RAW: Port At Adelaide Oval. Great Day But No Endorsement of Need To Spend $535m

Opening Bounce

It was a beautiful spring afternoon that greeted the first Australian Football League game at Adelaide Oval. A comfortable and well behaved, but hopelessly Port adoring crowd saw their otherwise hapless year finish on a high with a narrow but entertaining victory over Melbourne 112 – 104.

However those who said this was a ringing endorsement of the Government’s plans to spend $535m need to think again. The reality was this fixture gave no support for the proposition that Adelaide needs a 50,000 seat stadium, for even after all the hoopla, media support, fine weather and novelty, the crowd in attendance of 29,340 failed to reach the average expected every Port game from 2015 onwards in the now somewhat discredited Centre for Economic Studies modelling.

The facts are Port games could be played at the Adelaide Oval as it is and there is little need for the great cricket icon to be destroyed in the name of accommodating AFL football in the city.

Of somewhat greater concern to the SACA must be the fact that it seems less than half of the SACA member tickets on sale (a total of 4,000) were taken up leaving one to ask ‘where the bloody hell were you’ and how did 80% of them ever support the proposition back in May.

The fears of a complete takeover of their ground by footballing interests can only intensify for this and recent press speculation that there is a major shortfall of funds to undertake the redevelopment (as now capped by Parliament) for which BHP Billiton has been approached for ‘sponsorship’.

Kryztoff understands the shortfall is in the order of $50m and is caused as much as anything by the recent construction workers wage outcome which delivers a 27% increase in wages over the next three years – an impact that is plaguing major infrastructure projects all over the country.

Kryztoff now also understands that the proposal before BHP involves naming rights for the oval even though the legislation that went through parliament attempts to enshrine that such an outcome cannot occur and, under pressure from Save The Adelaide Oval campaigner, Greg Howe, all parties supporting the proposal said such would not happen.

SACA members may also be concerned by the financial results of the SACA just released. While reporting a profit of $1.5m, this covered only eight months of post completion costs for the members’ grandstand. Adjusting for those and netting out the impact of new member joining fees and SMA costs, the result on a full year basis was more like a loss of $1.5m, and this in an Ashes year.

Should the oval redevelopment project not proceed, with lesser supported cricket tours for the next three years and the spectre of debt repayments looming, it is hard to believe SACA officialdom would remain as confident about their association’s ability to meet their obligations as they stated they were before the big May vote.

What is also of interest but not hitherto reported is that the final grandstand costs are now listed at $116.9m, up almost $2m on the figure provided previously by the SACA (and some $47m more than the original budget).

What is worse, much worse however, is the carrying cost for the SACA from the absence of any final joint venture agreement with the SANFL. Upon that being achieved, the Government assumes the SACA’s $85m of debts and interest from that moment forth. But before that, it is the SACA that pays the interest costs that have kicked in since completion of the Members’ Grandstand last November. As at 30 June 2011, that has already cost $5m and Kryztoff estimates the costs are running at $500,000 per month.

With the SANFL in its own financial turmoil and the interests of the AFL now much needed to be considered (with the licenses for the Crows and Port to be bought back by it), the negotiations may  be some way off yet being concluded; all a far cry from the days when Premier Rann set deadlines for decisions between the sporting codes, the last of which is now more than a year ago.  Given also the Government’s increasingly acute financial woes, it too no doubt is in no hurry to take on this burden and away from the SACA.

What is also now at risk with this on-going problem is the SACA’s claim that the redevelopment deal would free up $18m in the first two years for cricket development in this state. With the interest bill already at $6m, just how this impacts this commitment remains an important unknown.

Of course, with these problems on-going and the SACA’s record of negotiating a good deal for its members somewhat underwhelming, its position of power at the negotiating table is back to being poor, driven entirely, as it has been from the time former CEO, Mike Deare resigned, by the blow out in the costs of the Members’ Grandstand.

With all this, the best option for the Adelaide Oval of redeveloping only the Bradman Stand looms large again. To seek much more may yet find the whole proposal collapses, taking the Government’s credibility and the state’s premier football and cricket entities down with it.

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