A-League Expansion

[adz]

If I was buying GCU, i wouldnt be keeping it up on the GC

Not a fan of the night life?

 

[Muppet]

We've got two clubs at death's door (GCU for want of any public support and us for want of cash), and Heart can't really be doing all that well given they're not exactly running on the smell of an oily rag but their crowds aren't very big at all. If anybody's got cash and wants to run a team, I'd suggest they take over either GCU or CCM.

On GCU Clive would be better served packing up the team and heading up the highway to Townsville. North Queensland Fury had better crowd numbers suggesting there is a better market for the game as well as cheaper stadium options. There is no way he would supplant the team to NSW.

I am sure Heart is doing ok. They tend to get their money back on the local derby. Their crowd figures are an improvement on last year. I think half the problem with their figures also stems from the fact that they play out of the same ground as MV. They would be better served perhaps moving out of the city to another ground.

Western Sydney really does need a team. No doubt about it. The sooner it happens the better as there is a large demographic that plays the sport and can't be bothered in following or supporting a team that has no links to the area. In fact I reckon if a Western Sydney team sprung up and played out of Parramatta, Penrith or BLacktown they would probably pull bigger crowds than Sydney FC. Take a leaf out of CCM's book and engage with the community.

It would not surprise me that the Russian ownership thing won't happen in its current form. I bet those Russians are waiting for the club to fall over so they can claim it for next to nothing. Club folds, FFA steps in, Russians appear, club moved to Western Sydney. I hope not.

 

[dibo]

So, it's been a long time since we talked expansion, but expansion is better talked about well in advance of doing it and we've got a four year TV deal. It's worth looking at what needs doing to make expansion work and provide more and better content for the *next* TV deal.

More content is good (and yield more $$$). More places for young talent to spring through and develop at a high level is good, and from what we're seeing it's not the kids who let down the play in the league these days, frankly some are scary good.

Looking at the big urban centres around the country, we see the following:



Grounds are crucial - they've got to be up to standard so they don't feel like a paddock with a grandstand on one side, and they should be rectangular, not a bloody great oval.

There's obvious potential for Gold Coast and Canberra. Done right, they would both be great additions, and you're up to 12 teams.

Next stops should be Wollongong and Townsville, you're up to 14.

There's always the option of another NZ team or another Sydney/Melbourne team - another Sydney team is the more obvious candidate simply because there are more grounds and the city is more geographically spread into neat hubs. A team in Campbelltown for example would tap into the massive population growth out that way.

After that, you've got the places with no suitable grounds...

Learning from MLS, what would be simply excellent would be if the FFA got in touch with an architect who would draw up a design for a 'flatpack' 10k capacity football stadium to be built as cheaply as possible. You'd want it to be able to host A-League and NRL games as well as concerts, and ideally be owned by a private owner. The big thing here is that if the design can be done cheaply and quickly enough, if a NPL club down the track needs to build one to make the step up to the A-League, they can.

Done right, expansion provides the framework to support the growth in talented kids coming through and drives greater opportunities for players excelling at NPL level to step up to the big league, and provide a pathway for NPL clubs themselves to make the transition.

 

[T]

Personally I would love to see a Townsville team in the comp.... mainly for away trips

But would also like to see a Southern NSW team

 

[eenfish]

Shame the GCU folded, but that is a 50-50 fault between Clive and FFA. Maybe try a Sunshine Coast team instead, 'eh?

Also I think Canberra-Hobart-Wollongong are the three obvious choices for new teams. Hobart is a bit trickier, because whether to base it there or the equally populated Launceston/Devonport area, or to rotate games between the two spots. Plus they don't really have a rectangular stadium, so they'd be using ovals.

Wollongong would be a good choice, the Wolves were good quality in the NSL and Win-Jubilee would be a decent spot to play at.
Canberra makes sense. Their W-League team is the best supported around as far as I know, so the fans are up there. Why they can't expand into an A-League team as well, no reason why not. Get linked up with the AIS, get some decent youngsters and training fields to use.


I'm not hot on the idea of expanding overseas. Maybe another New Zealand team on the South Island or in Aukland, but that is their prerogative, whether it'd work is another story. Going to Malaysia or Indonesia or something, nah.

 

[Jesus]

A team in auckland would be good as far as rivalry etc goes in NZ, assuming they have enough kiwis for the teams.

The gong should be looked at, as should canberra. Townsville too. Fury minus fowler plus the new TV deal would probably be enough to make it sustainable.
That said I think some centres might need slight salary cap advantages to encourage players to move to them.

I would leave the gold coast a bit as is really scorched earth.

I think Hobart would be a good place for a team, but would need a stadium, Ovals do not cut it. Enjoyed the game last year in Launceston, but the same attendance in a 10k rectangular stadium would have been great and would have had far better views.

