A large number of football teams have “united” in their name.
This is no coincidence, and not just because Manchester United sounds a lot better than Manchester Divided (although that is the reality in this city when it comes to football loyalty).
It all comes back to the old adage: “United we stand, divided we fall.”
Given this, it may not be necessary to step back and question the wisdom of the separation of the A-League and Football Australia on New Year’s Eve 2020.
Like many things that happen on New Year’s Eve, it seems to have ended with a painful hangover and deep regret for many who took part.
Club owners and private equity funds are losing money
As a starting point, let’s take club owners.
Desperate to break free from Football Australia’s dominance, the owners were one of the driving forces behind the divorce, which, like most separations, was at times far from amicable.
But a combination of COVID, a broadcast deal with performance targets that weren’t met (partly because the broadcaster’s streaming service lacks basic user features that others have had for years), and the costly – and now largely abandoned – rollout of a multi-million dollar digital platform in the works have left the Australian Professional Leagues (APL), and the clubs that rely on them, in a massive financial hole.
The A-League Women’s competition has just recorded the highest attendance of any women’s sporting league in Australia. (AAP: James Gourley)
The owners are facing a central payout that could be as low as half a million dollars, roughly equivalent to the minimum player payments for their A-League women’s teams alone, and just a fifth of what they had originally expected.
The saving grace for some A-League teams – those savvy enough to have invested heavily in their youth academies – is a steady stream of homegrown talent being sold overseas for big money.
Sydney FC has broken its transfer record by selling academy product Jake Girdwood-Reich to a US Major League Soccer (MLS) team for at least $1.3 million, more than double what it can expect to get from its share of the broadcast deal.
Adelaide United starlet Nestory Irankunda left for Bayern Munich for a reported $1.75 million, while Melbourne City duo Jordan Bos and Marco Tilio both moved overseas for more than $2 million last year, breaking Australian transfer records.
Adelaide United’s Nestory Irankunda will join German giants Bayern Munich in a deal worth an initial $1.75 million, which could rise as his career develops. (AAP: Dan Himbrechts)
A-League clubs are estimated to have collectively raised around $15 million from player sales in a record year.
But, instead of being the cream that repays the owners’ colossal expenses, these player sales are increasingly the bread and butter that keeps clubs alive.
Private equity firm Silver Lake, which is certainly no stranger to football with its significant minority stake in City Football Group controlled by Abu Dhabi’s Sheikh Mansour bin Zayed Al Nahyan, bought a third of Australia’s professional leagues for $140 million in 2021.
This must be another rethink of his decision to attach himself to the APL, which bills itself as “a sports entertainment and media company that operates, markets and commercialises the men’s and women’s professional football competitions in Australia and New Zealand”.
The term “exploits” rings true: both the men’s and women’s leagues have been run and won every year under the control of the APL, but the terms “commercializes” and certainly “commercializes” seem much more dubious in a context of declining attendance (at least for the men) and mounting losses.
Australia emerged with the golden children
In the end, it looks like the winner of the divorce is Football Australia.
The Matildas have achieved the largest Australian broadcast audience for a single sporting event since the Sydney Olympics. (AAP: James Ross)
Australia’s historically maligned administrator of world football has taken sole custody of football’s golden boys, the Matildas and Socceroos, just before the latter two reached their peak performances on the world stage.
The Matildas, in particular, inspired the country with their run to the World Cup semi-finals on home soil, achieving the largest estimated broadcast audience for a single sporting event since Cathy Freeman won gold at the Sydney Olympics.
Australia will soon host the Women’s Asian Cup, with the Matildas as hot favourites.
While the appeal may not be World Cup-level, broadcasters expect bigger audiences and are willing to pay for them. Football Australia is set to receive $200 million over the next four years, mainly for the rights to broadcast Matildas and Socceroos games.
With the game split, the A-Leagues will not get their share of that money.
Could a second division team prop up a struggling A-League?
Instead, Football Australia is using some of the money to advance its plans to create a second-tier domestic professional league.
The ultimate goal is to build a stadium where the best teams at that level can be promoted to the A-League, while the elite’s laggards will have to earn a return to the top flight by playing in the second division.
Bruce Djite is a former Socceroo and A-League Mens player with a business degree who was director of football at Adelaide United and is now executive director of the Property Council of Australia.
He does not yet see the finances accumulating for promotion or relegation.
“If you look at MLS, they have (29 teams) now (and) still no promotion or relegation there,” he told ABC’s The Business program.
“So we’re a long way from that. And MLS is a very, very healthy league, with significant capital reserves coming from its ownership groups.”
But with the A-League and many of its clubs on the brink of financial viability, is there any chance that Football Australia’s creation of a second division could also serve as a safety net to ensure the continuation of a domestic professional competition if the APL collapses?
Djite doubts it, but believes the time for a meeting between Football Australia and the APL is fast approaching.
“Football Australia has never been stronger. The A-League has never been weaker.
“They have never been in such a precarious situation. We really need to do a lot of soul searching to get things back on track.”
“But in five years, if the game was operating as one game, I think it would be in the strongest possible position.”
APL finds itself in charge of football’s problem child
Professor Tim Harcourt, an economist at UTS who is writing a book called Footynomics and the Business of Sport, agrees that the sport’s greatest strength against its wealthier rivals – Australian rules football and rugby league – lies in its international teams.
“Australian football is strong because of the Matildas in particular and the Socceroos and the fact that it’s the world’s game,” he told The Business.
“Even rugby league and Aussie Rules fans will be behind the Matildas and Socceroos at the World Cup, so there’s still that international dimension.”
Another advantage of football over its competitors is the massive participation in all regions of the country.
As Harcourt, whose children play Australian rules football, noted in a recent Conversation article, nearly twice as many people play football than any other code.
And what organisation runs grassroots football? Football Australia or, more specifically, the state football associations that make it up.
That leaves the APL out in the cold with Australian football’s long-standing problem child, the domestic professional game.
The problem with football as a sport is that both ends of the pyramid actually need the professional game to at least survive, if not thrive, to continue to be successful.
While the Matildas and Socceroos are usually a source of inspiration, the A-League offers a realistic pathway for talented young Australians into professional football, without having to risk moving to Europe as a teenager.
It also gives young people the opportunity to see high-quality professional matches in person, experience the atmosphere and see football as something that doesn’t just happen on a screen.
Similarly, it would be a disaster for Football Australia to see the A-League disappear, instantly reducing the talent pool and high-quality training for the next generations of Matildas and Socceroos.
Instead of investing millions in a failing technology platform, perhaps the APL should have invested first and foremost in football boots on the pitch to win young hearts and minds.
“It really takes a concerted effort from all the A-League clubs, as well as the players, to really get a foothold at grassroots level and in schools,” Djite says.
Harcourt says the Swans visit his children’s school about four times a year, the Roosters once or twice. Sydney FC? Never.
Some free marketing advice for the APL: If you can get kids to attend games, their parents will have to attend too.
This is what economists call a multiplier effect.
