Who’s paying the price for A-League’s problems?
Columnist By Davidde Corran, 17 Nov 2011 Davidde Corran is a Roar Expert
- Tagged:
- A-League, Brisbane Roar, Central Coast Mariners, FFA, football, Harry Kewell
Melbourne Victory's Harry Kewell will need to be on top of his game (AAP Image/James Elsby)
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As the sun sets on another international week, attention around the globe has begun to turn back to domestic matters.
For Australian football fans it’s already been a vibrant start to season seven of the A-League with Brisbane Roar’s continued dominance even outstripping the Harry Kewell show in Melbourne.
Yet, while we’re all pleased with the renewed interest in Australia’s fledgling domestic football competition, developments beneath the surface point to the continuation of some worrying trends.
Let me cut to the chase – as one club after another burns through its original ownership structure (and in some cases its second), A-League management and Football Federation Australia now have to look abroad for fresh investment.
Hot on the heals of controversial Indonesian business family the Bakrie group taking over Brisbane Roar, the Central Coast Mariners have now become the latest club to look abroad.
While this latest development out of Gosford raises the question of whether A-League clubs should be locally owned (or at least by someone from within Australia), what really interest me is the reasons why this is happening, and most importantly, what it means.
Basically the game is running out of people with a kangaroo and emu on their passport willing to sink large amounts of money into the local game for no return.
All of which harks back to the structural issues within the A-League that have been prevalent since day one – over-sized stadia, a restrictive long-term TV deal that is only now beginning to approach its end and the systematic bungling of where clubs have been set-up.
Yes, the arrivals of high profile Socceroos Harry Kewell and Brett Emerton have garnered a raft of fresh excitement into the league, but as I’ve argued on this site before, much of it has been by fortune and not design.
FFA may have laid the ground work for Kewell and Emerton’s arrivals with their Australian marquee agreement with the PFA, but they didn’t make either of these deals happen (comparisons with how the new domestic Twenty20 league is using the signing of Shane Warne are informative).
The changes that have been made to the A-League this season have been mostly cosmetic and so massive flaws remain in the competition’s setup.
Though now it is no longer just Australians who are paying for them.
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- Explore:
- A-League, Brisbane Roar, Central Coast Mariners, FFA, football, Harry Kewell
November 17th 2011 @ 8:12am
Eamonn said | November 17th 2011 @ 8:12am | Report comment
Same problem in the UK Davidde. They ran out of people with a Union Jack on their passport to fund Man Utd, West Ham, Blackburn, Chelsea, Liverpool, Man City years ago.
Personally I’d love to see another overseas investor fund a team in Canberra if that’s what it takes. Great to have a local ownership model but at the end of the day if it’s going to be one big wealthy owner – does it really matter if your club is owned by a wealthy Aussie or wealthy overseas person.
I don’t feel particularly connected to either of them. Same, same.
November 17th 2011 @ 2:03pm
WoobliesFan said | November 17th 2011 @ 2:03pm | Report comment
I looked up the Bakri Group. Indonesian family with interests in agriculture, real estate, banking, media, manufacturing, government, etc, etc, etc…..put simply, if it involves money and power, you’ll find a Bakri sniffing around.
But get this -> not only are they tied to the disgraceful Soeharto regime, but were / are majority owners in the exploration gas drilling company that caused the catastrophic eco-disaster in Sidorajo.
I just want to thank FFA for inviting such worthy, reputable and respectable owners into the A-League.
Well done.
November 18th 2011 @ 2:15pm
PeterK said | November 18th 2011 @ 2:15pm | Report comment
FFA rejected an Asian bid to take over the NQFury — we northern fans have never been told why it was rejected.
Makes you wonder how much worse than Bakrie they might have been, and what it was!
November 17th 2011 @ 8:27am
Luke said | November 17th 2011 @ 8:27am | Report comment
Happy to have foreign players and foreign coaches, but not foreign owners? Sounds a bit hypocritical. I take it as a sign of confidence in the game that we have foreign investors will invest in our clubs. The reason why this might not have happened previously is due to a lack of awareness about the A-League due to its short history. You can’t be a credible football competition without a significant foreign influence.
The upcoming TV deal is the most significant issue for the A-League since its inception. Not only will it bring a financial gain to the A-League, which clubs will share in, but it has the potential to increase the fan base for the A-League if it goes free-to-air. Ben Buckley is the right person to be in charge during this pivotal point of time, given his history in negotiating the previous AFL TV rights deal.
November 17th 2011 @ 10:02am
Michael said | November 17th 2011 @ 10:02am | Report comment
Davidde, have you had a haircut or something?
