Time for a change in A-League ownership?

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Has the time come for a shift in the A-League ownership model? Given how the spectacular implosion of the Newcastle Jets in recent days has echoed the demise of Gold Coast United, is it time for Australian football to dispense with, or at least lessen the grip of the single owner with all-encompassing power?

There are broader issues including who runs the A-League as a whole, and there has been dissatisfaction from both clubs and fans alike with the administrative efforts of Frank Lowy and David Gallop. However, the problem that the Jets have brought to light is how an ownership system and league-wide framework that is designed to avoid failure actually increases the likelihood of it.

Currently A-League clubs exist in a particularly safe and cosy bubble. There is no relegation, the television broadcast deal covers the salaries of their players, and the FFA conduct the majority of their marketing exercises for them. However, the nature of this bubble presents a dilemma that must be addressed before another club needlessly ceases to exist.

A-League clubs do not own the right to their intellectual property. That is, their name, logo, colours and therefore ability to market themselves are all controlled by the FFA. A-League clubs make an extraordinarily small amount from merchandise sales because the FFA take such a huge slice of the pie. They find it incredibly difficult to generate profits under this autocratic league structure.

With this being the case, it is little wonder that when things start to go wrong inside a club things unravel very quickly. When the bubble bursts due to any number of reasons, there is no fallback option for many clubs apart from their owner simply ploughing more money into a sinking ship. Without the ability to generate sufficient funds off their own backs, clubs are run at the behest of a single owner or ownership group which can lead to poor management decisions with little thought given to the long term health of teams.

Perhaps then we have reached the fork in the road where it is more advisable to alter the A-League’s modus operandi than to stick to the current system, laden with its numerous failures. Three clubs have perished since the inception of the A-League which began in 2005. New Zealand Knights, North Queensland Fury and Gold Coast United. That’s nearly one every three years, simply unacceptable and unsustainable.

Whilst there are no guarantees that a different approach to league structure and ownership would have saved any of these clubs from their demise, the fact is they died under a system that appears to have a cracked façade, if not one that is entirely broken.

The Knights were an awful football team and struggled to attract crowds, any club who has the consistently poor results they did will find themselves in trouble. But the cases of the Fury and Gold Coast make for an interesting hypothetical.

If the Fury, who had their licence revoked for financial reasons, were able to generate more income from their merchandising and intellectual property would they have been able to meet their financial obligations and survive until the increased TV deal signed in 2012?

Had the ownership model been different and such autonomy not been allowed to a single figurehead, would Gold Coast still be playing in the A-League? What if a collective group of fans had an input into the running of the club, along with relaxed regulations that allowed them to increase their profitability, would they be here today?

Would the same system help the Newcastle Jets?  With a strong and loyal supporter base that is rapidly growing disillusioned with the club’s management and the FFA for their failure to step in and safeguard the Jets’ future, these two changes could present a solution to the increasing crisis that Newcastle are facing.

Fan ownership has been successful in giving fans a voice at clubs such as FC United of Manchester, AFC Wimbledon and even established English Premier League side Swansea City. There are over 30 fan owned clubs in the United Kingdom, and German clubs are subject to a ’50 + 1’ rule, which is actually enforced by German law.

This law means that investors cannot purchase a controlling stake in any club in the top two divisions of German football, preventing them from gaining a potentially problematic foothold within an organisation. Prospective investors can still buy significant influence with 49% of any club allowed to be owned by one individual or group, but rash and misguided decisions are greatly reduced.

When combined with an FFA restructuring process to allow clubs to increase their profitability, either of these models would present greater viability for A-League clubs in an ever increasingly competitive Australian sporting landscape. The additional benefit being that members of these clubs would have voting rights and be actively involved in the running of the club, as opposed to being held at arm’s length as is the case currently.

The A-League is growing and yet at the same time fans are becoming increasingly frustrated with the way the league is administrated and in many cases, also how their club is run. To prevent more clubs dying an unnecessary death the FFA need to embrace their most important stakeholders, the fans, and give them the right to take back their clubs and ensure their livelihoods beyond the next white knight with a big chequebook.

Andrew Cussen

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