What can we make of Steve Lowy's message to the football community from the weekend?
The first thing Steve Lowy's oped from the weekend did was firmly position the current imbroglio over the governance structure for the FFA Congress as an ‘Us’ v ‘Them’. Without mentioning his father by position or name, he leant on the history and successes of the past 14 years since a Lowy has been in charge of the game in Australia, and said that was what was at stake.
In other words, it was family first: protecting the Lowy football legacy. (Let's not mention the Garcia Report).
According to Steve, the A-League clubs and the PFA want to “return to the bad old days of self-interest and suffer the inevitable results.”
However, he is flirting with the truth to suggest that the current FFA Constitution is the one that was supposed to be implemented after the ‘intervention’ of the government of the day and the subsequent Crawford Report.
What David Crawford – at the time, one of Australia’s foremost governance experts – actually recommended was the following.
“The Board be independent of special interest groups, and be free of any conflict of interest of a financial, personal or representational nature.”
The FFA Constitution has taken this to mean that an independent Board member cannot be involved in football in any capacity in the two years prior to becoming a Board member - a somewhat broader definition than what Crawford was trying to address.
Of course, exceptions are applied when convenient – hence the inclusion of people with football knowledge such as Moya Dodd (who has now served on the FFA Board two years past the term limit), Jack Reilly, Peter Tredinnick, Danny Moulis and Chris Nikou.
And then there’s the conflict of interest of the ownership share of the Lowy family in an A-League club. It was once the majority share; it is now around 15%. Those of us who have been around long enough to remember the “bad old days” – as Steve refers to them – also remember that one of the issues people most objected to at the time was the dual role of the former Soccer Australia Chairman who was also President (not owner) of an NSL club.
The next bit is where it gets interesting because Crawford recommended that the Board be appointed by: “… a voting mechanism that ultimately gives recognition to: a) the registered participants at grass-roots level through their respective state member affiliates; b) the NSL; and c) special interest groups such as women, Futsal, referees, players and coaches.”
Crawford recommended proportional voting for the state federations. For example, NSW and Victoria would receive 3 votes each, Queensland 2 and so forth. He also said that one vote should be given to each of the special interest groups which were then identified as coaches, Futsal, players, referees, women and the NSL.
What we ended up with is a membership structure – now referred to as the FFA Congress – which comprises one vote for each federation (nine in total), and one for the A-League. Missing, are the special interest group representatives.
There is one other crucial recommendation of David Crawford; and that is, that the A-League (then the NSL) operate as a separate entity under license to the governing body.
The same recommendation was also made by Frank Lowy’s late good friend, Andrew Kemeny, whom he commissioned to advise him on the best structure for what became the A-League. Kemeny’s first recommendation in his 2003 report was for a separate entity operating with autonomy from the governing body.
It was also the basis for a blueprint prepared by the PFA for a new national domestic competition.
I made reference to this history at a presentation in 2012 here.
Notwithstanding all the advice to the contrary, the move to a separate entity was resisted by Frank Lowy. When FFA was first established, Frank didn’t want a separate A-League entity because the (then) new competition was not mature enough to stand alone. The Socceroos subsidised nearly all other activity.
The argument had merit in 2004 when the A-League was established. But things have moved on.
For those who are not aware, Frank himself long advocated for separate management of the NSL when he was a club owner in the 1980s. He famously declared that the future was “bleak ... until there are radical changes to the control and administration of the game”. One game into a new season in 1987, he literally packed up his ball and went home. He withdrew the funding support for his successful Sydney City team because he was disappointed that his vision for the game was not shared by the leaders of the game.
So we need to follow the money
The challenge is that it’s not easy to follow the money when it comes to the A-League – which is one of the gripes of the Australian Professional Football Clubs’ Association (APFCA), the new association of the A-League clubs.
What we do know is what Steve tells us.
He said that five years ago in 2011-12, the clubs received $1.2 million each from FFA. This year, it will rise to $3.55 million each. He presents this as a case of unbridled generosity from FFA.
However, he fails to mention that the salary cap – which the distributions were designed to cover – was $2.4 million in 2011-12. In other words, clubs had a $1.2 million shortfall to begin with on the A-League salary cap alone. They are also required to fund the NYL and W-League participation.
