A letter from Sydney Swans chairman, Andrew Pridham
//April 20, 2020
The unprecedented events related to the COVID-19 pandemic have had a significant impact on the entire community, including all AFL clubs. Below is a summary of the most significant impacts on the Sydney Swans, followed by a letter penned by Sydney Swans chairman Andrew Pridham to our true believers.
The Board and senior executives of the Sydney Swans have taken decisive and necessary actions to secure the long-term future of our football club.
– Significant reduction in the operating expenses of the club to partially counterbalance reduced revenue during the suspension of the AFL competition. This has resulted in a significant number of staff being stood down during the AFL industry stoppage, while all other staff are working reduced hours with corresponding reduced salary. Key programs, including the QBE Sydney Swans Academy, have been suspended.
– The Sydney Swans has entered into an agreement of financial support from the AFL. All 18 clubs will enter into the same agreement. This will provide the Sydney Swans with the funds necessary to continue operating.
– The Sydney Swans has surrendered the lease of the Royal Hall of Industries (RHI), which was to become the club’s future training and administration facility. This has been done as it is considered imprudent to, at this time, continue with this $65-million project given the current environment of economic uncertainty. The club is committed to reigniting the project with government post the pandemic.
Keep reading below for an update from our chairman.
To our true believers,
May I take you back a little over one month ago. On the evening of Monday, 9 March 2020, I arrived in Melbourne. The purpose of my journey was to attend an AFL Commission meeting to be held the following day. Post the Commission meeting I attended a dinner at long-term club stalwart Craig Kimberley’s home. Guests at this intimate dinner included coach John Longmire, co-captain Josh Kennedy and club legend Bobby Skilton.
At this dinner we discussed the upcoming season and the exciting plans for our new training and administration facility, which had been many years in the planning.
At the conclusion of dinner, I farewelled Bobby Skilton with a firm handshake and as he departed, I remember feeling warmed by his familiar and generous smile.
I have not shaken hands with anyone since. Such has been the dramatic speed of change to our daily lives that is COVID-19.
Let me now take you back 146 years. We are in Napier Street, South Melbourne. It is June 1874. On a Friday evening in the Temperance Hall a group meet to form what is to become the South Melbourne Football Club. This Hall has become an incredibly important part of our long history.
From 1881 – 1981 the Swans played at The Lake Oval, South Melbourne.
After much emotional debate, when the very existence of our club was under threat, on Sunday, 28 March 1982, the Swans played their first match at the Sydney Cricket Ground. South Melbourne was about to become the Sydney Swans – a proud football club with its origins in South Melbourne and its future in Sydney.
Between that Friday night in 1874 and a Sunday in 1982 the club, and the world, had survived many profound and tragic events. The Boer War, the bloody campaigns of two World Wars, the Great Depression, Korean and Vietnam wars, and even one or two Collingwood Premierships.
Post 1982, our club survived countless threats of oblivion. Private ownership missteps, stock market crashes, a Global Financial Crisis and now, in 2020, perhaps our greatest challenge: COVID-19.
Over these almost 150 years of tumultuous events we have sustained our course. From Temperance Hall in South Melbourne to COVID-19 in Moore Park, Sydney. We have retained our colours, our song and most importantly of all, the pride and love of our club – a truly unique achievement of global significance.
All challenges have been overcome. Over time we have fallen, dusted ourselves off and come back even stronger. We only have to consider our more recent history where, despite being essentially bankrupt in the early 1980s, attempts at private ownership and other near-death experiences, we subsequently enjoyed a great phase as a member-based club. We have all enjoyed the wins and delighted at the skills and courage of our champion players. Since 1996, we have all been thrilled at reaching six grand finals, delivering two Premierships and qualifying for the finals more times than any other club in the AFL.
No football club has faced oblivion, only to survive, endure and then thrive more than has the Sydney Swans/South Melbourne. We will once again endure and then thrive. This I can promise you. I am reminded by the Japanese proverb “Fall seven times, stand up eight”.
In 2019, we had over 60,000 Members and more fans than any other sporting club in Australia. In excess of one million people support the Sydney Swans.
Impact of COVID-19 on the AFL and Sydney Swans
The impact of COVID-19 has been profound on societies and economies globally. The AFL, Sydney Swans and so many people important to us have not been insulated from the devastating impacts of this pandemic.
The thought of little or no football being played in Australia in 2020 was, only one month ago, unthinkable. It is the reality.
The impact of COVID-19 on the AFL and Sydney Swans will take many years to recover from. However, recover we will.
