The A League and Football Australia closed out 2020 announcing their unbundling, as though their adolescent relationship was one of accident, having been ‘bundled’ together since 2005.
The announcement itself gave little detail on what specifically is set to change. Regardless, what does it mean for football at a wider level in Australia?
The A League clubs now have parity with the power leagues of England, Germany, Spain. It’s a platform they feel is necessary to increase the game’s popularity in the lucky country. When it comes to club ownership though, the Premier League model is different to it’s continental counterparts.
In Germany and Spain, clubs can’t be majority owned by one individual. Poor ownership and greed have been the demise of many an English side, with directors holding clubs hostage after their plans to profit from their investments backfire.
Monetizing football, as was the key motivator for the Premier League breakaway in 1992, has been disastrous for the British game as a whole. The talent in the home nations flocked to England, whereby the Scottish game suffered, unable to compete with bumper wages. The lower league sides became cash strapped incubators of youth prospects for the elite who possessed secure top flight status.
The distribution of both power and TV money in England hasn’t had the trickle down benefits the breakaway chairmen promised either the FA or the Football League. The result; over half of the League’s 72 clubs going bust at one point or another in the last 28 years.
Whilst the Australian game, in terms of size, age, viewer demand, net worth may not be comparable to the English one, the risks of the A League’s green light to negotiate their own commercial deals still pose a large threat to the sport at a national level.
Whilst there is no glass ceiling for clubs to get into the Premier League, there are major underlying risks when teams do rise to the top of the football pyramid. To compete, wage bills need overnight inflation, but to some clubs it becomes an anchor weighing them down, especially if relegated the year after.
The big winners of the Premier League breakaway were those already set up to maximise ticket sales. At the outset, the TV deals were a fraction of what they are today, with gate supplementing the ar chests. The first five years of the Premier League were broadcast on Sky who shelled out some £304m. The current deal, spanning three seasons is worth £5bn. In the early days, ground capacity was just as valuable. Chelsea, Manchester City and Liverpool have caught up with foregin investment, Tottenham remain in the mix through a solid financial footing at the outset of the Premier League, being the first club to form a PLC and float.
In 1992, post Taylor Report, with stadia being converted to all seater, Old Trafford housed 55,000 fans following recent expansions which saw the ground grow from its previous, lowest ever capacity of 44,000.
Despite the relative lowness (in the context of Old Trafford’s long history), the ground was still the biggest in the division. Nonetheless, tickets in the division increased 20% across that first summer before the Premier League began. United’s $14 ticket price may have seen the club realise $770,000 in gate receipts, per game.
Highbury, though smaller, would have seen similar revenues per matchday, seats going at twenty quid a pop.
Compared this to Leeds and Blackburn. The former would have had gate revenues around a third of Manchester United’s, and would later try and play catch up by taking on mass debt to pay star player wages. No silverware came, only financial implosion and almost two decades out of the big time.
The former, Blackburn, were bankrolled by their chairman Jack Walker. Their gate receipts from Ewood Park had potential of being around half those of Old Trafford.
Sticking with the first two teams to win the Premier League, United and Blackburn, the difference would see United about $7m better off per year. This is roughly $150,000 per week. Given the average player wage in the Premier League was $77,000, if we consider a squad size of twenty players, if United used all this surplus on salaries, they could pay each player an extra $7,500 a week.
The Premier League has been cited in the past as a cartel, and evades such accusations through a more even distribution of TV money than, for example, Spain. (Though Project Big Picture didn’t stop the league’s power brokers from moving their TV deal in that direction, shortchanging the lower leagues further along the way).
TV money in Australia is pocket change compared to that of the Champions League, Premier League, La Liga et al. In Australia clubs cannot establish financial and therefore competitive dominance through the TV deal alone. Even the league itself couldn’t attract a sponsor after its relationship with Hyundai ended.
As a result, like clubs during the infancy of the English Premier League, Australian outfits will have to look to the gate, and ultimately the fans to fill their coffers. The added challenge though, is most clubs don’t own their ground, often playing at a city or state owned facility. You only have to look at the financial forecasts of Tottenham and West Ham to see the difference matchday revenue makes when you own the ground.
So who will make up the shortfall? Fans once more?
Under past TV deals, A League games were split in two, with a package offered to the major networks and a smaller portion negotiated by Football Australia with the terrestrial carriers.
It’s here money may flow down the ladder, but what of the new deal? No details are provided yet on what money will still go to Football Australia, and ultimately grass roots. You can’t help but wonder that it is moving from very little, to none.
The unbundling, as it is termed, only separates the elite of the game from further from the grassroots, giving top clubs more financial muscle to cherry pick local and lower league talent at a pittance, except there is likely to be less of it pick from too, if less money reaches the development level of the game.
As far as clubs outside the A League are concerned, the ceiling to the game’s pinnacle isn’t made of glass, but of steel reinforced concrete. The Premier League, the mansion on the hill the A League aspire to be. When you think about it, it becomes clear why.