Relegation: Great entertainment and good business
Football in Australia is apparently as good as it has ever been. The national team has played in the past two World Cups, the national league is by many accounts getting stronger and Australian teams are making an impact in the Asian Champions League.
Despite this, Nathan Tinkler wanted a refund on the Newcastle Jets he bought and crazy Clive bailed on his Gold Coast. Unfortunately not all of Australia’s billionaires share Frank Lowy’s altruistic enthusiasm.
How can football attract more investors with greater commitment? Australia has only so many billionaires. Unfortunately for football fans, most of them got rich by making solid investments. Perhaps a way to do this would be for the A-League to adopt a relegation system.
I am certainly not the first person to suggest a relegation system for the A-League. Apart from making good theatre for lowly teams at the end of a season, it also makes football more attractive for individuals or groups that are a little short of buying an A-League license but keen to watch an investment grow.
Let’s begin with a look at Manchester City. Imagine how much the club was worth 10 years ago when it was outside the Premier League and compare that with its value right now. Yes hundreds of millions of pounds were spent on buying players, but in the long-run there must be a reasonable return on investment. In a relegation system, savvy and committed investors can by a lower team and slowly build towards the top flight, increasing the value of that investment.
Just as a number of AFL teams follow the idea of a three-year premiership plan, smaller teams from second or third tier football competitions can make similar style plans for promotion to the top league.
Another team from the English system that helps my argument is AFC Wimbledon. Established with funds from FC Wimbledon supporters after the decision to relocate and rebrand as MK Dons. It has used money from supporters to build a club from scratch and starting in the ninth tier in 2002 to now being in the fourth division – only one below MK Dons.
Cheaper entry points for football club ownership can encourage community investment in clubs and young players. Turning fans into shareholders builds loyalty and provides another revenue stream.
Regional cities can work towards having national level teams – an opportunity much less possible in rugby league or AFL. For young developing players, instead of waiting for contracts from one of the big teams, they can enter the top flight with their old club. Transfer payments then reward smaller clubs for developing players and redistribute the wealth of the bigger clubs.
There are a number of drawbacks; the emergence of a few big clubs dominating the top of the table, logistical challenges such as stadiums and most importantly the issue of corporate governance. Any framework would have to be considerate of the Australian football environment, not just copied from overseas.
However, in order to attract committed investors, be they millionaires, supporters or regional cities, there needs to be more than the occasional opportunity to bid for a license when another team goes bust.