The FFA has moved a giant step closer to honouring it’s promise of paying all of the A-League club’s salary cap costs. The A-League Salary Cap currently stands at $2.8 million.
The second meeting of the Joint A-League Strategic Committee (JALSC) between Football Federation Australia (FFA) executives and a representative group of A-League club owners was held yesterday.
At this meeting A-League clubs were offered a substantial increase of their share of A-League revenue to $1.9 million per club for the 2012-2013 season.
This represents a massive increase of $1.45 million per club or a 422% increase on the FFA’s contributions to clubs last season of $450,000 per club.
A-League owners were obviously delighted and received additional concessions from the FFA regarding owners’ advertising rights and local sponsorship, merchandise and signage deals, which will also lead to increased club revenue.
The FFA added that once the Media rights deals with Foxtel, other free-to-air TV stations and Electronic media and internet companies are all finalised, A-League clubs would expect to receive additional revenue sharing.
The FFA is then expecting to be able to cover the whole of the $2.8 million salary cap costs for all A-League clubs. That would mean that if an A-League club had all players within the salary cap, they would not have any player payment costs, a huge boost for any club.
The FFA advised that the media deal negotiations are at an advanced stage and the Fox Sports deal would be worth at least double the existing contract, plus other additional and new revenue streams from other sponsors and media and internet outlets.
The increased offer of $1.9 million per club is not dependent on the new media rights increases, they will be additional to the offer put on the table yesterday.
Club representatives have been told at the meeting that when the new Fox Sports deal is finalised later this year, they can expect to no longer have to meet the costs of the salary cap.
The FFA’s increased funding for clubs comes as a result of new sponsorship deals, reduced costs of not having to fund a FIFA World Cup bid, increased revenue from the AFC World Cup qualification tournament, not having to fund another World Cup campaign until 2014 and increased revenue from A-League operations last season.
This increased revenue stream doesn’t take into account the new federal government funding package for football which will be announced shortly, which is additional to the $8 million investment by the federal government in Western Sydney and women’s and junior football announced a few months ago.
The increase funding for A-League clubs is based on the FFA’s recently completed financial modelling done by Price, Waterhouse Coopers on a number of initiatives including the 2015 Asian Cup, which allows for the increased dividend without taking into account other potential sources of increased revenues.
However, the increased A-League club package is based on the financial forecasting for the remaining matches of the World Cup qualifying campaign, including three home games and the new A-League season revenues with the addition of the West Sydney Wanderers.
The FFA offer is not guaranteed, but only a marked collapse in gate and sponsorship income from those World Cup matches and a decline in the upcoming A-League season could possibly reduce the amount of the distribution.
“Increasing the annual distribution to the level of the salary cap is the priority and we can see good progress towards that target in 2012-13,” said an FFA spokesman. “As we’ve said before, building a financially sustainable A-League is the core strategic objective.”
Yesterday’s meeting of the JALSC is also believed to have involved discussions about the future of the women’s W-League and National Youth League and assisting Perth Glory and Newcastle Jets to fully commit to fielding teams in both competitions.
The FFA’s remarkable change in fortunes from its “imminent collapse” and the Clive Palmer rebellion continues strongly.
The FFA should be congratulated for not only surviving the huge challenges thrown at it in the last few years, but growing its core domestic business to move within touching distance of a financially viable national football competition.
Most importantly, it has also turned around the disgruntled owner’s and fan’s perceptions of the league.
Zac
Guest
Not true! First season Foxsports paid $750K. During the early part of the second season after the euphoria of the 2006 World Cup and great attendance figures for the first season of the HAL, Foxsports moved quickly to 'STEAL' the rights for $120M over 7 years OR a pathetic $17M per season!!!!!!!!!!!! It was Highway Robbery!!!!!!!!!!!!! AND they're at it again trying to ROB US on the next deal!!!!!!!!!!!!!!!!
ItsCalledFootball
Roar Guru
I think the FFA are doing a good job connecting with the fan base and player groups - fan forums, votes on the club name and colour, honouring the fans wishes to play all games at Parra Stadium. That sort of effort is getting results and when the hype really takes off WSW will get some good crowds and with good results and a winning team, may even get a couple of sell outs at the 20K stadium.
Midfielder
Guest
Fuss Maybe but don't get caught in the trap of fighting little battles and losing sight of the big picture ... or as a mate of mine say's to much in the frame to see the picture... [eg I just stopped commenting on and reading Q a while ago] The big unanswered question and what needs lots of attention is how to connect with the player base and how to better manage the next expansion teams... these issues require lots of tho, planning and work...
