Why A-League salary cap should be increased

tonysalerno Roar Guru

By tonysalerno, tonysalerno is a Roar Guru

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    Yesterday’s Manchester United exhibition match announcement has snowballed from a massive A-League television rights deal and the Alessandro Del Piero effect.

    These moneymaking mechanisms have contributed to a spike in TV ratings and crowd attendances for the 2012/13 A-League season.

    It is ultimately the players who are the products of this growth but they will continue to get the same slice of the pie.

    Football Federation Australia chairman, Frank Lowy, said there will be no increase in the salary cap despite the game’s recent profits.

    Currently, the A-League salary cap is just under $2.5 million excluding marquee signings and third party arrangements.

    Clubs are expected to balance home grown talent along with overseas fringe players looking for an opportunity, which is where the bulk of recruitment will span from in the long run.

    The budget makes the task difficult. The teams are relatively even but the quality has plateaued.

    A look at the three mechanisms will show why spending a little more money on the salary cap will make a lot more money for Australian football:

    Manchester United exhibition match

    Manchester United will face an A-League All-Stars outfit in what will be Australian soccer’s showpiece for 2013.

    The Red Devils will stay in Sydney for six days holding training camps for football fans before their match at ANZ Stadium.

    The NSW government paid upwards of $3 million with the tour predicted to generate $16 million into the NSW economy.

    Del Piero was a factor in this arrangement given he denied an offer to play for Liverpool, which almost closes the door on an EPL stint.

    Matches against European heavyweights have been a hot topic in Australian football with Juventus vs Sydney FC earmarked for the A-League off-season.

    The game will attract global media attention and raise the A-League profile among Manchester United, the sport’s most popular club.

    TV rights deal

    The A-League signed a broadcast rights deal with Fox Sports and SBS for $40 millon over four years.

    The 200 percent increase has been attributed to the continual rise in crowd attendances and television ratings since the 2011/12 season.

    The new deal will build off the weekly Sydney FC match shown to Italian viewers as per the Alessandro Del Piero contract.

    SBS will cover the Friday night fixture, increasing the codes access to free-to-air viewers, which again raises the profile of the game.

    The Del Piero effect

    The great man himself has shaped the above influences but it is he himself along with Emile Heskey and Shinji Ono, who have changed the face of the A-League.

    Heskey from England, Ono from Japan and Del Piero from Italy are all global heavyweights who have sparked A-League interest from their home countries.

    The three men, all the better part of 30, have inspired a generation to play football.

    The move down south will encourage foreign talent to emulate their heroes and play in another country for international exposure.

    The latest investments will fill the game’s back protect to the brim.

    The moneymaking mechanisms all frame the code’s biggest investment: the A-League.

    A late-bloomer in the Australia’s round ball market, the game has the ability to span it’s talent internationally like no other.

    The monetary focus into grassroots football and infrastructure are good arguments, but the game must bring new styles and ideas into the domestic realm.

    The Manchester United exhibition and the TV rights deal will kick-off a strong financial year for Australian football.

    The international media attention, television ratings and crowd attendances will continue to grow.

    The A-League season has two transfer windows and the cap doesn’t provide enough money for one of them.

    A larger salary cap will provide larger incentives for domestic players while attracting foreign interest and increase the A-League player pool.

    The players are ultimately the products of these investments and their quality will dictate the direction of this code.

    More money is out there if people are willing to spend it.

    Frank Lowy should really think about it.

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    The Crowd Says (26)

    • December 11th 2012 @ 4:55am
      Johnno said | December 11th 2012 @ 4:55am | ! Report

      I’d allow another of the 5 foreign imports , to be allowed to be marquee. And i’d also allow 1 more local marquee spot too. In other words 4 marquee player spree team allowed. As we are now showing with 1 marquee foreigner, if he gets injured it stuffs up the hype factor a bit.
      And who knows a Lucas Neil type may come back earlier, or a chippers if 2 local marquees allowed.

    • December 11th 2012 @ 10:34am
      nordster said | December 11th 2012 @ 10:34am | ! Report

      More importantly to the viability of all clubs in the league, the floor in the salary cap needs to be abolished…raising the cap is fine for some, lowering the floor is what will ensure there are more teams for them to play against. Not all clubs can be kept equal…

    • December 11th 2012 @ 5:05pm
      Ian Whitchurch said | December 11th 2012 @ 5:05pm | ! Report

      Before doing anything really stupid, like anything Johnno or Nordster suggest, how about we wait for the smoke to clear on the next TV deal ?

      It is highly likely the owner of Newcastle’s owner will be unable to pay his debts as an when they come due, which will make things interesting if the Newcastle Jets need money to make payroll.

      We’ve already had North Queensland and Gold Coast go broke because their owners were unable to support a money-losing football club, and that created quite enough drama for the A-League.

