Where does all the money football generates actually go?

Mike Tuckerman Columnist

By Mike Tuckerman, Mike Tuckerman is a Roar Expert

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    Cutting costs and increasing fees – Football Federation Australia is under siege once again as the high price of running football comes under the microscope.

    The Australian’s resident football journalist Ray Gatt revealed on Tuesday that FFA spent an average of around $300,000 per player sending the Socceroos to the World Cup in Russia.

    Despite pocketing at least $10 million for qualifying for the World Cup finals, Gatt also said the FFA was only expecting to break even from the tournament.

    It prompted a verbose response from the FFA, who stated that football “doesn’t yet generate the massive revenues from broadcast agreements that the other major codes enjoy”.

    In the same breath they also announced that National Registration fees would be increasing for the first time since 2013.

    “The NRF increase is $1.40 a year for junior players (to $14 up from $12.60) and $8.00 a year for senior players (to $33 up from $25),” the FFA said in their statement.

    For all intents and purposes, it looks like a case of the grassroots subsidising the top end of the game.

    And it comes on the back of parents across Australia struggling to pay the ever-increasing costs of registering their kids to play football.

    It should be acknowledged that sending a national team to the World Cup finals is always going to be an expensive proposition. There would have been just as much of an outcry had the Socceroos not prepared for the tournament properly.

    But increasing registration fees barely a week after the Socceroos exit the World Cup is not a great look for the game.

    Socceroos Mile Jedinak and Mark Milligan react after losing a World Cup game

    (SAEED KHAN/AFP/Getty Images)

    Outspoken former international and current Fox Sports commentator Robbie Slater has suggested the Socceroos were already one of the highest paid teams in the World Cup.

    It also seems relevant to wonder just how much the FFA spent on sending its own executives over to Russia.

    It goes without saying that FFA should have indeed had some presence at the World Cup – it’s the perfect way to do some networking, after all – but there’s a perception that, with independent chairwoman Judith Griggs now in charge of the Congress Review Working Group, the World Cup represented one last chance for an all-expenses paid junket before the winds of change sweep through the game.

    And the issue of who is funding what plays a role in A-League expansion as well.

    Football might not enjoy the same broadcast revenues as other codes, but as the FFA hinted in their statement on Tuesday, one of the reasons they’re expanding the A-League is to try and encourage more people to watch it.

    And the $57 million Fox Sports is paying annually to broadcast the competition isn’t exactly chump change.

    Is it any wonder, then, that expansion bids like Tasmania’s fall by the wayside when it’s understood Fox Sports’ preference is for the next two expansion clubs to come from a major metropolitan market in one of Australia’s three largest cities?

    How can anyone – and this counts for fans as much as the FFA – expect Fox Sports to effectively subsidise running the A-League without having a say in important topics like expansion?

    Of course, there’s so much more to running football in Australia than just the A-League.

    As the FFA themselves pointed out, their $121 million budget for the next financial year is intended to cover the costs of not only the A-League and the Socceroos, but also the Matildas’ campaign at next year’s FIFA Women’s World Cup in France.

    These things cost money – that’s a given.

    But having slashed $5 million from their “central costs” last year, as well cutting a further $1.6 million this year, it’s hard not to wonder where all this money is actually being spent.

    I’m not for a second suggesting I have all the answers. I just think it’s important we ask the question.

    UPDATE: The FFA has responded to this article, pointing out a breakdown of funding costs can be found in their 2017 annual report.

    Mike Tuckerman
    Mike Tuckerman

    Mike Tuckerman is a Sydney-born journalist and lifelong football fan. After lengthy stints watching the beautiful game in Germany and Japan, he settled in Brisbane, and has been a leading Roar football columnist since December 2008.

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    The Crowd Says (146)

    • July 6th 2018 @ 8:51am
      MQ said | July 6th 2018 @ 8:51am | ! Report

      Coincidentally, as I mentioned on another thread, I stumbled across the FFA’s 2017 Annual Report last night.

      Annual operating revenue is up $2 mill to $105.6 mill and the operating surplus before distributions is up $2.7 mill to $32 mill.

      Curiously despite the broadcast deal increasing from $40 mill per annum to $57 mill per annum, the Financial Summary actually shows a decrease in broadcast revenue from $42.5 mill to $39.4 mill.