The 2017-18 season is the first year where the clubs will receive more than the salary cap - $3.55 million compared with $2.92 million.
Steve admonishes the clubs for asking for $6 million a year each on the basis that would mean the rest of the game could not operate. Fair enough.
However, the clubs’ would know that at least 80% of the value of the broadcast deal is because of the A-League – that’s $46 million.
There must be at least another $14 million in FFA revenue that is attributable to the A-League by combining Sponsorship, Gate Receipts (from A-League finals), Merchandising and Host Government Assistance. That would take A-League related revenues to $60 million. It's actually likely to be more.
But what is astounding is that Steve says that, at the $3.55 million a year level, the A-League takes up 60% of FFA's resources. How can this be?
$3.55 million x 10 A-League clubs = $35,500,000
FFA’s revenue in FY2016 annual financial statement = $103.5 million
60% of $103.5 million = $62,100,000
If the A-League is costing $62.1 million, and the clubs are receiving $35.5 million, where is the rest of it going? Travel and accommodation? Marketing? PR? Free tickets? Event costs? Marquee fund? FFA staff administering the A-League?
No wonder the APFCA want to look at the books! That’s at least $26.6 million which is essentially unaccounted for and, importantly, over which they have no management input.
Overseas clubs are bad. Really?
Coming from a shopping centre owner with a global property portfolio, the statement that “more than half of the clubs are wholly or majority owner by foreign individuals and organisations with little or no connection to Australian community football or our national teams” is breathtaking.
For a start, under whose regime were these ‘foreigners’ allowed in?
Who sold their share of Sydney FC to David Traktovenko? Who turned to the Bakries, friends of Nurdin Halid, when FFA was desperate to offload Brisbane Roar? Who gave Mike Charlesworth the thumbs-up at Central Coast Mariners? Who signed-on with Martin Lee at Newcastle Jets? Who welcomed City Football Group with open arms?
If not these owners, where are the Australians with a ‘connection’ to our national teams who could have taken over the licenses instead? Does he mean people such as Clive Palmer and Nathan Tinkler?
What would you do if you were Traktovenko, the Bakrie Brothers, Charlesworth, Lee or Sheikh Mansour reading that? Or the dog whistle referred to in the Fin Review today? Pack-up your ball and go home like Steve’s dad did 30 years ago? Or fight-on for what they think would be a better way of governance?
A few paragraphs later, Steve then seems to have a bit each way by stating that “Serious investors and major international football entities have expressed interest in investing in an expanded A-League.”
Does this mean the Ledman Group and City Football Group are not ‘serious’? Or does it mean that he’s fine with foreigners as long as they don’t try to rock the good old FFA boat?
Surely, the time has come?
No-one can disagree with the sentiment that we all want to see football in Australia succeed. (Motherhood anyone?) And the question Steve poses is appropriate:
“Will the sport continue to be governed by an independent custodian with an obligation to nurture and protect the entire game in the balanced interests of its many stakeholders or split along self-interested lines?”
The next question is: whose self-interest Steve?
Why not do what David Crawford, Andrew Kemeny, and the PFA recommended, and other football associations around the world do?
Give the A-League owners – all people with business nous, just like many on the FFA Board – the autonomy to run the competition under license.
Include an FFA Board member on the Board of the new A-League entity.
Continue to include an A-League representative on the membership of the FFA Congress – just as Crawford recommended with a separate A-League entity in mind.
Expand the Congress to include the special interest groups to ensure you truly do have a “balanced” representation of interests, knowledge and passion for the game. This should include the new AAFC, which didn’t exist when Crawford was written, and which represents the second tier of competition nationally that FFA put in place.
That way, the FFA Board can get on with their job of seeing the whole of the game prosper - and the A-League can get on with theirs. Steve’s vision can then be realised:
“Football can have it all - a popular, financially stable and growing A-League; a flourishing grassroots and national and club teams that are routinely competitive on the global stage.”
(Who knows, perhaps one or both of FFA and the A-League could include fans as a special interest group too, as advocated by #NewFIFANow).
It’s really not that hard if you learn to let go a little.