Ten And Seven Win AFL Rights - Hooray

[goswannie14]

Re: Re: Re: Re: Ten And Seven Win AFL Rights - Hooray

Originally posted by j s
But chickens come before eggs,

Depends whether you walk past the supermarket or butcher shop first

[OldE]

Originally posted by Charlie
The AFL is merely the rebranded and expanded VFL - a body that was created by eight founder clubs and joined by eight others over the years (excluding University). The AFL is nothing more or less than the sum of its clubs. The clubs are the league itself. The 16 clubs are effectively equal partners in the AFL - therefore, the AFL administration are akin to the elected directors and salaried officers of a private company, answerable to shareholders (the clubs).

Somewhere in the past 20 years, this relationship has been forgotten and transposed. The 'AFL' not only behaves as an independent entity, but it controls the clubs! If a club wanted to exercise its rights to leave the AFL, it could not take its names, jumper or logo with it, because they're all trademarks of the AFL! So far letting the AFL off it's rightful leash has cost us one club, and gone agonisingly close to costing us Sydney, the Dogs, Hawthorn and Melbourne as well. I wonder how many more it will cost.

Precisely the problem. Looking back, the AFL had absolutely no right to throw Fitzroy out of the competition. It should have found a way of saving Fitzroy - even if the only way to do it was to offer the club's directors to place the club in the AFL's administration (as happened with Sydney).

We talked about club relocations in a sports law class I took a while back. I'm a little hazy on the details (perhaps one of the fine RWO legal minds can fill me in), but IIRC, it is illegal for a team to continue operating for any lengthy period of time at a loss. As a legal entity separate to the AFL, it is the clubs responsibility to either make a profit or break even. Merging or relocating clubs can be a matter of legal necessity.

[goswannie14]

Originally posted by Charlie
Looking back, the AFL had absolutely no right to throw Fitzroy out of the competition. It should have found a way of saving Fitzroy - even if the only way to do it was to offer the club's directors to place the club in the AFL's administration (as happened with Sydney).

Last time I looked the AFL didn't kick Fitzroy out of the league any more than they kicked South Melbourne or the Brisbane Bears out of the league. We were relocated, and the Bears and Lions were merged. The only club that ceased to exist in its entirety from the VFL/AFL was University.

By merging the two clubs and coming up with the Brisbane Lions the AFL did in fact find a way of saving a club that in the end just wasn't viable. Like us, it has retaind it's history even though it exists in a different entity than it once did. Eventually I think the same thing will have to happen to a number of Melb based clubs. As JS said in another thread, you get more prize money for being a club that is going broke than if you win the GF, doesn't seem to be logical or fair does it?

[Charlie]

Originally posted by eirinn
We talked about club relocations in a sports law class I took a while back. I'm a little hazy on the details (perhaps one of the fine RWO legal minds can fill me in), but IIRC, it is illegal for a team to continue operating for any lengthy period of time at a loss. As a legal entity separate to the AFL, it is the clubs responsibility to either make a profit or break even. Merging or relocating clubs can be a matter of legal necessity.

I have faith in the accounting profession to find a way of placing cash injections from the AFL in the 'revenue' column.

[Charlie]

Originally posted by goswannie14
Last time I looked the AFL didn't kick Fitzroy out of the league any more than they kicked South Melbourne or the Brisbane Bears out of the league. We were relocated, and the Bears and Lions were merged. The only club that ceased to exist in its entirety from the VFL/AFL was University.

They kicked them out in so far as they didn't provide the financial support they were capable of - support that could (with appropriate administration, by the AFL if necessary) have gotten Fitzroy out of trouble.

By merging the two clubs and coming up with the Brisbane Lions the AFL did in fact find a way of saving a club that in the end just wasn't viable. Like us, it has retaind it's history even though it exists in a different entity than it once did. Eventually I think the same thing will have to happen to a number of Melb based clubs. As JS said in another thread, you get more prize money for being a club that is going broke than if you win the GF, doesn't seem to be logical or fair does it?

'Not viable' is a cop-out if the league as a whole is viable, whilst supporting that club. Also, the last time I looked clubs pursue premierships for their inherent value, rather than any cash bonus.

[Xie Shan]

Originally posted by Charlie
I have faith in the accounting profession to find a way of placing cash injections from the AFL in the 'revenue' column.

