It is going on 26 years since the Brisbane Lions were formed via the merger of the Brisbane Bears and Fitzroy. It was a monumental moment in football history which gave way to a period of ongoing change and a ‘super team’ that won an extraordinary premiership hat-trick in 2001-02-03. Under supercoach Leigh Matthews, they were arguably the greatest team of all-time. Better than the Geelong sides of 2007-09-11, the Hawthorn sides of 2013-14-15 or the Richmond sides of 2017-19-20? This year the Brisbane Lions and youi are teaming up for the “Moments Of Change” series, where each week they’ll look back at the defining moments that shaped them as the Club they are today. Where to start? It can only be one thing … the merger itself.
Life’s all about change, and Youi’s the insurer for all the changes – big and small – that happen to you. That’s why the Brisbane Lions and Youi have teamed-up for the ‘Moments of Change’ series, where each week they’ll look back at some of the defining moments that have shaped the club you know today.
THE MERGER
On a windy afternoon in early March 1996 Brisbane Bears Chairman Noel Gordon and Chief Executive Andrew Ireland walked up the front steps of Owen Dickson Chambers in Lonsdale Street, Melbourne. In his fifth-floor office they met then Fitzroy president Dyson Hore-Lacy. And so began the biggest coup in football history.
The rumour mill had been working over-time, the grapevine full of ‘fruit’, and the Brisbane camp had heard time and again that Fitzroy's much publicised financial hole was getting deeper and deeper. The AFL Commission had even asked Fitzroy to demonstrate its solvency.
So, not for the first time, Gordon had telephoned Hore-Lacy on the subject of a possible merger. And much to his surprise, after countless knock-backs, Hore-Lacy said "yes". There was to be nothing in the media, he insisted, but he was willing to discuss the matter.
A Brisbane-Fitzroy merger was nothing new. There had been numerous approaches since 1986, when Fitzroy seemed certain to move north until a private financier stepped in at the last minute. It seemed like a never-ending media saga. But this time it would end. This was a merger with one major difference. It was not waged in the media. It was driven by the insatiable passion of chairman Gordon and a business-smart support team who simply refused to take "no" for an answer.
Pivotal to the entire matter was the AFL Commission's $6million merger ‘carrot’, tabled 11 months earlier in a bid to assist a merger considered essential to the League's on-going rationalisation process.
After the groundwork meeting of Gordon and Ireland with Hore-Lacy a string of equally positive meetings followed as Brisbane solicitors headed by David Dunn began drawing up a document that encompassed what may happen. The two camps met often but Hore-Lacy was reticent to sign anything as the 1995 Fitzroy Annual General Meeting, already postponed under special permission from the Australian Securities Commission, finally approached. The ever-busy grapevine suggested the club's auditors may not be able to sign off on the accounts, and that the club did not want to go to the members with any sort of merger proposal formally on the table.
Ireland and Gordon confessed in hindsight that the Bears thought things were "going reasonably well" until a phone call from AFL Communications Manager Tony Peek in Melbourne on Friday night, 10 May 1996, told of a story that would appear two days later in the "Sunday Age" detailing a probable merger between Fitzroy and North Melbourne.
Gordon was disappointed. He had maintained that Hore-Lacy negotiate only with the Bears or not with the Bears at all. But it was later revealed Fitzroy had signed a Heads of Agreement on 11 May to merge with North and form the Fitzroy-North Melbourne Kangaroos. And that on the very day in which Fitzroy wore period-style playing jumpers against Carlton at Optus Oval to celebrate the 100th anniversary of the first VFL game.
"We never received any formal confirmation of Fitzroy's talks with North, but we were told via our solicitors that they had opted not to pursue a Brisbane merger for geographic reasons," Ireland explained. "Clearly, North Melbourne held the front-running, but we continued to receive regular contact from Fitzroy people who believed that Brisbane was a better merger option for the club than North. But we didn't really have much to go on.”
