11/02/2009 - 22:00

Global pressures at play in local sport

11/02/2009 - 22:00

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Like all businesses, sport is being affected by the economic downturn, which has consequently reignited the state’s stadium debate.

Global pressures at play in local sport

THE ailing global economy and the deteriorating condition of Perth's major stadiums are the key issues confronting Perth's major sporting codes, and their bottom line.

With companies scrutinising discretionary spending, sports clubs are bracing for a lull in sponsorship and corporate hospitality activity over the next few years, which will ultimately affect profit margins.

Plummeting state revenue and a looming budget deficit have forced the state government to shelve the stadium proposal at Subiaco for at least two years, to the dismay of Western Australian sporting entities.

Western Australia's top two sporting bodies based on operating revenue, the Fremantle Football Club and the West Coast Eagles, fear they cannot grow to their full potential without a larger outdoor stadium.

With 43,000 members - the third-highest membership in the AFL - Fremantle could soon outgrow its shared home at Subiaco Oval.

"In terms of the business of an AFL club, membership is the most vital," Dockers chief executive Steve Rosich told WA Business News.

"It not only defines the club but it provides a framework where your other commercial aspects can be built upon.

"The more members you have the more vibrant your home games, which means the more attractive it is for corporate hospitality, which in turn provides attractiveness for sponsors looking to talk to your members.

"It is the most important fundamental of an AFL club."

Mr Rosich said Fremantle would work closely with the WA Football Commission in the stadium debate, but would not comment further on the issue.

West Coast is fighting a similar battle to adequately cater for its growing membership, which at 52,000, is about 9,000 more than Subiaco Oval can currently accommodate.

"From a West Coast Eagles point of view, the stadium at the moment isn't big enough for us; we'd obviously like a bigger stadium but we also understand the economic environment at the moment," Eagles chief operating officer Richard Godfrey said.

"We understand why the government made its decision."

Mr Godfrey said the Eagles were also conscious of the impact of changed economic circumstances.

"We know we're not immune to what's going on, we're very wary and we are not taking anything for granted. At the moment in these economic times, the key is to not take too many risks."

The Perth Wildcats' growth has also been capped by the lack of an adequate playing venue. But with the 13,500-seat Perth Arena due to be built be year's end, Wildcats chief executive Nick Marvin said basketball was back on the agenda.

Under Mr Marvin's guidance, membership at the has grown by a third each of the past three years, with the 4,500-seat Challenge Stadium often filled to capacity on game nights.

Mr Marvin believes the club's membership could expand up to 150 per cent when the Wildcats relocate to Perth Arena.

"Then we don't have to survive on the generosity of [owner] Jack Bendat," he said.

"The sport is just not viable with 4,000 members, but we're lucky we have not experienced any corporate issues with the economy in terms of the downturn as yet.

"We started planning for the crisis in October and we have done a risk analysis on all our customers and we think we are going to have some challenges, but we have enough prospects and enough renewed interest in the club. We should be on par to last year.

"We don't expect to be significantly hit in the corporate hospitality sector. We might get hit in the sponsorship sector, like with naming rights and those types of things, so we might see a little bit of that."

The National Basketball League will undergo a major overhaul when it merges with Basketball Australia next season.

The merger follows the collapse of the Sydney Kings last year and an announcement that Wollongong Hawks would not seek to renew its licence.

"There is a need for this reform. The reason Wollongong ... can't comply to the new rules is they [the rules] are justifiably and purposefully more stringent," Mr Marvin said. "And we want the rules to be stringent; we don't want teams falling over every season."

Perth Glory owner Tony Sage said despite his club's $2.3 million loss last year and soccer's chequered history in Australia, he was quietly confident the sport could ride out the economic downturn.

"The financial future of the A-League is well-secured and that's one of the reasons why I decided to invest into the Perth Glory. It won't go broke like the old National Soccer League system did," Mr Sage said.

He expects the club to run at a loss in 2009 because of the difficulty securing sponsorship deals in the current market.

The WA Cricket Association's membership of 7,650 is slightly down on previous years, however chief executive Graeme Wood said the WACA would focus on the quality of its services, not quantity.

"What we've probably noticed is that members haven't taken up the same amount as last year in the business class and packages," he said.

"There's no doubt we're not immune to what's going on. We noticed at the start of October in our corporate hospitality packages that we were certainly going well ahead of budget, but then October hit and we noticed a softening in certain areas."

In other sports, Tennis West returned a $30,400 surplus in 2008 following a loss the previous year, short of the projected $33,500 surplus.

"It's been a challenging period for the association, particularly with staff departures, as it has for the economy in general," Tennis West treasurer Bill Price said.

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