Adelaide won’t draw on AFL funds to survive financial impact of COVID-19 crisis despite looming debt blowout
Adelaide Crows are set to press on unassisted and not draw on AFL funds to survive the coronavirus pandemic, even though they are expecting to record an “enormous amount of debt” during the crisis.
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The Crows are set to try and press on as an “unassisted” club and not draw on AFL funds to survive the coronavirus pandemic even though they are expecting to record “enormous amount of debt”.
It comes as AFL chief executive Gillon McLachlan told clubs the league will have a return-to-play plan by the end of the month, reiterating the goal of playing the rest of the 144 matches in 2020.
The AFL has offered clubs the chance to sign up to a program that will ensure every club can have their total player payments fully funded.
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But some clubs will self fund the remainder of their football department and administration, while the majority will borrow from the AFL.
The AFL secured a line of credit of up to $600 million, using Marvel Stadium as security, to help the league and clubs get through the financial crisis brought on by COVID-19.
Clubs who choose to borrow from the AFL will be able to get money immediately, and potentially a better interest rate than they would from a bank, but would be subject to increase scrutiny from the league.
A small group of clubs will look to draw down on their own funds to navigate the 2020 season, and spend the money how they wish.
This includes West Coast, the richest club in the competition, while Collingwood, Richmond, Hawthorn and, surprisingly, the Western Bulldogs have said they will not seek financial support from the AFL this year.
The Crows do not have the cash reserves to be “unassisted” but are in discussions with the club’s premier partner Bendigo Bank to borrow the required funds.
Crows chief executive Andrew Fagan said on the weekend the club was expecting to record significant debt because of the financial impacts from the coronavirus pandemic.
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“It’s our intent to be unassisted, as in we’ll still be in an enormous amount of debt,” he said on Grandstand SA.
“It’s more (debt) than we’ve ever had in our history and it’s going to be very uncomfortable, but we think at this stage we have the ability source that via our own banking partner rather than use the AFL’s facility.
“But again, we’re going to need some time to understand the full extent of this issue and how it’s going to impact us financially.”
Port Adelaide received the fifth most in distributions from the AFL in 2019 – behind GWS, Gold Coast, Brisbane and St Kilda.
It also renegotiated loans with Bank SA, totalling $4.75 million in 2018 to be payable in 2021, which the AFL provides a guarantee for.
The Power have been contacted for comment whether it will try and be an “unassisted” club.
Port Adelaide president David Koch said on radio it would take up the AFL’s offer.
“We have signed on to the program,” he said on FIVEaa.
“We have no idea how much we are going to need.”
On Tuesday, McLachlan sent a memo to clubs, saying that three of his heavyweight executives – Andrew Dillon, Steve Hocking and Travis Auld – had been tasked with creating a return-to-play plan that would be revealed by the end of the month.
Clubs being quarantined in “hubs” in different locations in Australia is a possibility.
Originally published as Adelaide won’t draw on AFL funds to survive financial impact of COVID-19 crisis despite looming debt blowout