Docklands Stadium (Etihad)

Dimensions 159.5m x 129.5m

The Docklands Stadium is a sports facility located within the city of Melbourne, Victoria. It was completed in 2000 at the cost of $460 million. The Stadium is the location of the headquarters of the Australian Football League, and is owned by the League. It has an official capacity of 53,359.

History

The concept for a concert and event stadium at Docklands was concieved as early as 1994. Other sites were considered, including Olympic Park, before Docklands was chosen. While the stadium was a private project build, it was tendered after a deal struck between the AFL and the Victorian Government. A tender was put out in 1996, and in September 1997, it was announced that Baulderstone Hornibrook and Channel 7 would build the stadium for $386m, and a broadcast centre for a further $50m.

The development of what has now become a first class international acclaimed venue was first discussed more than 10 years before its development. There was a view that soccer and rugby league required a new stadium but costs made the concept prohibitive. As a result, planning turned to the idea of developing a privately funded stadium which could accommodate a number of sports including AFL, soccer, rugby league and union, cricket as well as entertainment acts.

According to the AFL’s 1997 Annual Report, the league believed it had a choice. It could upgrade Waverly Park – which would be nearly 30 years old in 2000 and which would require an immediate capital injection of between 14 and 60 million dollars. In return the league said the transport situation showed no hope of improving, and there was a prospect of little financial return for investment. The league would also have to increase its debt.

The AFL’s 1997 Annual report says that the Seven Network had formed a partnership with Baulderstone Hornibrook, Merril Lynch, Westpac and News Limited to form the Docklands Stadium Consortium which was to build an operate the stadium. This was announced by the Premier of Victoria, Jeff Kennet in September 1997. The joint company was known as Stadium Operations Limited.

The concept of building a stadium with a closing roof and retractable seats was raised. When locations were discussed, Melbourne Park was given first consideration, but the Docklands’ precinct was also in the mix. The Victorian Government wanted to open up the Docklands area, bridging the CBD and Spencer Street Station, now known as Southern Cross Station.

A build, own and operate scheme was the theme of the original plan, but after some negotiation the AFL entered into agreement to buy the future ownership of the stadium for $30 at the expiry of a 25 year lease period.

Originally projected to cost $385 million, on March 9, 2000, after two years of construction and $450 million, the venue was handed to the operators.

While theoretically free of cost to the taxpayer, the cost of connecting the stadium to transport was about $71m including the LAtrobe and Bourke Street bridges.

The AFL

The Stadium was a replacement for the aging Waverly park venue. The Original deal as written in the AFLs 1997 Annual Report can be found [here] and [here]

As part of the arrangement –

Docklands is entitled to a final if there are two or more finals in the first week, otherwise they must be compensated with extra matches the following year.
46 games a year contracted until 2013, then 40 games a year until 2025
best endeavor clause requires at least 30 games to have a potential crowd of at least 40,000 or more.
Stadium returns for crowds of 40,000 are believed to be about half that of a similar crowd at the MCG.
No third stadium can be built before 2025
The AFL and clubs receive 36% of match revenue.

The 2000 AFL Annual Report states that indiustrial action delayed the opening until just a few days prior to the season start. Preseason games had to be moved to other grounds, and testing was unable to be conducted before the season started. The AFL notes that there were a number of major operational issues including an inability to properly access the stadium and book tickets.

The stadium opened for the 2000 AFL Season with the first match for premiership points being between Essendon and Port Adelaide in front of more than 43,000 fans.

Different types of grass were used on the playing surface at times, leading to an unsatisfactory playing surface and the round 14, 2000 game between Carlton and St Kilda was moved to the MCG with just 24 hours notice.

The ground is home to five AFL clubs – Essendon, Carlton, North Melbourne, St Kilda and the Western Bulldogs. However as a practical matter, all Victorian clubs play at least one home game a year at the stadium.The record crowd for an AFL match at Docklands is 54,444 between St Kilda and Geelong in 2009. The lowest crowd for an AFL match at Docklands is 12,542 between the Western Bulldogs and Fremantle.