The 112th and last Annual General Meeting of Fitzroy Football Club, as a member club of the VFL/AFL, was scheduled at the Fitzroy Town Hall for Monday 29 April 1996. It was the 1995 AGM which had been held over and was conducted as merger speculation raged.
Ten days earlier Hore-Lacy and other Fitzroy directors met Gordon and Ireland again. The Bears pair were enthused by the softening of the Fitzroy demeanour. An unnamed Fitzroy official even reportedly told the Age newspaper they were “about 20m down a 100m track”.
On the Saturday before the Fitzroy AGM Gordon and Ireland flew to Melbourne to meet AFL chief executive Ross Oakley and other League heavyweights at the MCG. Seeking details of the $6million merger offer and the League’s blessing for a Brisbane-Fitzroy merger, they were told by Oakley that the League would support a merger but would not interfere or take an active part.
On the Sunday Brisbane beat Fitzroy by 109 points at the Gabba in Round 5. The Bears had gone to the top of the table for the first time in the club’s history. Fitzroy were entrenched on the bottom, having not won since Round 8, 1995. They’d lost 19 in a row.
Yet Hore-Lacy was defiant. He opened his address to the AGM with a stinging attack on the media and those “faceless” people who had preyed on the Lions’ imminent demise.
But there was no hiding the facts. His club had to announce a $263,834 trading loss for 1995 and confirm that accumulated debts had soared to $2.3million. The club’s football operation had spent $4.07million in 1995 – about half what was considered necessary for an AFL club. And the Fitzroy Club Hotel, which had become the Lions’ primary income source, had 1995 revenue of $2.8million for a profit of just $132,000.
Worse still, Hore-Lacy had to tell 1200 members and supporters at the meeting that the Fitzroy Board was duty-bound to consider all options, thereby opening the door to a possible merger. Stressing that it was his intention and desire for Fitzroy to remain a single entity, Hore-Lacy said market forces and the club’s inability to lure large sponsors and increase membership had forced the Board’s hand. “The directors believe we would be negligent as a Board to fail to explore other and all alternatives,” he said. “The stated policy of the Board is that it would prefer, if it had to merge, to organise a satisfactory merger with a Melbourne club, if that’s possible. But circumstances may be that that’s not possible.”
The Bears were following at arm’s length the events of the AGM but they had an inside observer. Legal adviser David Dunn, who had returned to Melbourne in January 1991, had attended the meeting on the club’s behalf as Hore-Lacy, still insistent the club would pass the AFL’s solvency criterion, was re-elected to the Board. Favourite son Ross Lyon and long-time director Elaine Findlay were awarded life membership.
There was no doubt that Hore-Lacy, who had led Fitzroy’s fight for survival since taking over as Fitzroy in 1992, was still firmly in charge. But for how long? And with the AFL having confirmed that the salary cap for each club would raise by $350,000 to $2.9million in 1997, how long could they walk the financial tightrope?
If Fitzroy was to be forced into a merger with anyone Hore-Lacy clearly favoured a merger with North Melbourne. And in a letter to Fitzroy members in June he campaigned strongly for support. It began: “It may be that in the next month or so the Fitzroy members/share-holders will be asked to give their approval to a joint venture with the North Melbourne Football Club”.
Hore-Lacy wrote: “The directors believe that the overwhelming majority of our members/share-holders would rather us merge with a Melbourne club than an interstate club. Whilst the Brisbane offer has some superficial attractions, the directors have formed the view that the North Melbourne proposal is far superior”.
He listed the positives of the Brisbane offer – the name Brisbane Lions, the lions logo and a jumper predominantly comprising the Fitzroy colors. But he featured equally the factors he considered negatives – a guarantee to take only eight Fitzroy players, a commitment to take only enough staff to operate a Melbourne office, two Fitzroy directors which he said would be “meaningless” and only six guaranteed games in Melbourne at different venues.
Hore-Lacy, who had become a QC in 1995, was unable to outline the specifics of the North proposal due to a commitment he’d given the Kangaroos to keep them confidential, but he assured members that “once final agreement is reached, in all significant areas there will be equality”.