Luke, you said it. The upcoming TV deal is huge and will provide a lot more stabililty if it’s the right size.
However, there is a very important point that Davidde mentioned, and that is about the stadia. Certain clubs are living well beyond their means rattling around in oversized stadia and paying too much for them. We could hope that a few more boutique stadia could be built if there is enough financial investment in the league.
November 17th 2011 @ 10:28pm
Luke said | November 17th 2011 @ 10:28pm | Report comment
I’m not always sure that just because it is a bigger stadium that it costs more money to hire. In some cases this is true, but in anothers no. I think Sydney FC get a very good deal with the Sydney Football Stadium, which is cheaper for them than a lot of other smaller size grounds in Sydney.
November 17th 2011 @ 8:27am
JAJI said | November 17th 2011 @ 8:27am | Report comment
Another massive whinge on the A League from a writer who you get the impression at times has a bone to pick about the old NSL not being around anymore, perceived “new” football people running the game (ie the FFA) etc etc
I dont see the fans of Chelsea, Manchester City, Liverpool, etc etc whinging too much about foreign ownership
What other domestic competition in Australia is completely funded by wealthy local businessmen? There are already rumblings that Russell Crowe, owner of one of the few NRL Clubs that is privately owned, has had enough.
Would you rather we be funded by Leagues Clubs and poker machines? Our competition has only been around 6 years not 100 like the AFL so cant rely on the membership model. Rugby tried a new comp in 2006/2007 and it lasted 1 year.
Comparing the FFA and the challenges it faces day in and day out to the totally inept Cricket Australia is also amusing
We are a world game and interest is world wide – and embracing this advantage we clearly have over other local codes is crucial given how competitive the local sports market here is with 4 codes fighting for the dollars in a small population….plus a potential second GFC shaking confidence, plus the AFL and NRL dominating any media space…..
Why are we the only code still that has to put up with these type of articles trying to pull down within……
November 17th 2011 @ 8:39am
Australian Rules said | November 17th 2011 @ 8:39am | Report comment
“I dont see the fans of Chelsea, Manchester City, Liverpool, etc etc whinging too much about foreign ownership”
…I notice you didn’t include Man Utd in that sentence
November 17th 2011 @ 9:13am
whiskeymac said | November 17th 2011 @ 9:13am | Report comment
liverpool??? you forget quickly gillette/ hicks etc?
November 17th 2011 @ 1:53pm
Kasey said | November 17th 2011 @ 1:53pm | Report comment
Liverpool, built by Shanks, wrecked by yanks:(
November 17th 2011 @ 12:00pm
Nick Sculley said | November 17th 2011 @ 12:00pm | Report comment
Haha as a Liverpool fan I would beg to differ. Not so much now, but past (American) owners brought the club to it’s knees! Due diligence must be done when going down the path of foreign ownership.
November 17th 2011 @ 10:21am
Ian Whitchurch said | November 17th 2011 @ 10:21am | Report comment
Jaji,
The rumours about Russell Crowe limiting support for the Rabbitohs arent rumours, by the way. They are facts.
http://www.rebelrabbitohs.com/hutch/archive/index.php/t-1403.html
In any case, relying on a small number of rich people to fund you is a bad strategy, as sometimes they get into legal trouble, run out of money, or both (cf Edelsten, Serepisos and Constantine), and sometimes they do really dumb things (cf Davis, Palmer).
November 17th 2011 @ 8:47am
TomC said | November 17th 2011 @ 8:47am | Report comment
I’m not sure I really see the point of this article. Isn’t it well understand that the A-league is struggling to attract local investment? This just seems to be covering old ground.
It bugs me a bit the way opinion writers will leap on small events like this one (and this is a rumour about an unnamed company investing in one team) in order to justify articles written previously. I mean, shouldn’t they be writing for the benefit of the reader, rather than themselves?
November 17th 2011 @ 8:58am
CrossIT said | November 17th 2011 @ 8:58am | Report comment
Occupy A-League?
November 17th 2011 @ 9:04am
Kasey said | November 17th 2011 @ 9:04am | Report comment
wouldn’t work, the hippies would have to spend money on a match ticket.
November 18th 2011 @ 7:44am
Roger said | November 18th 2011 @ 7:44am | Report comment
Ha!
November 17th 2011 @ 9:04am
Futbanous said | November 17th 2011 @ 9:04am | Report comment
Agree with all replies so far. Hoping for the day that football journalists write articles that reflect the reality of operating in a world market rather than an isolated domestic one.
