Welcome to Western Sydney Business Access

 fb tw yt in 

Sydney A-League. Sydney A-League. Featured
15 February 2017 Posted by 

A-LEAGUE EXPANSION OPTIONS

Which region will be successful?

By Theo Fotopoulos

FOOTBALL Federation Australia (FFA) confirmed a new Hyundai A-League broadcast deal with Fox Sports in December.

The new broadcast rights excluded a Free To Air component which will be negotiated in early 2017 and the new arrangement has flexibility for a 12 team competition.

A-League expansion continues to be talked about around Australia, as well as New Zealand and the FFA will issue new A-League expansion criteria in the first half of 2017.

Many regions around the country, as showcased by the breadth and success of the FFA Cup are in the process of formalising official bids in time for the new FFA A-League expansion team criteria, expected by early 2017 according to newly appointed Hyundai A-League boss, Greg O'Rourke (previously, Chairman of Football NSW).

Who are the likely two bids that may receive support from the FFA for inclusion in 2018-19 Season?

There have been many for and against arguments about the ideal number of teams for expansion, 12, 14, 16 or 18 which will be subject to the depth of the FFA led broadcast deal or other investment.

Front-runners at this very early stage, favour a “super club” operating in Sydney’s St. George, Sutherland and the Illawarra, similar to the FFA inspired Western Sydney Wanderers

FC which was eventually sold to the Paul Lederer (former Primo Smallgoods owner, nephew of the great football pioneer, Andrew Lederer who was part of former NSL Club, Sydney City/Hakoah)

Alternatively, should the FFA consider new start up bids or favour more iconic, historical and former National Soccer League clubs (current League Clubs that were former NSL Clubs include, Perth Glory, Newcastle United and Adelaide United), like a revitalised, South Melbourne FC which has many criteria already in place and a massive Victorian and national following.

Current and future sustainability is key for A-League growth, both from TV and other forms of commercial revenue which would provide a base for profitable club/franchise organisations with world-best management (eg. FFA Cup winners, Melbourne City FC are owned by the global City Football Group). The stakes are high, with many opinions favouring Clubs in major markets (1M+ population) which may reduce chances of a Canberra/ACT II bid for example being considered, however it will depend on which criteria are issued at the time.

Which A-League Bid and region would you consider?

AUSTRALIA
NSW
• Sutherland Shire (Stand-alone).
• Southern Sydney-NSW (St George, Sutherland, Illawarra).
• South Coast/Illawarra (Stand-alone, Football South Coast backing).
• Wollongong Wolves (NPL 1).
• Northern Sydney – (North Sydney CBD/Chatswood/Manly).
• Campbelltown – (Camden/Mittagong).
• Liverpool.
• Penrith - Nepean/Blue Mountains.
• Albury-Wodonga/NSW-VIC.
ACT
Canberra/ACT/Queanbeyan.
QUEENSLAND
• Ipswich
• Brisbane Strikers (NPL1/Former NSL).
• Brisbane/Ipswich (Combined Bid).
• Gold Coast City/SE Queensland.
• Northern Queensland/Townsville/Rockhampton.
TASMANIA
• Tasmania United (Hobart, Launceston, Devonport).
SOUTH AUSTRALIA
• Adelaide City (NPL1, Former NSL).
• West Adelaide (NPL 1, Former NSL).
• Port Adelaide.
WESTERN AUSTRALIA
• Perth (Football West).
• Freemantle.
VICTORIA
• South Melbourne FC (NPL 1/Former NSL).
• South East Melbourne/Casey-Dandenong (Combined NPL 1 Teams, potentially backed by; Dandenong City, Dandenong Thunder, Springvale White Eagles, South Springvale, Berwick City and Casey Comets).
• North Melbourne.
• Geelong (Southern Victoria).
• Bendigo.
NORTHERN TERRITORY
• Darwin/NT (Top End).
NEW ZEALAND
• Auckland City (FIFA Club World Cup regular, NZ National League).
• Christchurch.
ASIA/PACIFIC
• Singapore.
• Jakarta/Bali (Indonesia).
• Hawaii (USA).
• Port Moresby (PNG).
• New Calendonia.

Aside from criteria and metrics to be established by the FFA and external consultants, there are other issues facing new A-League Clubs.
Viability of New A-League Clubs

Critical to the success of new franchises will be financial sustainability (remember Gold Coast United and North Queensland Fury) in a small marketplace by global football standards, with the lower end of the A-League operating investment required per annum at around $11M upwards to run a professional team in 2016 compared to $2M-$3M per annum under the former semi-professional National Soccer League model.

The bulk of A-League Clubs, although improving their financial bottom line continue to carry deficits which require support from their ownership consortia and some support from the FFA via the TV subsidy which contributes to player payments. Alternate income streams is key to developing non-broadcast/FFA revenue, with some great models operating in Germany and other parts of the world.

A-League Clubs can operate profitably without massive dependency on broadcast revenues, this can be achieved through innovation, greater fan engagement, enhanced entertainment value, wide community engagement and extending Club traditional footprints. In the US, some Minor Baseball League teams outperform Major League Baseball teams in terms of sustainability and crowds.

The Major League Soccer (MLS) in the US, commenced on similar grounds in 1993, with a different model of single ownership and eventually stadium ownership for many franchises which have now evolved into sold out spectator arenas, tech savvy media (MLSNet/mls.com), free to air TV (ABC Disney) cable (ESPN, Spanish language media) and Club franchise value growing from $6M for the San Jose Earthquakes in the early 2000s to over $200M with a league composed of 20 teams, 17 from US and 3 from Canada.