Club Stadium Arrangements

Carlton were contracted to play 6 games a year, deal ending in 2014. Etihad management aretrying to convince them to stay. Carlton recieved 2.5 million up front to move, however this has meant lower returns since. Carltons deal is apparently set to its gate reciepts. This deal was later extended to 2024.
Essendon are contracted to play 7 games a year, deal ends in 2025. Widely reputed to be the best deal of the docklands clubs.
St Kilda hasnt had a deal since 2008 and would like to play at the MCG.
North Melbourne may not have had a deal at Docklands since 2007.

North, St Kilda and the Bulldogs have complained for years that Docklands does not generate anywhere near the financial returns they expected. St Kilda demanded more games at the MCG and will move several games to New Zealand, North have relocated several games a year to Bellerive Oval in Tasmania, and the Bulldogs play a game a year in Darwin. Carlton are actively seeking to reduce the number of games played at the stadium.

Stadium management have explained that since Etihad recieves no government funding, the rent is higher than that expected at the MCG, limiting returns. Management also point out that scoreboard advertising at Docklands is paid to the AFL whereas at the MCG advertising is paid to the MCC.

In response to club and AFL concerns, a new deal was negotiated where all clubs recieve a guaranteed $100,000 per match.

The leagues concern was revealed in its 2011 Club Funding Presentation where it showed that of all the clubs, North, St Kilda and the Bulldogs had the worst stadium deals of any of the AFL clubs.

On December 7, 2015, The Age reported that Geelong are unhappy being forced to play 2 games at Etihad saying that its not fair they have to pick up the slack for clubs playing games interstate, like Hawthorn, claiming it could cost the club between 1 and 1.5 million in 2016.

“We support taking the game around Australia and beyond,” said the former AFL commissioner. “We support games in Cairns and Darwin and Wellington and Launceston and Hobart, but we’ve developed a business model to play games at Geelong. And our clear preference for Melbourne games is the MCG.

“It’s like building your own house and being asked to rent for two weeks. Why two games at Etihad? Hawthorn play seven games at the MCG and four in Launceston where they’re paid a bundle. Good luck to them, they’ve done a great job but why are we being asked to pick up the tab?”

In 2020, it was revealed that clubs could expect match payments of $150,000 to $200,000 per match at Marvel.

Soccer, Docklands and the AFL.

Stadium Management sided with the AFL in its dispute with Football Federation Australia citing the AFL as its major tenant with existing rights expected to be honored, and completely rubbishing the idea of being compullsorily required. Many in the soccer community blamed the absence of Docklands on the AFL, and perhaps the subsequent failure of the World Cup bid as well.

This is covered in more detail here.

In May 2015, tensions flared again briefly when SYDNEY FC branded the AFL “a disgrace” for refusing to allow Etihad Stadium to host the A-League grand final, forcing it to be played at the 30,000-capacity AAMI Park.

Sydney CEO Tony Pignata said the AFL must be “scared” of football not to have agreed to move the Bulldogs-Dockers game.

“I’m disappointed that agreement couldn’t be reached between FFA and the AFL to use Etihad Stadium,” Pignata said. “I’m from Melbourne, I follow AFL and enjoy the footy — just as a lot of the fans who go to the game will be AFL followers.

“But I just don’t know what the AFL are scared of, really it’s a disgrace that they wouldn’t agree to move the Bulldogs game. AAMI Park is a great venue from a footballing purists’ point of view, it’ll be packed to the rafters and a great atmosphere.

“But we have 12,000 members, and only a quarter of them will be able to get tickets — they’re really angry and understandably so. I’ve had loads of messages via social media and it’s very unfair that almost three-quarters of our members can’t get a ticket.”

Naming rights

Initially the rights to Docklands were sold to Colonial Mutual for 32.5 million over ten years. When Colonial was bought by the Commonwealth Bank, those rights were sold to Telstra for $50 million. Colonial Stadium became Telstra Dome.

