As we ponder the reported $6 million annual loss to football’s coffers with the demise of the 15-year relationship with Hyundai, it’s worth also pondering the money spent by football in support of ten separate administrations and asking ourselves whether that’s money well spent. 

In 2019*, the game spent $53.7 million on employee expenses against total revenue of $206.1 million.

The lion’s share of that was with FFA who brought in $132.2 million (64% of the total) and spent $28.6 million (53% of total employee expenses) on paying their staff, as well as the Socceroos for the Asian Cup and the Matildas for the World Cup. 

The combined surplus for the year of all ten entities was $885,575 of which FFA accounts for $435,000 (49%).

If we look at it another way, more than one-quarter (26.1%) of money that football manages to bring into the game goes on paying people.

However, take FFA’s revenue and employee expenses out of that equation and consider the state federations only, and just over one-third (34%) of the game’s money is going on employee expenses. 

The state federation with the highest wages bill is Victoria who spent almost half of their $11.7 million in revenue on staff in 2018.

Also spending a high proportion of their revenue on employee expenses was the ACT with 45.6% salary and wages spend from $4.9 million in revenue.

The state federation with the highest wages growth over the past four years is Queensland. 

In 2014, they spent $1.5 million on salaries from revenue of $6.2 million (24.8%). By 2018, their wages bill had increased by a whopping 78.7% to be $2.9 million or 33.8% of their $8.2 million in revenue. It is expected this will increase further once Queensland lodges their 2019 financial statements in light of known staff increases. 

Again coming in second is the ACT, with wages growth of 74.7% with wages of $2.2 million in 2018, up from $1.3 million in 2014. 

In the same period, revenue growth in the game has largely kept pace with inflation at 8.9% from 2014 to 2019 (inflation = 8.5%). No state member federation has increased their revenue as much as they have increased their staff costs. (Northern NSW and Tasmania have seen a decline in revenue in those five years).

The financial statements also show that most state federations could not exist without their share of registration fees or other income derived from the game’s participants.

For example, in Queensland only 5% of their income is derived from sponsorship, while most of the remaining 95% comes from registration fees, coaching courses, coaching clinics, representative team charges, and grants from FFA and government. 

In the ACT, participant fees and charges account for 81% of income; in Victoria, it's around 72%; while in Tasmania they account for at least 55% of total revenue. 

This data must give all of us involved in the game – especially those who give tirelessly as volunteers – pause for thought.

• Why do we need ten separate governing bodies?
• Why do we need ten chief executives and ten boards?
• What value are they adding that can’t be provided under one entity with state-based operations?
• Is this structure - based on an early 20th century federated model - still relevant and appropriate?
• Are we getting value for money? 
• Could we be using this money on 'football first' type activities, rather than building administrative empires?
• In light of the loss of national sponsors, should FFA stop granting approximately $7 million to state federations each year?

The idea of ‘doing away with state federations’ is not about denying our geography – or even our history. Football would still need state-based operatons and we would not save the entire $25 million in employee costs spent last year in the states. 

However, when state federations are granting themselves staffing cost increases of 78.7% in a five-year period and only increasing revenue in the same period by 30.8%, surely it tells us we could be doing things smarter. 

The need to transition from a federated model has been recognised by a variety of organisations, both sporting and non-sporting, and is also consistent with Sport Australia’s Sport 2030 national plan, Sport Australia’s ‘One Management’ model, and the requirements of the Australian Charities and Non-Profits Commission. 

The code from the top down, and throughout the layers of governance, also needs to comply with the FIFA Constitution and specifically the 2016 changes that require improved gender diversity and greater financial transparency and accountability. As an aside, the only state federation that fully complies with FIFA requirements is Victoria. 

Organisations such as a Basketball Australia, Tennis Australia Touch Football Australia, the Red Cross, the Royal Flying Doctor Service and Dementia Australia have all moved from a federated structure to a single, unified structure in recent years – notwithstanding competing interests, personal agendas and the sea change required in making that happen – and provide models from which to learn.

These are not new issues. The role of the state federations was raised in many individual submissions to the 2002 ‘Crawford Inquiry’ into the management and governance of the game, but it has never been addressed. For example:

'It seems odd that in Australia the domestic governance of the world’s biggest sport — governance that requires an international outlook — should be constituted in a way that empowers state federations. A removal of this anachronism is the first most important step in the revitalisation of Australian soccer.’

'Soccer Australia and the state federations should have the same fundamental objectives, that is, rowing in the same direction in the same boat. However, their structure allows them to do the opposite. While everyone plays the same sport, the game itself is not unified either in structure or in practice.’

The Constitutional changes effected in October 2018, and the putative separation of the leagues from FFA, do not address the ‘anachronism’. 

While the game has progressed in the 17 years since the Crawford Report, has it progressed as much as it should have? 

The loss of sponsors, the frigid interest of the broadcaster and the disruption caused by the coronavirus have shown that it has not. 

Instead of seeing history continually repeating itself and some of the big issues in the game failing to be addressed, it’s time to unite the game – not just in words but in deeds and, importantly, in how it is organised.

*  Please note: throughout we refer to 2019 financial data although it is not yet available for some member federations. In these instances, 2018 is used. Where 2014 is not available, we have used data from the nearest available year either side of 2014. 

Categories: Opinion | Analysis | Football Business | Australian Football

Tags: ffa, ffa board, state federations, ffa congress

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