THE ECONOMIC DEVELOPMENT OF THE AUSTRALIAN FOOTBALL LEAGUE

Ross Booth

No 03/05, Monash Economics Working Papers from Monash University, Department of Economics

Abstract: This paper begins with a brief review of the evolution of the unique brand of Australian football and the development of a fully-professional and national Australian Football League (AFL) comprising 16 clubs from the Victorian Football League (VFL) formed in 1897. Analysis of clubs' finances and stated objectives suggest that AFL clubs are win-maximisers (subject to breaking even financially) rather than profit maximisers. The win-maximising objective stems from the nature of club ownership. Of the 16 clubs, ten are owned by their members, one is shareholder-owned, four are owned by their respective state football Commissions and one licence is held by the AFL. The objectives of the league and the changes in its governance are also discussed. The history of labour market devices and revenue sharing rules the VFL/AFL has used to try to increase competitive balance is outlined. Six different periods between 1897 and 2003 are identified and the different levels of competitive balance are calculated for each year and then matched against the devices and rules used in each period. It is suggested that the high levels of competitive balance achieved in the VFL/AFL in the most recent period could well be the result of the introduction of both a national player draft and team salary cap.

Keywords: Australian Football League (AFL); economic development; competitive balance; club ownership; club objectives; league objectives; league governance; player draft; salary cap. (search for similar items in EconPapers)
JEL-codes: L83 (search for similar items in EconPapers)
Pages: 19 pages
Date: 2005-03-02
New Economics Papers: this item is included in nep-spo
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Citations: View citations in EconPapers (1)

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