AFL only hopeful the 2020 season will get underway again, potential 40 per cent cut to AFL department cap
The AFL has just been hit by the biggest financial crisis in its history. What does that mean for clubs, staff and the overall survival of footy as we know it? Radical new financial measures are on the way.
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The AFL says there are no guarantees the 2020 season will recommence, after football was hit by an enforced break that threatens clubs and the financial viability of the league.
In a day of drama and midway through yesterday’s three matches, AFL chief executive Gillon McLachlan announced the season would be put on hold until at least May 31.
McLachlan said the league was facing “its biggest financial crisis in our history” and Hawthorn boss Jeff Kennett said football’s only priority was surviving until next season.
“To say this is the most serious threat to our game in 100 years is an understatement,” McLachlan said.
“It is unprecedented in the impact it is having on our game and the wider community; and as a community and as a code we all need to take the unprecedented and required actions to get through this together.’’
Clubs will send their players home — probably until the end of April — when the league will decide whether it needs a further postponement.
But while players return to their families the AFL will commence its version of the NFL’s Bloody Monday — a series of the most savage financial cuts to clubs and the league that has ever occurred.
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Those cuts could result in the AFL’s football department cap being reduced by 40 per cent, a purge of club staff across all levels and the securing of a line of credit that would allow clubs to avoid trading while insolvent.
Some clubs will this week stand down staff and put them on unpaid leave until it has roles for them to fulfil.
The Herald Sun understands the players’ union is awaiting an indication of the financial hole in footy’s coffers as it ponders pay cuts likely to extend past 20 per cent.
The players are prepared to take considerable pay cuts to ensure they are not paying money back at the end of the season.
McLachlan said that once Victoria moved to secure its borders, playing was untenable.
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But the federal government’s health experts are guessing at a June COVID-19 peak, and McLachlan can only hope the season is finished by December.
“I don’t know where this goes. We can all have a view about modelling and flattening of the curve,” he said.
“All we have been advised is we can’t indefinitely stay locked down.
“I don’t know when it gets better. We all hope it’s six or eight or 12 weeks.”
He said football might be unrecognisable in the coming years as the financial toll could exceed $500 million.
AFL legend Leigh Matthews yesterday called on the AFL’s 18 captains to come out and immediately pledge that they would take a 20 per cent pay cut as a sign of faith to the league’s 800 players.
And Port Adelaide chairman David Koch said if the league did not nail its execution of cost-cutting, clubs could be at risk.
“Of course we could (lose clubs),” he told 3AW.
“It is that serious, but let me tell you every single club and the AFL, what has been achieved in the last 10 days is fricking remarkable.
“The co-operation, the collegiate thinking has been amazing …”
AFL committed to keeping clubs afloat: Gill
Lauren Wood
The AFL has committed to doing everything it can to ensure its clubs stay afloat amid the coronavirus crisis.
The league last week told clubs that each must find at least $5 million in savings by slashing costs and taking pay cuts across both staff and players, while Collingwood president Eddie McGuire estimated that clubs could face collective losses of more than $500 million this year.
He described the effects of the quickly spreading virus as “financial armageddon” for the AFL and its clubs, with McLachlan conceding that solvency “is a challenge”.
“But we’ll get there,” he said.
“The Federal treasurer gave some comfort for businesses for the next six months, which is a start.
“We’re working collectively to secure liquidity so that we protect the AFL and all our 18 clubs. That’s what we’ve been working on over the last week or so.”
He said that the league and it’s clubs would “do what we’ll need to do to survive as an industry, and we will do what we need to look after everyone’s health and wellbeing right across the community.”
It was last week flagged that players could face pay cuts of 20 per cent, while clubs have already begun cutting some staff in an effort to curb costs.
McLachlan said chief executives across the code – himself included – would be forced to have “honest conversations with staff” in coming days and weeks.
“This is a very human part of the business,” he said.
“This virus is taking an incredibly personal toll physically on many people and will continue to do so, but the economic cost and the livelihood cost is significant as well. We’ve got to stay united and work through it as a community in whatever industry you’re in.”