Presently not holding my breath.
Even the so called Multi-cultural channel SBS football pundits Foz & Zdrilic expressed doubts about foreign ownership on TWG the other week,yet drool over foreign football teams & players.
On one hand we praise the benefits our membership of the AFC has brought to the game,yet on the other we dont want them involved in our clubs.
Total hypocrisy IMO.
November 18th 2011 @ 2:27pm
PeterK said | November 18th 2011 @ 2:27pm | Report comment
For some reason I missed this article yesterday, so I’m playing catch-up after I noticed it listed today as the most commented article.
I repeat what I’ve said not far above:
“FFA rejected an Asian bid to take over the NQFury — we northern fans have never been told why it was rejected.”
We’d have been happy to continue with foreign ownership.
November 17th 2011 @ 9:25am
Lucan said | November 17th 2011 @ 9:25am | Report comment
Foreign investment/ownership is the lifeline a number of franchises need. As stated by an earlier poster, a wealthy foreigner or a wealthy Australian, neither are actually representative of the fan bases, so why the fuss?
If this allows the FFA to cut the umbilicle cord and let the clubs prosper or fail on their own two feet, all the better.
The FFA can then dedicate their resources into the national teams/curiculum, and an independant commision for the HAL can finally be established.
November 17th 2011 @ 9:37am
The Cattery said | November 17th 2011 @ 9:37am | Report comment
Local or foreign – probably doesn’t matter – it’s private ownership per se that is the real debating point.
November 17th 2011 @ 10:22am
Ian Whitchurch said | November 17th 2011 @ 10:22am | Report comment
Note the most competantly run and successful league in the country doesnt allow private ownership.
November 17th 2011 @ 11:28am
Stevo said | November 17th 2011 @ 11:28am | Report comment
You’re right but it helps to have had a 100 yr head start isolated in the far corner of the world – like a rare animal species that it’s very well adapted to it’s local environment.
November 17th 2011 @ 11:29am
Ian Whitchurch said | November 17th 2011 @ 11:29am | Report comment
Stevo,
Private ownership of clubs is a very recent thing in most countries. The AFL experimented with it in the 1980s with Edelsten, and found it just wasnt worth the very real downsides.
November 17th 2011 @ 11:39am
Stevo said | November 17th 2011 @ 11:39am | Report comment
YES, but where will the $$$$ comes from????
The sporting sponsorship $$ is already well spoken for by existing codes who have had a long time to get their houses in order.
November 17th 2011 @ 11:54am
Ian Whitchurch said | November 17th 2011 @ 11:54am | Report comment
Stevo,
I’d argue pretty darn strongly none of rugby league, rugby union or cricket are even vaguely close to having their houses in order.
November 17th 2011 @ 1:41pm
Ian Whitchurch said | November 17th 2011 @ 1:41pm | Report comment
Jaji said “GWS is a very bad example”. No, its a very good example. They sold 12 000 memberships, at $50 each, for a membership package that did not include game tickets.
Thats six hundred grand.
November 17th 2011 @ 11:40am
Lucan said | November 17th 2011 @ 11:40am | Report comment
Ian, the only alternative to private ownership for a start up franchise is ownership by the league/governing body, and that throws up a whole heap of conflict of interest issues.
The membership model would be ideal, but is not feasible for a start up.
November 17th 2011 @ 11:59am
Ian Whitchurch said | November 17th 2011 @ 11:59am | Report comment
Lucan,
There are literally thousands of association football clubs in Australia, and hundreds of thousands of people who play association football.
If you can’t get these people to join a club and show up to games, then you need to ask if a league is viable.
I’d also argue that GWS showed the way to do it, selling club memberships prior to them actually playing first grade.
November 17th 2011 @ 12:48pm
Lucan said | November 17th 2011 @ 12:48pm | Report comment
Don’t be fooled, GWS are AFL owned, and will be for a long time. I estimate it will be 15 years before they can stand alone on their membership + self sourced funding + sponsorships.
I’m a member of one of the largest state league clubs in the country, and we couldn’t come close $$-wise to competing in the HAL as a members backed club.
It would need all members of all community clubs to come together and put their hard earned into one combined side. A great idea, but not practical.
November 17th 2011 @ 1:16pm
JAJI said | November 17th 2011 @ 1:16pm | Report comment
GWS is a very bad example
The AFL is pumping millions into the GWS project – millions from its TV Deal it has negotiated as the most professionally run competition in the land. No private owner is needed as the money is there to “experiment” with in a market that largely is disinterested in the game
You cant compare football to AFL on this front
November 17th 2011 @ 1:37pm
Punter said | November 17th 2011 @ 1:37pm | Report comment
I think you put the that argument to bed Jaji.
