The AFL, NRL and Privatisation

With reports recently concerning the Brisbane Roar and St George Illawarra, I thought Id take a brief look a the football codes and their history of private ownership.

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 members not receiving even a single elected director, and Fremantle members electing just two, of nine directors.

The arrangement is Western Australia is phenomenally profitable, in large part due to an extremely generous stadium arrangement with their landlord, who is also their owner (this doesnt always work out for the best, see Adelaide and Port Adelaide). This has enabled West Coast to bank almost 40 million dollars while both clubs have returned between 8 and 12 million dollars ANNUALLY to the WAFC.

Of course, before WA even had an AFL club, the AFL 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).

With negotiations failing 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.

The AFL has since 1992 been strongly opposed to private ownership of clubs.

AFL Privately owned clubs:

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

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.

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. The club is currently under the control of the National Rugby League which formally took over in June 2014.

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.

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.

NRL Privately Owned Clubs:

  • Manly-Warringah (87%)
  • South Sydney (75%)
  • Gold Coast (100%)
  • Brisbane Broncos (100%, 67% by News Limited)
  • Melbourne Storm (100%)
  • New Zealand Warriors (100%)

 

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