I am sure that many of our members, fans, players and staff have been reading about the comings and goings within the walls of the AFL and Sydney Swans over the past four or so weeks. Times have been very difficult, events dramatic and outcomes challenging for all involved. However, I believe that we have acted quickly, appropriately and with the pragmatism and courage of conviction necessary to survive the consequences of this pandemic.
I assure all of you that your Board, club executives, football staff and players are all working together as one to ensure the club can emerge from this crisis and move forward into an exciting and successful future.
Our plan is simple.
It is important to be aware that the very survival of the AFL (meaning the AFL elite competition and its 18 clubs, senior state leagues, AFLW etc) has been genuinely threatened. The AFL Commission and all 18 clubs have come together to develop a survival plan that is robust. The spirit of cooperation between governing body, clubs, players and all interested parties, has been uplifting.
What does the plan involve?
Significant reduction in operating costs at the AFL and all 18 clubs. This leaves no person or part of the AFL eco-system untouched. It has involved a material number of stand-downs, salary cuts and the suspension or reduction of a wide range of football and community programs.
It is important to acknowledge the personal hardship this has involved to many good and hardworking people. It is also important to thank all people involved, whether they have lost their job, had their pay reduced or been thrust into a period of great personal uncertainty. Everyone has accepted that cost reduction actions are unwanted, but necessary.
Everyone has shared in the pain. I especially thank our players and football staff for the collaborative way they have engaged with the Sydney Swans and broader AFL Industry in accepting the need to be part of the solution.
AFL financial support package
Reflecting many years of prudent management, the AFL industry has substantial assets. However, it is important to be aware that the financial impact of COVID-19 is greater than any level of prudent long-term management planning could have prepared us for.
The AFL has secured bank financing for in excess of $600 million (which is in the form of a loan secured against a key AFL industry asset: Marvel Stadium). This finance will allow the AFL to essentially act as banker to those clubs that will need additional financial capacity to manage their way through COVID-19. The need for support from the AFL will differ between clubs, depending on individual financial circumstances.
AFL financial support has been made available to all AFL clubs, and all clubs needing it will enter the same letter of financial support. As you may have read in the media, some clubs will need to draw on this financial support almost immediately, some in the coming months and a small number of clubs may not need to draw upon the financial support. However, such is the nature of uncertainty relating to COVID-19 and associated government policies of industry closures, personal isolation and social distancing that no-one knows how long the suspension in playing of professional sport will last.
Until we are back to playing games again, hopefully once again in front of packed stadiums, available revenue to all clubs will be materially impacted.
Clubs who draw upon the AFL loan are considered “assisted clubs”. Prior to drawing on the AFL support, clubs will be considered “unassisted clubs”. When AFL borrowings are fully repaid by a club, they will revert to once again being an “unassisted club”.
The difference between being an “assisted” or “unassisted” club simply involves the level of oversight from the AFL relating to a club managing its administrative affairs. It will be critical that post COVID-19, and the implications of AFL financial support, that all clubs be treated fairly depending on their individual or market circumstances. It is essential that the AFL Commission take all necessary steps to ensure a fair and balanced competitive landscape between all clubs, whatever the future may hold.
I see no stigma in being an assisted club, nor special importance in being an unassisted club.
The Sydney Swans is likely to be an “unassisted club” for a period, most likely two-to-three months. However, when our club’s cash reserves are depleted (we still have significant ongoing financial obligations relating to staff, general overheads and facilities) we are likely to need to draw on the AFL financial support and thus will then become an “assisted club”. We are pragmatic about this and thank the AFL for its support.
Members, fans, our staff and the general public are unlikely to notice any difference in how we operate when we move from being unassisted to assisted – provided an appropriate competitive balance regime is adopted. As always, we will advocate strongly for our club and the unique circumstances of all clubs in NSW and Queensland.
We often remind all within the AFL system that NSW and Queensland represent in excess of 50% of Australia’s population. As such, we represent unique markets, critical to the financial future of our game.
The AFL will impose strict controls to ensure that no club can gain a competitive on-field advantage by virtue of spending above AFL mandated caps on football or administrative programs. As a club the Sydney Swans will abide by these controls and do all in its power to ensure that all other clubs do likewise.
It is critical as we enter the reset phase, seeking to once again thrive as a game, that the AFL and all clubs work together in a spirit of doing things better and more efficiently than ever before. Just because something worked pre-COVID-19 does not mean it will be appropriate or even possible in the post pandemic world.
