The feasibility of and criteria for expansion of the leagues under a new model will be further developed as part of the process.
The need to attract more investment into football was discussed by FFA Chairman Steven Lowy AM, CEO David Gallop AM and senior executives with club chairmen on February 14. The existing joint working group, which includes four Club Chairmen, will meet to discuss this on Thursday.
Analysis of football’s financial position following the conclusion of a new six year broadcasting agreement in December last year shows that rapid growth in the game generally – and expansion of the Hyundai A-League/Westfield W-League in particular – will require significant more capital investment. Changing the ownership and operating model would create a more attractive opportunity for current and prospective investors.
The FFA’s analysis found that expanding the Hyundai A-League by two teams under the current model would result in net losses over the next six years. This is because grant distributions to the new clubs, and the increase in costs to FFA for operational matters such as transport would be greater than the additional revenue the clubs would generate through broadcast arrangements and sponsorships. As the FFA is a not-for-profit organisation that redistributes all of its income into the clubs and other parts of the game, such losses are not sustainable.
“We recently advised the clubs that we must explore a new model for the Hyundai A-League/Westfield W-League. We agree that we need to protect the value of the existing licences in which the current owners have invested,” said Mr Gallop.
“We want to expand the leagues but this has to happen as part of a new structure. That’s why we are now working with the clubs to determine the future structure of the leagues and the criteria for expansion.
“We will examine these issues in detail and expect this work will take months rather than weeks. We know that those consortia that have expressed an interest in joining the league would want to be part of something that is financially sustainable and attractive as a sound investment.”
FFA is engaging a corporate advisory firm to assist with developing models for a new structure and to provide advice on the financial aspects of the expansion process.
“The decisions we make around the future of the Hyundai A-League/Westfield W-League will have an impact on every aspect of football in Australia,” said Mr Gallop. “That’s why we want to work with the clubs and other stakeholders on changes that benefit the whole game.”
Mr Gallop said FFA would provide updates on the process over the months ahead. While it was too soon to predict when expansion might occur, it would not happen before the 2018-19 season.
This article was originally published at: http://www.a-league.com.au/article/ffa-starts-detailed-work-on-ownership-models-and-expansion-for-leagues/1otukx2xpe3421aryw0fr7t09m.