The AFL will on Friday reveal a record $48.8 million surplus for its 2017 financial year from its highest-ever income of $650 million, cementing its status as by far the richest sport in the country.
Defending premier Richmond opened the league's 2018 season on Thursday night in front of a crowd of more than 90,000 at the Melbourne Cricket Ground.
But it is the inclusion of Etihad Stadium on the fringe of Melbourne's CBD on the AFL's balance sheet for the first time which shows the league's financial strength, with its total assets rising to $399 million. Net assets across the consolidated entity, taking in both the AFL and the stadium and after debts related to the stadium, reached $185 million.
Etihad Stadium was purchased for $200 million last year, with the AFL taking out a $280 million bank loan to fund the deal and provide it with ongoing working capital.
The league is paying $15 million off that loan annually, and such is its financial strength that it also has set aside $20 million in its latest accounts for a capital reserve to be managed by AFL and club executives, to which it plans to add another $20 million annually for the next five years, even after increasing distributions to its 18 clubs and giving players a pay increase.
"It allows us to establish a framework to set the code up well past the six-year period of the current broadcast deal," AFL chief financial officer Travis Auld told The Australian Financial Review. "The increase in broadcast revenue is a once in a generation opportunity to invest in the future."
The AFL is heading into the second year of a $2.5 billion broadcast deal with Seven West Media, News Corporation and Telstra. The league also used a future fund of $89 million to help fund the Etihad purchase and there is now $185 million of debt on the AFL balance sheet. The property, plant and equipment value increased by $217.7 million as a result of the Etihad purchase.
Most clubs that hold home games at Etihad Stadium have long complained that their stadium deals have been onerous, though Mr Auid said the AFL was on the verge of striking new contracts with the teams that would allow them to make more money but also ensure the stadium remained profitable for the league on an operating basis.
The AFL is also negotiating with the Victorian government for funding to go towards what could be a $200 million revamp of Etihad Stadium and the surrounding precinct at Docklands. The plans include the knocking down or refurbishing of the AFL's adjacent headquarters.
Broadcast revenue for the league rose to a record $381 million from $264 million in 2015, while commercial income including Etihad Stadium reached $265 million from $185 million the year before.
The AFL made a record $305 million distribution to clubs in 2017 and total player payments reached $224 million or about $12.4 million per club.
This article was published and provided by Australian Financial Review.