The AFL has bought Etihad Stadium for $200 million nine years early to deliver the biggest boost to tenant clubs struggling under onerous deals to play at the roofed venue.
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The long-anticipated buyout, which will see the free-hold and the management rights transfer to the AFL, was confirmed on Friday after state government sign-off. The handover will take effect within weeks.
The stadium, originally called Colonial Stadium then Telstra Dome, will retain the name Etihad Stadium at least until the end of the current naming rights contract with Etihad Airlines until 2019.
The deal is likely to result in major upgrades to the 54,000-capacity ground, which opened in 2000. The tenant clubs' financially punishing stadium agreements – which can mean clubs pay to play in low drawing matches – will now be revisited by the AFL as the new owner.
"I believe this is a great deal for the AFL and our clubs," AFL chief executive Gill McLachlan said.
The stadia deals of St Kilda, North Melbourne, Western Bulldogs, in particular, have been one of the main financial burdens for the clubs, creating one of the main imperatives for the AFL to move to purchase the ground ahead of the initial 2025 handover date.
Western Bulldogs president Peter Gordon was thrilled at the announcement capping a big and successful month for the club.
He said the tenant clubs had largely paid off the venue for the AFL over the past 15 years due to their stadium arrangements.
"Both the affected clubs and all clubs as a whole have a joint interest in making sure that the stadium tenancy agreements do not create unfairness," Gordon said.
The venue was due to be handed over to the AFL in nine years for the peppercorn rate of $30 but the AFL has moved in early with its $200 million purchase in large part to redress the financial imbalance in stadia deals between Etihad tenant clubs and those at other venues.
Essendon and Carlton are also tenant clubs. They struck superior deals initially but Carlton have agitated in recent years for an improved stadia arrangement.
"Owning Etihad Stadium enables the AFL to continue to strengthen the financial health of several of our Victorian clubs, develop an asset for our whole industry, and commit to being a serious stakeholder in the future of the Docklands precinct," McLachlan said.
Etihad signage around the stadium has been covered over, but this is unconnected to the sale of the ground and is due to the soccer World Cup qualifier against Japan being played there on Tuesday. Under FIFA rules, non-rights-holding sponsors' signs cannot be visible.
The AFL will undertake a facelift of the 16-year-old stadium and seek to open the venue up to the Docklands precinct. By taking ownership of the venue, where the AFL is also housed, the league will have access to a range of other significant revenue streams including access to all signage sponsorship rights as well as better control over non-AFL events staged at the venue.
The use of Etihad Stadium for concerts and other sports such as soccer and cricket has been a cause of concern at times for the AFL because of the damage to the turf ahead of AFL matches.
"The AFL will continue to operate Etihad Stadium as a multi-purpose entertainment venue hosting AFL matches, other sports, concerts and a broad range of entertainment options," McLachlan said.
"Our commitment as owners of Etihad Stadium is to work with government to provide a stadium experience for our fans equal to the best in the world, as well as explore how we can help improve the stadium's relationship to Docklands and the city."
McLachlan said he wanted the ground to be upgraded to "improve the match-day experience" and open the venue out to the wider precinct.
Gordon said the overwhelming success of the redevelopment of Adelaide Oval in opening up the ground to the river and the city meant it needed to be the template for what was achievable at Etihad Stadium.
"We have a once-in-a-lifetime chance to do it right and create a world-class precinct and the proximity of Etihad to the harbour is largely an unexplored asset at the moment," Gordon said.
Etihad Stadium chief executive Michael Green will remain in his role after the handover.
Collingwood president Eddie McGuire has previously flagged the possibility of demolishing Etihad Stadium and building a $1 billion new AFL venue in the shadow of the MCG to take over the mantle of Melbourne's second stadium. McLachlan believes the Docklands ground is still a strong asset which can be improved.
