Where to next for the A-League?

A-League expansion has been a hot topic in recent months and so it should be, the world game is growing in Australia and so should our premier football competition.

The big question is where? David Gallop famously argued we should “fish where the fish are,” but this was countered by football enthusiasts in smaller towns saying, “only if they are biting.”

It has been great to see a wide variety of options available to FFA officials when considering where to put the next two A-League teams.

We have the big city prospects like Southern Sydney, Brisbane, Casey-Dandenong (southeast Melbourne), South Melbourne and Tasmania (a state surely has to come under this banner). However there has also been ample interest from the regional centres such as Geelong, Wollongong and Canberra (okay, our capital city, but you get my point).

One of the biggest financial stakeholders, the TV broadcasters have rightly been given the chance to have their say. The ones putting their money where their mouth is have every right to put their thoughts forward. Whether we like it or not sport is a business and financial consequences must be considered. Much like a bank rejecting a home loan application, if a TV broadcaster rejects a potential A-League club’s bid it is most likely a sound commercial decision. Passion is vital in football but emotions won’t pay the bills and aren’t reported on the balance sheet. However putting money making too far ahead of the passion of the fans, will burn the bridge that exists between the two. A delicate balance is needed.

The best decisions in any business are informed ones. The A-League doesn’t need far to go when researching which clubs should get the nod. While the league has thrived it has seen its fair share of flops (for example Gold Coast United) amongst its many success stories (cue Western Sydney Wanderers).

One doesn’t need an accounting degree to know there are two sides to the profit equation – income and expenses.

The first part is driven by sponsorship revenue, gate takings and the all important TV dollar. The fans are the key factor on this side of the equation. The second part comes from player wages and operating costs, namely stadium rental and interest expense (the reward for the investors/creditors). This is driven by smart business decisions and deep pockets from investors.

Let’s focus on the income side of things and its major driver – the fans. David Gallop understandably wants to go to areas where there is a large population, it isn’t rocket science to work out this will increase the likelihood of more fans and so more dollars.

A large population is also where you are likely to find a larger number of registered footballers – however the smaller town clubs in the A league have generated relatively good numbers when compared to their big city counterparts.

An analysis of the 10 current clubs leads to some interesting numbers. The TV audience is an estimate based on stats from footyindustry.com. The population figure is based on the catchment area of each club in the opinion of the author.

While small town clubs have a higher number of proportionate fans, clearly the raw numbers which is what translates into dollars, favours the big city clubs.

This analysis actually supports David Gallop’s view of fishing where the fish are but also vindicates to an extent those that want to go where the fish bite.

The benefit of small town clubs is the tribalism of the people can translate into decent if not passionate crowds.

However, the difficulty in obtaining sustained corporate support in those areas is a clear obstacle. Nathan Tinkler’s relationship with Newcastle is a prime example. The Central Coast Mariners posted a modest profit in 2016 which was impressive considering they finished with the wooden spoon, however a large reason for this is the millions invested (lost?) by owner Mike Charlesworth.

The big city clubs draw larger numbers overall but also clearly bring in large corporate support which means increased sponsorship revenue. A very important consideration is the interest the bigger market clubs bring to the league as a whole.

Would Hyundai and Foxtel prefer a league with Central Coast or Melbourne City? Geelong or South East Melbourne? Logically clubs from big citys like Sydney, Brisbane and Melbourne would likely bring in more corporate support purely due to the potential audience generated by their large populations.

Now when considering newer clubs let’s look at the potential impact they will have on the existing league. Who would neutral fans, sponsors and broadcasters like to see play – Canberra versus Melbourne Victory or South East Melbourne versus Melbourne Victory? Geelong versus Western Sydney or Southern Sydney versus Western Sydney? Wollongong versus Brisbane Roar or Brisbane II versus Brisbane Roar? I won’t pretend to know what everyone else is thinking but it isn’t the riddle of the sphinx.

A major issue with the current league is the lack of games that generate genuine interest amongst the fans and the media. Except for fans of the clubs themselves Newcastle versus Wellington hardly sets the pulse racing. Neither does Central Coast versus Adelaide. Melbourne Victory versus Western Sydney or Sydney FC versus Brisbane is a much juicier prospect even if the clubs aren’t high up the ladder.

The FFA Cup final with Melbourne City and Sydney FC attracted a record cup final crowd of nearly 19,000 fans and a healthy TV audience of 153,000. With all due respect, is it realistic to suggest Central Coast versus Adelaide would have generated similar figures? What about Canberra versus North Queensland? What about Southern Sydney versus South East Melbourne?

If the A-League wants to get bigger it needs to think big. The prospect of TV audiences in Asia has also been mooted as a potential cash injection for the league. Again, what Australian regions would fans and sponsors in those countries recognise or relate too?

Only time will tell which model the A-League governing body would go with. No matter what they choose it is great to see Australias domestic league growing and so many potential teams throwing their hat in the ring. Who knows, in a decade or so there may be room for all of them – an exciting thought.