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AFL Acquires the Etihad Stadium


Everyone is still talking about the AFL's acquisition of Etihad Stadium. With the player exchange period having finally ended on Thursday, the Etihad acquisition is still the biggest news in the post season. Sure, the acquisition isn't likely to affect online soccer lines.

However, anyone that understands Soccer will appreciate the trade. The AFL spent $200 million to get the rights to manage the stadium from Management Stadiums. The AFL also acquired the freehold from the Stadium's consortium of institutional investors.

The former Waverly park Stadium had a 1997 book value of $38.2 million. The AFL has basically converted it into a prime inner-city real estate with a massive redevelopment value that exceeds the billion dollar mark.

Some people might be wondering why the AFL jumped so early, considering that this acquisition comes well ahead of the 2025 schedule when the AFL would otherwise assume ownership for a nominal Sum.

The AFL has already injected several hundred million dollars into the Gold Coast and Greater Western Sydney. From a business perspective, it isn't hard to see why the AFL moved to gain access to the Etihad Stadium.

Stadiums are an essential component of any league. They are what could be referred to as major fixed capital investments, and the AFL didn't exactly empty their vaults to bring this deal to pass, not when they just recently completed a six-year broadcasting rights deal worth $2.5 billion.

Ownership of the Etihad stadium is a boon to the league and, following the announcement of the deal on October 7th, Gillon McLachlan (AFL Chief executive) said that it would strengthen the finances of a number of Victorian Clubs.

A number of the AFL's games are played at the Etihad stadium; more importantly, there are five clubs that are co-tenants. The next step for the AFL is to initiate plans to improve the stadium's average operating profit of $3.45 million.

It isn't the norm for national sports governing bodies in Australia to own major stadiums. This is in contrast to English Sporting Heartlands. The Football Association and the Rugby Football Union respectively own and manage Wembley Stadium and Twickenham.

You also have the MCG, SCG, Kardinia Park and a number of sporting cathedrals that are managed by certain state governments through trusts. The ANZ Stadium and Etihad have remained outside this bracket for a while now, being privately owned. As it stands, though, both stadiums are now leaving private hands.

The chances of the Victorian Government pouring, even more, money into the renovation and revamping of the 17-year-old stadium are higher now that the Etihad is in the hands of a non-profit entity like the AFL.

The AFL's acquisition of the stadium will allow them to optimize its operations and contend with consumer complaints such as the spiking food and parking prices. The financial issues surrounding stadiums can often complicate league strategies.

The AFL has the opportunity to boost its revenue streams by expanding the utilization of the stadium and reaching out to new co-tenants with whom they can work to ensure that everyone benefits from this acquisition. The AFL has a number of similar acquisitions that they can look to if they need guidance about the best way to succeed in this new venture.