The collapse of Ceres-Negros, the most successful and well-supported team in the Philippines, is a direct result of the economic impact of COVID-19.
They have company, as clubs across the confederation collapse, including 11 in China alone. Yet the pain and uncertainty created by the pandemic may be exactly what football in much of Asia desperately needs.
For years the AFC has relentlessly pursued a strategy centred upon club structures. Licensing for AFC competitions has hinged upon football clubs meeting tightly defined benchmarks, from the minimum number of underage teams through to the quality of stadiums.
These requirements have in turn been promoted and at times enforced by national federations.
This approach saw an immediate lift in the standard of the game but has also left adrift those pursuing alternative approaches to the AFC model. Clubs that are part of a holistic provincial football structure, with local clubs developing youth and the professional club acting as a ‘finishing school’, have been forced to undermine their own provincial structures in order to attain an AFC licence.
(Gene Sweeney Jr/Getty Images)
This is an issue faced even in Australia. Adelaide United, a club whose reliance upon SANPL club youth development resulted in a swathe of promising talent, can only attain an AFC license by undermining that very same development structure with the introduction of underage teams.
The focus on structural aspects meant clubs with easier access to capital were better able to meet licensing requirements. In Asia, this has seen the favouring of clubs with single wealthy owners over those who pursue a more diverse corporate governance strategy.
This reliance upon wealthy owners resulted in a raft of governance issues. Most owners have a high level of passion but constantly involve themselves in the management of the squad, undermining coaching staff and on-field leaders. Many have uncertain cash flows, resulting in delayed payments, ad hoc approaches to development and limited long-term planning.
Clubs that rely heavily on single owners have less incentive to engage the fan-base and broader community to enhance revenues and generate enthusiasm for the local product. This created a gap in local talent identification and development.
The single-owner corporate model that delivered the rapid rise of football across second and third-tier footballing nations has become the very reason for stagnation in these very same countries.
The AFC has an opportunity to address this issue.
The COVID-19 pandemic has created an unprecedented strain upon economies across the entire confederation. Owners are far more amenable to improving club internal governance, diversifying revenue bases and reaching out to the community.
A change in focus of AFC licences away from formulaic club structures and towards corporate governance approaches would help break the governance glass ceiling that has held back far too many national leagues. It would allow clubs to better adapt their structure to each club’s unique environment, improving the efficacy of development while improving club sustainability.
COVID-19 presents unprecedented challenges for Asian football. It also presents an unprecedented opportunity. The AFC need to take it.
Roberto Bettega
Roar Rookie
There are a long list of terrible owners beyond just Charlesworth and Tinkler. The thing about the single owner is that, well, it is at the behest of one man (and it's always a man). In the case of the A-League, its' one man owning the license. The club doesn't own the license, and without that license (owned by one man), there is no club to speak of. That's kinda the point.
AGO74
Guest
Single owner clubs aren't necessarily a bad thing. I'd say a large part of Sydney FC's success has come through its owner not being too hands on and ensuring that he employs the right people to deliver success. Tony Sage via Perth Glory, whilst not as successful as Sydney FC - and arguably a little more eccentric - I'd say has also provided more positives than negatives as an owner. That said, we've seen some poor owners such as Charlesworth and Tinkler. Ideally fans would like to be part-owners such as a Barca or numerous Bundesliga clubs - but the reality is most clubs around the world have to operate on the basis of sole or joint ownership amongst a handful of people. Ultimately if a club is successful such as Sydney FC most fans won't really care if it is owned by an individual or a community....
chris
Guest
Ben "house of cards" is an apt description. Apart from a few outliers (Messi, Ronaldo, Neymar) there are few footballers that should be commanding the types of salaries they are getting. Like CEO's of present day corporations, they believe being paid 10-15 million per season is par for the course.
Ben of Phnom Penh
Roar Guru
Rich single owners certainly have contributed to rapid player wage inflation, but so too state-linked investment funds, most notably from the Gulf States, where investment has geo-political push factors. This pursuit of success through heavy investment has created something of a house of cards, as seen with the collapse of eleven Chinese clubs over the past 6 months, as well as the reluctance of the English FA to condone the Saudi investment in Newcastle. "Sports washing" has entered the lexicon. As you noted, COVID-19 is already forcing a rethink. I dare say the correction has only just begun and will pick up pace as television & IP rights are up for negotiation.
chris
Guest
What Covid has bought is a correction to the market. Player payments for example have become so grossly distorted it had to burst. Rich single owners using the clubs as play things and closely tied to their success or failures depending on how the owners business affairs were going. The US has had this model since way back when. Moving clubs (franchises!) to different cities and ripping the soul out of their supporters. Hopefully we will get back to a more sustainable model where the fortunes of a club aren't tied to the whims and fortunes of one person/organisation.
Ben of Phnom Penh
Roar Guru
It raises an interesting question in relation to longer term planning and club resilience. Whilst a single owner can provide the large cash injections so many fans crave, something local conglomerates often fail to muster, all the financial eggs are in one basket. This effects long-term planning as single owners have visions they want implemented. When owners change, so do the plans. A conglomerate has smaller members coming and going which allows for greater long-term consistency. The main problem is the inflexibility of the current A-League licensing which places a heavy expenditure requirement on clubs, a financial burden than many conglomerates struggle to meet over the long term. Once again licensing promotes riskier ownership structures, something that was fine in the times of largess when the model was developed but less appropriate for the uncertain economic conditions we now face.
Coastyboi
Guest
A thoughtful, well-written piece, on a complex topic. “Clubs that rely heavily on single owners have less incentive to engage the fan-base and broader community to enhance revenues and generate enthusiasm for the local product.” Food for thought, especially since Central Coast Mariners are now on the market. I am wondering if a multi-millionaire playboy will buy the club, or, will it be divided between a series of local businesses & shared by the community?
Ben of Phnom Penh
Roar Guru
One part of the problem is the AFC licensing which focuses on what clubs look like as opposed to how they are run. Promoting good corporate governance and allowing flexibility in club structures would be a good start.
Rodger King
Roar Rookie
A good article Ben. Interesting topic. Single owner clubs vs community based clubs, rich vs poor. For the life of me, I can't see why some one hasn't come up with a combination that works for both parties.
Ben of Phnom Penh
Roar Guru
Single-owner clubs have a place, the problem is the corporate culture that has evolved around many of them which has increased their off-field risk profile whilst limiting their on-field evolution. It varies somewhat as owners have established clubs with different motivations, most of them well intended. Problems arise when they have both autocratic management styles coupled with emotional attachment to the clubs, a common theme in SE Asia. The collapse of clubs in China is staggering, with 2018 ACL quarterfinalists Tianjin Taihan and 1990 Asia CLub Championship winner Liaoning both folding. Many clubs were back partly for political purposes and the resulting over-capitalisation left them highly exposed. As they say, it is when the tide goes out you find who has been swimming naked.
Roberto Bettega
Roar Rookie
Intelligent article, interesting topic. I'm a bit like the writer, I dislike the preponderance of single-owner "clubs". It's not a coincidence that the golden generation was produced during the NSL era. All those clubs were broke, but they were real football clubs with real football culture.