THE AFL has delivered a stunning broadside to the Melbourne Football Club, informing the Demons' board that its brand was meaningless and that it virtually stood for nothing in 2008, the club's 150th season.

In a full and frank assessment of the club's dire predicament delivered by the competition's governing body three days ago, Melbourne was told it had to face up to its financial crisis and dreadful public image if it had any chance of digging itself out of its black hole.

Not only has Melbourne's debt blown out dramatically in recent months but the club's projected profit has dropped by $1 million thanks to its current perilous state.

The view of Monday's meeting — quarterly talks with AFL financial and commercial heavyweights including Ian Anderson and Andrew Caterall and the Melbourne board — was that the club needed to admit its crisis in a bid for long-term survival.

However, of greater concern to the AFL was Melbourne's image. The league has little faith in the club strengthening its brand as a result of its 150th anniversary and has pointed out to the club that it has failed to sell itself to a new generation of supporters. Melbourne has no permanent training base, has stripped the Demon from its logo and its AusKick numbers are the worst in the AFL.

It is understood chief executive Paul McNamee has vowed to concentrate on nothing else but the club's perilous financial state until the end of June. The club's partnerships with China and Team Melbourne, while not discouraged by the AFL, have been placed on hold. Melbourne's projected membership of 30,000 is currently struggling at just over 24,000; its home-game attendances have been poor with a 0-4 win-loss ratio to date. Indeed the club has gone as far as to book newspaper adverts such as the one on page 4 of this section in a bid to boost their crowds.

Heavy staff turnarounds and payouts — including at least $250,000 to the departed chief executive Steve Harris, who was contracted until the end of the season — have led to the shortfall.

To make matters worse the annual $1 million AFL special assistance funding Melbourne received this season will drop next year to $250,000 and, under the current arrangement with the Melbourne Cricket Club, a cash injection of $500,000 in 2008 is due to drop by 75% as well.

AFL chief executive Andrew Demetriou yesterday denied Melbourne had applied for an increase in next year's projected funding but chairman Paul Gardner emerged from last night's board meeting refusing to rule out a bid for extra AFL cash.

"When we get down to looking at the budget for 2009 we might reassess that but at the moment we are concentrating on 2008," said Gardner. "We might have to take other matters into account like next year's draw. We might look at playing five games at Carrara. Who knows?

"We are having a lot of talks, regular talks with the AFL and the MCC and we'll look at anything the AFL puts to us."

While 21% of MCC members barrack for Melbourne, the traditional home of the Demons has refused to commit to funding the club an annual $500,000 beyond 2008 with club chief executive Stephen Gough saying the MCC was monitoring Melbourne's negotiations with the AFL.

Under the current tripartite agreement, Melbourne receives $1.5 million from the AFL and the MCC this year with that amount dropping to just over $400,000 next season.

The Gardner-Harris regime projected a $500,000 profit this year including the AFL-MCC special funding but that projection now stands at an estimated $500,000 loss.

Not only has the AFL offered to supply its staff and expertise to the club, it has also said it would temporarily take over the China partnership while allowing the club to remain in the running for a pre-season international clash in that country in 2010.

The Melbourne push to reach an agreement with the city of Casey looks likely to succeed with the club determined to find a training base in time for the 2008 spring.