Image for HAWTHORN: It’s a con. A fraud

It’s a con.  A fraud, which if it involved a private company would see shareholders revolt and Directors thrown out.  There’s no accountability from those involved.  Contradictions, spurious financial projections and grandiose claims, which when combined, would make anybody concerned about basic standards of governance shudder.

But this is Tasmania, and football appears untouchable.

For years, politicians at local, state and federal level have enthused about the value of Tasmania’s sponsorship of the Hawthorn Football Club, and whether due to political cowardice, ignorance or a combination, have refused to face up to the facts.

The current $15 million funding deal which expires at the end of the 2016 season requires the Hawks to play four home games at Aurora Stadium, together with branding rights.

That football is popular in Tasmania isn’t in doubt.  That we wouldn’t have AFL games in the State were it not for taxpayer subsidies is also not in question.

What we still don’t know, years after we began helping Hawthorn Football Club generate revenue of $70 million annually, is the impact of our sponsorship dollars.

A consultancy commissioned by Tourism Tasmania in the early years of the deal put the direct economic benefit of the sponsorship at $3.9 million, in addition to media exposure worth $1.9 million.

Those numbers seem reasonable, although one might question the economics of spending $3 million of taxpayer funds to generate $3.9 million in private sector activity. 

But from this point, things go a little crazy.

Despite attendance numbers for Hawks home games in Launceston slowly declining in recent years, the claimed economic benefits have gone ballistic.  In a recent public forum, the city’s mayor claimed Hawthorn provided economic stimulus of $50 million each year to Launceston.

Another alderman, a 33-year veteran on Council and long-standing chairman of the loss-making Aurora Stadium has put the marketing value of the sponsorship alone at $80 million.

Current and former Premiers have talked of ‘direct economic benefits’ of $15 million each year.  And the parochial local newspaper has, for years, rejected any suggestion that the direct subsidy of $50 for every punter attending the footy is a bad deal.

Part of the historical problem can be sourced to the dangerously-flawed survey conducted by Tourism Tasmania in 2008, which concluded 31.7% of those attending Hawks games came from interstate.  Rather than question the validity of the outcome (or perhaps use different, more reliable survey metrics) they simply concluded around 6000 in the crowd were visitors.

Ludicrous claims about interstate attendance numbers ...

So when Pricewaterhouse Coopers were asked to calculate the economic benefits of the sponsorship deal to the local economy, they just multiplied the estimated visitor numbers (23,768) by standard value-adding multipliers to reach their conclusions.

At least the voices making ludicrous claims about interstate attendance numbers have gone quiet.  Perhaps they’ve done the obvious sums (total available accommodation in the entire northern region could only support about 1200 visitors, not to mention a shortfall of around 25 passenger flights into Tasmania) and moved on to the value of the Tasmania brand.

A great brand it is, and we’re regularly told our exposure nationally and internationally thanks to the Hawks sponsorship is ‘priceless.’

According to a survey by sports sponsorship consultants RepuCom, it isn’t priceless at all – they’ve valued everything from the Tasmania-badged jerseys right down to the branding on apparel worn by spectators.  In 2008, they put the total value of media exposure at $3.4 million.

RepuCom also came up with other statistics, like 16% of respondents were unaware of Tasmania as a destination, and the worrying fact fewer than half of Hawthorn’s fan base could identity Tasmania as a club sponsor.

But the most damning number in the RepuCom report is 2.6.  That’s the percentage of those surveyed indicating they were likely to come to Tasmania to attend an AFL match.  Even Tasmania’s weather was seen as a bigger attraction by respondents.

Those trends are consistent with Tourism Tasmania’s annual visitor survey, a comprehensive analysis of demographics which provides useful insights into visitors, their motivations and spending patterns.

To be seen and heard as a supporter of footy is clearly a positive for politicians.  Many people, perhaps even a majority of Tasmanians are passionate about the sport.  Most have been conditioned to believing a few million dollars to sponsor a Melbourne team is a small price to pay for the benefits we achieve.

What’s missing is the truth, and the answers to some basic questions.  Like what are the actual demographics of those attending AFL games in Tasmania?  Why does Launceston City Council underwrite Aurora Stadium losses of nearly $2 million each year if the sponsorship deal is such a winner?  Is political support for football now so entrenched that to release the real numbers would be too damaging?

I support AFL games in Tasmania.  The social benefits are widespread and the Launceston business sector is certainly boosted on football weekends.  But I question why we’re paying so much for branding, and don’t understand why Launceston City Council hasn’t insisted on some sort of contribution from Hawthorn, the State Government, or both to help recoup the losses of running Aurora Stadium.

Tom Ellison is an analyst and consultant.  He is also an independent candidate for Deputy Mayor and Alderman, Launceston City Council.

• AJWW, in Comments: Not just a con and a fraud Tom - its also manifestly unjust that a traditional football State should be denied its own team in the AFL for any reason, let alone the spurious argument that it is unaffordable. Having a team in the national competition would have a unifying affect, bolster State pride and contribute significant social, as well as economic benefits. For example, it would provide our young talent with a pathway that avoids always having to move interstate if they are to realize their sporting dreams. Strong legislators would cast aside the “cringe factor” and the agendas of vested interests, and push hard for a stand-alone team knowing we would be playing to one of our great strengths in a sustainable, growth industry. Saul Eslake has challenged the received wisdom (from Kennet, Demetriou, Bacon et al) that a State team would not be financially viable.In the meantime, we continue to prop-up a previously unviable Melbourne-based club. What a travesty!Tony.

Peter Gutwein, Ministerial Statement: Update on Budget Savings

TT, Sept 2006, James Boyce: Hawthorn: what Lennon signs away