I dont expect they are intending to head into south east asia, more selling one off games during asian cup 2015.

The good thing will be if the NPL starts to take off and allows a few teams to naturally evolve into potential a-league clubs with growing bases.

Another team in western sydney is also probably not much further than 4 years away I would assume. As well as another some time down the track.

 

[eenfish]

A team in auckland would be good as far as rivalry etc goes in NZ, assuming they have enough kiwis for the teams.

The gong should be looked at, as should canberra. Townsville too. Fury minus fowler plus the new TV deal would probably be enough to make it sustainable.
That said I think some centres might need slight salary cap advantages to encourage players to move to them.

I would leave the gold coast a bit as is really scorched earth.

I think Hobart would be a good place for a team, but would need a stadium, Ovals do not cut it. Enjoyed the game last year in Launceston, but the same attendance in a 10k rectangular stadium would have been great and would have had far better views.

I dont expect they are intending to head into south east asia, more selling one off games during asian cup 2015.

The good thing will be if the NPL starts to take off and allows a few teams to naturally evolve into potential a-league clubs with growing bases.

Another team in western sydney is also probably not much further than 4 years away I would assume. As well as another some time down the track.

If you link the growing NPL teams and another team in Western Sydney, Sydney United could be a very real pick to join the A-League one day. Big support base, history, and very competitive in their league.

I was talking to a bloke from Wellington, he reckons there isn't enough support in both Auckland and Wellington to support two different teams, but I reckon people based out Auckland would feel differently and are probably sick of having to travel so far to see top-flight football. Which I imagine would also be a stumbling block for a Tassie based side, with the Launceston-vs-Hobart debate being an issue that has plagued the Tasmania United bid in the past.

 

[dibo]

If you're going to do United, why not Marconi? And then if you're going to do Marconi, why not Olympic? And South? And Knights? And Strikers? And St George... ad infinitum

I think when they do expansion off the back of NPL clubs, it'll be down the track, when every AL club has a direct feeder in the NPL (like CCMA) and the AL licence is granted in addition to that.

Expansion is entirely reliant on the AL business model being a profit-generating thing - they should not have structural deficits. This means broadcast money and a basic level of crowd support (and I'm talking somewhere between 5-10k) should be sufficient to sustain sufficient income for the business to be functional. Spending up on supercoaches and marquees and massive marketing budgets are another thing, but it can't be a loss-maker right out of the gate.

The pathway for NPL clubs to enter would therefore be that they'll be given notice (hopefully a couple of years, in similar fashion to MLS expansion moves, where they're stepped out gradually) to create a AL setup that sits over and above the NPL setup. They have time to get their people in place, time to sort their venue needs, and hopefully FFA is at a point where they can do an 'expansion grant' to cover all those costs of running the club that are incurred before a membership is sold or a ball is kicked. That way FFA helps with the cashflow, and then the basic structure of the business is sustainable once the club is actually competing.

 

[Big Al]

To many struggles already - No more expansion
Newcastle (Tinkler money disappearing)
CCM - don't need to elaborate
GCU - More gold coast folds than poker tournament

Stay small & strong - Maybe a reserve grade instead of expansion

 

[dibo]

To many struggles already - No more expansion
Newcastle (Tinkler money disappearing)
CCM - don't need to elaborate
GCU - More gold coast folds than poker tournament

Stay small & strong - Maybe a reserve grade instead of expansion

Leaving aside the fact that we already *have* a reserve grade (the NYL), did you actually read any of the posts before? Like maybe this part of my last post:

Expansion is entirely reliant on the AL business model being a profit-generating thing - they should not have structural deficits. This means broadcast money and a basic level of crowd support (and I'm talking somewhere between 5-10k) should be sufficient to sustain sufficient income for the business to be functional. Spending up on supercoaches and marquees and massive marketing budgets are another thing, but it can't be a loss-maker right out of the gate.

I think you'll find this year that CCM will make a surplus, as will a number of other clubs. Jets will probably be among them; once you're at a point where clubs are structurally profitable, you don't need masses and masses of money to run them (just to buy them, because suddenly the licences to compete are worth something).

It's also noticeable that there's not a club going around in the AL this year who has a noticeable gap in their kit sponsorship - everyone has good corporate support it seems. The increased crowds and media coverage will see us accelerating.

