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SMA questioned over profits from Adelaide Oval Hotel

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Adelaide Oval management has been accused of misleading the public over where profits from the Adelaide Oval Hotel will flow, after it was revealed both the SACA and SANFL would end up with the bulk of earnings.

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Fronting a parliamentary select committee for the second time this morning, Stadium Management Authority CEO Andrew Daniels and chair Kevin Scarce had a prickly exchange with the committee’s chair and Labor MLC Ian Hunter, who accused the pair of not previously revealing that only $600,000 per year would flow back to the Adelaide Oval.

Daniels said that profits from the Oval Hotel would first go towards paying back the $42 million taxpayer loan provided by the State Government, with a further $600,000 per year poured into the Adelaide Oval and the remaining profits to be split evenly between the SANFL and SACA.

He said representatives from SANFL and SACA would form a “commercial operations trust” within the SMA that is tasked with overseeing the running and management of the hotel.

“They are part of the board that directs and oversights activity,” Daniels said.

“That’s the nature of the arrangement that was worded when the oval hotel was constituted.”

Hunter questioned whether it would be a conflict of interest for representatives from SACA and the SANFL to be on the board overseeing hotel, saying there was a “fine distinction” between how they could switch between representing the sporting codes and the Oval Hotel.

“We never know which hat they’re wearing,” Scarce admitted.

“But, when they come together to oversight the activity and direct the strategic development (of the Oval Hotel) they are constituted as a board to the SMA and that is a very clear responsibility.

“As the chair – an independent chair – for me it works well.”

Hunter said the profit stream indicated by the SMA showed that “all profits are going to SACA and SANFL for their own purposes”.

“I’ve understood all along that the benefit of the hotel was to go to the upgrade, upkeep when things are going poorly,” he said.

“But, what you’ve told me today is that the profits will go to football and cricket.

“I find that strange given the information that I was operating on – clearly incorrectly – but this is the first I’ve heard of it.”

Daniels said SACA and SANFL were responsible for making up any shortfall in revenues for the Adelaide Oval.

He said this year the Oval had seen a 50,000 drop in attendees, meaning SACA and SANFL had to forgo more money into the management of the oval.

“New revenue streams for them will cover the costs that they have to put back in to the Adelaide Oval,” Daniels said.

“I do appreciate that that does sound somewhat circular.”

Scarce added that having a hotel at the oval would allow the SMA to generate a “diverse revenue stream that enables the two shareholders who are taking the risk in this proposal to get some return for the risk that they are taking”.

“All the activities that we undertake at the oval through the Stadium Management Authority are designed to ensure that the stakeholders take the risk in the maintenance of the Oval,” he said.

“I don’t see how this is any different to any other activities we have at the oval.”

Addressing reporters after the committee hearing, Daniels said SACA and SANFL are required under the terms of the agreement to rebalance the Adelaide Oval’s books every year.

“What it does is provide a new income stream, which makes sure that going into the future, the costs of the Adelaide Oval continue to grow and that can be covered off.”

But Opposition spokesperson Stephen Mullighan accused the SMA of using the $42 million taxpayer loan for creating a “profit benefit” for the SANFL and SACA.

“That’s a very different thing to the message that was put out at the announcement of this hotel in November and I think it’s another serious query that’s got to be placed over this hotel arrangement and taxpayer funds being used for it,” he said.

“What we do know is for a $42 million hotel development this would rely on a business model that is making profits in the millions of dollars a year and unfortunately only a small proportion of that is going to the Oval and the bulk of that is forecast to go to the SACA and the SANFL.

“Unfortunately any upside of this hotel won’t be captured by the Oval.”

Planning Minister Stephan Knoll, whose government approved the taxpayer loan to fund the hotel, said declining Oval attendance figures indicated the need for “diverse” revenue streams.

“This is a great asset but it does have some frailties,” he said.

“We cannot continue to rely on record crowds to make sure the Oval functions.”

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