      • July 6th 2018 @ 9:21am
        Lionheart said | July 6th 2018 @ 9:21am | ! Report

        I dropped out of accountancy many years ago (merci mon Dieu), but see the attached Financial Report, which is the one you’re referring to I think, page 9 gives an Operating Loss (after expenses) of $335 mil. But I don’t understand financial reports.
        https://www.ffa.com.au/sites/ffa/files/2017-11/FFA%20Financial%20Report%20for%20the%20year%20ended%2030%20June%202017_0.pdf

        • Columnist

          July 6th 2018 @ 9:36am
          Mike Tuckerman said | July 6th 2018 @ 9:36am | ! Report

          FFA’s Head of Communications, John Kent, was good enough to send me the link to the annual report this morning. It’s worth noting that I’ve seen it before, and was responding mainly to the discussion that emerged this week around the cost of sending the Socceroos to the World Cup.

          • July 6th 2018 @ 9:45am
            MQ said | July 6th 2018 @ 9:45am | ! Report

            Understood, just thought it was timely.

            It sort of makes sense to me that the FFA would get very little change out of the $10 mill they receive for qualifying for the WC.

            We can debate whether $300,000 is too much to pay per player (around the average annual salary in the A-League), but that immediately chews up $7 mill. Another mill for Bert’s salary, and you have a couple of mill left over to pay for training camps and related expenses. If anything is left over, it’s no more than petty cash.

          • July 6th 2018 @ 9:46am
            Lionheart said | July 6th 2018 @ 9:46am | ! Report

            With you Mike, although the headline broadens the topic somewhat.
            I think Robbie Slater has a point worth debating. I recall similar points made in 2014, maybe 2010.
            I doubt the players would miss, say a 30% reduction. It’s all about the jersey after all. And the FFA will surely publish their own expenses, who went and how much, in the next financial report.

            • July 6th 2018 @ 10:14am
              Kris said | July 6th 2018 @ 10:14am | ! Report

              Did the players get $300k each as the article suggests, or has someone taken the total cost of the campaing (training camp, travel, security, accommodation, wages etc) and divided it by 25 players and come up with the $300k per player figure?

              • July 6th 2018 @ 11:13am
                Redondo said | July 6th 2018 @ 11:13am | ! Report

                Most likely the latter Kris.

                Strange that no journalist has clarified that point.

        • July 6th 2018 @ 9:41am
          MQ said | July 6th 2018 @ 9:41am | ! Report

          LH

          A small but important correction. That’s a loss of $335,000, not $335 mill (which would have made them insolvent overnight).

          That loss is after distributions to the clubs, it’s pretty small in the scheme of things (5% of net assets as they currently stand, and less than half a percent of operating revenue).

        • July 6th 2018 @ 9:41am
          Kris said | July 6th 2018 @ 9:41am | ! Report

          $335k loss not million. If they were losing $335m on income of $105m we would have cause for complaint 🙂

          • July 6th 2018 @ 9:48am
            Lionheart said | July 6th 2018 @ 9:48am | ! Report

            my bad – of course
            I did say I dropped out of accountancy, ever thankful for that

      • July 6th 2018 @ 10:43am
        Nemesis said | July 6th 2018 @ 10:43am | ! Report

        The FY2017 report will refer to the Year ending 30 June 2017.

        The new TV deal commenced on 1 July 2017.

        • July 6th 2018 @ 11:17am
          MQ said | July 6th 2018 @ 11:17am | ! Report

          Yes, I think that’s right.

          • July 6th 2018 @ 11:36am
            Nemesis said | July 6th 2018 @ 11:36am | ! Report

            Too bad for you, Grobbelaar/Mr AFL that I read the contents of your post. Normally, I’d just skip past since you write the same rubbish every day under different names for the pas 10 years.

            You need help. Why are you so miserable all day every day? Can’t you focus on the stuff you enjoy, rather than stuff you don’t enjoy?

            • July 6th 2018 @ 10:46pm
              Peter said | July 6th 2018 @ 10:46pm | ! Report

              You are in serious need of treatment for whatever ails you. You make a statement of fact, someone agrees with you and you abuse them for doing so. I assume you enjoy putting sh$t on people, since you do it so often to so little purpose.

              • July 7th 2018 @ 10:03am
                MQ said | July 7th 2018 @ 10:03am | ! Report

                Peter

                One comes across all sorts on these forums.

                I take the view it’s best to just ignore such individuals, and will now endeavour to do so.

    • July 6th 2018 @ 9:06am
      Conan said | July 6th 2018 @ 9:06am | ! Report

      A lot of the money is spent on admin and governance including gallop’s huge salary. Given the job gallop is doing his salary is an outrage.

