Special Report - Game on as sports play hardball

Rugby WA chief Rick Smith is acutely aware of the challenges Perth’s Super 14 franchise will face in securing and retaining crowds, memberships, and sponsorship dollars.

And recent moves by the AFL to shore up the position of its two Western Australian clubs, the Eagles and the Fremantle Dockers, indicates the league is preparing for a tough and confrontational few seasons.

But it’s a showdown Mr Smith says need not take place.

“The market is there to co-exist. It shouldn’t be an us or them idea,” he told WA Business News.

What rugby will do, Mr Smith says, is create competition “and competition is healthy, as it drives improvement”.

“It forces you to take a hard look at yourself and ask whether you are offering value,” he said.

A noble sentiment maybe, but try telling that to the AFL.

Two weeks ago AFL CEO Andrew Demetriou told the league’s annual general meeting that the new rugby team and soccer’s A-League presented a challenge to Australian Rules Football in Western Australia.

This week Mr Demetriou will meet with the WA Football Commission and the two local AFL clubs in Perth to discuss how football can counter the challenge in WA.

A spokesperson for Mr Demetriou told WA Business News the AFL is concerned not just about the impact rugby and soccer will have on the AFL clubs’ memberships and sponsorships, but also the code’s long-term viability – player pool via participation at grass-roots level.

The West Coast Eagles – chaired by Perth accountant Dalton Gooding – is one club gearing up for increased sponsorship competition.

West Coast chief executive Trevor Nisbett said the club would be prepared for Super 14’s impact and would discuss the issue with Mr Demetriou.

“We’ve had a lot of long-term sponsors and keeping them happy is high on our agenda,” he said.

“We’ll have strategies to put in place and will work with sponsors, as the key issue is retention.”

It’s a challenge Eagles management has faced, and overcome, before.

As one Perth’s first national sporting clubs in a major competition the Eagles have seen off the threats posed by both the Fremantle Dockers and the Perth Glory. The Eagles are now the AFL’s most profitable club, last year making a profit of $2.8 million on a turnover of $30 million, with sponsorship generating almost half this ($12m).

For the Dockers the arrival of a Super 14 team and the rebirth of soccer in Australia come at a crucial time in the club’s evolution.

In 2002 Fremantle’s debt level was more than $8 million, but the implementation of a strategic plan, the attraction of new major sponsors, and a couple of years of successful trading has breathed new life back into the Dockers.

This January Fremantle unveiled a $1.25 million profit on revenue of $23 million – a financial turnaround of more than $4 million since 2001. Membership ($5.5 million) has increased revenue by 71 per cent since 2001, while sponsorship and corporate sales ($7 million) have boosted revenue by 84 per cent and 30 per cent respectively since 2001.

Surprisingly, Fremantle CEO Cameron Schwab, while not openly welcoming of the A-League and Super 14 side, believes the rugby team can coexist with AFL.

“If they [rugby] niche out a part of the market which is genuinely supportive of the code there is no reason it can’t be successful,” Mr Schwab said.

But competition for sports sponsorship was intensifying, he said, with the club sensing for the first time that its sponsors were being targeted by other codes. Mr Schwab warned