Leaked letter reveals club anger at new AFL sponsorship rules

Still reeling from COVID’s financial crisis, the AFL’s 18 clubs are furious over “alarming” new sponsorship rules they claim could severely impact revenue.

Clubs fear major financial losses in sponsorship deals because of “alarming” new rules they claim favour the AFL’s “protected partners” including Toyota, McDonald’s, Telstra and Coca-Cola.

Rising anger in club ranks has seen all 18 teams fire a letter to head office seeking an urgent redress of measures causing an “erosion of club commercial rights”.

One example was a recently aborted AFL push for McDonald’s signage to appear at all West Coast Eagles home matches at Perth Stadium – in direct conflict with the club’s long-time backer, Hungry Jack’s.

“What was once a clear operating environment is no longer, with a distinct blurring of the lines and confusion in regard to club versus code assets, significantly impacting what clubs can commercialise,” the letter says.

Clubs, still reeling from last year’s COVID financial crisis, believe would-be sponsors are being frozen out by “exclusivity or a form of protection” given to AFL partners.

On top of the AFL’s “big four” – Toyota, McDonald’s, Telstra and Coca-Cola – clubs say preferential treatment has also been given to its other major partners: CUB, Virgin Australia, Accor Hotels, AAMI and Aquim.

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Port Adelaide's Hamish Hartlett and captain Tom Jonas with KFC buckets to promote their new sponsor, which was announced in December. Picture: Sarah Reed

Club sponsors in competition to the AFL’s preferred partners must meet significant financial “thresholds” in order to be approved by head office, the letter reveals.

Advertising categories include fast food, automobiles, beer, soft drink, insurance, airlines, IT, mobile phones and energy providers.

“Telstra represents over 15 categories that are excluded and blocked to clubs, some of which represent the fastest growing and emerging categories globally,” the leaked letter says.

Clubs are also dismayed that lucrative AFL arrangements are encroaching on “club controlled” assets such as branding on match-day, runner and trainer outfits, and “product placement” on the interchange bench and in changerooms.

Sponsor logos on match-day Sherrins are another point of contention for some clubs as are “commercialised” post-game kick-to-kick sessions branded by McDonald’s.

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Another battleground has emerged as a result of the AFL’s “unlimited access to paid/unpaid player appearances” to promote league brands such as AAMI and Telstra – a practice seen to be in conflict with the clubs’ financial interests and additional service agreements.

“We are really pissed off and fed up with the lack of consultation. Every club is disenfranchised with the state of play,” one club chief said on Wednesday.

“It should never have got to this.”

The clubs have accused the AFL of creating “recent” partnerships with little or no consultation or revenue collaboration, highlighting “a disconnect between club and AFL definitions of assets”.

“Gradual erosion of club commercial rights and changing of the rules by the AFL are seriously and materially impacting the club’s ability to promote and commercialise their club, their brand and their assets,” the letter says.

Richmond captain Trent Cotchin with flight attendant Courtney Denis at a Virgin Australia/AFL partnership announcement.

“This creep has significantly increased over the last few years and further limits clubs’ ability to generate revenue in an already cluttered market.

“A core industry objective is strong and financially viable clubs, which ultimately benefit our core stakeholders: our fans.

“Over time, the amount of AFL partners that are afforded various levels and forms of protection has increased significantly.

“Clubs currently feel there is little to no consultation regarding decisions that directly impact club interests, including the sale of club-related assets into AFL deals.

“There are also recent instances where the AFL has engaged clubs, but that feedback has not been reflected in the final AFL partnerships.”

Clubs acknowledge that the AFL has committed to review the rule changes – and permitted extra advertising on match-day jumpers – but fear the damage is already done.

An AFL spokesman said: “The AFL will continue to work with club commercial managers to provide and identify new revenue opportunities as we emerge from a COVID-affected year.

“A year in which resulted in a significant drop of revenue and forced both the AFL and all 18 clubs to drastically reduce their workforce and costs.

“A recent example of new club revenue being in 2020 the AFL introduced a new asset on the back of the playing guernsey, which has garnered millions of dollars’ worth of revenue collectively across the clubs and was extended in 2021.

“The AFL and the 18 clubs have the best corporate partners in world sport and we are all aligned in delivering ongoing value for partners, members and supporters during what has been a tough economic period for all.

“Our role is (to) assist clubs in building back their revenue base while also supporting our overall investment in clubs, AFLW and community football, all while ensuring our game remains as accessible and affordable as possible for supporters.”