Adelaide typifies the contrasting fortunes of the codes
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By Adrian Musolino, 4 May 2009 Adrian Musolino is a Roar Expert
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- A-League, ADELAIDE 36ERS, Adelaide Crows, Adelaide United, AFL, Basketball, football, Port Power
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Adelaide United's Sasa Ognenovski (centre) celebrates with team mates after their 1-0 win against Queensland Roar after the A league Preliminary Final match in Adelaide between Adelaide United and Queensland Roar, Saturday, Feb. 21, 2009. AAP Image/Rob Hutchison
What a week of contrasts for some of Adelaide’s leading sporting franchises across the codes. As 41,558 saw Port Power defeat the Adelaide Crows in the showdown after much discussion about crowd figures, the running of Adelaide United was handed over to the FFA and the 36ers appear to be on their deathbed.
Despite a successful recent on field history, Adelaide United has been a club dominated by back room politics and speculation over the ownership of the club.
It is now in the hands of the FFA as it searches for new owners.
The FFA’s head of major projects Michelle Phillips will likely play a large role in helping the United backroom staff through the transitional phase and finding new ownership avenues, a similar role he did successfully at Perth Glory.
While much of the talk regarding the A-League is focused on field matters and the impact that has on the much discussed crowd figures and community interaction, the ability of the clubs to turn a profit for their investors is vital. This is especially so in such difficult economic conditions and is going to be critical in this next phase of the league’s development. The flow on from the 2010 World Cup, the next media rights deal and hopefully the success of expansion will all come into play.
The forecast is looking much better for United when compared to the Adelaide 36ers.
The fact the 36ers are struggling so badly is a shocking indicator of just how basketball and the attempted revitalisation of the NBL is faring.
The 36ers not only have a successful on and off court pedigree with a rich 27-year history, they are also an established brand name in a state with a large and passionate basketball supporter base.
Yet they are struggling to find the necessary investors to cover the $1 million bank guarantee and additional $500,000 for working capital, namely due to the confusion and uncertainties of what comes next in the NBL revamp and the lack of any real concrete plans.
Unlike the football revolution that produced the A-League, the model which many recommend the NBL follows falls short as basketball simply doesn’t have the supporter base, or commercial potential. Hence why they are struggling through this process.
The failings of Australian basketball are many any varied, including some self inflicted wounds, but the timing of the downfall, coinciding as it did with the global financial crisis was a devastating blow and the struggle of the 36ers highlights this.
It is a terrible shame. Basketball is deserving of this second chance and it has the potential to flourish just as the netball ANZ Championship has done.
In this economic climate it’s not the time to be so reliant on private ownership and investment.
Former Adelaide 36ers coach Phil Smyth made an interesting observation in the Adelaide press when he claimed privately owned sporting franchises will always struggle to engage with the community compared with state owned associations as there is not the link to the grassroots of the game.
Certainly when you look at the fortunes of Adelaide United and the 36ers, especially when compared with the other sporting franchises in Adelaide, with the exception of Port Power and their unique dilemma, Smyth’s argument holds some weight.
The true impact of the global financial crisis may be finally hitting and thus franchises and codes that don’t have their house in order are going to pay the price.
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whiskeymac said | May 4th 2009 @ 12:12pm | Report comment
Is there scope for ownership by the supporters, say such as Real Madrid or Barcelona, versus ownership by the one interest, such as Man Utd and the Glaziers or Chelski, in an Australian market? The politics involved in those clubs seem to be considerable compared to a privately owned one… not discounting mourinho getting the boot and viddie’s pissant outbursts.
and wld the FFA allow a franchise to be owned by the State associations (the dreaded old soccer?)? probably not.
cld the NBL align with another code? as in Europe it seems a lot of the “clubs” have footy and basketball teams under the same organisation… could that happen here or wld the failures of past teams (parramatta power cost the eels considerably i think?) already show that the markets are too small in oz?
True Tah said | May 4th 2009 @ 12:44pm | Report comment
It just seems strange that Adelaide United had a successful year in terms of getting to the finals of both the AFC and HAL, yet this has not translated into financial success. They probably could have sold out AAMI for all of their games in AFC, yet couldnt draw more than 10K to their semi.