Um, yeah. They already have Charlie! It's called "non-operating revenue". A common ploy, but not enough to fool the likes of me. Ah, financial statement analysis...one subject I did at uni that actually might come in handy!

I'm a little confused as to who owns who, though - is the AFL really owned by the clubs? Assuming the clubs are incorporated - the Swans' official name is "Sydney Swans Limited" from the bottom of the members' emails - then each club would be a separate legal entity according to company law.

[Charlie]

Clubs are still required to vote on certain decisions, and clubs still appoint the Commissioners. 67% is required for a vote to be passed, I believe - although some require unanimous agreement.

[Xie Shan]

Originally posted by Charlie
Clubs are still required to vote on certain decisions, and clubs still appoint the Commissioners. 67% is required for a vote to be passed, I believe - although some require unanimous agreement.

Smells like an agency relationship then if this is correct, where the clubs have basically delegated the running of the league to AFL admin to the point that the AFL controls everything. Can anyone confirm this? If so, then basically the AFL would have a duty to act in good faith and in the clubs' best interests according to agency law.

[Charlie]

Originally posted by sydfan83
Smells like an agency relationship then if this is correct, where the clubs have basically delegated the running of the league to AFL admin to the point that the AFL controls everything. Can anyone confirm this? If so, then basically the AFL would have a duty to act in good faith and in the clubs' best interests according to agency law.

That's what I thought the arrangement was.

Now, can the AFL, under 'agency law' (which I won't pretend to understand) actually shut down one of the clubs which conferred its powers to it?

As an aside, our treatment by the AFL was appalling in the 1980s and 1990s - forced to pay several million dollars between 1986 and 1994 for a VFL/AFL license that was our's in the first place. Worse, in 1993 we were excluded (presumedly for expediency) from the most important league vote in our history, when the clubs voted on whether we would remain in the league.

[Xie Shan]

Originally posted by Charlie
That's what I thought the arrangement was.

Now, can the AFL, under 'agency law' (which I won't pretend to understand) actually shut down one of the clubs which conferred its powers to it?

I don't understand it that well either! I'm just trying to remember my business law lectures...

I guess if the club was so hopelessly bankrupt that it would actually be in the best interests of the league (ie. all the other clubs) to shut it down, maybe.

But if that's the arrangement then it would make sense that the clubs would have a responsibility to make a profit (mentioned in a previous post), being bound to each other by the agreement to create the league.

[SimonH]

Originally posted by Charlie
Yes there is. Because each of those ten teams has been in the league for more than 80 years, and between them they hold a 62.5% share in the competition. They have an inherent right to be in the competition, if it is financially possible for them to be there. Further, since the 16 AFL clubs are the ones responsible for $780million TV deals, they should have first access to those funds to secure their survival if necessary. The clubs must always be the number one priority of the body they created to serve their interests - the AFL.

Originally posted by Charlie
They kicked them out in so far as they didn't provide the financial support they were capable of - support that could (with appropriate administration, by the AFL if necessary) have gotten Fitzroy out of trouble.

We really will need another thread, maybe another forum to deal with this, but the two quotes above really show up the contradiction inherent in your position, i.e.
1. Each club is entitled to say, "We are the league. There's no question of what the league should do for us or vice versa, because we are it and it is us. Take us away and it ceases to be the league."
2. The league should financially prop up ailing clubs regardless of troublesome, dire or non-existent long-term prospects, just because they are their clubs.

If there is no 'league' as an independent entity, there is nothing to prop you up. Conceptually, you are trying to keep cool by lying in your own shadow. Practically, you are doing no more than laying the begging bowl in front of the other clubs (particularly the wealthy ones), and their reasons for helping you (or not) are not likely to be fearless and principled.

However, the first proposition is wrong. The AFL is not just a convenient name for the 16 clubs when they're sitting in a room together. It is its own entity. If there was no legally independent organisation, there would have been no one body that could have offered the WA Football Commission entry to the comp in 1986 and demanded a $4 million license fee from it. There would have been no one body that could have made squillions putting the broadcast rights out to tender. Etcetera. Whether the 12 clubs in the VFL made a horrible error in 1985 by creating the Commission is a nice historical argument, but not terribly relevant.

