The 80/20 View: A non-Melbourne AFL Grand Final delivered a bumper outcome for the AFL – should they keep doing it?
In his regular column for Mumbrella, media analyst Ben Shepherd examines the real battle amid broadcasting the AFL in the COVID era.
The scoreline may not have shown it, but Saturday nights AFL Grand Final was an electric affair, producing one of the most exhilarating third quarters in modern memory. I swear, if I listened hard enough I could hear the howls of delight from Demons tragic Russel Howcroft 30 kilometres away from my house.
And for the second straight year, it was an AFL Grand Final featuring two Melbourne-based teams battling it out outside of the city of Melbourne. Brisbane in 2020. Perth in 2021. Both under lights. Both bursting with atmosphere. Both triumphs for both the winners and the hosts.
The question of whether the AFL Grand Final should be played under lights, as well as the more radical concept that the AFL should consider other cities outside of Victoria host the Grand Final are as much cultural questions as they are commercial.
For many Victorians, the idea of the AFL Grand Final anywhere but the MCG is a thought too radical to entertain. It has always been played there, and always should be played there. Even the idea of a night Grand Final is highly controversial.
However, the AFL is now a national competition (hence the ‘A’ in AFL), and it is also one that is right now in the eye of one of the greatest financial storms the competition has ever faced. COVID has wreaked havoc with ticketing revenue, as well as causing the league to incur significant incremental costs to run two years of competition around the pandemic; and the structural forces hitting TV broadcasters may mean that two decades of constantly increasing broadcast rights revenue may be coming to a stop (or at least a slowdown).
So, now is a good time as any to look at these two hot button issues.
1. Should the AFL move the Grand Final to nighttime?
This is ultimately a TV and visual aesthetic question. The game will sell out whether it was at 2:30pm. 7:30pm or 7am. So there is very little revenue gain for the league, or the venue, from it being at a different time.
Does the game look better under lights? For many it does. For many it doesn’t. The game is the game. The entertainment definitely is better served in an evening, but no one watches the game for the entertainment.
So, what about ratings?
Well, the 2021 and 2020 Grand Finals definitely rated well when you look at the metro cap city numbers for the game itself.
2020 was up significantly on 2019, and 2021 was up marginally on 2020. Either way, when you look at the past five years of Grand Final ratings the two night games rated significantly better.
But the devil is in the details when looking at the source of the incremental viewers.
Let’s look at Sydney, Brisbane, Adelaide and Perth over the past five years.
Brisbane has trended down during this time. It spiked in 2020, but it hosted the game so this 30% increase was to be expected. However, when you look at performance 2021 was the lowest rating Grand Final game in Brisbane in the five year period.
Adelaide is a city that loves its footy, but it definitely loves it more when it has a team in the Grand Final. In 2017 the Adelaide Crows played. And ratings boomed. Two years later for GWS and Richmond numbers had dropped 30%. 2020 and 2021 were better than 2019, but still below 2017 and 2018.
Sydney numbers for 2021 were down on 2020, even despite the city being in lockdown. The trend here seems to be relatively low movement in ratings over the past five years. Even a GWS showing in 2019 didn’t really boost interest.
Perth is another AFL heartland state, but one which needs a dog in the race to really participate at big levels. Saturday night almost eclipsed the 2018 ratings when West Coast beat Collingwood. But the story here is more around the cities passion for its own rather than anything to do with start time.
So, where are the majority of incremental viewers coming from?
It’s Melbourne. Home of AFL and home to more days locked down than most other capital cities in the world. The 20 and 21 Grand Finals both took place in the middle of pretty intense lockdowns, complete with curfews. Right now in Melbourne, there really isn’t much to do.
This goes someway to explaining the 600,000 audience jump between 2019 and 2020 in Melbourne, as well as numbers increasing again in 2021. Melbourne Grand Final ratings are sitting around 20-25% more than they were pre-COVID, but this is a reasonable result considering the circumstances in the city at present. It’s also reasonable to believe that a day Grand Final would have received similar ratings performance given the inability of the population to move about.
