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There’s already been a lot of discussion about the pros and cons of Harry Kewell’s proposed incentive-based deal with the FFA.
Yesterday, Kewell’s manager Bernie Mandic clarified his demands in order for his client to play in the A-league.
According to theworldgame.com.au, Mandic is asking that Football Federation Australia pay Kewell 70 percent of any increase in gate takings from last year’s average crowds to any match in 2011/12 involving Kewell. In his words:
“So if for example Harry is playing for Sydney against Adelaide at Hindmarsh Stadium and the Reds’ average home crowd last season was, say, 14,000, and 18,000 turn up to watch him play, he gets 70 percent of the income generated by the extra 4000 people.”
At face value, it seems fair enough. If Kewell leads to a big increase in crowds, then he pockets a big paycheck. But if he has no effect on crowds, he walks away with nothing. All the risk is on Kewell, right?
As Mandic says “…this episode proves beyond any doubt that Harry is not about money but about giving something back to the game.”
If you dig into the maths of this system, however, it starts to look a little less rosy. The important thing to remember is that Mandic’s system works on a game by game basis. So if crowds go up by 4000, Kewell gets 70 percent of the increase. If crowds go down by 4000, Kewell loses nothing.
This exploits the natural variability of matchday attendances.
For example, last season the Wellington Phoenix had an average attendance of roughly 8000. When the Melbourne Victory played there in November only 6500 people showed up. Maybe it rained.
If that same attendance is repeated this season, Kewell wouldn’t make any money, but he wouldn’t lose any either.
However, just six weeks later, the same two teams played at the same venue and this time the crowd was an impressive 9500. If that same attendance is repeated, Kewell would stand to make 70percent of the extra 1500 people who rocked up on top of Wellington’s 2010-2011 season average of 8000.
That means Kewell would stand to make a tidy sum even if the attendances for those games in 2011/2012 are exactly the same as they were last season. That same process gets repeated for every game. If one week the crowd increases, Kewell get a chunk of money. If the next week it goes down, Kewell loses nothing.
In addition, the two clubs that Mandic says have agreed to terms, Melbourne Victory and Sydney FC, tend to draw the highest away crowds in the league.
In the case of the Victory, the derby with the Heart draws a crowd massively higher than average. 26 000 people attended the first Melbourne derby, and 23 000 went to the second.
Both were Heart home games.
That’s compared to an average attendance of just over 8000 for the Heart.
Under Mandic’s system, the FFA would have to pay Kewell 70 percent of the increase in attendances for those two games.
That’s 70 percent of 23000 tickets. Say the average ticket price is a conservative $20, that’s over $300,000 Kewell would pocket even if his personal impact was nothing.
That’s for just two games, on top of everything else he’d be paid by his own club. No wonder the FFA knocked back Mandic’s offer.
This also poses the question of exactly what Kewell’s incentive-based deal with Sydney FC and Melbourne Victory looks like.
If it’s based on a similar arrangement, where the club pays Kewell when there’s an increase for each individual match above last season’s average, then it’s a lot more favourable than it seems at first glance.
Mathematically, the risk that Kewell and Mandic are taking through attendance-based deals is lower than people think.
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