Maybe its an issue in Adelaide in that there just isnt the corporate $$$ to go around, compared to say Sydney or Melbourne. Sydney FC had nowhere near the success of Adelaide, yet did not have any issues with finding new backers or with finances.
whiskeymc, agree that the size of the market would prevent sports clubs operating in several sports, its just too small. Many European clubs have futbol as their dominant sport, but also dabble in other sports, basketball, water polo, volleyball, handball and maybe rugby, which leverage off the success of the clubs futbol team. Not too dissimilar to the US and the college setup, where the big sports of American football and basketball effectively fund all of the other athletic pursuits of various colleges.
Robert B said | May 4th 2009 @ 1:46pm | Report comment
Adelaide United to turn it around.
I wonder the actual impact Michael Jordan had on world basketball? I believe he created such an interest and hysteria that it helped generate a mass flowing of the game here. Now with ONEHD, the ability to watch NBA games on Free to air is there so maybe a general interest will start to flow again.
whiskeymac said | May 4th 2009 @ 2:08pm | Report comment
am sure Adeliade will turn it around. the attractiveness of a HAL club in Asia hopefully will see them pull through this dificult blip and out the other side… and then the boost of the world Cup shld mean an up period for a few more seasons. until the next crisis anyway
michael jordan was incredible for the sport… and US economy. Tiger at golf. Pele in the 70s for the cosmos… and viagra of course (not that he needs it you understand). I wonder if there are any players nowadays that could generate that kind of marketing power – well apart from the obvious Beckham who is at the end of his cycle i assume.
Robert B said | May 4th 2009 @ 2:55pm | Report comment
“I wonder if there are any players nowadays that could generate that kind of marketing power.”
Roger Federer and now Rafael Nadal for tennis.
With football I’d say from a marketing perspective Cristiano Ronaldo but then again he’s more just a face you put onto the Manchester United machine. Kaka’ and Messi have appealing characteristics because of their obvious skills but also their attitudes are extremely commendable. It’s a shame in English speaking countries outside of Europe, they probably are not well known to the average person.
Kurt said | May 4th 2009 @ 10:09pm | Report comment
This article is a bit confusing to me. All I ever hear from the soccer supporters on this site is that ‘the a-league is going from strength to strength’. So how does that fit with the fact 2 of the franchises are technically insolvent, including one (Adelaide) that has been pretty successful? Must be another beat up by the anti-soccer media.
Midfielder said | May 4th 2009 @ 11:01pm | Report comment
Kurt & Adrain
Adrain your article would be a bit better balanced if you discussed that the key backer has been badly hurt by the GFC and because of this wants out … FFA are very confident new buyers will be found in fact they have a number of offers and are doing the due diligence work to see if any stack up.. suggest you contact FFA and get a comment.
Kurt … you are so right … but if I where long term investor who would I invest in today’s recent king or NRL / RL / RU / 20 : 20 / or football … HMMMMMMMMm what products does the AFL have a 16 team growing to a 18 team domestic competition played over about 30 weeks … in the southern states in what marketers call the mature phase of the market cycle meaning near impossible to get more market share .. more than likely loose some market share … therefore a need to grow in new markets and fight a costly battle with existing codes in the NRL & RU also in the mature phase of their growth in these markets. Meaning in NSW & QLD the AFL is in a growth phase of market share… which they will get how much is yet to be seen. The hope is the growth in NSW & QLD is more than the loss in the Southern States … BTW I think it will..
I will let NRL & RU folk speak there bit .. but Football is awakening and has replaced its failed management practices for up to date and best practice (AFL copied) and is rolling out a 8 growing to 14 team domestic competition / 9 international teams / including World Cup and Asian Cup for the national men and women teams / Plays a major international club competition across Asia / in time a FA cup style competition… with an increasing economic base outside the media / has an ability to operate with a very small media deal / low operating cost (compared to other codes) The season will be 36 to 40 weeks for the domestic competition and year around for the national teams. Football is in what marketers call a growth phase meaning the market share will grow in all sectors …
Now here I can use some of my day to day work experience … a significance part of my practice (maybe 8% of revenue) involves business analysis and I can tell you any objective adviser would say short to medium term … invest in the AFL .. medium to long term invest in Football. How i define short 1 to 3 years … medium 3 to 8 years … long term over 8 years.
