The Smith report and the future of football

Roy Hay

After seven months of deliberation the Chair of the Australian Sports Commission and former Liberal Sports Minister, Warwick Smith, has handed in his review of the Football Federation of Australia (FFA) and its custodianship of the world game. The review was instituted by the Federal Government because of its concerns about the sustainability of the code, the level of public support provided and the costs associated with the forthcoming Asian championships for national teams, the Asian Cup, which will be held in Australia in 2015. Smith’s report contains a mixture of insights into the problems facing the game and a series of recommendations for its future development. It has some broad strategic vision and some very curious blindspots.

Smith notes that football has the highest level of participation of any of the team sports and that the code is drawing new recruits so rapidly that keeping up with demand is a huge problem for clubs and local authorities. He points to the successes of the national teams at senior level, with both the Socceroos and Matildas shooting up the FIFA rankings. He reports that it looks as if the A-League has turned around the decline in numbers of supporters in the last few years and that the failed World Cup bid was technically sound. But he stresses that financial stability must be the singular and immediate priority for the FFA to reduce reliance on government support.

Smith quite rightly notes that the FFA has received $122 million in recent years to assist with the finance of operations, carrying out high-performance and participation programs and its failed World Cup bid. What he fails to do is to put this in any comparative context. The AFL’s new stadium at Carrara on the Gold Coast cost $120 million, of which the AFL put up $10 million with the balance coming from Federal, State and local governments. So one stadium received almost as much public funding as the FFA for all its activities.

Smith recommends that the A-League clubs should develop stronger links with their grassroots and local communities, while the FFA should give club owners a formal, structured opportunity to contribute to the strategic decision making for the League. Player payments should be reduced and current arrangements with stadia reformed. Clubs should aim for a broader ownership. The FFA should reduce its own administrative costs, while the government should not make changes to broadcasting rules which might inhibit the FFA in gaining the best possible media rights deal in the next round which is due in 2012.

It is understandable that the review has bowed to the demands of the owners for a greater say in the operation of the A-League. Even Melbourne Victory with its huge support is hardly breaking even, despite the fact that one-quarter of all attendees at the A-League went to Victory home games in 2009–10. But the danger is that club control, which has been tried and found wanting in the past, may result in the triumph of self-interest over the collective good. At least Frank Lowy, chair of the FFA and the controller of the Westfield shopping complex empire, should have accumulated enough experience over his long life in the game and in business to know that. He has the example of the Australian Football League, which has had an effective commission running the game for nearly two decades, to point to if he wants to convince sceptical owners.

Smith shows that the A-League, the flagship domestic competition, lost more than $20 million in 2009–10 and that 40 per cent of FFA’s total revenue, including government support, went to the League. Instead of a budgeted profit in the last financial year the FFA made a loss, largely as a result of emergency finance to clubs during ownership transitions and the collapse of North Queensland Fury.

Smith attributes the cost blow-out in the A-league to the rise in player payments, which have exceeded the growth in club revenues. He quotes Braham Dabscheck’s report that A-League players receive a larger share of total revenue than those in the AFL or the NRL or the J-League in Japan or Major Soccer League in the USA. But cutting minimum player payments as he suggests is not the answer. That lies in curbing owners’ attempts to buy success and persuading them that professional players can contribute more to club activities including revenue raising than they tend to do.

There are indications of how the A-League, in particular, might become viable. Brisbane Roar won the league last year playing what is generally regarded as the best and most consistent football seen in Australia by a club side. They did so with no marquee overseas players or Australian marquee players and with one of the lowest overall player payment of any club. Even so, the club’s owners had to give up the A-League licence at the end of the season and were subsequently replaced. Looked at in isolation, that is a poor reward for the financial stringency and on-field performance, but given the circumstances in Queensland last year, when Suncorp Stadium was under water at one period and the floods had a big impact on people’s incomes and discretionary spending, it becomes more understandable.

FFA’s key objective, according to the report, is to make the FFA independently sustainable by 2015. Given that it has to finance the national teams, the A-League and the Asian Cup, this is a very big ask. Club matches against Asian teams in Australia have not resonated with the Australian supporters in recent times. Melbourne Victory drew 26,000 to its first two matches in the Asian Champions League but since then the average has been around 5,000–6,000. If the Asian Cup is to attract the sorts of figures for attendances and media audiences being bandied around by pundits, then promotion of Asian interactions have to begin now. Perhaps Brisbane can show the way when it takes part in the Asian Champions League later this year.

The Smith report is an important and worthwhile document and some of its advice to the FFA will need to be taken to heart and not just have lip service paid to it. It should not be used by outsiders as a stick to beat football for its continuing problems simply because it has failed to compare the levels of public support obtained by this game with that provided to other codes.

Comments

  1. John Butler says:

    Thanks for that Roy.

    It’s interesting to watch various major sports go through these exercises, invariably in circumstances when things have gone off the rails.

    “Blind spots’ aren’t the exclusive domain of soccer.

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