 

[sydmariner]

To many struggles already - No more expansion
Newcastle (Tinkler money disappearing)
CCM - don't need to elaborate
GCU - More gold coast folds than poker tournament

Stay small & strong - Maybe a reserve grade instead of expansion

Maby a new gc team could be sponsored by jupiters lol

 

[Lowlander]

I am all for league expansion, given a measured policy is adopted and a proper execution plan on whatever policies are decided upon. I would not like to see another GCU or Fury debacle. Very unfair to the fans of those clubs. This years memberships for A league clubs is fast closing in on NRL yet we only have 10 teams, suggesting we will overtake NRL memberships within the next few years. Proper stadiums is a must and I think that Melbourne will struggle the most in that AAMI park simply isn't big enough and that round oval of theirs is pathetic for watching a football match, however it probably wont deter the punters. furthermore, I think the AFL own AAMI park or have a majority share so this will no doubt restrict things somewhat. I believe that this year is the first year that a full review of all three football codes will be conducted, suggesting that media networks beyond FOX are taking notice. There is a reason why channel 7 bought the rights to the MU and Liverpool matches. I cant see the current networks pumping more money into the NRL or AFL given their growth has reached a peak or in the case of the NRL could be in decline. The next broadcasting rights will be a very interesting period for A league expansion and in the scheme of things it is not that far away.

 

[Big Al]

Yeah Dibo I did - But who generates the profit?

TV mostly - The clubs are always whinging for more or a bigger slice.

The ad dollars are limited to areas like CC. They have to spend big for small markets. They all want to go to Sydney or Melbourne.

You might end up with the league running the teams like the wanders - Who still lost money last (Understandably with setup).

Think we are a long way off secure enough to support expansion IMO but 10 teams probably would be ideal in a perfect world.

 

[dibo]

Yeah Dibo I did - But who generates the profit?

TV mostly - The clubs are always whinging for more or a bigger slice.

The ad dollars are limited to areas like CC. They have to spend big for small markets. They all want to go to Sydney or Melbourne.

You might end up with the league running the teams like the wanders - Who still lost money last (Understandably with setup).

Think we are a long way off secure enough to support expansion IMO but 10 teams probably would be ideal in a perfect world.

If I have to walk you through it step by step, I will.

Last year was under the old media deal.

There have now been three deals.

The first was for $4 million a year, so each club got about $500k in the first season.

The league outstripped expectations (and we made it to the World Cup) and so we were wide open to being poached by another deal (worth enough to break a contract for) so we struck a 7 year, $120 million deal. This ended last year, and clubs were receiving approximately $1.9m a year (that was the peak of the climb; it was up from $1.45m the year before).

The new deal is a 4 year $160 million deal, and clubs are receiving for the first time the full value of the salary cap in TV distributions - some $2.5 million. Clubs are receiving more than $1 million more per season than just two years ago.

Crowds are on the upswing again, TV ratings are way up, this league is getting stronger again; we're on the up.

If we lock in the gains of recent years, if the benefits of FTA exposure and massively increased radio exposure yield even stronger crowds and interest and sponsorship, there's no reason whatsoever to think that the TV money won't go up again in four years' time.

TV relies on content - at the moment we have five games a week. If getting increased TV money (and getting more spaces for young kids to come through and develop) means we need another two or even four teams then that's what we'll do, but it needs to be done right.

Getting to 14 teams would mean that we'd be able to play each side just twice (like most other leagues in the world) and have a 26 week season. If we got to 16 teams we could have a 30 week season.

There are (as discussed earlier in this thread) viable locations for 14 teams without trouble, 16 is a definite possibility too. We would have some serious corporate weight, we'd have 8 games a week to broadcast, we'd have national coverage and more and better opportunities for professional players to make their way to the bright lights.

We would need to take in a little from the MLS experience and learn how to expand sustainably, but this is by no means impossible, if only we had a little more imagination and ambition than to rest on our laurels and say "stay small & strong", because small is anything but.

 

[midfielder]

Just as an aside ... I was at a Football function last year and the A-Leagues financials were part of the discussion...

On average an A-League club cost 8.3 million to run... and the break end point in crowds was 13.5 K at an average price of $ 18.00 [after GST] .

With the extra money this year the 13.5 K figure has more than likely fallen ... Gallop has indicated he expects half the teams this year to make a profit and those that loose money it will be under 1 million ...

Our [meaning the A-League] big cost are wages, travel & accommodation & stadium hire .... some of the stadium hire arrangements in place are not football friendly and I guess something is being done to bring help bring these down...

On this issue if we get control of Bluey and given RL have indicated the CC is not on their expansion team plans then this will assist our club most think...

 

[dibo]

Just as an aside ... I was at a Football function last year and the A-Leagues financials were part of the discussion...

On average an A-League club cost 8.3 million to run... and the break end point in crowds was 13.5 K at an average price of $ 18.00 [after GST] .

With the extra money this year the 13.5 K figure has more than likely fallen ... Gallop has indicated he expects half the teams this year to make a profit and those that loose money it will be under 1 million ...

Leaving aside other variables (and assuming the numbers are solid - for all I know a man in the street could make these numbers up and mentioned them at a football function), this is very important.