In 2009, Etihad Airways paid $25 million for the naming rights to the stadium, triggering legal action by the AFL as this conflicted with its major sponsor, Qantas. The AFL said that its contract gave it veto rights over naming rights sponsorship, and threatened to not allow its various arms to refer to the stadium as Etihad. That legal action is detailed here. The situation was settled out of court, and the deal was renewed in 2012 until 2019.

The Age reported in September 2015 that the Stadiums operators were considering leasing various sections of the stadium out for marketing purposes. In an Australian first, Etihad has introduced an ambitious strategy to lease to corporate Australia the dome’s internal and external real estate for mega-size marketing installations, giving carte blanche to full ground-to-ceiling branding of the venue’s internal seats and walkways.

In 2017, it was reported that Etihad Stadium naming rights were worth between $5 and $8 million dollars per year, making it likely the most expensive naming rights for a stadium in Australia.

In 2018, it was announced that Etihad were leaving the deal early, but the naming rights were being taken by Marvel for 8 years through 2026.

Surface issues

There have been some issues raised over the condition of the surface, particularly after an ACDC concert in the preseason of 2010. As a result of the concerns, and amidst the threat of player boycotts, the AFL forced the stadium management to ensure that no concerts were held in the preseason. That deal expired in the 2013 preseason, and its notable that concerns are already being expressed about the surface again.

In 2015, the league and stadium faced calls for compensation after Micheal Close received a season ending injury on the astro turf on the side of the stadium. Etihad laid extra artificial turf both behind the stadium goals and at the interchange gates because of heavy traffic which caused extra problems with the natural turf. Both the MCG and the Gabba have artificial turf but at neither ground does it extend as wide as the Etihad extensions.

In May, 2015, Ross Lyon called the Etihad Stadium surface dangerous, saying

“The left-hand side’s as dry as a chip, the other side people are slipping and sliding and slipping over like sprinklers have been on an hour before the game. I’m not sure, but it was very confusing when I walked the ground, and that far side is wet and slippery and the other side’s as dry as a chip. If someone can explain that to me?”

In January 2016, the Aleague website reported that a survey of Aleague footballers by the Professional Footballers Association found that Etihad Stadium had the best surface in the league with a rating of 4.7 out of 5.

Retractable roof Issues

During a game between North Melbourne and Geelong in round 2, 2013, an unexpected period of rain raised the ire of both coaches when the stadium roof remained open. It has emerged that the for occupational health and safety reasons the stadium roof cannot be closed while people are inside the stadium, and the AFL CEO Andrew Demetriou is on record as saying that the roof will remain open unless rain is forecast or its a night matc h.

In April 2015 however, the league made a concession with its Etihad Stadium roof policy, declaring the roof will be shut for day games if the contrast between the sun and shade inside the ground is deemed to be a problem for players, coaches and spectators.

A Heraldsun fan survey in June 2015 found that 60% of fans think the roof should be closed at all times.

Ownership

According to the 1997 AFL Annual Report, the League said that it concluded negotiations with the Docklands Auithority for the freehold title to the land in March. According to the 2015 Concise Annual AFL Report, The AFL paid an Option Fee of $30 million to the Docklands Authority in 2001. This gives them the option to take the freehold land title on the land for $30.00 anytime within 6 months of the end of the present lease arrangment. Essentially the AFL will pay $30,000,030.00 for the freehold title to Docklands.

In 2012, The Age would report that the Kennett Government had been giving land in the Docklands away for a song. One of the first land deals orchestrated by the Kennett government in 1999 in an effort to kickstart the Docklands precinct saw the 136,970 square metre New Quay precinct, roughly five city blocks in size, sold to developers MAB Corporation for $3 million. The deal priced the land that came with harbour access at $22 per square metre. (A Brunswick workers’ cottage in 1999 cost $991 per square metre.).

Upon completion Channel 7 took control of the Stadium, before selling out for $330 million in 2006 to a consortium consisting of National Australia Bank Group’s staff super fund and industry funds such as Retail Employees Superannuation Trust, Western Australia’s Westscheme and South Australia’s Statewide, and managed by a joint entity of Mirvac/Leighton Holdings – Melbourne Stadiums Limited.

In the 4 years leading up to 2011, it reported $60 million in losses and paid no dividends to its owners.