Royal Hall of Industries project
As you are aware, we have been planning our new training and administration facility for many years. In 2018, we announced that we had secured a long-term lease over the Royal Hall of Industries (RHI), located in Driver Avenue, Moore Park. Importantly, we have also recently completed the redevelopment of Lakeside Oval, which is located on Driver Avenue directly across from the SCG. Lakeside Oval was a critically important development as it provides the senior team with an elite standard oval, the same dimensions as Marvel Stadium. Lakeside Oval is now utilised by our senior team, the QBE Sydney Swans Boys and Girls Academy and has hosted NEAFL games.
The RHI development was to have a cost of approximately $65 million. It was planned to house our senior team, our future Sydney Swans women’s team, QBE Sydney Swans Academy, NSW Swifts, GO Foundation, Clontarf Foundation and the only Australian Red Cross Blood Bank collection facility located in Sydney’s eastern suburbs.
As a consequence of the financial uncertainty relating to COVID-19, we have made the decision to surrender our lease over the RHI. We are hopeful that in the future we can re-engage with the owner of the RHI, the Centennial Park and Moore Park Trust (CPMPT), to undertake this project. However, at this time of considerable uncertainty it would not be prudent to be obligated to continue with a project of such scale and subsequent cost. We thank the NSW and Federal Government’s for their significant ongoing support.
This decision in no way impacts our future commitment to the QBE Sydney Swans Academy, entering the AFLW, nor support of the important community and charitable groups we have worked so closely with over many years.
Sydney Swans Foundation
We established the Sydney Swans Foundation 15 years ago to raise money and then invest this capital for use at a later date. The Sydney Swans Foundation has a highly credentialed independent board, chaired by Peter Ivany.
I am pleased to say that the Sydney Swans Foundation remains well capitalised. The capital of the Foundation is available for important capital/infrastructure and community-related projects. Whilst the capital of the Foundation is not available for use in funding the Sydney Swans ordinary operating expenditure, we will work closely with its board with an intention of continuing to build its capital base. The partnership between Foundation and club is vital to achieve our Thrive strategy.
I believe that continuing to grow the Sydney Swans Foundation can play a vital role in assisting the future growth of our club post COVID-19, and in particular, by supporting development of our facilities and many community programs.
Demonstrating the spirit of support for our club from so many people it has been very reassuring that the Sydney Swans Foundation has received donation pledges from true believers exceeding $2 million in recent weeks, reflecting enormous generosity at perhaps our club’s greatest time of need.
I am confident that the Sydney Swans Foundation, supported by so many good people, will play a major role in not just our survival but also continuing the trajectory of stability and growth fostered by off-field giants of the past 30 or so years, such as Richard Colless, Basil Sellers, Peter Weinert, Craig Kimberley, Mike Willesee, John Cloney, Frank O’Halloran and John Gerahty.
We all love our club. We have a great culture. We have great people. We have long-standing and loyal supporters, you – our true believers. We have a rich and long history. We will have a rich and long future.
I would like to thank our corporate partners for their ongoing vital support of the club. In particular, I would like to highlight our longest serving partner, QBE, which has stood by our side through good and bad times for over three decades and continues as a true and loyal partner. Thanks also to longstanding Major Partner Volkswagen and our more recent Major Partner realestate.com.au for their ongoing support and encouragement. Our partners have remained rock solid, reflective of their strong corporate principles and senior leadership.
To all our members and fans – your support is greatly valued. Your support today is more important than ever. We share your passion for the Sydney Swans and hope to be back playing as soon as is possible.
We know that all Australians are experiencing the difficulties and anxieties associated with COVID-19. The continued support of the Swans true believers is critical to our future. I ask fans that have not yet purchased a membership to do so. If you have already done so, I thank you. Your ongoing financial support will play a significant part in ensuring the Sydney Swans not only endure these challenging times but emerge strong and ready to win plenty of footy matches in the decades ahead.
We are all in this crisis together. Together we can all play our part in ensuring the Sydney Swans come through this period. No support is too little.
We live in uncertain times. I cannot tell you when the footy will be back. However, I can assure you that everyone involved at your club and at the AFL is doing everything possible to resume playing the game we all love as soon as can be achieved.
I am confident that the Sydney Swans will survive this great challenge. Just as has occurred so many times in our club’s rich history we will dig in, we will endure, and we will survive. We will emerge from COVID-19 stronger and more exciting than ever. The word resilience has never been more appropriate.
Thank you to my fellow directors, executives, football staff, players and many volunteers. Your understanding, optimism and hard work makes, what is an incredibly difficult time, just that little bit easier to navigate.
I would encourage all our true believers to regularly access the Sydney Swans website where updates relating to our players, club news and plans to recommence playing will be provided on a regular basis.
Andrew Pridham AO
Chairman, Sydney Swans