Ceteris paribus (All things being equal…)

So the AFL heavies have been over in the US, investigating world best practice in equalisation practices. When you consider the latest horrendously uncompetitive effort by Melbourne last weekend, you’d say it’s certainly not before time.

But as well as visiting the major US sporting institutions, maybe Andy and his entourage could have dropped in at Ford Motor Company HQ as well.

Let me explain.

The big kahunas in the AFL love to describe their competition as “an industry”.

It’s a typical piece of “talk yourself up” jargon – using a term that connotes something productive rather than admit that that they derive their income from the collective, over-hyped pursuit of a bag of wind.

Anyway, if the AFL really does regard itself as “an industry”, then perhaps it could start to conduct itself like one, or at the very least, like the multi-million business that it has become.

Let’s imagine for a minute that the AFL is a global company – say, Ford – and that its constituent clubs are its major production operations around the world. It’s operating in a tough environment, competing with other football codes (car manufacturers) for market share. Each of its operations has to deliver results.

Ford HQ recognises that not all its operations will do brilliantly all the time (there’s always a wooden spooner), but their long-term survival and the good of the global brand requires certain performance standards to be met.

Sometimes, global HQ decide that it’s worth investing more in an under-performing operation in order to lift standards (think struggling Victorian clubs). Sometimes, it spends money on a new operation that it thinks will open up new markets (think Gold Coast and GWS).

However, if these ventures under-perform over time, global HQ will have no qualms in shutting them down. That’s what it’s like to be in “industry”.

Of course, the car industry (and I’ve picked this example deliberately) doesn’t operate entirely to the whims of the free market. Governments around the world regard car manufacturing as an iconic industry – big employer, high-tech manufacturing, lots of supply chain links and a splash of patriotic fervour associated with the capability to make our own cars. They offer lavish incentives to attract and retain car manufacturers, who, in turn, have become pretty cluey at playing governments off with threats of closure or relocation if the financial assistance tap is turned off.

But even with these generous subsidies, car-makers eventually bite the bullet when the long-term performance of their operations reaches the point of no return.

When Ford Australia recently announced that it would cease its local manufacturing operations in 2016, there was a predictable outcry about job losses and the demise of an icon of Australian manufacturing.

The effects of letting Ford stand or fall in the face of market forces are certainly not pleasant for those directly affected. However, the logic is hard to counter. Put simply, Ford Australia produces small volume runs of cars that fewer and fewer Australians are willing to buy, let alone the rest of the world. Even with substantial government support, the company couldn’t make a profit. Its global parent made a commercial decision that, to those with any knowledge of the car industry, had been on the cards for years.

To apply the Ford analogy back to the AFL, I would argue that at present, the League is not playing its proper role as a hard-nosed global HQ, in which it makes strategic and commercial decisions about its operations (the clubs) in the best interests of the overall competition. In this role, the consistent application of equalisation measures is entirely appropriate insofar as it provides a transparent, fair operating environment for all clubs and ensures that such support comes with strict expectations of performance improvement over time.

Instead it appears to be drifting into the inappropriate role of benevolent local government, reacting to crises by offering ad hoc assistance to struggling clubs in order to keep them afloat and keep parochial local interests happy. The prospect that Melbourne is going to receive even more assistance to compensate for its own costly mistakes and its inept recent performances is the prime example of this.

Of course, the League is operating in a “once-bitten” mindset here. In the late 80s and early 90s, the AFL suffered a PR nightmare through its wildly unpopular and, often, abortive, attempts to broker mergers and relocations of clubs. The forced demise of Fitzroy in 1996 left such a sour taste that the AFL has since pursued a strict “hands-off” policy when it comes to the destiny of individual clubs.

However, for all that the Fitzroy experience broke the hearts of long-term supporters and the more sentimental among us lamented football’s loss of innocence, who could argue that the competition as a whole hasn’t become stronger, healthier and more popular since 1996? After all, what was the logic of the AFL continuing to prop up a club that was half a century without a Premiership, had a limited supporter base, was financially bereft and was performing at such a poor standard that even its own loyal fans were leaving in droves? Parallels with Melbourne in 2013, anyone?