      • July 6th 2018 @ 9:51am
        MQ said | July 6th 2018 @ 9:51am | ! Report

        Employee benefits increased by $3.2 million from 2016 to 2017, but it wouldn’t surprise me if a significant part of that increase was made up of redundancy payments (so the savings in downsizing will flow through in the ensuing years).

    • July 6th 2018 @ 10:00am
      BrainsTrust said | July 6th 2018 @ 10:00am | ! Report

      The Socceroos are paid extremely well per match, then ontop of that they get an additional share of the revenue so the money that was given to the FFA by FIFA a third is already in the pockets of the players. Then you have the expenses of all the players its going to be a lot more than any executives, and the coaches and support staff as well, and their wages on top of that. Remember a tennis player pays their coach and all their expenses not this lot. To qualify they use first class fares with physios for the players, and then even their own jet. That comes at a cost.
      If the Socceroos break even on their activities then who pays for all the other teams and their expenses, the womens and juniors teams that generate no revenue.
      The key to all this was Craig Foster, Mr PFA, the rise in revenue from the A-league , taking out the increased money given to clubs, has been counteracted with the Socceroos reduced revenue while expenses have risen. The W-league I think was started because of a government grant that is no longer given. So that is another big expense and the FFA cup thats another expense which they get nothing extra from as well.

    • July 6th 2018 @ 10:12am
      Nick Symonds said | July 6th 2018 @ 10:12am | ! Report

      Did the $300,000 per player figure include the equivalent of sending them around the world 6 times during the qualification campaign?

      • July 6th 2018 @ 12:08pm
        AGO74 said | July 6th 2018 @ 12:08pm | ! Report

        Not confirmed but I don’t think so. Based on above, 23 players at $300k is $7m give or take. I believe we got $12m for qualifying – yet we are only breaking even apparently overall. I’d suggest the other $5m of that $12m ( plus more $$$ when you include gate takings for home games etc) goes to the cost of the qualification path.

        I have read for previous World Cup campaigns that our players are amongst the highest paid.

      • July 6th 2018 @ 3:41pm
        BrainsTrust said | July 6th 2018 @ 3:41pm | ! Report

        The 300k is the bonus payment for making the world cup.
        Ontop of that is their match payments and the old payments were something 7000 a match each.
        so add up all the friendlies and qualifiers .
        Travel expenses are on top of that.
        So in a World cup year they would be earning about 450k a year and 150k other years.

    • July 6th 2018 @ 10:39am
      Nick Symonds said | July 6th 2018 @ 10:39am | ! Report

      “Is it any wonder, then, that expansion bids like Tasmania’s fall by the wayside when it’s understood Fox Sports’ preference is for the next two expansion clubs to come from a major metropolitan market in one of Australia’s three largest cities?”

      Metrics and ratings were probably what stopped it but the late announcement on the stadium wouldn’t of helped either.

      An ABC news report that came out on June 28 said that a government report found that Cornelian Bay was the best location for where to base a new 15,000-seat stadium. The report also found that the cost would come in at anywhere from $140-160 million, well above the $70 million cost put forward by Harry Stamoulis and Robert Belteky.

      The timing of the report’s release coming in after the initial deadline for bids to be submitted to FFA is extraordinary, as is the massive cost blowout.

      The government had plenty of time in advance to identify a site for the stadium and failed to do so before the initial deadline, to late for FFA to consider it properly. The cost blowout would also have likely put them off the idea. In short, the government squibbed it.

      http://www.abc.net.au/news/2018-06-28/tas-pitch-for-new-a-league-soccer-stadium-in-hobart/9915924

      Cornelian Bay looks like it would be a good spot for a three sided stadium like the one at Gosford, only smaller –

      http://www.abc.net.au/news/2018-06-28/drone-shot-of-cornelian-bay-soccer-fields.jpg/9916638

      http://icongosford.com.au/views.php

      Papa Murphy’s Park – Sacramento Republic FC

      11,569 seats – cost $5 million

      https://www.sacrepublicfc.com/papa-murphys-park

      Tasmania could buy one each for Hobart and Launceston for much less than $140-160 million.

      From the website –

      The approximately $5 million privately funded facility is a private-public collaboration among Spectra, Republic FC and Cal Expo. In addition to the soccer pitch, Papa Murphy’s Park features concessions, merchandise, VIP and field seating, state-of-the-art digital board, beer garden and activities for all ages.

