One of the criticisms levelled at expansion clubs Western United and Macarthur Bulls was they bought their way into the A-League. The phrase ‘franchise clubs’ has been bandied about.
While both clubs did pay licence fees to FA to get in, the amounts were not as much as people think. The figures released publicly were said to create an ‘optical illusion’ to make FA’s books look better than they were at the time.
Western United paid $18 million up front to get into the A-League in 2019-20, while the Bulls were set to pay $12 million for their entrance in 2020-21. However, United were apparently due to receive back $14.5 million of their $18 million fee, in instalments between 2018 and 2022, while the Bulls were to get back $9.75 million.
The net amount received by FA was therefore said to be only $3.5 million and $2.25 million, respectively.
For Western United, the remaining $14.5 million paid in advance was in effect a security deposit, to ensure the club could survive without receiving broadcast money from the previous Foxtel deal that existed prior to COVID.
The ten existing clubs were assured that any two expansion clubs that came in would not receive any of the $346 million six-year broadcast deal signed in 2016 by the FA with Foxtel.
With the Bulls, according to a club insider, their $12 million fee to FA was broken up into a $2 million initial payment plus two annual payments of $3.5 million, and a final payment of $3 million. The Bulls in turn were apparently then going to receive $9.75m back from the FFA by 2022, broken up into three payments of $3.25m.
The $9.75m flashback was again framed as a form of financial security, similar to Western United’s deal. The only difference is, the annual payments from the Bulls were then received back throughout the year they paid, allowing FA to have short-term working capital.
(Photo by Mark Evans/Getty Images)
A close look at FA’s balance sheets in 2019 and 2020 shows the Western United amounts sitting in contract liabilities.
The Macarthur FC amounts won’t feature prominently in the financials, partly due to the terms of their arrangement and also because ultimately they didn’t pay all their licence fees after COVID struck, with the Bulls attempting to renegotiate the terms of their deal to reflect the economic climate at the time.
With the unbundling of the A-Leagues from FA in 2021, the financial landscape has now changed. There is no indication from the APL, who now govern the A-Leagues, as to how much they would charge a new club for entering into the APL arrangement.
The APL was valued at $425 million based on the recent equity deal with Silver Lake. Silver Lake have a $140 million stake, while Viacom and FA have their own minor stakes. It is unclear if FA’s is an equity stake, since the terms of the independence deal were kept in commercial confidence.
A rough ballpark figure is that each of the 12 clubs have around a $20 million stake if looking at it from a simplified point of view.
Time will tell how expansion of the A-Leagues will work and how lucrative it actually will be for the APL. But with Silver Lake and Viacom buying in, things look different to when FA was in charge.
At work
Roar Rookie
This is the point that many ignore, a N2D would be combining most of the the best NPL players into a small number of teams, instead of the current huge spread that we see in the NPL state leagues
A-League Fan
Guest
If A League club spends $15M while npl club spends say $1k a game at 20 players times 20 rounds so say $500k, let's say $1M. That's still less than 10% of the budget so there shouldn't be any cupsets and ffa cup games should be 10.0 wins not 1.0 wins. Now if the same npl spends $2.5m to $5m than surely there will be more cupsets.
Rodger King
Roar Rookie
You raise an interesting point, re Entertainment value and the Quality on the park. I can be totally entertained by watching a team I am invested emotionally in [AUFC] regardless of how they play and then by the same token, turned off the Leeds vs Burnley game the other night as 'boring as bat s*** . So depending on how you feel about the two teams playing, whether you see the plus's or minus's of both games.
Roberto Bettega
Roar Rookie
Roar vs Mariners postponed
TheSecretScout
Roar Guru
a solid striker, but not consistently prolific like pengelly
Waz
Roar Rookie
Lions already have the best Striker in QLD - Joe Duckworth!
Nick Symonds
Guest
NPL vs A-LEAGUE vs NSD Keep in mind that the current gap between the NPL and AL is larger than AL vs NSD. The talent pool below the AL is currently split among 90 clubs in 8 divisions whereas a NSD would have a much smaller number of teams in just 1 division.
TheSecretScout
Roar Guru
asking price is 20 million for adelaide united. 3 different consortiums interested - 2 bids of 12 and 14 million have been rejected so far
TheSecretScout
Roar Guru
every team needs a 20+ goal a season striker, especially one that used to be a juniors player at the club
Waz
Roar Rookie
Clubs are like any business, they only have two valuations: 1/ An insured value to cover losses in the event of a disaster. 2/ The value someone else is prepared to pay to buy the club - only valid on the day of transaction and not indicative of current or future value.
Waz
Roar Rookie
Lions didn’t need him Andy, it’s one of those signings that weakens your opposition more than strengthening Lions lol.
Janakan Seemampillai
Roar Guru
Cup upsets should not be used as evidence as they are an aberration. Common sense should be the evidence. Full time footballers in far better facilities than NPL players will win more often than not. My point is, the discussion here is how some NSD clubs could compete at a league level. And use cup upsets as an example Don’t think so. The biggest argument saying an NSD is sustainable is the fact it’s cheaper. How can cheaper be better in terms of quality?
TheSecretScout
Roar Guru
power will be losing that claim now that my boy, pengelly has returned home to lions!!! lol
Nicko
Guest
What about the value of existing clubs? What are they worth in today's market? It's obvious Adelaide United are up for sale and as such have pretty much given up on this season when you see they have released probably their most consistent player over the last 3 years in Ben Halloran (did they sell him?) and are about to sell their Captain Stefan Mauk to a J League club.
Jordan Sports Fan
Roar Rookie
Wait what? Waz uses the Roar v Power and Roar v Lions games as examples which according to you is “spot on” but then in the same sentence you say results in cup games should not be used as evidence of NPL teams ability to compete? I guess perhaps I should have used the word entertainment instead of quality. There is a huge noticeable gap in quality thus entertainment between PL and AL. Hell, there is a big quality/entertainment gap between MLS and AL. However, I don’t see that gap as being so big between AL and a proposed 2nd div as it currently is between say MLS (let alone PL) and AL is all I meant. I like AL mostly because it’s my local team more so than because it is a top quality entertaining league (although it of course has it moments) . I believe I could get that local flavour that appeals to me from a 2nd division, and the drop off in quality and entertainment from the AL would not be significant to me personally. Free to disagree of course.
Jordan Sports Fan
Roar Rookie
Yes, and APIA beat WSW. And then CCM beat APIA. Any given Wednesday as they say in the NFL. Roar did bring it on the day in both of those games but on balance I don't look at them play week in week out and see immense quality there as a spectator. Remember how dire the WU game was?
Brainstrust
Roar Rookie
We were told there was a clause in the deal with Foxtel that expansion would mean Foxtel pays extra money. Foxtel made it so they had to be Sydney and Melbourne teams. So I assume then they would have been license fees originally, then they got converted to tv money payments because they not only didnt get the extra money from Foxtel they ended up with even less than the original deal, and the other clubs didnt want to share that revenue.
Janakan Seemampillai
Roar Guru
The Bulls are planning on building facilities in the Macarthur Region to the tune of nearly $40M, they will be community assets if and when they are complete. Their owners also have property investments in the region.
Janakan Seemampillai
Roar Guru
Spot on. This myth that NPL clubs can compete regularly with A-League clubs is hilarious based on a handful of Cup upsets.
brookvalesouth
Roar Rookie
WU exist to sell real estate, while I am not sure what the Bulls exist for?