During grim moments I bet I'm not the only one to have jollied myself along with an under the breath rendition of "accentuate the positive, eliminate the negative, don't mess with mister in-between..." I wonder whether Ballarat City Council officers were having a grim day when they set the terms of reference for the Ernst and Young study, entitled An estimate of the economic impact of AFL matches being played in Ballarat, completed in September 2011, and subsequently reported in The Courier a month later.
The task involved looking at the economic impact only from the benefits side. Yes, count the income, but ignore the expenditure. Here are the attendance figures to use, here are the economic multiplier figures to use, and whatever you do, don't question them or look at varying them. Cost/benefit analysis is out of bounds. But most of all, don't look at risk. Just accentuate the positive...
Ernst and Young counted the benefits, and for 3 & 5 AFL games a year plus a NAB game (pre-season competition), the respective estimated benefits to Ballarat are $7.86m and $13.01m. This assumes average attendance figures for pre-season of 8,000 and 19,500 for the home and away season. It also assumes an economic multiplier, provided without question by Ballarat City Council, of 1.802 - in other words, for every dollar spent directly by footy fans, another 80.2 cents worth of value will be added because those dollars just keep going round and round.
Let's say we accept the multiplier and look at the figures for attendances. It is worth noting we are looking at having the North Melbourne Football Club as the home team for our matches in Ballarat. NMFC had 7 of the lowest 20 match attendances for the AFL during 2010, and 4 of the lowest in 2011. Average attendances for home games during 2010 were 23,851, and for 2011, 26,474.(Ref 1) The 19,500 prescribed by council for Ernst and Young seems reasonable until we look at attendances for home games out of Melbourne. The average attendances for games in Launceston since 2001 are 17,216; whilst for Canberra from 1998/2011, they are 11,070. These are the grounds that would most directly compare with a revamped Northern Oval.
So the modelling is accentuating the positive in terms of attendances, and by extension, in the overall multiplier effects on the Ballarat economy. Why sensitivity analysis that takes account of higher and lower average attendances would not be allowed by council staff in the modelling is incomprehensible. Why not go into this thing with eyes wide open?
Because this is not a cost/benefit analysis, it does not look at how much Ballarat would have to spend to make this much money. The costs not only include the stadium component of the $80m Precinct redevelopment, which may or may not take into account provision of car parking (because the plans are unavailable to the public, we do not know), but certainly wouldn't account for the additional costs of necessary upgrades to rail and bus infrastructure if we are to move people to and around Ballarat with ease and comfort. Nor does it count the cost of mounting the events, including advertising. It doesn't tell us whether the benefits would outweigh the costs, and over what time period we would need to operate to recoup the total investment in facilities, or even on the net investment paid by Ballarat residents (assuming grants could be obtained from elsewhere, and/or the AFL or private business contributions were forthcoming).
This leads to the business case, which the Ernst and Young study does not pretend to be, though proponents of the Think Big Ballarat-Eureka Stadium would like to have us believe it is. A business case would make a cool-headed assessment of the risks associated with the proposal to invest in facility upgrades to have 3 or 5 NMFC home games played in Ballarat. If we needed say 10 years of games to recoup our investment for the 5 game option, and 20 years for the 3 game option, can we be guaranteed that NMFC will be around that long? Given they have the lowest attendances of Melbourne based clubs and are presently involved in discussions with the council in Hobart over Tasmanian home games, you'd have to say we can't be guaranteed. Bookies would give good odds if you wanted to place a bet that NMFC will still be a Victorian side in 5 years time, let alone 10. Another element of the risk is how dependent NMFC are on achieving 19,500 average attendances in Ballarat. If they can get better attendances at Docklands (averaging 29,776) or the MCG (averaging 28,788), why would they lose money coming to Ballarat? Last year in home games against Adelaide, Sydney, Brisbane Lions, Melbourne and the Western Bulldogs (the teams modelled by Ernst and Young for games in Ballarat against NMFC) average attendances were approximately 22,000. Still higher than the 19,500, and higher again than the likely average attendances at Ballarat based games.
Put bluntly, the case for upgrading the Northern Oval for AFL games seems incredibly thin. The downside would be residents funding the upgrade and no home and away AFL games ever being played. This looks a distinct possibility. The beneficiaries of an upgraded Oval are the existing tenants, the North Ballarat Football Club. How much are they proposing to put toward the project, and isn't it reasonable that they bear the bulk of the risk if they stand to benefit regardless?
When is the Ballarat City Council going to allow us to peruse the plans and studies done to date? When do we have our chance to apprise the project and make the judgement that it is a good or bad investment? When will we be told how much this will cost ratepayers/taxpayers to build and to operate? And when will they let us in on the risks associated with the project?
When is The Courier going to start doing the job that journalists are supposed to do, to inform us, rather than propagandise as partners in this apparent misadventure?
Grim times indeed.
My next article looks at what the alternatives to a sport-led economic future for Ballarat might be, and what the councillors might concentrate on to make our futures prosperous.John Barnes worked as a senior officer in local government in Ballarat. He subsequently went on to be a councillor and was Mayor from 1998 -2000. View his stories for The Ballarat Independent here.