By the mid-1990s, there were eleven teams based in Victoria – ten of those in the inner suburbs of Melbourne – and concerns were raised about the long term viability (both on the field, and economically) of some of the weaker Melbourne-based clubs.
Statistics published in newspapers like the Herald Sun showed that several Melbourne-based clubs (including Hawthorn and Melbourne) only had a fraction of the membership base of either their interstate or cross-town rivals.
While the growth of a national competition from the former VFL has arguably been highly beneficial to the code of Australian rules football overall, throughout the 1980s and 1990s, many Melburnians were opposed to reform attempts.
The merger debate led to widespread accusations that the league's administrators had grown out-of-touch with the sport's grass-roots supporter base.
Upon pressure and incentives from the league, and saturation of the dire warnings about the consequences of too many teams based in Melbourne, a number of Melbourne-based clubs began investigating and pursuing potential mergers.
Speculation about ongoing merger negotiations often appeared in the mainstream media prior to the official announcement, with several key details leaking to the press.
Key points related to the club's identity which were agreed upon during negotiations prior to the official announcement included that: Some commentators noted that the merged team would more closely resemble Melbourne than Hawthorn and speculated whether Hawthorn suffered from a weaker bargaining position as a result of its weak financial situation.
Under the package offered by the AFL, the transitional arrangements for the merged club would be as follows:[1] In the wake of the official merger announcement, Don Scott (a former Hawthorn footballer) launched the "Operation Payback" campaign.
[2][3] Following the launch of Operation Payback, and Gutnick's campaign at Melbourne, a vocal backlash to the merger proposal emerged amongst the supporters at both clubs.
A crowd of 63,196 attended the Melbourne Cricket Ground to see Jason Dunstall kick 10 goals and the Hawks win by one point.
Prior to the game, an "anti-merger" rally, led by Scott, was held at Hawthorn's then training ground, Glenferrie Oval.
[4][5] To the surprise of the respective clubs' boards, the meeting halls were filled, with more members and supporters of each team watching proceedings on large monitors outside.
Footscray and North Melbourne also changed their names to the Western Bulldogs and the Kangaroos respectively to attract more fans, having both been considered for mergers in the last two decades.
Shortly after the season and the collapse of the Melbourne-Hawthorn merger, AFL CEO Ross Oakley, who had overseen the previous decade, stepped down and was replaced by Wayne Jackson.
A new structure, which included stronger and earlier action against insolvent clubs, as well as restrictions on private ownership, was put forward.
In the months following the 1996 merger vote, prominent businessman Joseph Gutnick became president of the Melbourne Football Club.
Despite the reduced debt, in November new club CEO Cameron Schwab declared that it required urgent AFL assistance to continue, requesting additional funding to its special annual distribution.
In 2021, Melbourne reached the Grand Final for the second time since the failed merger, where they ended their 57-year premiership drought with a defeat of the Western Bulldogs.
One of the proposed advantages of merging was playing on the MCG, and Hawthorn moved its home games there in 2000 after the AFL closed Waverley Park.