After a solid season in 1978, Balme's career suddenly curtailed the following year. He had missed just seven games in the preceding four seasons, but suffered his first major injury when he hurt his knee. Restricted to just two games for the year and usurped as first ruckman at Richmond by Mark Lee, Balme shocked the club when he accepted life membership and then retired from the game, aged only 27. Balme then shifted to South Australia, where he was snapped up by South Australian National Football League (SANFL) club Norwood as coach.