      So, as a basic plan, how about FFA does nothing for this season, and maybe next season, and then see how healthy the finances are before raising the salary cap and so on.

      • December 11th 2012 @ 5:18pm
        Midfielder said | December 11th 2012 @ 5:18pm | ! Report

        Gotta agree Ian…

        • December 12th 2012 @ 1:22pm
          whiskeymac said | December 12th 2012 @ 1:22pm | ! Report

          +1

      • December 11th 2012 @ 5:49pm
        Punter said | December 11th 2012 @ 5:49pm | ! Report

        I think you will find that this is what Frank Lowy has already said, flatly, no raising the salary cap. However, this does not stop clubs from the ability to have an extra marquee player as suggested by Johnno, this comes out of the clubs & hence only the richer clubs can afford them.

        • December 11th 2012 @ 6:52pm
          Ian Whitchurch said | December 11th 2012 @ 6:52pm | ! Report

          Punter,

          None of the A-League clubs are richer. They’ve all got no history, no assets and no guarantees they’ll not be the next Wollongong Wolves.

          The worst thing they can do is piss money up against a wall by hiring overpriced “marquee” player.

          The absolute worst thing they can do is hire two of them.

          The real marquees in this league have been the guys like Berisha and Ifill – quality who play large chunks of their careers here, not once-greats at the end of their career like Kewell and Del Piero.

          • December 12th 2012 @ 1:55pm
            Punter said | December 12th 2012 @ 1:55pm | ! Report

            This is where we differ Ian & thankfully so, my views good or bad are aimed at the good of the game, I don’t think yours are.

            • December 12th 2012 @ 3:27pm
              Ian Whitchurch said | December 12th 2012 @ 3:27pm | ! Report

              Punter,

              Here is two dollars. For the moment, I’ll buy your argument that I hate, loathe and fear soccer.

              Now, the single best thing that now has me rubbing my hands in glee are last years collapse of the North Queensland and Gold Coast sides. More of that, thank you ! More cases of players who may or may not get paid ! More clubs going through ‘will they be here next year, can a buyer be found ?’. More uncertainty as to whether sponsorship or TV contracts can be honoured.

              Given that, I would be in *favour* of clubs desperately spending money they dont have on a Harry Kewell or an Alessandro Del Piero. I would be in *favour* of letting clubs repeat the experience of Collingwood and Richmond in the VFL early 1980s, when they both went insolvent due to excessive salary spend – Melbourne Heart as the next Leeds United, yes, thank you ! That will cripple soccer nicely !

              I would likewise be in *favour* of clubs being owned by dodgy overseas owners, as their arrest/sispicious death/unexplained cash flow crises put their pet club on a selling spree.

              I would likewise be in favour of clubs not owning any hard assets that will get them through the bad times.

              See why your argument doesnt make sense ?

              Because its 100% against all the things I recommend.

              • December 12th 2012 @ 4:22pm
                Punter said | December 12th 2012 @ 4:22pm | ! Report

                OK Ian, i’ll play the game with you.

                Melb Heart, now the new TV deal will cover their salary cap, so how will they be the next Leeds utd & cripple football?
                Gold Coast demise & well documented, it was badly run definitely lack of cash flow was not the issue.
                Nth Queensland, crashed & burned mainly due to the GFC, a new franchise, where the investors were hit by the GFC & renege. The FFA ran it on life support, with minimum cost looking for new investors before casting it aside. There was a dodgy investor from Asia, who the FFA with due diligence dismissed.
                With the salary cap, the TV deal will cover most of that, so difficult for excessive salary spend. Notice & I will use your 2 examples, the marquees like Harry Kewell & the great man Ale Del Piero were only offered to the teams that could generate income via corporate sponsorships, crowds & owners that can afford it, Melbourne & Sydney.
                In both cases but more so in Del Piero situation, the argument was more on the long lasting affect of his signing, more than the value of his cost. Del Piero has already paid for himself many times over with the corporate investment, the attendances not only in Sydney but everywhere he plays, the shirt sales & most importantly the publicity he has generated. Likewise with the Man U tour or the Beckham bid, their salaries will be already be covered.
                The FFA would not approve a marquee signing to a club that could send that club to insolvency. They, the clubs would need to show, ala CCM with John Singleton’s bid for David Beckham, how they would pay for marquee before FFA allowing for it.

              • December 12th 2012 @ 4:47pm
                Ian Whitchurch said | December 12th 2012 @ 4:47pm | ! Report

                Punter,

                Leeds bet big on player salaries to make the Champions League, after which the clubs future as one of the Big Clubs would be secure. It didnt work, and the club went into a death spiral.

                There are various people – notably Titus and Nordster – saying that Australian clubs should repeat this mistake with the Asian Champions League, that the various A-League clubs should spend on players to try and … repeat what happened to Leeds United.

