A-League football clubs lost close to $27 million during the 2011-12 season, and despite record television ratings, attendances, merchandise sales, transfers and corporate sponsorship for the 2012-13 season a loss of $20 million has been recorded.
The Australian Financial Review has provided an insight into the gains, losses and break evens for season 2012-13.
Melbourne Victory, having witnessed a significant improvement both on and off the field, has aided them in recording a small profit, while their rivals Melbourne Heart and Adelaide United reportedly broke even.
Unfortunately for the other seven A-League clubs consisting of Brisbane Roar, Central Coast Mariners, Newcastle Jets, Perth Glory, Sydney FC, Wellington Phoenix and Western Sydney Wanderers, they are left to share in the unfortunate $20 million loss.
Sydney FC, despite luring the greatest signing in Australian football, Alessandro Del Piero, have recorded a significant loss. It may not be until next season that the benefits of his arrival will appear.
Perth Glory have also incurred significant financial losses as they were unfortunately denied compensation at the start of the season while refurbishment occurred at a reduced capacity NIB stadium, much to the dismay of club owner Tony Sage.
To make matters worse for the Perth club, Tony Sage’s health has come under the spotlight throughout this past season and there is talk he may have to walk away for the betterment of his health.
The Wanderers were always expected to record a financial loss, but considering they had such tremendous success both on and off the field you could have perhaps hoped they could break even, rather than incurring a loss of more than $1 million.
Fortunately for the Wanderers, their success of 2012-13 may transcend into next season in which participation in the Asian Champions League may aid their process to one day challenge Victory as the biggest club in Australian football.
Grand final champion Central Coast Mariners also recorded a loss of more than $1 million. Mike Charlesworth, a British telecommunications company owner, is in the process of taking closer control of the club with concerns over the immediate financial future.
Although aiding the club through such a hard time, it seems as though things may be more bleak than first thought.
It has been reported that Charlesworth spoke with the Australian Financial Review and said the Mariners may seek to forgo their participation in the 2014 Asian Champions League as the costs of the competition come close to about $300,000 extra on an already expensive business to run.
FFA chief executive David Gallop has said Charlesworth and the Mariners may need to look at the longer-term picture regarding ACL participation. Their participation remains to be seen, but Australian football fans are hopeful.
However concerning these matters may be, it has been said all the clubs should remain optimistic as the future of Australian football looks bright.
Football Federation Australia believe clubs and fans will see improved financial results next season when the new broadcast deal with Fox Sports/SBS begins. It has also been said the clubs’ salary caps will be fully subsidised in an effort to aid club owners stem the flow of money. This could in-turn cut losses by $5 million between all clubs.
Although it has been said the cap will look to be covered, it must also be noted the FFA will soon enter negotiations with the Professional Footballers Association in regards to a new enterprise bargaining arrangement.
Over the coming months A-League club owners and the FFA will continue to work together in an effort to maximise revenue and minimise losses.
Future financial security is a must and despite the hardships our club owners have had to endure, hopefully they can see the light at the end of the tunnel and wait to see our competition flourish even further.
Despite all the positives of the most successful season, it is a timely reminder that the A-League still has a long way to go.
Daryl Adair
Guest
You should follow John Stensholt on Twitter. His brief is the business of sport, not any particular sport.
nordster
Guest
He actually writes about football quite a bit...in fact wrote a piece floating valuations of WSW around the 20mill mark...and has been covering the aleague fairly regularly this past season. He is basically the Fin's sport business writer across all competitions.
Cameron
Roar Guru
I'm not sure it'll extend to such matters but there is a possibility for sure. All parties will do what's best for the game and next season will hopefully be even better than this one just past.
Cameron
Roar Guru
No need to apologise West, I can understand perfectly where you are coming from but I don't believe the writer from the AFR is out to denigrate football. Reports will continue to surface and evolve in the coming days, Weeks and months and i'm sure we'll hear some positives to eventuate. Unfortunately there may be some downers as well.
West
Roar Pro
kellett, the table lists the transfer balance sheet for SFC and shows they have done pretty well out of it making 1.5M Euro profit. Sorry, it was Fussball who estimated Perth and Sydney FC lost between 10-12M, not you or AFR. Need to be careful with all these stories estimating how much money A-League clubs lose and I tend to ignore them till the FFA puts out its financial reports later in the year. Its not a profitable competition yet, but its not as bad as some people make out. Just like the commercial media BS about Wanderers fans terrifying the good people of western Sydney and its not safe to walk the streets any more.
West
Roar Pro
The shortfall is met by the owners, but the CBA is set by the FFA and the PFA. I wonder if the owners will get more say this time? Will we get an A-League strike against the owners, like in the US, when players don't get the increases they were after.
West
Roar Pro
Apologies kellet, wasn't trying to implicate you just have my doubts about the story. The author is a Melbourne journo who usually writes about horse racing and AFL. I get my back up for 2 reasons - people who know nothing about football usually writing BS negative pieces about football, they are paid to do it - the number of trash articles over the years quoting how much the A-League and FFA is losing ( 25M to 100M) and predicting the demise of the A-League as we know it.
West
Roar Pro
Fletcher, that link to the Fitz files doesn't mention anything about A-League losses, or am I missing something??
