Image for AFL - Economic saviour, or financial disaster?

A couple of years ago, I released some modelling into the likely economic benefits of hosting AFL games in Tasmania.  My findings, which can be summarised by suggesting the Hawthorn sponsorship deal was a loss maker, were dismissed on the basis I was `anti football.’

So let’s be clear at the outset - I’m not a great fan of AFL.  My one and only visit to a game at York Park ended midway through the third quarter, when I decided the spectacle of vomiting drunks and abusive fans were perhaps not appropriate entertainment for my young children.  Still, to each his or her own, and I accept football is a passion enjoyed by many.  I’m not even concerned about Government sponsorship of football.  I’m more interested in whether the grandiose claims about the impact of the Hawthorn sponsorship deal on the Northern economy have any basis in fact.

Since early in the piece, the Government has been sensitive to any criticism of the arrangement.  In 2007, when grilled about the economic basis for the Hawthorn deal, Treasurer Aird told an estimates hearing to `visit any coffee shop in Launceston’ when the football was on.  They are all full, he said.  He was unable to produce any independent, verifiable analysis as to the quantum of the benefits, although he claimed one had been conducted.  To my knowledge, it has yet to be released in full.

At that time, it was claimed well over 2,000 mainland visitors attended each AFL match at York Park, reportedly injecting `millions of dollars into the Northern economy.’  As is often the case, those claims continue to be exaggerated.  Last week, the Launceston Chamber of Commerce, in arguing against AFL games in Hobart, made the claim `for each dollar of sponsorship five dollars is returned to the economy’ and AFL brought `24,000 extra tourists to the State.’

Indeed, the analysis which was conducted by Price Waterhouse in 2008, based its economic modelling on the number 6,000.  That is, they did their sums based on a Tourism Tasmania survey of two AFL games, from which they concluded over 30 per cent of attendees were from interstate. The expression `garbage in, garbage out’ springs to mind.  As the bare numbers used as the basis of the modelling are fatally flawed, none of the conclusions of the Price Waterhouse analysis can be trusted.

Yet the claims of 6,000 visitors from the mainland on football weekends continue, with scarcely a raised eyebrow.

My question is, how do all those visitors get here?

I’ll release my full modelling after the Hawthorn/Fremantle game, but in a nutshell, unless the State Government in partnership with the AFL have secretly built a tunnel under Bass Strait, the numbers used in their economic modelling are wildly fanciful.

I’ve assumed the majority of football fans arrive in Tasmania at Launceston airport.  I’ll accept some will fly to Hobart and make the 2 hour drive, but suspect most would prefer to land in Launceston and save half a day of driving.  The Spirit of Tasmania vessels add capacity, but prior to the last Hawthorn match, I counted fewer than 30 Victoria-plated cars leaving the boat.  I’ll conduct another survey this week, on both Friday and Saturday, and update my numbers.  But at this stage, my modelling is based on 80 per cent of visitors flying into Launceston.

More assumptions - The Government claims visitors stay on average two or three nights.  This is contradicted by many of the packages promoted by travel agents, which are uniformly based on an overnight stay in budget accommodation.  I’ll give them the benefit of the doubt, and assume visitors start arriving two days before the game, and stay on afterwards.  It has been suggested to me (but not confirmed) that the teams and entourages, including Hawthorn, usually take the first flight out of Tassie after the game, the $250,000 gate fees in their pocket.  Not much economic benefit from that source.

But back to those hordes of arriving footy fans.  Between 7.45am Thursday and kick-off time, Virgin Blue fly ten 737-800 planes into Launceston from Melbourne.  Jetstar helps out with eight A320 flights, and Qantas adds further capacity.

In addition, I’m informed the Fremantle club will charter a jet from Perth to Launceston, although the number of seats available for fans isn’t yet available.

I doubt many would make the trip from Sydney, but again, being fair, I’ve assumed a few diehard football tragics give up a weekend in Sydney to travel to Launceston on a direct flight.

If every available flight is fully booked, and 50 per cent of those on every flight into Launceston are coming just for the football, and we accept another 25 per cent of visitors arrive in Hobart or via the Spirit, fewer than 1,900 visitors come to Tasmania for AFL games.

I suspect even that number is inflated.  All three airlines are close to capacity on the Launceston route year round, and although in the past extra flights have been scheduled on AFL weekends, that isn’t a regular occurrence.  Simply put, there aren’t enough seats on planes to bring anywhere near 6,000 visitors to Launceston for a game of football.  As a side note, there are still seats available on every flight prior to next week’s game.  And plenty of vacant hotel rooms.

If the true figure is closer to 1,500 visitors (still a significant number), an evaluation of the true economic benefit becomes critical.  The Hawthorn sponsorship deal has been described as the most generous in the AFL.  Tasmanians have a right to know whether their sponsorship dollars really do produce a net economic benefit, or whether we are just supporting a very popular form of entertainment.

I’ll release my full numbers later, in addition to a calculation of the number of hotel beds available in Northern Tasmania, which will confirm that my figures, not Mr Aird’s, are close to the mark.

And, one final point. As John Lawrence points out HERE: Even Professor Felmingham seems to be softening his views towards industry assistance. Talking about the most important issue in Tasmania today, the matter of where AFL teams play, he pointed out that Government funding can have negative effects.

“The more you sponsor a place, the more you deprive it of a long-term future”, he said. “You just don’t determine things politically”.

Tom Ellison
Launceston (Tassie’s home of AFL)

Mercury, Friday, August 13:  Hawks Tassie deal doubts