So, in this sense it’s unlikely a shift to a night Grand Final would result in materially superior ratings that would either a) allow the AFL to command a significant premium in broadcast rights or b) expand the reach and appeal of the game to a wider audience (which would also result in event ‘a’ being achieved.)
I must acknowledge that post 2020 Grand Final ratings I encouraged the league to look closely at a night Grand Final due to the 25-30% ratings increase achieved on the year prior. However this result ultimately said more about the 2019 ratings and the fanbase and pulling power of the GWS Giants than it did about a structural change in behaviour around marquee sporting events. The data suggests that outside of Melbourne (and the host cities in the year they hosted the game) ratings have not really changed.
So, as a TV spectacle it is unlikely there is significant value to be realised from moving the game to the evening. Therefore, it makes sense for it to remain in its usual timeslot.
2. Should the AFL closely consider allowing cities other than Melbourne to host the Grand Final?
It’s worth pointing out that this question is largely a hypothetical one. The AFL has an agreement with the Victorian Government to host the game at the MCG until 2059. This long term deal allowed the league to secure funding contributions to subsidise development and improvement at the AFL owned Marvel Stadium, as well as significant capital improvements at the MCG. The AFL website estimated the deal was one that would bring over $500 million of benefits to the league from the Victorian Government.
And that makes economic sense, but it’s hard to not consider the cost of this decision by locking the game in Melbourne at the expense of the rest of the country.
Australia has at least five stadiums that could house a Grand Final outside of the MCG. The Gabba in Brisbane, the SCG and Stadium Australia in Sydney, Adelaide Oval and Optus Stadium in Perth.
Is it feasible to suggest that the AFL could earn more than $500 million by looking at the revenue opportunity of rotating the game across other venues. $500 million over 40 years is approximately $12.5 million each year.
For reference, in 2015 the ABC estimated that the Victorian Government covered a $62 million hole incurred by the Formula 1 Grand Prix that year.
It also suggested the government covered a $10 million shortfall from the Motorcycle Grand Prix held in Philip Island
Losses aside, there is an appetite for major events across all states of Australia. And in terms of domestic sporting events there are not many with the prestige and pulling power of the AFL Grand Final.
Events are coveted by governments as they bring an inflow of funds into the state. An event may ‘lose’ money as a stand alone endeavour, but the idea is that the money the attendees pump into the economy more than makes up for the loss. This explains the comfort of the Victorian Government in subsidising the Formula 1 Grand Prix.
The Victorian Government claimed the Grand Prix in 2011 estimated approximately 38,439 attendees from outside of Victoria. And the estimate was that these visitors spend collectively $42 million across the event duration.
On these figures, if the AFL Grand Final could bring 25,000 visitors the city that was housing the event, it would make it worth between $25-30 million to the city holding it.
This means it’s a highly valuable asset, perhaps more valuable than locking it in Melbourne for 40 years.
At a $25 million contribution, this approach could yield the league $1 billion in revenue in today’s dollars over the 40 year period.
And it could take its best marketing platform into a wider variety of cities in an attempt to grow the game and its viewers outside of Melbourne, More viewers equals more broadcast revenue. If a wider range of cities hosting the Grand Final could boost ratings by 5-10%, this could add hundreds of millions of dollars to the leagues bottom line each decade.
The league is missing out on opportunity by locking the game in Melbourne. However, with the Grand Final locked down until 2059, we will never know how much. Regardless, there is a clear commercial case to look closely at the commercial benefits of changing the way the game is hosted.
One thing we can thank COVID for is certainly its defiance for tradition and the opportunity some of these changes have created. For the AFL the cities outside of Victoria more or less saved the game over the past two years, it’s a shame they and the league will not get the chance to showcase the greatest game of the year across all of Australia.
Ben Shepherd is a media analyst. The 80/20 View is a regular column on Mumbrella.
