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GC17 deal uncertain amid world financial crisis
Damian Barrett | October 10, 2008 12:00am
THE global financial crisis could force an AFL rethink on the timing of Gold Coast's entry to the national competition. It has long been considered fait accompli that Monday's AFL Commission meeting would rubber-stamp the licence bid by the Gold Coast consortium, but the issue is now set for extended consideration.
The Gold Coast's two major investment management firms, MFS and City Pacific, along with major developer Raptis, have collapsed in recent months, causing major job losses and the abandonment of significant works projects.
With this backdrop, the AFL has managed to entice just $10 million - from Gold Coast council - of the at least $200 million it requires to build a new stadium in the region.
Asked if the worldwide economic crisis had changed the Gold Coast outlook, AFL chief commercial officer Gillon McLachlan said: "I can't comment on that. They (GC17) have done a hell of a job and I hear they have met all criteria, but I haven't seen the report and ultimately I can not speak for the commission."
GC17 will make its final presentation to commissioners on Monday, confident it has met strict criteria established in April for AFL entry by 2011.
Group heavies John Witheriff and Graeme Downie will pitch for the AFL's 17th licence and leave with the nine commissioners a 400-page document outlining the group's business plan.
McLachlan said commissioners would likely require at least two weeks, and maybe four, to analyse the bid in light of all economic developments.
Collingwood president Eddie McGuire was the first official at club level to warn that football would be hit by slowing economies throughout the world, and that as a result the game needed to "take cautious steps".
Last night, from New York, McGuire reiterated those concerns.
"I said a long time ago the world economic crisis was going to hit everybody, and it is hitting everybody," McGuire said.
"But, in times like this, cash is king, and the AFL has cash.
"At Collingwood, we support the AFL in whatever it chooses to do with this, having got itself in the right position at the right time to make the right decision."
Even in the absence of the licence, GC17 has appointed a coach, Guy McKenna, and recruiting manager, Scott Clayton, to oversee the club during what has been forecast as its formative years in the under-18 TAC Cup competition in 2009, and the VFL in 2010.
Witheriff, who could not be contacted yesterday, is expected to tell the commission on Monday he is confident GC17 has met the criteria, which included:
$5 MILLION in sponsorship;
20,000 "committed supporters";
111 SPONSORS, including a naming rights sponsor (with the AFL standard set at at least $1 million), 10 second-tier sponsors ($250-$350,000 each) and 100 business supporters.
GC17 will actually tell the AFL it has 40,000 "committed supporters".
The Herald Sun has learnt the AFL, should it award the licence to GC17, is forecasting just 10,000 members for 2011, and aims to double that figure by 2016.
In May, before the world financial crisis took hold, AFL chief executive Andrew Demetriou told the Herald Sun the Gold Coast club would "cost the competition, over a five-year period, starting in 2011, probably somewhere around $65-$70 million".
That figure was based on the yearly dividend to all clubs as well as millions of dollars of extra annual assistance.
Demetriou said the club would need "at least $20-to-$25 million over a five-year period on top of what the normal (club) distribution will be", and even that injection of extra funds would not produce a break-even result until the fifth year at the earliest.
"I don't want to go there (how much the club will lose in initial years), as it depends on a number of factors, but it is not unusual in any business to lose money early," Demetriou said.
McLachlan, the league's executive in charge of the Gold Coast project, would not comment yesterday on the progress of talks with federal, state and local governments relating to a football stadium being built.
GC17 deal uncertain amid world financial crisis | Herald Sun
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