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Opinion

Equal pay could lead the FFA into a crisis

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Roar Rookie
15th December, 2019
8

Football Federation Australia (FFA) is on dangerous ground.

I know that sounds like an extreme statement to make, but recent events involving the FFA and football in general are leading the FFA into a concerning position. We may be witnessing a grand reformation of football in this country.

A landmark new collective bargaining agreement (CBA) was announced by the FFA in November. The deal pledges equal payment for the Matildas and the Socceroos. The prize money earnt by both teams will be pooled together and 24 per cent of the funds will be distributed equally between the players. This total increases by 1 per cent each year until 2023.

I assume this decision was influenced by the outroar coming out of the 2019 FIFA Women’s World Cup in regards to the salaries of female footballers. There’s also obviously a desire to continue the perceived success of women’s football in Australia.

Unfortunately the differences between economic behaviour and the expectations of proponents of ‘equal pay for equal play’ – including some media outlets – means that there are enormous risks associated with the new stance of the FFA.

Matildas Football 2017

(AP Photo/Ted S. Warren)

The main problem with equal pay for the sake of equal pay can be better understood when viewing the Matildas as a completely separate entity. In 2018-19 they brought in only 35 per cent of the ticket sales the Socceroos did. This does not represent total revenue, but it does give an indication. If they bring in poor revenue, there is no way to pay the players higher salaries without a huge grant or subsidy.

This isn’t a revolutionary idea. Revenue has to stimulate the FFA payment model, and that is why one might assume the pooled prize money plan in the new CBA is not inspired by the demand for equity alone but also by a need to impress the people and organisations that have been demanding equal pay.

Unfortunately the increased expense and the current state of the FFA can easily limit the effectiveness of the benefits from the new agreement.

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The table below displays both the profits and the approximate profit margins of the FFA in financial years since 2008-09. The figures are taken from the FFA’s financial reports and the 2019 annual review. The figures are telling us the FFA’s profits are low for their level of operation.

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Profit ($’000) 3434 -5784 -891 1454 785 7260 259 -387 -335 -126 433
Profit margin (per cent) 3.91 -6.3 -1.12 1.89 0.92 5.73 0.16 -0.37 -0.32 -0.1 0.33

There’s no reason to fault the FFA just because there are a couple of yearly losses, but let’s consider that the top-tier Matildas will each see an annual increase of around $30,000. That significantly cuts into the expected profits, not to mention the other perks such as business class flights. It is not just a case of paying the Matildas money they might not deserve; it is also a case of paying the Matildas money the FFA does not have.

It’s necessary to look at the other part of the agreement. If the new agreement does not significantly cut the salaries of the Socceroos, there is a risk of insolvency. If it does have to cut the salaries significantly, there becomes a huge risk of conflict between the FFA and the Socceroos, who would be paid peanuts considering what they generate and what they have to commit.

Such an unstable environment would theoretically lead to worse on-field performances, including in their World Cup and Asian Cup campaigns. Less revenue would be brought in, leading to less paid to male and female players. There would then have to be hefty restructuring, which might result in the neglect of grassroots football.

It is clear the money involved in this CBA has to take the form of an investment into women’s football. However, the FFA will probably struggle to bring in investment-like growth through this agreement.

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One area of perceived growth would be in the broadcasting of women’s football. Broadcasting revenue represented about half of the FFA’s total revenue in the recent financial year, as per the FFA’s annual report. However, broadcasting relates to the ‘attractiveness’ of the product, which does not rely on how much the players are paid. Therefore there would be no change.

Participation rates are also a point of focus for the growth of women’s football. The same could be said for many facets of women’s sport. But the money professional footballers earn is not what attracts young kids to the sport for the first time. I for one am grateful for that.

Using money to market the game means the future Matildas team will be made up of people who started playing football at a more mature age and are majorly driven by money. This is not a recipe for success. It would be a horrible tarnish on the outlook of sport in Australia.

The Matildas score a goal against Brazil at the Tournament of Nations

(AP Photo/Mark J. Terrill)

The next pertinent revenue source is sponsorships. It’s hard to see how the amount players are paid affects marketing revenue. But the FFA bring another factor into consideration: they are pledging to negotiate with their current sponsors to ensure the Matildas have performance bonuses brought to the same level as the Socceroos. This has been stated by Professional Footballers Australia (PFA) in the CBA fact sheet. However, it does not say the Socceroos bonuses will be reduced, meaning the equality of bonuses will come from an increase to the Matildas bonuses.

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Why is this a problem? Because now the potential scenario is this: the organisation with known short-term financial struggles is trying to charge other businesses more money because of a concept some businesses may not support. I think most people can see how that type of negotiation may end up for the FFA.

The only reasonable source of increased revenue through the new CBA would be through outside grants. Outside commissions would be expected to pay more to the FFA because of their support for equal pay. The FFA could then invest in the game while still paying more in salaries. However, if all associated commissions were in support of equal pay, why have they not given funding to sports organisations to ensure equal pay in the first place? Either they don’t support it or they face financial restrictions. This extends to the federal government, who are also a source of funding for the FFA and who already committed to a large investment in April this year.

To warrant equal pay women’s football needs long-term growth coming from investment. The new CBA does not allow for that, even with the added commitment to youth national teams. Without coinciding junior-level investment the talent pool coming into professional football would be restricted because of the difference in talent between players in junior national teams and players not in them. There would be a heavy reliance on these junior prodigies, and the lack of selection competition might not stimulate their performance as much as possible. The attractiveness of women’s football might not increase as intended.

There certainly should not be a slamming of the Matildas just because they are asking for more money. If they are asked for a professional commitment, they should have a salary that ensures they can look after themselves. But their pleas for equal pay are not going to be for the betterment of the FFA, partly because of the position the FFA finds themselves in.

Aside from the business of the agreement, the on-field performance of the Matildas plays a big role. Therefore we should all hope that the Matildas can continue to go out on the pitch and make Australia proud.

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