert in the preseason of 2010. As a result of the concerns, and amidst the threat of player boycotts, the AFL forced the stadium management to ensure that no concerts were held in the preseason. That deal expired in the 2013 preseason, and its notable that concerns were already being expressed about the surface again in 2013.
Etihad laid extra artificial turf both behind the stadium goals and at the interchange gates because of heavy traffic which caused extra problems with the natural turf. Both the MCG and the Gabba have artificial turf but at neither ground does it extend as wide as the Etihad extensions.
“The left-hand side’s as dry as a chip, the other side people are slipping and sliding and slipping over like sprinklers have been on an hour before the game. I’m not sure, but it was very confusing when I walked the ground, and that far side is wet and slippery and the other side’s as dry as a chip. If someone can explain that to me?”
In January 2016, the Aleague website reported that a survey of Aleague footballers by the Professional Footballers Association found that Etihad Stadium had the best surface in the league with a rating of 4.7 out of 5.
Retractable roof Issues
During a game between North Melbourne and Geelong in round 2, 2013, an unexpected period of rain raised the ire of both coaches when the stadium roof remained open. It has emerged that the for occupational health and safety reasons the stadium roof cannot be closed while people are inside the stadium, and the AFL CEO Andrew Demetriou went on record saying that the roof will remain open unless rain is forecast or its a night match.
In April 2015 however, the league made a concession with its Etihad Stadium roof policy, declaring the roof will be shut for day games if the contrast between the sun and shade inside the ground is deemed to be a problem for players, coaches and spectators.
A Heraldsun fan survey in June 2015 found that 60% of fans think the roof should be closed at all times.
Early buyout of the stadium
Several prominent AFL persons have suggested that the AFL buyout the remainder of its Docklands contract. The idea first surfaced in 2011 after the AFL signed a record broadcasting contract for 1.25 billion, but has seen a renewed push in recent times. The AFL resisted  the early push as the stadiums current owners wantedt $250 million for the last 12 years of the contract.
In 2014, Fairfax reported that the league made an offer of about 250 million to the stadiums owners, who believed that the offer was about 20-30 million short. The article says Andrew Demetriou said the league was a long way off buying the stadium “at a fair price”.
In February 2015, the Financial Review reported that the stadiums owners and Melbourne Stadiums Limited were eager to sell in order to maximise returns ahead of a token sale in 2025.
The AFL believes it could make immediate savings at the stadium by taking over back-office functions such as marketing, ticketing, human resources and event management. The savings could then be used to sign improved deals for the tenant clubs to play at the stadium.
According to the Age in August, 2015  the AFL  held a series of talks with tenant clubs, broadcast partners and sponsors with a view to transforming its Docklands home into a wider sporting and entertainment precinct.
Future
In 2011, Ian Collins suggested the league may well want to sell off Etihad in 2025 believing that it would be worth 1.2 billion.
In March 2016, Eddie McGuire proposed the league sell off Etihad and build a new stadium near the MCG.
The Heraldsun reported on 17/3/2016 that there were three Chinese conglomerates interested in buying the stadium, saying that building the car parking facilities at Etihad alone would cost more than $100 million.