The competition known as the AFL is run by the AFL Commission, comprising eight people. Any or most of the clubs could just walk out-- refuse to nominate persons to be on the Commission, refuse to vote for nominees, refuse to cooperate with the Commission in any way, the works... and the Commission would continue to exist.

The AFL is bound by a Memorandum and Articles of Association in the same way as most other companies, which in keeping with its usual standards, are not available on the web. Those seeking any particular change have to act accordance with those documents. The most immediate and practical service that the AFL provides to the clubs is to organise a competition in which they can compete against other clubs. As the AFL is a separate entity from any club, the AFL's Memorandum and Articles (which govern its operation, no-one else's) would say nothing about 'shutting down' a club, but rather would talk about the circumstances in which the AFL could exclude clubs from the competition that it organises. However, the clubs themselves are generally corporations, and as such have a duty under law to stop trading and place themselves into administration/receivership if they are no longer able to pay their debts as and when they fall due. So when push comes to shove for bankrupt clubs, it would not be a question of the AFL excluding it from the competition, but simply that the club would have to shut its doors.

The fact that nominees as commissioners are put forward by clubs, and voted for by clubs, doesn't mean that the commissioners have a duty to do the bidding of any individual club, or even a cabal of 9 clubs, when voting on the Commission. In all types of organisation, there are plenty of structures where a person is appointed to a position of authority by an individual or the vote of a group-- but having taken up that position of authority, does not represent the group or individual who appointed him or her.

An obvious example is judges, who are appointed by politicians in one way or another, but are expected to be entirely independent of the political process, and in fact would be liable to be sacked if caught doing the bidding of any individual politician or party while performing their duties.

This is how judges decide cases against the Government that appointed it; boards of directors make decisions that outrage the shareholders who appointed them; and Royal Commissioners make damning findings against the politicians who ordered that the inquiry be held. The perceived duties of their office override any perceived or real loyalty to those who gave them that office. Similarly, as an AFL commissioner, if you're given a choice between a decision that helps an individual club but hurts the game as a whole, or vice versa, then your duty should be clear-- even if that individual club voted you onto the Commission.

Whether it would be theoretically possible for the 10 Victorian clubs (or any other group of at least 9 clubs) to form a gang and elect only commissioners who would do their bidding in all matters, regardless of the good of the code or the principles of the organisation is again a matter of speculation; but it's clearly not how things are intended to work.

But leaving aside theoretical nastiness, the policy decision has to be: Do you want every existing team that used to play in the VFL, to continue to play in the expanded and rebranded VFL indefinitely, at any cost; or do you want the best national comp we can have? In the long term, you can't have both.

In my opinion, the first option is just a 'we're here because we're here because we're here' putting of your head in the sand. The history of the game at all levels, in all states, involves change. To pretend that 1928 or 1981 or 1997 was the golden era, and our only job is to keep things as similar as possible to what they were like back then, is just a fantasy. And it's a fantasy that damages the credibility of the AFL as an organisation in the 5 states and 2 territories that aren't Victoria.

[SimonH]

Originally posted by Charlie
Completely unnecessary. Why wouldn't you want the 16 teams to each play each other every year? The only change I could countenance would be conferences of eight teams each - every team plays the seven teams in its conference twice, and the other teams once.

Normally I love you, man, but that is the absolute pits. You seem to think that there are only 16 football teams in Australia-- and among them 4 are corporate blowins with less than 2 decades' history. Heard of Norwood, North Adelaide, West Perth, Glenorchy, Glenelg, North Launceston, Zillmere, Balmain, Port Melbourne, St Marys etc etc etc? All teams with long and proud histories. Have a look at this site and then get back to me.

Between them all, they provide at least 70% of the heart, soul and history of the game in this country (over-generously allowing 30% for VFL clubs). In a 4 division national comp, some of them now would be Division 2 teams, some Division 4.