Merger talks between Fitzroy and North Melbourne had been progressing smoothly enough until a dispute over the name of the proposed merged club. Initially, it was to be Fitzroy-North Melbourne Kangaroos, but on 25 June it was reported that the senior partner in the would-be union was having second thoughts. On 17 June North CEO Greg Miller had written to members advising that the name was a crucial issue. There was now a push from Arden Street for the name North Melbourne-Fitzroy Football Club United. Fitzroy, meanwhile, had suggested North Fitzroy United. It was a difference of opinion that was never going to be easily resolved.
The merger equation changed entirely on Friday, 28 June 1996. Bears CEO Ireland was playing golf with a holidaying Oakley at Twin Waters on the Sunshine Coast when Oakley's mobile phone rang. The Nauru Insurance Corporation, owed $1.25million by Fitzroy, had appointed an Administrator to recoup their debts. How ironic it was. The same company which two years earlier had saved Fitzroy from extinction would deliver the final telling blow that made a merger the only alternative to oblivion.
Under Administrator Michael Brennan all power over Fitzroy's financial matters was withdrawn from the directors. Brennan, representing Ernst & Young, became the sole decision-maker for a club he said was $4.5million in debt. The biggest creditors, he said, were the Nauru Insurance Corporation ($1.25million) and the Australian Taxation Office ($500,000). “I suggest that Fitzroy are insolvent,” Brennan told the media. The Melbourne papers on 29 June were smothered in doom and gloom.
One of the first things Brennan did was declare "I've got no money". He asked for, and received, a $100,000 commitment from the AFL to under-write the club's playing expenses for the following day's match against Geelong at Whitten Oval. Ian Collins, AFL General Manager – Football Operations, said the League had only two options – to fund Fitzroy to the end of the season, which would cost about $1million, or effectively terminate one of the League’s foundation clubs. There was much speculation that this might be the Lions’ last game. And a 127-point loss to the Cats – 6-3-39 to 25-16-166 - didn’t help the situation.
Hore-Lacy accused Brennan of releasing mis-leading information. Brennan’s financial assessment of the club was wrong, Hore-Lacy said, because he’d failed to include the upcoming AFL dividend and other income due for the rest of the year.
Suddenly, too, there was a new issue. Would the AFL withdraw the $6million merger incentive if Fitzroy failed to survive? Rival clubs argued that the League should no longer pay it because the motive behind the payment would already have been achieved.
And what were Brennan’s powers? Hore-Lacy insisted the Administrator had no right to initiate further merger talks. Collins disagreed, confirming Brennan had every right to do as he saw fit to help fulfil his obligations to Fitzroy creditors.
Ireland and Gordon had been in Melbourne for the Bears' match against St.Kilda at Waverley the same day as the Fitzroy-Geelong game, and after meeting with solicitors on the Sunday they flew home on the Monday morning. But they had been in Ireland’s office no more than 15 minutes when they learned that Hore-Lacy would meet with the AFL Commission that night to plead his case. It wasn’t the place to be. No good being 2000km away. They were on the next plane south.
On Monday night, 1 July 1996, in a meeting which lasted almost six hours, the AFL Commission declared that unless Fitzroy could forge a merger with another AFL club acceptable to the Commission and the other clubs then their upcoming game against Essendon on 6 July would be their last. Effectively, the Commission had agreed in principle to a Fitzroy-North Melbourne merger, and given the parties four days until the following Friday to close the deal.
North Melbourne, with their non-enforceable Heads of Agreement with Fitzroy, privately thought they were over the line. But the fight was far from over. And pivotal to it all was the player guidelines for the merged entity. Brisbane had always proposed a list of no more than 44 players, but North wanted more. They wanted a total of 50 players, a $400,000 salary cap extension, and the right to trade Fitzroy players and retain draft rights. Critical, too, was the Brisbane camp’s belief that merger conditions outlined by the AFL gave Fitzroy no fall-back position, and so no bargaining power. If they couldn't come to terms with North they were effectively being expelled from the competition, effective Friday 5 July.
