The COVID-19 pandemic has hammered AFL clubs with major financial pressures, with the aggregate revenue of all AFL clubs falling by 31.4% in 2019-20, to total $762.7 million.
Match day revenue was hit hard by lockdown restrictions and stadium capacity limits, limiting match day attendance and overall ticket sales. Total match attendance fell sharply by 85.3% in 2019-20, to total 1.1 million people. Sponsorship revenue for AFL clubs also fell in 2019-20, due to sponsors cutting their marketing costs.
‘The AFL saw a 15% decline in revenue in 2019-20, to $674.8 million. The AFL also reduced its total distribution to clubs by $83.8 million, in an effort to mitigate losses,’ said IBISWorld Senior Industry Analyst Matthew Barry.
However, AFL supporters remained loyal to their club, with membership numbers only falling by 6.1% in 2019-20. The Federal Government’s JobKeeper wage subsidy also aided clubs through the COVID-19 pandemic, helping clubs retain and pay existing employees.
The top teams
With back-to-back premierships, the Richmond Tigers have leapt to the top of the 2020 AFL club revenue ladder. Despite the challenges of the COVID-19 pandemic, Richmond retained high membership numbers and outperformed other AFL clubs financially.
‘Richmond’s on-field success and members’ loyalty helped mitigate revenue declines for the club during the COVID-19 pandemic,’ explained Mr Barry.
Carlton secured the second spot on the 2020 AFL revenue ladder. Blues membership numbers have risen by 4.3% in 2019-20, limiting the club’s revenue decline during the pandemic. Growth in Carlton’s membership numbers has stemmed from the teams improved on-field performance and the club’s marketing initiatives.
The Brisbane Lions significantly outperformed other clubs in 2019-20, rising five spots to third on the revenue ladder. The Lions’ strong on-field performance and talented list drove growth in membership numbers in 2019-20. Additionally, the Lions’ social club posted a strong financial performance relative to other clubs’ hospitality revenue, only declining by 15.2% in 2019-20.
Notably, the West Coast Eagles have fallen from first place in 2019 to rank seventh on the revenue ladder in 2020, with a 56.5% decline in revenue.
‘Despite the Eagles having over 100,000 memberships in 2019-20, the club faced a sharp decline in membership revenue, with only about 8,000 members pledging their annual fees to the club during the pandemic,’ said Mr Barry.
The remaining four clubs in the top eight on the revenue ladder were Victorian clubs, which have all faced declines in membership, match day and hospitality revenue due to extended lockdown restrictions in Victoria.
The Wooden Spoon
Clubs outside the revenue ladder top eight all faced similar headwinds in relation to the COVID-19 pandemic. Of the bottom eight clubs, only the Western Bulldogs and North Melbourne remained profitable in 2019-20. Notably, the GWS Giants recorded the highest losses of the league in 2019-20, largely due to revenue falling by 41.0%. The Giants faced a deep cut to their sponsorship revenue and AFL funding in 2019-20, making the club claim the revenue ladder wooden spoon.
The Melbourne Demons and Sydney Swans experienced the largest fall in membership numbers in 2019-20, with both clubs’ membership numbers falling by over 20%. This was largely due to the COVID-19 pandemic and their lacklustre 2019 season performance, where the Swans finished 15th and the Demons finished 17th on the AFL ladder. Sponsorship revenue for both clubs fell by nearly 45% in 2019-20.
Conversely, both St Kilda and Gold Coast Suns grew their fan base during the COVID-19 pandemic, with Saints and Suns memberships rising by 12.9% and 19.0%, respectively. In particular, St Kilda Football Club offered their members a variety of different compensation options during the pandemic to help retain members. This resulted in the club recording membership revenue growth in 2019-20, as thousands of members pledged their commitment to the club.
Of the bottom eight revenue ladder teams, only three teams made it to finals in 2020: Port Adelaide, St Kilda and Western Bulldogs. This indicates that a team’s on-field success continues to correlate with revenue.
‘The highest earning clubs tend to have hospitality and pokies operations, with the Brisbane Lions and Hawthorn accounting for the largest shares of total hospitality and gaming revenue in 2019-20. However, Collingwood, Geelong and the Western Bulldogs have taken steps to exit gaming, with these clubs selling off most of their gaming assets in 2019-20,’ said Mr Barry.
IBISWorld reports used to develop this release:
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