Several prominent AFL persons have suggested that the AFL buyout the remainder of its Docklands contract. The idea first surfaced in 2011 after the AFL signed a record broadcasting contract for 1.25 billion, but has seen a renewed push in recent times. The AFL is understood to be resisting the push as the stadiums current owners want $250 million for the last 12 years of the contract.

In 2012, Etihad Stadium recorded a $17.3 million loss in 2012, , but made an operating profit of close to $4 million. Revenue reached $72.5 million

The financial report of the stadium’s owner, Stadium Operations Limited, revealed net operating profit reached about $4.8 million in 2013, up from $3.9 million the year before. Total revenue rose by about 10 per cent to $79 million. However, the stadium’s net loss after about $21 million worth of interest expenses was $16.7 million, down slightly from the $17.3 million loss recorded in 2012. The Stadium Operations balance sheet showed its owners have a loan of about $199 million outstanding.

In 2014, Fairfax reported that the league made an offer of about 250 million to the stadiums owners, who believed that the offer was about 20-30 million short. The article says Andrew Demetriou said the league was a long way off buying the stadium “at a fair price”.

In February 2015, the Financial Review reported that the stadiums owners and Melbourne Stadiums Limited were eager to sell in order to maximise returns ahead of a token sale in 2025. The AFL believed it could make immediate savings at the stadium by taking over back-office functions such as marketing, ticketing, human resources and event management. The savings could then be used to sign improved deals for the tenant clubs to play at the stadium.

According to the Age in August, 2015 the AFL held a series of talks with tenant clubs, broadcast partners and sponsors with a view to transforming its Docklands home into a wider sporting and entertainment precinct.

On March 11, 2016, The Financial Review reported that the AFL was in due diligence to buy Etihad Stadium for a price of about $150 million.

In October 2016, the AFL purchased the stadium and management company outright after years of negotiations, taking out a loan of $270m to do so.

Future

In 2011, Ian Collins suggested the league may well want to sell off Etihad in 2025 believing that it would be worth 1.2 billion.

In November 2015, the Mayor of Melbourne, Robert Doyle predicted that Etihad Stadium would be bulldozed in 20 years time, saying

“In the time-frame you’re talking, Etihad Stadium will disappear,” Doyle told radio station 3AW. “It’s a great idea for another stadium close to the city, but I would have thought that’s one of the things that cuts off Docklands from the city. I don’t mind a stadium in the Docklands, it’s just we can look down and see Western Park, it’s down towards Bolte Bridge. There’s room down there to put an AFL-sized ground and it doesn’t block off the city from Docklands.”

In March 2016, Eddie McGuire suggested it should be demolished, with a new ground to be built on the site of the Hisense Arena. The ground would be similar to the one currently in place at Docklands, with a retractable roof and a capacity of up to 60,000.

The Heraldsun reported in 2016 that there were three Chinese conglomerates interested in buying the stadium, saying that building the car parking facilities at Etihad alone would cost more than $100 million.

2018 Redevelopment

Etihad Stadium and its surrounding precinct will undergo a $225 million revamp under a landmark deal between the AFL and the Andrews government. In return for the Etihad upgrade money, the AFL will frequently have to open the ground to other major events and sporting codes, including rugby and soccer.

Footy clubs hosting games at Etihad will get “fairer” deals. And women’s change rooms will be upgraded. Etihad’s revamp will focus on improving fans’ viewing, with better seating for the footy and other major events on the bottom level.

A hotel tower on the current site of AFL House isn’t believed to be part of the government funding, but could be funded by the AFL itself. It’s been speculated the new luxury hotel which will help link Etihad Stadium to the Victoria Harbour waterfront will have a ballroom big enough to host the Brownlow Medal and other functions. in 2020, it was announced that this had been shelved and the land sold to Grocon Group for $60m.

On November 20, 2020 THE AFL, in conjunction with the Victorian State Government, evealed the designs for the Marvel Stadium and Docklands precinct upgrade, which will deliver a 365-day-a-year hub for all things sport and entertainment.

References