The AFL, NRL and Privatisation

The Australian Football League

While most of the league is now either operated from headquarters or member owned, there remains two clubs in semi private hands, West Coast Eagles and Fremantle Football Club. Both clubs are 100% owned by the West Australian Football Commission, with West Coast and Fremantle members not receiving even a single elected director (Fremantle changed in 2014 from two member elected directors back to WAFC appointments only)

There has been some history of private ownership and a number of attempts at private ownership through the years.

In 1985 the then VFL sold the Sydney Swans in 1985 to Geoffrey Edelsten for 6.3 million, although the full amount was never paid and by mid 1986, Edelston had stood down as club chairman. (although the company he set up to control the Swans, Powerplay, continued as owner) In May 1986, the Swans were formally taken over by the VFL, after the league bought some of the shares owned by Powerplay Ltd.

The VFL sold the club again in December 1988, this time to a consortium led by media personality Mike Willesee.The Swans were in dire trouble by 1992, and the AFL effectively bailed them out by refunding 1.9 million of the license fee, and redirecting it into the club.

This arrangement lasted until April 1993, when the AFL again was forced to take over the club and appointed Alan Schwab to turn the clubs fortunes around. The Swans remain under the control of an AFL appointed board (a position shared by newcomers GWS and Gold Coast, and now the Adelaide clubs).

In 1986, North Melbourne floated itself on the stock exchange – the only VFL club to do so, and one of two clubs in the AFL to have done so (the other being West Coast). This arrangement lasted until 2006 when it reverted to membership control.

In 1986, Indian Pacific Limited was floated to raise funds for the West Coast Eagles license – The float eventually raised $12.3 million. The WAFL solds its sublicense to Indian Pacific Limited for $5.6million, making a 1.6 million profit. IPL would later be taken over as a 100% subsidary of the Western Australian Football Commission after it ran into some financial trouble. It was revealed later that SAIL, a south african sporting company had tried to buy 49% of West Coast in the early 90s, an attempt which was ultimately rejected by the WAFC and West Coast.

With license negotiations having originally failed in South Australia, the league offered a 4 million dollar license in Brisbane which was taken up by actor Paul Cronin and his backers, including Christopher Skase. That fell through with the collapse of the Quintex Group in late 1989. The Bears  were purchased in 1990 by Reuben Pelerman, who was unable to make much headway financially, and the club was given over the the members to control in 1992, and in 1996 merged with the Fitzroy Football Club – the club is presently entirely member controlled.

In 1990, The Adelaide license was sold to the SANFL who controlled it until 2014 when it reverted to AFL board control for at least 15 years, it is due to be released in 2028 after it has paid the SANFL $11.326 million for its license.

In 1991, Carlton allegedly tried to take over North Melbourne as it sought to purchase 20-40% of the club using shares it was thought to have bought from Tricontinental. The idea was vehemently opposed by other clubs and was never seriously considered by the League.

In 1994, the Fremantle Football Club license was awarded to the Western Australian Football Commission, who have total control over the club and its board.

In 1996, the Port Adelaide Football Club license was awarded to the SANFL, who held it until March 2014. The license is currently held by the AFL until at least 2028, while Port pays the SANFL $6.985 million for its license.

The AFL has since 1992 been strongly opposed to private ownership of clubs and negotiated the release of the SA licenses from the SANFL during the Adelaide Oval negotations in 2013 and 2014. Adelaide’s AFL licence was released for $11.326 million, while Port Adelaide will pay $6.985 million over 15 years from 2014. The Crows constitution specifies an end date of October 30, 2028 and Port Adelaides constitution doesnt mention an end date at all.

In 2012, The AFL was believed to be canvassing the idea of buying the WA licenses from the WAFC. On August 28th, the West Australian and WA today reported that Andrew Demetriou had said the AFL could not order any change to the license structure of the WA clubs, despite the desire of both West Coast and Fremantle, as well as the AFL to remove the clubs from the shadow of the WAFC. He also said there was no specific time frame for it to happen.

While notionally independent bodies,  the leagues approval is required however for boards appointed at Greater Western Sydney, Gold Coast, Sydney, Adelaide and Port Adelaide. For the two Sydney clubs and Gold Coast, the League is the sole voting member of all three organisations until such time as it deems the “transition” period to have ended.

AFL Privately owned clubs:

  • The West Coast Eagles, through Indian Pacific Limited are 100% owned by the Western Australian Football Commission.
  • Fremantle Football Club Limited are 100% owned by the Western Australian Football Commission.

AFL Club Constitutions

The National Rugby League

The National Rugby league has adopted a pragmatic approach to private ownership. While it contains many traditional clubs, it hasnt rejected the idea of private ownership either.

Up until 1988, the New South Wales Rugby League consisted entirely of member owned entities, including the 1980 Illawarra team.