Midfielder
Guest
Candy You could be spot on the NRMA is a huge sponsor ... simply having the NRMA will get other sponsors on board ...
Sports Candy
Roar Pro
By "developed" I think Fuss is saying that they have turned young footballers who probably cost them zero transfer fees into professional football players who could be sold on the world market for hundreds of thousands of dollars and that opportunity exists for all A-League clubs as a source of additional revenue. Of course youth actually learn how to play football at an early age, but a professional football club will turn them into football professionals and that career path has been established by the A-League.
Fussball ist unser leben
Roar Guru
Middy, you're far too kind with your assessment of Ian's bona fides. He's never had a single positive thing to say about football. If Ian, indeed, holds the views you suggest I would embrace him with open arms. Be vigilant - as we count down the weeks to HAL 8, every piece of positive news about AUS football, will be scrutinised by the anti-football brigade and they'll try to dampen our enthusiasm. Unless they dramatically alter their attitude, I will never have any regard for the musings of the anti-football posters in relation to football matters.
Sports Candy
Roar Pro
Mid, the press reports are unclear about who the FFA will give any "bonus" or "additional revenues " to. But I don't think the FFA themselves know how much they will end up with at this stage because: 1. There has to be an FTA component because of the new Anti-Siphoning list that comes out later this year and makes all Socceroos WC Qualifiers FTA. The Socceroos games are good TV raters and should get a good price. 2. The international demand for A-League games, highlights packages and Finals from a growing list of cable companies around the world and Asia 3. Internet and Electronic media, which had not been priced separately previously 4. The FFA's share of Asian football competitions and WC Qualifiers 5, The amount of growth in revenue from the A-League Plus many other unknowns. However, it seems clear that they will give $2.8m to each club by the end of the year or next season at the latest, no matter how much money they get from the media deal. That suggests to me that Foxtel have already offered them more than double the last deal and they are negotiating for more, and this I repeat, is just the pay TV component of any media deal. So in a sense Ian is correct, but I think he is still underestimating the earning potential of the FFA and the A-League. A major company like NRMA Insurance has just signed a 3 year multi million dollar sponsorship of WSW, a completely unknown quantity and risk.
jbinnie
Guest
Fuss - No wish to enter this debate but must ask you to cite your arguments with just a little more care when replying to "non believers", I know it is a play on words but football players are not developed in two years by any club,never mind Heart,so if you could just say "helped" to develop young players over that length of time you would cut the chances of being asked where one could buy the magic wand that turns a junior into a super star in 24 months. Your mate jb
Sports Candy
Roar Pro
Ian, stop being an Ian Whitchurch and pouring cold water on the FFA every time there's some positive news about the A-League. The FFA are going to cover the $2.8m salary cap costs by the end of this year, whatever the media deal is worth. That's a very generous offer and gives the A-League clubs a big boost in their quest to be profitable. If they get a lot more than that, then the FFA will spend it on Australian football from juniors up to the Socceroos so the sport and ultimately the A-League will benefit in other ways. Why not count on the government to keep up the annual grants to the FFA. They just gave them 8m to kickstart west Sydney and women's and junior football in the area. The government realises that football is the biggest participation team sport in the country, so the social, economic and health benefits will be returned to the country in so many ways that you can't put a figure on it.
Midfielder
Guest
Fuss Ian's point is simple ... he is not saying FFA will only get a certain size media deal.... he is saying FFA are so sure of their position they can guarantee a figure .... I expect the figure quoted to be a fair bit more ... In simple terms the A-League should bring somewhere between 20% & 30% of the AFL deal... so lets take the low figure ... of 20% that means roughly 250 million over five years .... 50 million a year a tad over double of the current deal after inflation... Lets add what is not known the W-League, Socceroo friendlies etc.... However FFA is taking a very safe position I would too but I still expect the figure to be close to 70 million per year...
Fussball ist unser leben
Roar Guru
The HAL's newest club, Melbourne Heart, has received around $2m in this off-season for players it has developed in 2 years, so we're already got that base well covered. Which AFL clubs have built own their own stadium? I know of State Governments building stadiums that are used by AFL clubs. I have even witnessed many AFL clubs, tearing down their old stadiums - literally, not metaphorically - and NOT rebuilding. The AFL's GC Suns have been housed in tin sheds for the past 2 years - similar to facilities used by the ill-fated Brisbane Bears. PS: Nothing you've mentioned in this last post adds to your argument, where you try to claim that forecasting additional FTA & online broadcast rights can confuse the financial forecasting for HAL clubs.