Ireland said it was then brought to the Bears' attention that Fitzroy-North Melbourne negotiations had not finished. "This was confirmed when we spoke to a Fitzroy director, who spoke to Hore-Lacy, who came to us and said the door was still open." Ireland said. "We stressed to them that we would not be a stalking horse for North for a second time.”
The intensity of the whole affair increased. Solicitor David Dunn was critical in tactical deployment as Gordon pushed the belief that Fitzroy Administrator Brennan was now the key player. His responsibility was the best financial deal for creditors, so why not go to Brennan? They did on Tuesday, 2 July. "We felt if we could put a better offer in front of him he'd be compelled by law to say it was his preferred deal, remembering that he was in an awkward position because the only way he'd get his money was if the AFL provided the $6million," said Ireland, believing at the time that the North Melbourne proposal did not guarantee payment of the secured debt to the Nauru Insurance Corporation.
Under key elements of a $3.25million Brisbane proposal put to Brennan, the club would:-
- Pay in full the $1.25million debt to the Nauruan Insurance Corporation.
- Under-write the player costs for the 1996 season, including money they were already owed, to a maximum of $1million.
- Cover Fitzroy debts, estimated by the club to be $950,000.
"All we could go on at the time was that what we were told by Fitzroy was the financial position. And as it would turn out later, the $950,000 only covered about a third of the debt," Ireland said. "They were closer to $5million in debt than $3million."
As the entire situation moved towards resolution it was important to remember that the extended player rules proposed by North Melbourne had never been approved. What they were chasing was a variance to merger guidelines set down 12 months earlier when the $6million merger "carrot" was tabled in July 1995.
The AFL Commission, needing support from the clubs to finalise the Fitzroy-North Melbourne merger, called a meeting for 5pm on Thursday, 4 July 1996. Prior to that, the clubs, with the power to overturn an AFL ruling, were to assemble at Richmond at 3pm for a meeting chaired by Tigers president Leon Daphne.
In the morning of the same day the Fitzroy board had met privately elsewhere. "We made as many as 20 phone calls to the meeting of Fitzroy directors, and as the day wore on we felt they weren't being totally straight with us. Said Ireland: “Promised answers to specific questions were not forthcoming, and deadlines pass without answers. We were concerned that they were also talking with other people.
“So, realising that Fitzroy weren't going to give us an answer, we rang the AFL and requested a meeting with Ross Oakley and Ian Collins (Football Operations Manager) to indicate to them where we were at. We'd also made a number of calls to other clubs and it became quite evident that they would not support the extended player conditions stipulated by North. We believed we had the best offer and one that the clubs would accept."
Brennan had confirmed exactly that. In a letter to creditors on Ernst & Young letterhead dated 22 July 1996 he would write that the North Melbourne offer would provide approximately $150,000 to the unsecured creditors, and that Brisbane had made a “significantly better financial and football offer” which would guarantee payment to unsecured creditors of $1million.
The TV cameras were rolling and media representatives were running everywhere as club representatives gathered at Punt Road. Brennan represented Fitzroy, Hore-Lacy was permitted to attend as an on-looker, and Oakley was a special guest. The Brisbane "team" of Gordon, Ireland and fellow director Graeme Downie, an expert in insolvency, was armed with a legal document proposing a merger with Fitzroy, and were confident it was substantially more appealing to the Fitzroy creditors than the North offer.
Oakley spoke to the meeting on the need for a merger to occur to preserve Fitzroy's history, to get them through the 1996 season, and uphold the AFL's standing in the corporate world. Brennan told the meeting he believed a merger was necessary and explained that his legal position as Administrator may entail action against the AFL and the directors of Fitzroy. This was an option he was prepared to pursue, he said. North told the meeting that the expanded player concessions were non-negotiable in their merger with Fitzroy, and essential for the successful resolution of any merger. The meeting voted 14-1 against them. Brennan, with the Fitzroy vote, abstained.