13500 x $18 x 13 home games = $3,159,000.

So assuming all other spending stays the same, they only need to hit $8.3 million and the only change is the TV distribution, we go from needing a crowd of 13,500 to 10,936.

That makes a huge difference to the economics of the league last year's numbers, and a break-even of 13,500 yields the following:



A break even of 10,936 looks very different:



The weakness here is that not every club has the same cost base. We run pretty lean (I gather) but others may run leaner. Others spend more either by choice or necessity.

We won't earn as much off-field as the big city clubs either, so it's pretty hard to offer a cast-iron guide, so bearing these pretty massive (and knowingly flawed) assumptions of equal cost and revenue bases in mind, you can take these illustrative figures with an appropriately-sized grain of salt.

 

[dibo]

Note - looking back two years, when clubs received $450k less than even last year so the break even point would have been 15,424 but crowds were lower, we had the following:



That's *ugly* - little wonder clubs were looking like going under (or in GCU and NQF's case actually doing so)!

 

[eenfish]

Where that falls apart is merchandising. Theres no chance in heck, with all those shirts being sold leading up to the grand final, that WSW ran at a loss last season.

 

[Big Al]

Dibo - You then want to put more hands in the Pie. More teams more handouts - Or split the same amount over more teams

While more revenue may flow to FFA they will be reluctant to give to much away like any business.
Businesses cap what they want to give to staff for wages or advertising etc because they want to fill there own coffers.
Especially the FFA who are not an A-League only business.

Take the rugby league for example. probably same costs to run a club they have 16 teams & they have a majority borrowing from leagues clubs etc to survive. They always want more money. The NRL have a billion dollars and aren't giving them anymore of the pie than they have to because they want it for themselves. Look how under funded country or junior league is - Some one always wants more.

I like your dreams & I know you don't want it straight away I just don't think small markets can sustain your growth. There are no more Western Sydney's out there left to attack.

10 at most is my ideal but I also think the improvement you mention in standard comes from smaller competitions. The guys cracking the teams have to be good. The guys leaving are desired overseas. You play against better players you get better or go back to the lower leagues. Coaching has improved as well. Can't remember who but an overseas player said it was just straight 4-4-2 a couple of years ago - Now everyone has advanced technically the league has improved.

 

[dibo]

You're missing the point - more hands in the pie is just fine WHEN THE PIE IS BIGGER!

As you keep missing/ignoring, in my view expansion is predicated on the basic structure of clubs being profitable between TV money distributions and moderate crowds.

I've illustrated above the massive improvements that have already occurred just in the last couple of years as rights distributions bring down the 'break even crowd number'. Clubs are coming closer and closer to being profitable at a basic structural level, even in small markets. If the Mariners can be profitable here (and I reckon they can, and will be this year) then other clubs can be profitable in other small markets - Gold Coast, Canberra, Wollongong, Townsville... If we can identify places where the basic structures are positive and there is sufficient potential support to be able to be profitable fairly quickly, then we're in business (just like the MLS).

This is a precondition of expansion. There's a happy consequence of expansion too. More teams, more games, more content = more $$$ from TV.

Aussie Rules have managed to grow their money at considerably greater than 1:1 by expanding their competition. Giants and Suns are costing money in grants from the AFL, but they're making squillions for the AFL by creating a 9th game each week.

If we were to expand out to provide a 6th, 7th or 8th game per week, the TV money will be bigger, and will provide the basic funding over which you put the crowds.

So FFA wouldn't be slicing a finite pie ever thinner; instead FFA would have more money to distribute, so the basic structural profitability of clubs is unaffected (or even enhanced).

The next precondition is quality (as you've noted). There is quality outside the current squads - Arnie told us so when he argued for scrapping the squad size limit. Over time, more quality is emerging than ever before, meaning we're able to support more teams. I've argued before that more teams is a better option than more kids sitting on benches around the country. When the next Daniel de Silva comes along (and there are more out there!), I want him to be playing, not watching.

Frankly, the stronger we get, the more likely it is that FFA has the spare cash to start pouring money down to the grassroots. The AFL and NRL fund their junior recruitment and development operations (both of which dwarf anything football runs) straight out of TV dollars. At present, not all the TV dollars go to the AL, a fair slice funds other FFA operations. If we've got more TV dollars, we've likely got more operational funding.

The point is not just to have a big league, it's about having a big game:

• successful national teams, from Socceroos and Matildas to the juniors
• successful national leagues, AL, NYL, WL, NPL
• strong grassroots, with support flowing to (rather than from) the grassroots clubs and associations.

Put these in place, and our game locks in its position as a behemoth of Australian sport. It can only come from expansion of the A-League, there's nothing else that will generate the funding to support it.