Ian Whitchurch
Guest
Fuss, Read the article. "The FFA added that once the Media rights deals with Foxtel, other free-to-air TV stations and Electronic media and internet companies are all finalised, A-League clubs would expect to receive additional revenue sharing. The FFA is then expecting to be able to cover the whole of the $2.8 million salary cap costs for all A-League clubs. That would mean that if an A-League club had all players within the salary cap, they would not have any player payment costs, a huge boost for any club. " This is a decent start on long term planning. The kind of things that needs to be done by codes who succeed. Once you've got things like that done, then you can look at things like building, or buying an interest in, permanent grounds to play on, rather than being a beggar to state governments and local councils. Then ensuring all clubs are financially viable so they dont, say, go into liquidation halfway through a season when an owner throws a wobbly. Having excellent training facilities so you have a good flow of players to onsell. Stuff like that.
Fussball ist unser leben
Roar Guru
Ian Whitchurch The FFA hasn't said anything like that, so, again I ask "what are you on about"? The FFA has said: 1. It will make payments of $1.9m p.a. to each HAL club, which is NOT dependent on the new media rights increases 2. It will pay each HAL club the full cost of the annual salary cap, when the new Fox Sports deal is finalised later this year These comments by the FFA are independent of extra money from: a) FTA Tv rights b) Digital/online broadcast rights I suggest, Ian, you stick to analysing the weighty issues of AFL: who will make the Top 8, which prepubescent boys should AFL teams place their dreams upon for the next 5 year-plan, etc. etc.
Ian Whitchurch
Guest
Fussball wrote "How could extra FFA revenue have any impact on any HAL club’s cash flow planning? : Really really freaking easily, if oh I dont know the FFA had made some sort of statement to clubs like "The FFA is then expecting to be able to cover the whole of the $2.8 million salary cap costs for all A-League clubs" The FFA's ability to do this is reliant on .... drum roll ... expected extra FFA revenue as compared to expected FFA costs. You're displaying a grasp of how to run a professional sports league that suggests your day job is running either the SPL or the NSWRU.
Fussball ist unser leben
Roar Guru
"FFA have given their clubs indiciative numbers so they can do cash flow planning". Ian Whitchurch What are you on about? How could extra FFA revenue have any impact on any HAL club's cash flow planning? The quantum of dividend the FFA disperses is dependent on the actual broadcast revenue it receives. So, a) If the FFA has OVER-estimated their broadcast rights revenue and the FFA receives LESS revenue than forecast, then, "yes", this will impact the dividend paid to HAL clubs & will impact HAL clubs' forecasting & planning. However, b) If the FFA has UNDER-estimated their broadcast rights revenue, and the FFA receives MORE revenue than forecast, the dividend paid to HAL clubs will not be impacted. It's simply absurd to think otherwise & displays a poor grasp of basic accounting principles.
Ian Whitchurch
Guest
Sports Candy, Stop imitating Fussball and thinking with your hopes. FFA have given their clubs indiciative numbers so they can do cash flow planning. They've quoted a number, and its a realistic number, based on a minimum increase of double in the TV contract, which they should get (association football in Australia *is* currently worth about a fifth of what AFL is worth). They've done this because they are confident that number will turn up. If they were confident of defnitely getting an extra $10m a year from overseas rights and whatnot, they'd have put a number on it. Therefore, FFA arent confident of that money. If it shows up, great, but they are telling their people not to plan on it. Likewise, I wouldnt be counting on Federal money, especially not Federal money that can pass through to private club owners. If it shows up, great, but they are telling their people not to plan on it.
Minister for Information for the Democratic People's Republic of Football
Guest
Thank you Roar Mods. Our thoughts exactly. There must be a Gold Coast United forum for him somewhere?
Sports Candy
Roar Pro
I did say that in the article - para 13-15. It would take a large collapse of the Socceroos attendances and A-League revenues to reduce the figure, but given the Socceroos are likely to qualify for Brazil 2014 and that WSW has replaced GCU, its hard to see that happening. The Fox deal will cover it to $2.8m anyway, so its a mute point till then.
Sports Candy
Roar Pro
Thanks Futbanous, wasn't aware of that and thought it was from year one. That makes sense since the deal expires at the end of this season and the FFA are hoping to sign a new deal by the end of this year. Interesting Neil also said back then that it would allow the FFA to give back to clubs between $1.5 and 2 million a year to "wipe out their debts".
Sports Candy
Roar Pro
Titus, there must be an FTA compnent in the next media deal because the Socceroos WC Qualifiers are going to be on the Anti-Siphoning list when its made law later this year.