What particularly concerns me is that the assistance is supposedly being provided on a “highly conditional” basis but with no public disclosure of what those conditions are. On the face of it, the package appears to be totally retrospective, bailing the club out for its poor choice of coach, poor recruiting decisions and general financial mismanagement. What future performance standards does Melbourne need to meet? Over what time period? Will there be more handouts if this one doesn’t work? None of this is being made clear.

Lest this be seen as a vendetta against Melbourne, I would argue that this mode of corporate tough love should be just as rigorously applied to any other club that falls on tough times, as well as the League’s shiny new projects. The AFL needs to ask itself why clubs like North Melbourne and the Western Bulldogs should be permanently clamped to the equalisation fund “teat” when they are apparently unprofitable without this support. They need to carefully monitor the Gold Coast and Greater Western Sydney experiments and be prepared to shut them down if the extensive establishment costs don’t start delivering a return in the next few years. There may be some markets that are just too tough to crack.

Whilst I recognise that the US is the home of equalisation policies and that it’s fair enough to learn from the originators, I hope the AFL delegation also observes that changes and relocations of franchises happen regularly in competitions such as the NRL. Presumably, the underlying philosophy is not one of applying equalisation to preserve the status quo at any cost.

Twenty years ago, even ten, I’d regard what I’m thinking as sacrilege. However, the amateur competition of my youth is now a multi-million dollar corporate machine where there’s precious little room for sentiment.

Isn’t it time it was run as such?

About Sam Steele

Stainless (aka Sam Steele) started following Richmond in 1970 when he was 6. This occurred when his mother, under instructions to buy him a Melbourne jumper, found they were out of stock and purchased a Richmond one instead. Despite the decades of heartache and turmoil this fateful decision has brought on Stainless, he is grateful to his mum as he has at least seen his side win a couple of Premierships. After 30 September 2017, his mum is now officially his favourite person.

Comments

  1. The Wrap says:

    Spot on Stainless. There was no sentiment where the Roys were concerned. No attempt to reach out — in fact quite the opposite. The real problem in this equalisation matter is that there aren’t enough players to go around. In other words too many clubs – and the experimental clubs are draining the limited talent pool for the others get a crack at it. Your call for some tough action is timely indeed. But first you’re going to have to get Andrew Demetriou a hearing aid. Even then, good luck. The AFL has been hijacked by a corporate wanna be, and he & his lackies are running it as his personal fiefdom.

    And aren’t you glad they were out of Melbourne jumpers that fateful day back in 1970. Three Flags and another competitive era in sight. Eat ’em alive Tigers.

  2. Cat from the Country says:

    Hard decisions are found everywhere. Governments and AFL just can’t seem to bite the bullet and do what’s is right for the Greater Good.
    Why does the AFL have to keep propping up under- acheiving footy clubs?
    Why won’t the Government upgrade our train lines?
    Why do big business management continue to have obscene pay packets?
    Sometimes I despair on umpiring when spectators see blatent rule infringements and umpires don’t.
    Life is full of disappointments and one just has to get over it and soldier on!

  3. Stainless says:

    Nice point about the jumper Wrap. How lucky was I?

  4. Gregor Lewis says:

    Man, I wish I’d read this before I decided to submit my own piece.
    The writing of it was cathartic for me, but the reading of this had my head nodding up and down like an arthritic gimbal that’s just been oiled.
    Disagree about the new clubs though.
    A few years must be at least a generation – 20 to 25 years – to create a pattern and preserve the National Competition Ideal of live footy in each ‘Full Member State’ every week. (not just on TV).

    grl

  5. Thanks Gregor
    I take your point about the new clubs. I guess I’m thinking GWS in particular where the League has taken a real gamble in going into heathen territory. You could argue that this requires an even longer term strategy than 20 years, but equally, if there is clearly no take-up in the shorter term, the AFL must ask itself how long it’s prepared to leak money for no obvious return.

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