                Regarding sponsorships being linked to the various high-priced veterans, I say “show me the money”. Tell me which sponsorships and for how much money. Dont just say it, prove it. Name names. Point to numbers in accounts.

                I see a Melbourne Victory who are back to their long term crowd average, who have the same level of sponsors and so on. I see a Sydney United team that are going through the same process with Del Piero.

                It was money thrown against a wall with Kewell, and bluntly it’s good for MV that his salary has gone off the books.

                Yes, its warm inner glow, to see some used-to-be-great on the field … but the actual long-term impact ? Not much, especially not when compared to equity in a ground or equity in a social club (Apia Leichardt survive. Woolongong Wolves havent … the social club is the difference).

                Regarding “With the salary cap, the TV deal will cover most of that, so difficult for excessive salary spend”, it isnt at all difficult when you are allowed to overspend on a single overpriced, off-cap has-been … and as well, they all need to watch out for that generic “football club expenditure”. I mean, dig into some AFL clubs, and ask yourself “does a club need to spend twice as much on trainers as it does on players ?” (if Fussball bothered to understand anything about the AFL, he’d be far more effective at attacking it. Just saying).

                Likewise ” Likewise with the Man U tour or the Beckham bid, their salaries will be already be covered” – this is like Richmond playing in Cairns. The big club makes sure they get paid a guaranteed amount, and a percentage of the profits, and the locals get scraps.

                And gullible rubes lap it up.

                Long. Term. Sustainability. Clubs building asset bases. Clubs building, well, clubs. The league making sure that Williamson’s “The Club” isnt repeated.

                Not everyone who tells you what you want to hear is your friend.

              • December 12th 2012 @ 5:07pm
                Punter said | December 12th 2012 @ 5:07pm | ! Report

                I’m not sure why I am bothered because I already know your answer.

                But let me end with this Man U gets $3M for the game. Already 80K at $150, all sold out has covered this costs,let’s not talk about the corporate investment, the overseas tourists, the media attention right in the middle of the RL season in Sydney at SOO time, nothing gets a look in during SOO time in NSW & Queensland.
                Good luck in trying to get others to believe that you care for the game.

              • December 12th 2012 @ 5:29pm
                Titus said | December 12th 2012 @ 5:29pm | ! Report

                Ian……salary caps are a bit more effective in a sport that has no competition for players and wages. No one is arguing for financial irresponsibility but Football operates in a more competitive wage environment than AFL.

                I can understand that you are happy for Football to remain small here and we all watch AFL and the EPL(just like Sheeds) but I’m not, I want high quality, real football.

                We may never be able to ocmpete with Man U but we should be able to compete with the AFL or the NRL but it requires some investment.

                Del Piero doesn’t play for Sydney United by the way.

          • Roar Guru

            December 12th 2012 @ 4:07pm
            Fussball ist unser leben said | December 12th 2012 @ 4:07pm | ! Report

            “None of the A-League clubs are richer. They’ve all got no history, no assets”

            I only know about MVFC’s finances & you are talking nonsense, which is not surprising, since you do this ever day to try to interrupt & hijack every football discussion.

      • December 11th 2012 @ 8:33pm
        nordster said | December 11th 2012 @ 8:33pm | ! Report

        Whats stupid about abolishing the floor and allowing the clubs to spend the tv money where they see fit, based on their own strategic imperatives at the local level? Gives them much more flexibility to remain viable and sustainable on their own terms, Stupider would be to impose a centralised wage structure…the norm in australian sport

        • December 12th 2012 @ 1:05pm
          Ian Whitchurch said | December 12th 2012 @ 1:05pm | ! Report

          Because that locks them into a death spiral of being the easybeats people dont want to show up to, watch or sponsor.

          Look at, for example, the Gippsland Falcons, or a number of other under-funded easybeat teams in the old NSL.

          Or look at Hawthorn between, say, when they came into the VFL and 1960 or so.

          Or look at, say, Penrith in the pre-salary cap era in the NSWRL.

          Heck, look at amateur rugby union in Australia.

          A competitive league is good for the code.

          • December 12th 2012 @ 1:49pm
            Diablo said | December 12th 2012 @ 1:49pm | ! Report

            The VFL and Rugby League had uncompetitive teams in the past and they had a few teams that dominated for long periods. It wasn’t a problem back then and it certainly hasn’t hurt the EPL which has just signed off on a massive 5 Billion pound, 3 year TV deal?

            What’s changed in Australia? The advent of NATIONAL competitions where new teams and new leagues were introduced and clubs formed in non traditional areas. The only way these leagues can prosper is if they go ‘socialist’ and give everyone a chance to win. With no history or loyalty these new teams wouldn’t survive without help. I understand this is how it has to be here in Australia but it’s a sign of weakness not strength.