Key to further success for the A-League is sold out stadia, sophisticated season membership, evolving entertainment value for younger fans, families, women and the non-football community inspired by the unique fan passion that the A-League brings, increased marketing investment across the board, greater community engagement, increased ticket/group ticket sellers/agents/community club packages as well stronger connectivity with business and corporate partners.

Greater use of global benchmarking against the best Clubs in the world will assist in identifying areas that A-League Clubs can continue to improve in terms of new revenue opportunities, enhanced fan experience and greater investment, eg. St Pauli in Germany, a small Club but an innovator in corporate partner support in the Bundesliga
A-League Expansion in Oceania and SE Asia

Australia left Oceania to join The AFC, Asian Football Confederation, in a fast-growing global region for football with many potential new markets available that could create a Super Rugby like competition subject to FIFA/AFC views, by including more teams from NZ, SE Asia and the Pacific and establishing further Australian-APAC opportunities.

After the fan/community/Club driven "Save The Nix campaign, Wellington Phoenix is safe for now according to FFA, however greater focus on investment, corporate partners and marketing contribution to the rest of the A-League will help accelerate interest in a second team in thriving Auckland (this would be the second time around after the eventual collapse of the Football Kingz, also known as Auckland Kingz/Auckland Knights in the former National Soccer League/NSL).

The Nix, need to evolve and develop greater engagement with the local fan base, at least 10,000 to 15,000 crowds are needed to build break-even sustainability long-term as well a greater TV (Sky TV and other networks) and commercial revenue from New Zealand which in turn will provide a better dividend and fan base to the whole A-League.
Improving A-League Football with more inclusive and diverse Pathways

Although the quality of football entertainment is improving, the quality of players coming through the established pathway systems needs to improve by international standards (eg, lack of success for Australian youth teams in Asia and elsewhere).

The pathways to the A-League are underlined by a national user pay model for aspiring youth which is slowing the identification of Australia’s next Kewell, Viduka or Vieri due to increased costs for 13-18 year olds rising to over $2,500-$3,500 per player annually in NPL (National Premier League) systems.

There are a couple of exceptions including NSW’s NPL Dunbar Rovers FC which is a no-fee NPL Youth structure due to efforts by their Committee to raise over $250k pa as one example and the other is Association-based community amateur Clubs that are recreating similar and alternate environments for players and families that may not be in a position to invest in a pay-based fee system.

Australian Football Next

As fans of the world game, we look forward collectively what the next phase of growth will bring, hopefully greater sustainability of the A-League, and A2 national competition, revitalised National Premier Leagues, continued growth of the FFA Cup (possibly a second League Cup) and re-investment to all tiers of football, in particular community football (increased coaching support, front office and marketing, digital integration to each Club and overall growth in participation numbers).

Expanding the A-League Club reach into other forms of football is also another way to grow sustainability with other brand extensions to the current A-League Club/W-League/NPL/Wheelchair model. The extended Club could incorporate Women's Youth League, Indoor Soccer/Futsal (F-League and NPL Premier/State League) and well established global phenomena of street football and beach/sand soccer which are all part of the FIFA football product range.

These other forms of football will help improve the qualities and attributes of Australian footballers, including the influence of futsal on 11v11 football which has created the skills of Brazilian football, advocated by the late Johnny Warren, former Captain Socceroo and an advocate to win the FIFA World Cup.
Promotion & Relegation: When?

In addition, A-League promotion and relegation within a ten-year period is also a worthy goal to prepare a second tier for broadcast friendly opportunities similar to the English Premier League which supports large success fees (over 150M+ pounds) for teams that are promoted, this will only be possible if all three tiers are recharged with greater investment, models of whole of game revenue share and improved stadia/infrastructure facilities as part of a National Plan.

The "A2" - A New National League

An A2-National League is possible now, based on historical evidence and current community interest, however the national second tier would be based on a different operational and cost model to the A-League, more like a semi-professional League above the National Premier Leagues (NPL), perhaps a $2M cap per annum as a starting point. The A2 would need a broadcast partner (Fox Sports model, SBS. ABC, Optus, Twitter, Digital broadcasters, eg. ESPN Streaming), centralised marketing, membership and fan engagement programs, airline/travel partner, strong fan/community backing and at least 12-14 sustainable teams in Year One of the competition.

The establishment of a new second tier below the A-League would form the platform to build towards future promotion and relegation opportunities within 10 years. A2 Teams will have time to prepare for potential A-League positions and bids, which would mean a jump from $2M budget annually to $10-$12M subject to promotion success fees provided. A long-term goal requiring an effective business case to help Clubs below the A-League bring the vision of promotion and relegation to fruition.

In the meantime, bring on the new A-League teams!

Theo Fotopoulos is a Marketing Strategist + Group CEO, FOS Group Australia – Sports & Entertainment Advisory and founder of Australian Football (Soccer) LinkedIn Group, with over 14k+ B2B football professional members, the largest in Australia and APAC

 



editor

Publisher and editor, Michael Walls.
Mobile: 0407 783 413
Email: info@wsba.com.au
Mail: PO Box 186, Kurrajong NSW 2758
Office phone: 61 2 4572 2336

Western Sydney Business Access (WSBA) covers the business and community issues of the Greater Western Sydney region of Australia. WSBA is the popular media source for connecting with the pulse of the region and tapping into it's vast opportunities and networks.