But playing strength is a very changeable thing, determined by a variety of factors-- clubs go from English Premier League down to Division 4, and then back again. In 1907 Norwood beat Carlton to become the 'Champion of Australia'. Such interstate club matches and championships unfortunately fell into disuse (if they had not, a more logical and truly national competition might have evolved from them), but results in state of origin matches over the decades tell the story-- the best side in the land would usually have been a Victorian one, but (at least up until the end of the 1970s when the trickle of interstate players being poached by Victorian teams started to become a flood) the odd dominant West Australian and South Australian team would have taken home the mantle. There is no reason why these SA and WA clubs, which continue to exist, would be organisationally unable to prepare teams that could compete and win at the top level if they won promotion. Similarly, if North Melbourne finish bottom, they should have to prove that they're the best of the second-tier clubs before they can have another crack at the top flight. At the other end, Balmain are no more likely to start poaching Chris Judd and making a grand final, than Rushden & Diamonds are going to knock Chelsea off the top of the Premier League. They aim to achieve the highest they can within their niche and their limitations, and that's fine.

Whether it would be financial for lower divisions to travel to compete against each other in Australia, is an open question. But footy is a tribal thing, and harnessing the full power of that tribalism, not merely the limited corporate version that is now available to most non-Victorians, could only increase player and fan involvement in the game.

[Eala ?ireann]

hg

[Charlie]

Originally posted by SimonH
We really will need another thread, maybe another forum to deal with this, but the two quotes above really show up the contradiction inherent in your position, i.e.
1. Each club is entitled to say, "We are the league. There's no question of what the league should do for us or vice versa, because we are it and it is us. Take us away and it ceases to be the league."
2. The league should financially prop up ailing clubs regardless of troublesome, dire or non-existent long-term prospects, just because they are their clubs.

What is the contradiction? The league is made up of the clubs - that you can argue this isn't the case astonishes me. Without the clubs, what is the league? Answer - NOTHING. An empty shell of a company that no longer operates.

You have also (wilfully?) misrepresented my argument, which is that while the league is financially viable (as it is now), there is simply no justification to cut adrift decades of history, and more importantly a club's right to continue to be a member of the league it helped to form.

If the league can no longer operate without shedding certain clubs, that is when replacing clubs becomes a necessary evil.

If there is no 'league' as an independent entity, there is nothing to prop you up. Conceptually, you are trying to keep cool by lying in your own shadow. Practically, you are doing no more than laying the begging bowl in front of the other clubs (particularly the wealthy ones), and their reasons for helping you (or not) are not likely to be fearless and principled.

Huh? I only vaguely understand what you're trying to say here. With regards to the begging bowl - the rich clubs should be reminded that each club's contributions to the league far outstrip any financial cost. The TV rights are only worth as much as they are because there are 16 teams, each of them with established supporter bases. Take out the Bulldogs, and you take out a quarter of a million football fans. Some will join other clubs, and more will casually watch the sport. But you will lose something precious that very, very few brands have - emotional identification with clubs that crosses generations. There are people support the Bulldogs whose great-great-grandparents supported the Bulldogs.

However, the first proposition is wrong. The AFL is not just a convenient name for the 16 clubs when they're sitting in a room together. It is its own entity. If there was no legally independent organisation, there would have been no one body that could have offered the WA Football Commission entry to the comp in 1986 and demanded a $4 million license fee from it. There would have been no one body that could have made squillions putting the broadcast rights out to tender. Etcetera. Whether the 12 clubs in the VFL made a horrible error in 1985 by creating the Commission is a nice historical argument, but not terribly relevant.

All of this loses the point - yes, it is it's own entity. So what? It doesn't change the fact that it is no more than a delegated authority charged with running the competition for the joint benefit of the competition. Delegated by the clubs.

The competition known as the AFL is run by the AFL Commission, comprising eight people. Any or most of the clubs could just walk out-- refuse to nominate persons to be on the Commission, refuse to vote for nominees, refuse to cooperate with the Commission in any way, the works... and the Commission would continue to exist.

This is rubbish. The Commission can ONLY function at the behest of the clubs - this is the constitutional reality of the AFL, if not the day-to-day case. If the clubs refuse to nominate someone to be on the Commission, then no-one sits on the Commission. How hard is that to understand?

The AFL is bound by a Memorandum and Articles of Association in the same way as most other companies, which in keeping with its usual standards, are not available on the web. Those seeking any particular change have to act accordance with those documents. The most immediate and practical service that the AFL provides to the clubs is to organise a competition in which they can compete against other clubs. As the AFL is a separate entity from any club, the AFL's Memorandum and Articles (which govern its operation, no-one else's) would say nothing about 'shutting down' a club, but rather would talk about the circumstances in which the AFL could exclude clubs from the competition that it organises. However, the clubs themselves are generally corporations, and as such have a duty under law to stop trading and place themselves into administration/receivership if they are no longer able to pay their debts as and when they fall due. So when push comes to shove for bankrupt clubs, it would not be a question of the AFL excluding it from the competition, but simply that the club would have to shut its doors.

