UQ ACCT3102-Case study and questions
SPORTING CLUBS, COMPANIES AND CORPORATE GOVERNANCE
In 2013, the Essendon Football Club was investigated for performance enhancing drugs in their elite sports science programs. News of the initial investigations was met with disbelief by supporters, players, club administrators and the governing body – the Australian Football
League (AFL). What followed was a period of intense and rigorous independent investigation by Australian Sports Anti-Doping Authority (ASADA) and the AFL. In August 2013, severe sanctions were handed down to the Essendon Football Club by the AFL. This case study focuses on the events at EFC before and leading up to August 2013.
Structure of clubs
In terms of the AFL, seventeen AFL clubs are limited by guarantee (including the Essendon
Football Club), while only one AFL club (the West Coast Eagles) is a company limited by shares. For the clubs that are structured as limited by guarantee, the ownership is vested in the hands of its members which provide certain rights (Foreman, 2006). The members of the club are defined in the club’s constitution as individuals who hold membership tickets. The members’ rights are outlined in each club’s constitution, the Corporations Act 2001 and
Common Law. The club’s constitution outlines the right of members to vote at annual general meetings and elect directors to the board. The Corporations Act 2001 states guidelines for requisitioning a general meeting and for proposing a resolution to members. However, there are important differences between AFL club members and shareholders of a listed company.
Motivations for membership in an AFL club are quite different to the motivations for owning shares in a company. Obviously, the supporter (member) is motivated for entertainment purposes and subscribing as a fan of the club, whereas shareholders are motivated towards financial rewards.
English soccer is a good example of a combination of both members and
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