State treasurer Rob Lucas says Crows and Power won’t get preferential COVID-19 bailout, but SMA could get reprieve
COVID-19 is devastating all levels of sport, but the Crows, Power and SACA won’t get special State Government help. However, the SMA might gain financial leeway, according to SA’s treasurer.
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AFL clubs Adelaide, Port Adelaide and the South Australian Cricket Association (SACA) won’t gain a COVID-19 rescue ahead of smaller sporting entities.
But the Adelaide Oval Stadium Management Authority (SMA) could receive financial relief, state treasurer Rob Lucas has revealed.
Mr Lucas is taking counsel over whether the SMA’s annual $2.9 million Adelaide Oval sinking fund contribution could be suspended given loss of income from AFL games this year due to the COVID-19 fan lockout.
“The sinking fund is money they are required to put aside to maintain the asset,” Mr Lucas told The Advertiser.
“I am having to get legal advice to see what is possible. I am looking at it.”
The bulk of SMA’s revenue is generated through game day events, which stand to be wiped if COVID-19 affects the Twenty20 World Cup, BBL and India Test tour after an already disrupted AFL season.
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The SMA employs 1000 staff around events.
The two storey hotel, due to be completed by September, was lauded as a financial lifeline for the SMA but labelled ‘anti-competitive’ by opponents.
The Crows and Power were upset at not being consulted about the project, which was bankrolled by a $42 million state guaranteed loan.
The SMA is coming off its worst year of trade at Adelaide Oval – a $3.1 million loss. However, SMA chief Andrew Daniels on March 6 told The Advertiser that the hotel would be ‘profitable from day one’.
Mr Lucas said the SMA had not yet indicated trouble in servicing its government loan to build the 138-room hotel if it had no patrons or events.
Repayments on the SMA’s loan could be reviewed in line with other projects.
“No one has asked us in relation to the loan and will have to address issues as they arrive,” Mr Lucas said.
“We have any number of contractual loans.
“While important to a particular section of the community we have hundreds of loan arrangements with businesses all of which will have concerns if people are not in a position to repay them.
“The advantage of the hotel is the first event booked in was around October with the T20 World Cup.
“My advice was they were on schedule.
“It depends on the worst impacts of the coronavirus.”
Mr Lucas says the financial might of the AFL backed Crows and Power mean they won’t get any preferential treatment despite industry fears of clubs hitting the wall in a prolonged COVID-19 crisis.
Crows chief Andrew Fagan says the club faces “unimaginable’ financial losses.
SACA boss Keith Bradshaw has forecast an $11 million dollar hit to membership income alone due to COVID-19, but its $55 million annual turnover is under threat.
“For all the problems the Power and Crows might have there are a lot of mid and lower level clubs with less access to finances (than AFL clubs) who have significant support bases and balance sheets,” Mr Lucas said.
“I am not going to into the business of we might try and bail them out or contemplate anything like that.”
It is premature to formulate a crisis management blueprint for sports clubs insists Mr Lucas, despite what he described as the worst economic circumstances faced by South Australia since Labor’s 1991 State Bank collapse.
“There are concerns about the implications of the coronavirus on event management, football, cricket and sport, but at this stage there is no master plan as we don’t know what the implications are,” he said.
“We will be aware of it and work with the Federal Government.”