And simply, this is stupid. The AFL has the capacity to support clubs in order to ensure they are all viable in the eyes of the law. This renders any obligations to turn a profit superfluous to the debate... completely irrelevent. Further, I would argue that it is in the best interests of all clubs to ensure that the AFL behaves in this manner. Who would have guessed in 1995 that by 2002 Carlton would be asking fans for donations to keep going? No club is financially secure for all time.

The fact that nominees as commissioners are put forward by clubs, and voted for by clubs, doesn't mean that the commissioners have a duty to do the bidding of any individual club, or even a cabal of 9 clubs, when voting on the Commission. In all types of organisation, there are plenty of structures where a person is appointed to a position of authority by an individual or the vote of a group-- but having taken up that position of authority, does not represent the group or individual who appointed him or her.

An obvious example is judges, who are appointed by politicians in one way or another, but are expected to be entirely independent of the political process, and in fact would be liable to be sacked if caught doing the bidding of any individual politician or party while performing their duties.

Rubbish analogy. Judges are not company directors. If the AFL is a company, then the clubs are its shareholders - does anybody argue against this? A company's directors are beholden to act in the interests of shareholders. I'm no executive, but this isn't earth-shattering stuff.

This is how judges decide cases against the Government that appointed it; boards of directors make decisions that outrage the shareholders who appointed them; and Royal Commissioners make damning findings against the politicians who ordered that the inquiry be held. The perceived duties of their office override any perceived or real loyalty to those who gave them that office. Similarly, as an AFL commissioner, if you're given a choice between a decision that helps an individual club but hurts the game as a whole, or vice versa, then your duty should be clear-- even if that individual club voted you onto the Commission.

What? The Commissioners have usurped control of the game. It was not in their mandate upon the creation of the Commission, and it should never have been placed in their hands.

Their duties are simple - to the 16 clubs that delegate authority over their league first. Anybody else second.

Whether it would be theoretically possible for the 10 Victorian clubs (or any other group of at least 9 clubs) to form a gang and elect only commissioners who would do their bidding in all matters, regardless of the good of the code or the principles of the organisation is again a matter of speculation; but it's clearly not how things are intended to work.

The magic number is two thirds majority in most cases. That is 11 clubs.

But leaving aside theoretical nastiness, the policy decision has to be: Do you want every existing team that used to play in the VFL, to continue to play in the expanded and rebranded VFL indefinitely, at any cost; or do you want the best national comp we can have? In the long term, you can't have both.

Why not?

In my opinion, the first option is just a 'we're here because we're here because we're here' putting of your head in the sand. The history of the game at all levels, in all states, involves change. To pretend that 1928 or 1981 or 1997 was the golden era, and our only job is to keep things as similar as possible to what they were like back then, is just a fantasy. And it's a fantasy that damages the credibility of the AFL as an organisation in the 5 states and 2 territories that aren't Victoria.

Since when did the desire of people in Tasmania to have an AFL team come before the right of Bulldogs fans who have included that club in their families for generations? Sigh - I guess you have to actually live in Victoria to understand what the clubs are here. They are more like tribes than teams. They are a way of life, a part not only of your personality, but your heritage. If you have that sort of r'ship with your customers, you don't throw it away.

[liz]

Originally posted by Charlie


Rubbish analogy. Judges are not company directors. If the AFL is a company, then the clubs are its shareholders - does anybody argue against this? A company's directors are beholden to act in the interests of shareholders. I'm no executive, but this isn't earth-shattering stuff

Not correct.

Company directors are beholden to act in the interests of stakeholders, not shareholders. Shareholders are but one group of stakeholders, albeit a group with the most directly linked needs.

In particular, if a director is nominated or elected by one shareholder or group of shareholders, that director is still not entitled to vote to act in the interests of that shareholder or group of shareholders to the detriment of other shareholders (and other stakeholders). They are obliged to act in the overall best interests of shareholders and stakeholders.