Kurt I have no doubt you think my analysis is crap … and I accept that … but don’t believe me … remember all A-League teams are backed by some of Australia’s most astute business people who see in a different way … they must also have crap advisers…
But in the end it will come down to the management teams running the four codes… all appear to be well managed now but footballs management team has many more products over a longer season to sell… and remember we have Frank Lowy setting this up … God I hope he does not croke it and can hang around for another five years he will build IMO the best management team of all the codes and that is why football will survive … BTW so will the AFL and in much the same manner it is today it also has a strong management team.
Kurt said | May 4th 2009 @ 11:30pm | Report comment
Midfielder – actually you might be surprised to hear that I think your analysis is pretty sound. Being a victim of an MBA education myself I think your calls on where the different codes are in their growth phases are spot on. However you missed out one critical piece of data – an estimate of the potential market size for each product. Sure I accept soccer is likely to grow faster than AFL over the next few years, but this is because it is coming off a low base – a bit like Michael C’s description of AFL as the fastest growing sport in the UK (although even I struggle with that one!). My personal view is that soccer has actually captured most of the fan base in each of its current markets already, and therefore growth will come from geographic expansion rather than further substantial growth within existing markets. For example I think a second Melbourne A-league team will seriously struggle as most people keen to get along and watch this level of competition are already doing so with the Victory. Of course I may be proven wrong and only time will tell.
As for the investment by astute business people, I see this somewhat differently. I don’t think they are doing this because they see it as a sensible business propostion that will make them lots of money, but because they see it as a) a billionaire’s plaything (i.e. the Chelsea model), ; or b) a chance to put some money into a sport they love. Now I guess either way money is money and the exact motivation of the investor is irrelevant when you need cash to buy players and run a club, but I don’t think you can look at that clown who owns the GC team and previously thought it would be a super idea for Joh to be PM and think that he is doing this as anything other than a hobby. I’ve no doubt that if AFL clubs could be privately owned (remember they are all membership based and as such can’t be bought regardless of how much money is on the table) then quite a few rich business men would be queing up to buy them as status symbols and playthings, but speaking personally I very glad that’s not the case. My club (Hawthorn) is member based and still manages to turn a $4m + profit with cash in the bank and no debt which would potentially make it an attractive take over target but there is bugger all chance the members (all 50,000 of us now) would agree to such a takeover.
Adrian Musolino said | May 5th 2009 @ 12:00am | Report comment
Midfielder, that is the problem with private ownership, it’s at greater risk from the economic conditions. Adelaide United is, as I say, looking okay as the investment will pay off in the long term, especially compared to the 36ers.
The FFA are very confident of finding new investors and are in talks with several potential suitors.
Robbos said | May 5th 2009 @ 7:31am | Report comment
Kurt said,
‘My personal view is that soccer has actually captured most of the fan base in each of its current markets already, and therefore growth will come from geographic expansion rather than further substantial growth within existing markets’
This is where I think you are wrong Kurt, I’m involved in Football in Sydney at the local level & there are alot of players, kids & adults, men & women, who enjoy football, are interested in European football & even the socceroos but have not been to an A-League match. Sure alot of it may be due to the quality but it’s also the lack of promotion from the media of the game.
If they can start tapping into this market, they will see huge growth. Plus the kids, the kids of today are more into football than kids have ever been in Australia, there is another growth.
Look at basketball during the height of the Michael Jordan era, the most famous sportman in Australia, everyone’s favourite, but how many people in Australia knew who Luc Longley was looked like even though he won 3 Championship rings alongside Jordan for Chicago Bulls or Andrew Gaze, Australia’s greatest basketballer. Why, yes neither were Michael Jordan, but also the lack of media attention.
I have often asked my wife why the US & England so dorminate the music industry when surely there are other talented musicians around the world, lack of attention from the English speaking media.