The Australian Football League's Recent Progress: A Study In Cartel Conduct And Monopoly Power

Abstract

Over the last twenty-five years, the Australian Football League (AFL), and its predecessor, the Victorian Football League (VFL) has become a central feature of the Australian sporting landscape by creating and managing a national competition. However, in the 1980s it was a Melbourne-based league facing serious structural and financial problems as player costs exploded. At the same time, a number of clubs were unable to trade profitably, and the richer clubs were toying with the idea of forming a break-away competition. The transformation of the AFL from a parochial suburban competition to heavily commercialised national league is analysed through the prism of cartel structure and conduct. It is concluded that first, even in its previous guise as the VFL, it adopted many cartel-like features, including controls over player transfers, fixed admission prices, and gate equalisation policies. Second, the establishment of a governing Commission in 1984 strengthened its monopoly power, and enabled it to set a singular vision for the game's development. This vision, in turn, enabled the AFL to create a national participation program that became the envy of every other sport association in Australia. Third, in achieving this outcome, the AFL tightened its authority over its member teams, administrators, coaches and players. Finally, within this cartel arrangement, member clubs surrendered their autonomy in return for an assurance that they would share the benefits from the AFL's growth and national expansion. In short, the AFL has strategically exploited its cartel features and monopoly power to become Australia's dominant sports league.