The AFL with all it’s TV wealth (deservedly so, they are a well run business) has the ability created by this wealth to go to foreign markets like Gold Coast & West Sydney, while football despite of all the football clubs with large participation rates has many obstacles, $$$ being the main one.
Plus the AFL despite it’s TV millions has a few clubs that are not that strong.
November 17th 2011 @ 1:58pm
Kasey said | November 17th 2011 @ 1:58pm | Report comment
Lucan, which club?
Are they in the West, do you think they’d be prepared to take a (pluck a number) 30% stake in a start up Western Sydney HAL team? that would be one ‘short cut’ to engaging an already partial audience, with the prospect of selling the other 70% to private investors to raise the capital needed?
In an ideal world, I’d love to see some of the ex-NSL clubs pool resources to be the brains and foundation behind a WS HAL team, but unfortunately, there will be peace in Palestine before Sydney United and Bonnyrigg would work together(just to name 2- could have said Marconi and Olympic)
November 17th 2011 @ 5:18pm
Kasey said | November 17th 2011 @ 5:18pm | Report comment
Ian, so because the AFL couldn’t make it work, we shouldn’t do it? You might want to let Sheik Mansoor know.
November 17th 2011 @ 5:51pm
The Cattery said | November 17th 2011 @ 5:51pm | Report comment
Kasey
When the biggest and most successful sporting comp in the land can’t get it to work, with two out of two monumental failures, then it certainly warrants further inspection.
By the way, there are other examples in other sports, like Basketball, where the NBL Mk I had privately owned clubs, and one by one they dropped off the face of this Earth.
And that’s the thing. As soon as an owner decides enough is enough – there is just insufficient emotional attachment for people to save the club – that appears to be the history of private ownership in Australia.
But let’s flip it around, let’s assume the privately owned club starts feeding millions of dollars into the bank account of the private ownder – how will fans react to that? Remains to be seen.
With an incorporated association, where the club is owned by the members, in the rare circumstances where there are surpluses (7 out of 17 AFL clubs this season, including $2 mlll + surpluses by at least two clubs), the money can go nowhere else except back into the club – and that feeds more members, more attachment to the club.
Ultimately, I think Australian sports fans prefer that model.
November 17th 2011 @ 5:53pm
Ian Whitchurch said | November 17th 2011 @ 5:53pm | Report comment
Kasey,
Well, it depends what you mean by “work”. The Premier League lost half a biillion pounds last year.
That isnt sustainable.
http://www.guardian.co.uk/football/2011/may/19/premier-league-finances-black-hole
November 17th 2011 @ 6:03pm
Kasey said | November 17th 2011 @ 6:03pm | Report comment
FWIW Catery: I mostly agree with you. As an ADLUtd season ticket holder and a member(with benefits tbd) I would much prefer my club to be based on a membership model, like my old SANFL club Norwood.
I just hate some of the cultural cringe in our game that we must constantly look towards the AFL for validation on our methods. Its silly to compare a sporting organisation that has evolved from one state into a one country behemoth with a fledgeling organisation (FFA is only 7 years old(HAL a touch over 6) There is a world of football experience out there to tap into. As a first world country developing a top flight football competition fairly late on in the gloobal scheme we have a fairly unique set of circumstances here in Oz, but not completely unique. A wise man learns from his mistakes but the wisest of wise men learns other men’s mistakes, that we he doesn’t have to suffer from making his own mistakes. We need to be tapping into the international footbal intelligence vault to draw what nuggets of relevant information we can and adapt it to our culture. Ideas like the membership culture of the AFL/NRL(recentl converts themselves) have proven to work not only here but in Spain and gee, they’re not doing too badly on the world stage are hey?
Sure some great ideas have come out of the AFL, but not everything they have done has worked. There are a growing group of disaffected former fans that have been left disenfranchised by the reign of Ross the Boss and Andy D. I would venture that the AFL have been reading the NFL crib notes themselves. The similarities between the NFL and the AFL are many.
