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A League ring fences itself from PFA battle with clubs

Furlough, furlough, furlough. This year, at the current rate, nobody is going to Istanbul. Football remains on ice. Australia, despite having one of the lowest testing and mortality rates is no exception.

In mid March plans were in motion to move all fixtures to the state of New South Wales, isolate players and finish the season behind closed doors. It was a solution driven by the FFA in a bid to complete the campaign, satisfy TV commitments and keep players in jobs.

It wasn’t to be and now the A League finds itself grounded, along with most other sporting codes. Only horse racing, an industry that generates over $9bn for the economy has found itself exempt. By the first week of April, eight A League clubs had stood players down and legal action was underway in a dispute between the clubs and the PFA.

The complications of halting seasons without conclusion has posed a head scratcher the world over. In Europe there is the added complexity of UEFA’s position - that ending seasons prematurely may affect future Champions League qualifications.

In the UK the game itself became a political football as fingers were pointed in all directions, questioning how the game itself should be taking responsibility for the dystopian situation we all find ourselves in. Fundamentally it shouldn’t, but it can help.

A four way battle between UK Health Secretary Matt Hancock and the government, Gordon Taylor and the PFA, the Premier League and top flight players themselves became messier than the inside of the Old Trafford tunnel post ‘pizza-gate.’

We look to be heading towards some common ground now - Jordan Henderson, a captain of captains. Marcus Rashford, feeding the 100,000. The list goes on, whilst players move closer to deferrals or wage reductions to help the cause.

The situation Down Under has unfolded in a different way though. An eleven team league with no relegation or promotion, and an average player salary of around $180,000 (£90,000) is bound to. It’s not a figure to be sniffed at, but in context the average house price in Australia is 16 times the average salary versus around seven times in the UK.

The game just doesn’t have the slush funds of their Premier League counterparts. That in itself isn’t a shock or a surprise - ‘soccer’ in Australia can’t even play second fiddle on the fans sporting ladder. Australian Rules, both codes of Rugby, the shorter form of cricket all pull bigger crowds and wider TV audiences.

The Aussie game has been franchised and white washed within an inch of its life over the last few years - the days of South Melbourne Hellas and Brunswick Juventus are long gone. The stadiums for hire model (which these smaller clubs are forced towards) has created a game that lacks the passion and atmosphere it once did as half empty grounds have their capacities made up by seagulls and pigeons that help the cleaners clear the stands of abandoned chips.

Just look at Tottenham and West Ham. There’s more that separates them than 10 miles and Markhouse Road. The clubs average either side of 58,000 attendance so why does one have the eighth highest revenue in Europe, the other eighteenth? Ownership of the stadium plays a massive role.

Spurs collect significantly higher matchday revenue and have greater control over commercial incomes through owning their manor.

In Australia the cities and state governments (who own the stadiums) realise a large portion of this income. The slice of the pie for the clubs is slender.

As the teams lease venues to play, a membership model helps support overheads. Melbourne Victory (with the highest members, 23,633 and one of four clubs to continue paying staff) have the revenue obliging them to file, and often turn a profit. Glory, in contrast, have 10,278 members.

One of the first clubs stand players down was Perth Glory. Chariman Tony Sage, up until earlier this year, was the league’s only solo owner (he began selling a stake to the Football Exchange).

Despite putting in over $30m of his own money, the return hasn’t been fantastic. The reporting threshold for businesses means most clubs don’t file accounts but it is understood most make a loss. As such it was a move Sage felt forced in to, but it drew angst from the PFA.

In response to the stand down the PFA released the following statement in late March. “A fortnight ago, it was fine to relocate players to the east coast away from their families and expose them to a global pandemic. Now, when the opportunity arises, it is considered acceptable to stop paying them. These are not the traits of a sport that values its people.”

Quite right. They are the traits and values of the business minded. The solution to move games was arguably straw clutching. Before the wheels could be set in motion the government intervened and the clubs immediately had their revenue streams turned off, limited as they were.

The PFA’s rankling is understandable. Their charges ply their trade in a league where salaries are capped and whilst the clubs for the most part don’t turn a profit they find themselves on a financial hamster wheel they can’t get off. Salary capping ties one hand behind the clubs backs restricting them from attracting top brass talent. Without enhanced squads, their individual sponsorship deals are hamstrung.

Over on the west coast the Glory entertain resident Perthies at the 20,500. The stadium is managed by Venueswest and a couple of years ago Perth were looking to up sticks to the new 60,000 Optus Stadium just out of town and across the river. It’s a phenomenal venue, sitting on the banks of the Swan River, with the Perth CBD towers of Rio Tinto et al the backdrop.

Despite Optus Stadium carrying higher charges per game Sage was happy citing almost three times the seats. The question was, could he fill them? In the end an agreement was struck to stay put, with grand final games to be held at the bigger Optus.

A wholesale move was a gamble Sage was prepared to take. At the time of negotiation, according to an article in The West, Perth were paying more per match as tenants of the then NIB than Melbourne’s AAMI Park and Etihad Stadium were charging Victory and neighbours City.

It was a negotiation that from a business point of view paid off. Glory made the 2019 final, losing out to Sydney in the end, but over 56,000 were there to see it. To put in to context though, second place in the SPL gets around £2.5m. In Australia? Not a dime, not even for the winners.

Back round the hamster wheel the clubs go, even if silverware, or the consistent challenge for it might attract a better calibre of player - you can’t pay them.

It’s been a month since a ball was kicked in the A League, one of the last divisions to postpone games and with two thirds of the clubs standing their squads down, it’s an impasse that was heading down the legal route.

Whilst an icy situation is now thawing and clubs and unions get around the ‘zoom’ negotiating table, where has as the A League been in all this? The last update on their website was March 31.

Fox Sports currently own the broadcast rights for the A League, secured in a six year deal worth $57.6m per season.

The salary cap is $3.2m. The financial statements of the A League to July 2019 show outgoings for wages founder $2.4m per club, that’s if the league’s administrators don’t take a salary themselves.

At July 2018 the statements shows retained earnings of close to $7m, a steady increase on the prior period. Whilst broadcasters knock on the door of Europe’s top leagues, does Rupert Murdoch’s Fox need their fees back?

At year end there was also close to $30m cash at hand. Whilst the statements only provide a snapshot as at nine months ago, there is no external debt.

While the union and cash strapped clubs fight it out in the corner, the A League are three weeks since they’ve offered a formal, on record update on how they are supporting the players. It simply isn't fair dinkum.

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