Friday, May 8, 2009

FFA: can't live with 'em, can't remain solvent without 'em

I got an email this morning from the club, confirming what we all knew was coming:


Dear Friend (that's me!),

As a valued friend of the Adelaide United Football Club, I wish to inform you of an important announcement that will shortly be made public. Club owners, Bianco Trade Supplies, today handed back its Hyundai A-League Licence and therefore ownership of AUFC, to the Football Federation Australia.

It is business as usual for the club and notwithstanding the transfer back to the FFA of the club’s licence, Adelaide United organisationally and people wise, is healthy and stable; and remains a strong, vital member of the A-League competition. Preparation for the 2009/2010 HAL season will carry on as usual, including day to day administration, football and financial operations.

The financial and personal contributions made by owner Nick Bianco and former chairman, Dario Fontanarosa are truly significant. They leave a legacy that will survive for years to come, in creating an intrinsically Adelaide entity that has set the benchmark in our still evolving national competition.

Full details will be announced tomorrow.

Yours sincerely

Sam Ciccarello

Chief Executive Officer, Adelaide United Football Club


So, it's official. Adelaide United's ownership is now, along with the newly-renamed Brisbane Roar, in the hands of the FFA. Which is not necessarily a bad thing: at various stages the governing body has aided or (in the case of Perth Glory) taken full ownership of other A-League clubs, with positive results.

The franchise system, which gives the FFA far greater centralised control than a system in which individual clubs are masters of their own destinies (as per the 'traditional' European leagues), can be a bone of contention. Some are uneasy with the notion of a big brother governing body being directly involved in the way clubs are run and setting all the rules.

This has been a source of frustration in the past for Adelaide fans, with the FFA carving up the club's winnings from its recent Asian Champions League campaign and distributing the loot between all eight clubs and the league itself. The only club not to actually profit from Adelaide United's ACL success, ironically, was Adelaide itself.

Some people might view the franchise system as socialistic. Which, in a way, I suppose it kind of is - the FFA is a powerful central administration which redistributes the wealth, ensuring that each of its consistuent clubs remains on a relatively equal footing, for the supposed betterment of the league as a whole. The downside of this is that the ambitions of individual clubs are somewhat hamstrung by the FFA's requirements, most obviously the limited salary cap. Clubs are prevented from growing and flourishing organically, as they might in a less regulated system.

The upside, as we are seeing now, is that when a club (or, in Adelaide's case, its owner) runs into financial difficulty, the FFA has the power and resources to jump in and steady the ship. So long as the governing body itself is financially sound, clubs' survival is more or less guaranteed. The abortive New Zealand Knights aside, I can't see the FFA ever actually cutting the cord on any of its clubs unless things really go pear-shaped.

Bianco wanted out; transferring ownership to the FFA gave him the ability to get out without fundamentally damaging the club. Now the club has time to find the right sort of investors. I don't see this as a bad thing for United at all. Let's line up a cashed-up sheik or Russian oligarch and really start cooking with gas.


john said...

I have been a 'foundation' member of the Roar for 4 years and I got nothing near as personal. Reinforces my view that we need more marketing people and maybe even a few less football people.

john said...

Thanks Bill
After my knee-jerk, I read your bog in detail. Great piece. A couple of things from my viewpoint.

'... Some people might view the franchise system as socialistic. Which, in a way, I suppose it kind of is.. '

Originally, the FFA thought that CCM and Adelaide would struggle because the potential audiences were thought to be smaller. However, both CCM and Adelaide have showed how shrewd their mgt was compared to the former Qld Lions.

The Economist published an article comparing the viability of the EPL with American Gridiron. It found Gridiron to be much more viable. The key factor was joint ownership of all revenues (particularly gatetake). Therefore everyone cooperates to maximise the crowd.

Very few EPL clubs consistently do anything other than make big losses - even the 4 that have any chance of winning anything.

The MSL in the USA is viable and it runs a much more centralised model than the A-League. Even the players are vetted centrally.

When it comes to sport, even now, the Americans make the most money out of it and they don't mind socialism at all (as it turns out).

Oh, and the FFA spent $ms (of Australian football money) owning the NZ Knights before Wellington signed on.

Bill said...

Thanks for the comments John. I think it's no coincidence that most newly-created sports leagues are franchises. Which might make business sense but it can be a bit more difficult for supporters to really relate to their clubs.

Tom said...

Months after you posted this, this is still relevant. The issues need to be dealth with - they won't just go away.