November 17th 2011 @ 6:38pm
pete4 said | November 17th 2011 @ 6:38pm | Report comment
Way off topic but anyway:
“The Bundesliga remained Europe’s most profitable league, despite a fall in operating profits from €172m to €138m. England’s Premier League narrowed the gap, with operating profits rising to €101m”
http://www.deloitte.com/view/en_GX/global/press/global-press-releases-en/8a17eba725990310VgnVCM2000001b56f00aRCRD.htm
November 17th 2011 @ 12:07pm
Kasey said | November 17th 2011 @ 12:07pm | Report comment
I disagree, the real issue here is unrealistic expectations regarding where the capital to start up, maintain and run a fledgeling competition ought to come from. We are in the business of football, as are millions of others around the world. We are also in the business of Sport as entertainment in a very crowded local market place. If we think about how new start up airlines(like footbal leagues both require a large injection of capital to begin with and both have to deal with the establishment desperate to maintain the Status quo) have fared in Australia in modern times we might remember Compass 1 and 2. both failed dismally, and it wasn’t until Virgin blue, backed by global capital with Virgin Atlantic came along that a start up airline was able to get a toehold in the competitive Australian Market.
The structure of the local football league cannot possibly be compared to the structure maintained by isolated local sports that have had 100+ years to refine their management practices and to compare them at this stage of the development of the A-League is disingenuous at best and out right unfair in general. I guess that means I agree with Stevo then.
November 17th 2011 @ 2:08pm
The Cattery said | November 17th 2011 @ 2:08pm | Report comment
When I said the real debating point is the concept of private ownership itself, I didn’t actually come out strongly in support of one side or another, but I’m making the point that once you accept private ownership as necessary, then why does it matter whether those funds are coming local wealthy benefactors (like Palmer and Tinkler), or wealthy foreign benefactors?
In the case of Tinkler, one might argue that he has an interest in his local region, and that’s better for the club and fans (as opposed to being owned by someone with no connection to the region).
And there might be some truth in that (but once you start going down that line of argument, it probably leads to a conclusion that the club is better off being owned by the community – if serviing the community is your main interest.
Otherwise – let us view things from this perspective: what is the purpose of the club laying down minimum capital requirements (I think it was $5 mill at the start of the A-League). The main purpose appears to be to absorb the losses that are expected over the first five or more years of the club’s existence.
In other words, if there are no losses, then there is no need for private investment to provide capital to absorb losses – you cover your expenses year to year, with the hope fo making a small surplus for a rainy day.
The initial salary cap was $2 million, so overall annual expenses from inception were around $4 million per annum – not really a lot of money for a professional football club to cover. 10,000 members covers half that operating cost before the season even starts.
In fact there are junior soccer clubs out there with a million dollars plus sitting in the bank.
So when viewed from that perspective, I’m not sure that there is a really strong argument that you definitely must have private ownership to get some sort of start-up capital in the club.
November 17th 2011 @ 2:49pm
Futbanous said | November 17th 2011 @ 2:49pm | Report comment
The Cattery
What is reality though is that you must have start up cash to absorb the losses as you correctly indicate.
The quickest way to initially set the wheels in motion is a committed rich person or group.
The difficulty of course is finding a committed investor.
Personally having been involved with Junior clubs there is little historical connection between themselves & local senior clubs.
Previously that was clubs in the NSL.
The majority of kids parents I came across were more interested in Liverpool or ManU than Marconi or Brisbane Lions.
For me the A-League had little choice in doing what it did. I dont personally believe thousands of mums & dads(for the reasons above)would have initially forked out their dollars on thin air to support an A-League club through memberships.
November 17th 2011 @ 9:54am
gawa said | November 17th 2011 @ 9:54am | Report comment
If we only had Australian based investment in the A League we could expect articles stating how the league is not good enough to garner investment from overseas.
Another big issue ignored in this article is that these people do not buy a football club outright, they instead pay for franchise licence for a set period of time.
November 17th 2011 @ 10:29am
Fussball ist unser leben said | November 17th 2011 @ 10:29am | Report comment
Comment removed. Roar Mods.
November 17th 2011 @ 12:59pm
Wal said | November 17th 2011 @ 12:59pm | Report comment
Comment removed. Roar Mods.
November 17th 2011 @ 2:00pm
Fussball ist unser leben said | November 17th 2011 @ 2:00pm | Report comment
Dear Wal
Thank you for your reply in which you pose the question: “do you only ever attack the man” … and then you proceed to write 4 paragraphs attacking me!
Love your sense of irony – keep up the good work.
I think we have every right to ask whether a columnist – be it in the field of politics, business or sport – has any conflicts of interest.
November 17th 2011 @ 3:09pm
Punter said | November 17th 2011 @ 3:09pm | Report comment
Abit harsh there Wal…..
November 17th 2011 @ 4:31pm
Australian Rules said | November 17th 2011 @ 4:31pm | Report comment
Wowsers. I’ve been moderated for far less than that.