            • December 12th 2012 @ 2:20pm
              Matt F said | December 12th 2012 @ 2:20pm | ! Report

              It’s a professional world now. Clubs need crowds and sponsorship revenues to pay the bills and they won’t come if only a couple of teams have any chance of winning the title. They no longer run off the meat raffle at the local clubhouse. Teams down the bottom lose money and a team that’s always down the bottom will be in big trouble. We’ve already lost enough A-League teams over the last few seasons.

              The EPL is very different. The EPL isn’t it’s own league in isolation but the top in a system of leagues so if a team does poorly it doesn’t sit at the bottom for years, it drops out of the division. For some teams even being in the EPL is an achievement. There are also various other things to keep up the interest like European spots, Cup (domestic and European) competitions and relegation. Until the A-League has those (it has one of those with the ACL) and I’m skeptical that a relegation system will even work in Australia, then it needs an even competiion.

              • December 12th 2012 @ 2:31pm
                Titus said | December 12th 2012 @ 2:31pm | ! Report

                CCM are winning the league and average 10 000 if they weren’t winning they would probably still get 8 000 along, same with Brisbane, Adelaide etc

                The only time these teams get big crowds is when Sydney or Melbourne come to town with star players. Having big clubs helps the overall league and increases the quality of the league overall.

                Having small clubs that are bigger than the big clubs doesn’t help the league overall and doesn’t do much to help those teams either.

                Don’t get me wrong, I think we need a salary cap for now and until we have promotion/relegation but I don’t think that the idea that all teams must be equal is necessarily true.

              • December 12th 2012 @ 3:09pm
                Matt F said | December 12th 2012 @ 3:09pm | ! Report

                The nature of the A-League is such that at worst a club will only be down for 2 seasons and every fan knows that, because of the salary cap, their side can potentially get their act togehter and win the league in the future. Besides the A-League is a very competitive league and the teams are generally always so close.

                Have a team consistently at the bottom for 5+ years with no hope of ever winning anything and then let’s see where their crowds are at

              • December 12th 2012 @ 3:28pm
                Titus said | December 12th 2012 @ 3:28pm | ! Report

                Well you would have small clubs and big clubs like you do all over the world. The small clubs would hate the big clubs with a passion and sing songs and drink beer and feel pride in players that they developed that went onto bigger things.

                You are born to your club and you can change them no more than you can change your parents, it’s your lot in life and you make the most of what you can.

                The big clubs would be smug and superior and compete against Gamba Osaka, FC Seoul and Shanghai Shenhua.

                Having small clubs would mean teams like Orange and Gold Coast and Bendigo and Tassie could form a second division and occassionally make it to the top flight, maybe even win a cup comp that will be handed down in tales to successive generations.

      • Roar Guru

        December 13th 2012 @ 9:46pm
        Cappuccino said | December 13th 2012 @ 9:46pm | ! Report

        Ian is absolutely right on this. Two marquees should be the limit for a while yet (Although potentially the FFA should make both marquee slots available to foreigners, rather than just one). However I think in a few years time the foreign quota of five could be increased to six or seven- this season foreign recruitment has generally been excellent (Adelaide United in particular have unearthed some top player in Jeronimo, Ferreira an Carrusca, SFC have found Yau, and so on).

    • December 12th 2012 @ 4:42pm
      TC said | December 12th 2012 @ 4:42pm | ! Report

      The author said: “It is ultimately the players who are the products of this growth but they will continue to get the same slice of the pie. ”

      Are the players the products of this growth, or factors in the growth?

      What has Manchester United got to do with the salary cap? Perhaps someone can clarify, but doesn’t United basically walk away with the loot?

      The TV rights deal didn’t increase by 200%, it increased by 100% (and even then, that’s debateable, we have never actually been given the full story on the deal).

      The author concludes: “More money is out there if people are willing to spend it. ”

      Come again??

      TC

      • December 12th 2012 @ 5:12pm
        Punter said | December 12th 2012 @ 5:12pm | ! Report

        I think the Man U tour shows the interest in football in Western Sydney. Now this may or may not help the A-league, but what it does show is that we here in Australia will pay to see the best players. One of the great AFL teams will be in Sydney that night as well, with some of the best AFL players in the world, can see them matching the interest in Man U.
        As I’ve always said never assume the following of football with the following of the A-League.

        • December 12th 2012 @ 5:22pm
          TC said | December 12th 2012 @ 5:22pm | ! Report

          We are all supportive of the Manchester United game.

          Even Kevin Sheedy is supportive – he has invited Sir Alex to visit him in Sydney:

          http://www.afl.com.au/news/2012-12-12/men-united

          • December 12th 2012 @ 5:26pm
            Punter said | December 12th 2012 @ 5:26pm | ! Report

            Yes, the funny thing is that Alex Ferguson is better known in Western Sydney than Sheeds.

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