North, represented by CEO Greg Miller in the absence of president Ron Casey, volunteered to change their position on the playing structure, and to match the Brisbane conditions. But chairman Daphne ruled that the Kangaroos had had their chance. He invited Gordon to outline in full detail the terms of the Brisbane offer. As 6pm approached, without a vote being taken, the parties moved across the park to the MCG. The Brisbane group, still confident in the merit of their offer, were nevertheless concerned that North's willingness to change their offer may still make things difficult. And there was still a question mark over whether the Commission, with an alternative on the table, would be prepared to take the hard line and effectively relocate a foundation Melbourne club of the VFL interstate.
Important to the events that would follow was the realisation that the decision on the merger conditions was not one for the clubs. It was for the Commission to make and for the clubs to endorse - or otherwise.
The Commission asked the Brisbane and North delegations for their best and final offer.
The Brisbane group of Gordon, Ireland, Downie, solicitor Dunn and off-sider Arthur Apos retired to Collins' office. The North party was in Oakley's office, with the Commission in the Board Room. The remainder of the club representatives huddled together in small groups in the corridors and reception area.
Brisbane was clearly in a better position, their proposal already finalised in the form of a legal document. North, in contrast, wrote their offer free-hand on loose paper and had no legal representation. The only concession Brisbane made to their original offer was to exclude the Administrator's fees from the pool of money that would repay Fitzroy creditors, thereby guaranteeing creditors the full agreed sum of $950,000. So, the deal was sweetened to the extent of the Administrator’s costs. And that, in the end, was the difference between the two proposals.
The Commission gave the two offers to Brennan with the instruction that he would put a recommendation to the Commission and the Commission would then make a decision.
It was later revealed that Brennan told the Commission the Brisbane offer was better, but that the North offer was also acceptable. Clearly, he didn't want to be left with nothing.
After about 30 minutes Commission Chairman John Kennedy emerged from the Board Room and walked towards the North party. Gordon was initially concerned, but he need not have worried. Kennedy was telling North they had lost. The North delegation left the MCG and the remainder of the clubs met with the Commission. They endorsed the Brisbane-Fitzroy merger proposal, and shortly after Oakley, Gordon, Brennan and Daphne addressed the media to announce details of a landmark decision in VFL/AFL history. Oakley said the Brisbane deal was “a good deal better for the competition than the North Melbourne one” and “the absolute best outcome for the competition”. Certainly, he said, it fitted the Commission’s strategic plan.
It had happened. A company named ‘Brisbane Bears-Fitzroy Football Club’ was to be formed, trading as the Brisbane Lions. Finally, the new club was born.
Gordon gave an unequivocal commitment that the Brisbane Lions would preserve the history and tradition of Fitzroy, a foundation member of the VFL/AFL, and operate a two-based operation that would service the needs of members and supporters based in Brisbane and Melbourne. Key factors in the merger are:-
- The Brisbane Lions would have a 1997 playing list of 44 players, two above the normal level, reducing to 42 players in 1998. They would have a 1997 salary cap allowance of $300,000, reducing to $200,000 in 1998 and $100,000 in 1999. The new club would take eight Fitzroy players from the 1996 list and would declare their playing list on 18 October - seven days prior to the 1996 AFL National Draft on 25 October. The new club would not participate in the 1996 National Draft or the 1997 Pre-Season Draft in February.
- The Brisbane Lions would play 11 home games at the Gabba, as the Brisbane Bears had done prior to the merger, and a minimum of six games in Melbourne at either Optus Oval or the MCG. Any subsequent games in Melbourne would be played at either Optus Oval, the MCG or Waverley Park.
Initially it was indicated that the Brisbane Lions would wear an adaptation of the old Fitzroy pre-season jumper for “away” games, and a modified Brisbane jumper in Fitzroy colors for “home” games. This deal had been struck with representatives of Fitzroy but was later scrapped in the interests of having one jumper, only, for the “new” club.
Whatever, the deal was done. At last. The Brisbane Lions were born.
Still want to know more? Check out the documentary we created in 2019 that goes into even further detail.
Thanks to our friends at Youi for helping bring this content series to life.