Cameron
Roar Guru
Jbinnie, Sorry about the delay in reply, I've been busy with work. In regards to your response... I know that at no time in your offering did you refer to cost cutting as a sole means of securing a profit. I think I went a little off track, forgive me. A little reason why I probably placed a central focus on cost cutting was due to this - "To simplify matters, would it help for our clubs to be run like true businesses should be run,with budgets,forecasts,actual expenditures based on potential incomes (from all sources) or to put it even more simply, run the businesses at a small profit." Now cost cutting although not a sole focus of these factors, is a factor that is still taken into consideration when trying to 'run a business at a small profit.' I completely understood where you were coming. I was just trying to place a little emphasis in this factor as it has been something well publicised for some of our club owners. You're friend, Kellett.
Cameron
Roar Guru
West, The link you've provided although nice to take in, is hard to grasp the full message trying to be conveyed - would be much easier if every single year was filled out... Just saying. There is nothing in the AFR that states Sydney FC have lost $10-15 million this year. Not one thing. So I don't know where you got that from. I may be reading you wrong but it seems as though you don't like the information I've conveyed or the figures presented, would I be right in assuming this??
Cameron
Roar Guru
West, You can take these figures however you like, that is your choosing. The writer of this piece (John Stensholt), has written for the Australian Financial Review providing a 'brief' overview of the losses, gains and break evens A-league clubs have experienced for 2012-13. I use the word 'brief' as it's literal term. I don't believe this piece gives a 'true' indication as to the actual finances each club has experienced. It did say in relation to Heart "... while their rivals Melbourne Heart and Adelaide United reportedly broke even." 'Reportedly' broke even... Two days later we find out through a statement brought upon by far greater garbage (if that's what you'd call it), that Heart will make a profit. Now why do you find the data I've used to be any less accurate than the statement Heart have provided, when as noted before the financial year is not over?? Now i'm not saying Heart are lying. What i'm saying is I don't believe my piece (based off the AFR piece) is aimed to denigrate or attack the A-league or it's respective clubs. It's a brief report outlining what most people haven't found bizarre but expectant given the youthful nature of the league. With the coming months to eventuate and the financial year not over, these numbers can improve and there is nothing wrong with that. Remain 'Optimistic'! That was a key word that struck me in reading the AFR piece.
West
Roar Pro
Sydney's transfer market balance sheet http://www.transfermarkt.co.uk/en/sydney-fc/transferbilanz/verein_8054.html and a profit of 1.5M Euros over the years. Tony Pignata said the club has lost about 20M since it joined the A-League which in 8 seasons is about 2.5M loss per year. He also said that this year with ADP will be a big turn around on previous years and he is hoping to break even within 2 years. Where does the Fin Reviews figure of a 10-15M loss this year for SFC come from?
West
Roar Pro
Kellett Melbourne Heart have just released a statement today saying they will make a profit at the end of the financial year, so this Fin Review article is wrong. http://www.footballaustralia.com.au/melbourneheart/news-display/Melbourne-Heart-FC-Statement/66386 What other figures are wrong? I think the figures are just made up to suit a story.
Cameron
Roar Guru
Cheers for that BrainsTrust, I generally look out for numbers and considering they didnt put any numbers up I most likely skimmed over it. I did remember seeing that article too. I would also assume that it wouldnt be much of a compensation payment.
BrainsTrust
Guest
http://www.footballaustralia.com.au/news-display/glory-forced-into-rebuilding-stage/57783
Australian Rules
Guest
"Don’t attack me"..?? huh?
nordster
Guest
Troublesome? Hmmm i have replied to your blog this morning so i guess we can pick this one up over there. :)
j binnie
Guest
kellett 1992- At no time in my offering did I refer to cost cutting as a sole means of securing a profit. Costs are a thing that should be under constant surveillance by the financial side of the management and acted on IF REQUIRED.Sales and Marketing should also be under constant revue in order that EVERY opportunity is taken to "sell" the club's brand's image in the market place, whether that be in sponsorship income,momento goods,fan functions (dances ) etc etc etc. I do not have to go into detail for you I am sure. These are all things that can go on in the close season and add to the cash flow. I am just a little suspicious (or cynical) about some of the "losses" being posted for ,due to our tax laws, it can sometime be better to run at a small loss than a small profit but that is for others with better fiscal education than I to discuss. Suffice to say,as Ian has pointed out "saving" or "selling" an extra $1,000,000 over 52 weeks is not a huge task for people who know in what they are involved.That in essence was the point I was trying to make. eg Were Nichols and Halloran to go to Germany a $1,000,000 could almost be gained in one move!!!!!jb
Cameron
Roar Guru
Jbinnie, The problem with operating at smaller costs to achieve profit is the costs that are cut. Sage has continually served to cut costs and yet he experiences predicted heavy losses. Though his playing group that was assembled was extremely expensive and yet just managed to scrape into 6th. If playing costs were cut to minimum in order to turn over a profit, would this in turn affect on field performance then affect off-field matters?
j binnie
Guest
Some interesting debate a lot of it based on guesswork and probability figures for the "actuals" are not known. To simplify matters, would it help for our clubs to be run like true businesses should be run,with budgets,forecasts,actual expenditures based on potential incomes (from all sources) or to put it even more simply, run the businesses at a small profit. As has been stated by Fuss and Ian the losses per club are not huge and it would not require a huge amout of effort in improving sales and marketing to rake in the necessary funds over a 12 month period.Any extras to be had from "other" sources would only be a bonus for effort expended. Before the objections start rolling in remember,in the scale of things, we are talking about comparatively small organisations with a staff of around 50 to 60,hardly a megafactory jb