      To-date, Papa Murphy’s Park has hosted a variety of prestigious international soccer teams, including C.D. Guadalajara (Chivas), Newcastle United and Rangers FC, as well as the United States, Samoa, Russia and Fiji men’s national rugby teams. Papa Murphy’s Park has also hosted performing artists such as Weezer, Panic! at the Disco and Lindsey Stirling.

      These types of events help make Sacramento a better place to live, work and play through music, sport and entertainment.

      • July 6th 2018 @ 11:21am
        MQ said | July 6th 2018 @ 11:21am | ! Report

        Even that estimated cost of $160 mill is probably optimistic.

      • July 6th 2018 @ 11:41am
        Mark said | July 6th 2018 @ 11:41am | ! Report

        I’ve said here before, you cannot simply take stadium construction costs overseas, convert them into AUD, and say that will be the construction cost here. Government approvals cost more here. Materials cost more here. Construction labour costs much more here, and is far less productive. I suspect the Tasmania bid team made this mistake, while the later report was much more realistic about the costs in the local market.

    • July 6th 2018 @ 10:41am
      Nemesis said | July 6th 2018 @ 10:41am | ! Report

      “I’m not for a second suggesting I have all the answers. I just think it’s important we ask the question.”

      Well, given you didn’t provide a single answer, that final sentence seems superfluous.

      People are kidding themselves if they think registration fees of: $12.50 moving up to $14.00 for juniors is outrageous; or $25 up to $33 for adults is over the top.

      Do you people actually spend money on anything?

      The cheapest daily return trip to the City on public transport in Victoria costs $8 for an adult. A beer costs $10. That’s one beer.

      And you think $14 ($33 for adults) for annual registration for football is excessive?

      The only excess in football are private fees charged by some – not all, but some – clubs. These fees have nothing to do with the FFA. The FFA could have $0 registration fees and those Private Clubs will still charge the same high prices.

      Why do private football clubs charge so much, when other sports do not?

      Because they can. Football is booming. People want to play. So, when demand exceeds supply, the rational supplier will raise prices as high as it can without reducing demand. Football clubs can keep increasing their annual fees because people want to play football.

      • Columnist

        July 6th 2018 @ 11:00am
        Mike Tuckerman said | July 6th 2018 @ 11:00am | ! Report

        And of course the “we” in that line was an obvious reference to you, Nemesis, since it’s hardly an official football discussion on The Roar until you throw in your two cents.

        • July 6th 2018 @ 11:18am
          Redondo said | July 6th 2018 @ 11:18am | ! Report

          Mike – perhaps you could address the perfectly valid point Nemesis makes.

          • Columnist

            July 6th 2018 @ 11:26am
            Mike Tuckerman said | July 6th 2018 @ 11:26am | ! Report

            Which point would that be?

            • July 6th 2018 @ 11:33am
              Nemesis said | July 6th 2018 @ 11:33am | ! Report

              The 3 most important points I raised for people who are slow.

              1) The FFA registration fee rise is insignificant and the actual fee after the rise is insignificant

              2) The only excessive cost facing grassroots football is AUS are the fees charged by some – not all, but some – private clubs. These private fees have nothing to do with the FFA. If the FFA fee is $0, the private clubs can still charge whatever they want

              3) The reason private clubs charge high fees is due to simple economics. A rational supplier will charge the highest price for services that it can without negatively impacting demand. Private football clubs can charge excessive fees because Football is popular & people would rather pay high fees to play football than pay small fees to pay RL, RU, AFL, Cricket.

            • July 6th 2018 @ 11:49am
              Redondo said | July 6th 2018 @ 11:49am | ! Report

              Thanks for clarifying Nemesis.

              Mike – there are undoubtedly many valid things ‘we’ could query about how the FFA manages the game, but the rego fee is not one of them.

              • Columnist

                July 6th 2018 @ 11:50am
                Mike Tuckerman said | July 6th 2018 @ 11:50am | ! Report

                The timing of it is, though, which is precisely why everyone from Craig Foster to Ray Gatt and Robbie Slater referenced it this week.

              • July 6th 2018 @ 3:39pm
                Brendo said | July 6th 2018 @ 3:39pm | ! Report

                So because they were lazy in their comments and outrage you thought to jump in as well?

              • Columnist

                July 6th 2018 @ 3:57pm
                Mike Tuckerman said | July 6th 2018 @ 3:57pm | ! Report

                No. What I thought I’d do is write a column that would generate the sort of discussion you’re commenting on right now.

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