In 1982, The Canberra Raiders were admitted to the NSWRL, and were originally community owned, but later sold a 50% interest to News Limited. This control ended in 2002, when the NRL club was sold back to the District Club.

This was followed by the Melbourne Storm who were introduced and owned by News Limited, and sold in 2013 to a local business consortium led by New Zealander Bart Campbell.

(It should also be noted that News Limited took over the Hunter Mariners after the members of the supporting Newcastle Wests leagues club effectively voted to abandon the license after its first year, and had some control over the Western Reds.)

North Queensland were taken over by News Limited in 2001  and privately owned until 2007 when they were sold for a reported $2 million to the Cowboys leagues club and returned to communty ownership.

The South Sydney Rabbitohs were member owned, up until 75% of the club was purchased by actor Russell Crowe and Peter Holmes a Court in 2006. Holmes-a-Court sold his 50% stake in the controlling company to James Packer in June 2014 for about 7.5 million.

The Gold Coast Titans were the third incarnation of a Gold Coast side, and owned from the outset by a consortium led by Micheal Searle. Searle still holds a 40% stake in the club. Darryl Kelly paid 3.6 million for 34.5% of the club in early 2014, with 25.5% held by Indian property tycoon, Anshuman Magazine. As of August 2014 however, he still hadn’t entirely paid for his share. In Ferburary 2015, the club was taken over by the NRL to prevent an imminent collapse. In August 2017, the club was put up for sale by the League, and in December, it was announced that the licence had gone to a consortium including Darryl Kelly and Rebecca Frizelle

Newcastle Knights were a member owned club until they were purchased by Nathan Tinkler in April 2011, following an AGM vote that gave him 97% approval to take over. By 2014 however, Tinkler was in grave financial trouble when he officially gave up the club in May. Control pf the club was assumed by the National Rugby League which formally took over in June 2014. In August 2017, the NRL announced that they would hand over the ownership of the Knights to Hunter-based organisation The Wests Group on November 1.

Manly-Warringah originally sold a 50.8% shareholding to the Penn family, but over time this was diluted down to the 48.97% controlled by Penn Sport, with Surfside Manly Football Club Pty Ltd (Quantum) holding another 36.75%. The original Manly-Warringah Rugby League Football Club Ltd holds 14.28%, while the members control the colours and emblems of the club through Manly-Warringah Rugby League Club Ltd. In October 2014, it was announced that Penn Sport had purchased the shares held by Quantum for 6 million, giving it 90% of the club, although the actual figure is 85.72%, with the remainder still held by the District Club.

70% of the New Zealand Warriors was sold to Cullen Investments in 2000, and by 2006 Warriors were fully privatised  when Eric Watson and Mark Hotchin purchased 100% of the club in a deal where the NZRL gave up its 10% shareholding. It is now fully privatised with control split 50:50 between Eric Watson and Owen Glenn as of 2012. It was revealed in April 2014, following the firing of key staff that Glenn may be looking to sell his share.

In December 2014, the St George Illawarra Dragons revealed that they were considering private investment in the club in order to be able to match it with the bigger clubs financially. In August 2018, it was announced that WIN Corporation would take a 50% stake in the Dragons. The former owners, Illawarra Steelers Club retain a seat on the board, with the remainder split between WIN and the St George Rugby League Club

Wests Tigers were a merged entity with joint control by the boards of Wests and Balmain. One hundred shares were issued to Balmain Tigers Rugby League Football Club and 100 shares were issued to Western Suburbs Rugby League Football Group Pty Limited as a 50/50-owned joint venture.

On 17 September 2014, after finace problems arose at Balman,  a new shareholder agreement was put into place with the supervision of the NRL. The board was reduced to seven with two from Balmain Tigers, two from Wests Leagues and three independents.  On 25 September 2014, with Balmain Tigers moving into Funding Default to the Wests Tigers, the board nominees from Balmain were withdrawn and with the backing and support of the NRL a new reduced five-person board of directors was appointed, with independent Marina Go announced as the new chairman of the board.

In 2016 it was announced that Wests Ashfield would take a 75% interest in the club. The new board had five members appointed from Wests Ashfield, two from Balmain along with two independents. In 2018, Balmain Leagues went into Voluntary administration, and in 2019 it was announced that Balmain Leagues and Wests Ashfield would merge.,

NRL Privately Owned Clubs:

  • Canberra (100%)
  • Manly-Warringah (87%m Penn, 13% Manly)
  • Melbourne (100%)
  • South Sydney (75% Crowe/Packer, 25% Member Co.)
  • Gold Coast (100%)
  • Brisbane Broncos (100%, 67% by News Limited)
  • Melbourne Storm (100%)
  • New Zealand Warriors (100%)
  • St George Illawarra (50% WIN, 50% St George Rugby League club)
  • Wests Tigers (100% Wests Ashfield/Balmain)

 

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