A-League needs rethink to survive

April 11, 2012
By Guy Hand

The obvious question is can the Newcastle Jets survive?

The bigger question - and one far more difficult to confront - is can the A-League?

The overwhelming evidence is that in its current form, it can't, and won't.

In the A-League's seven-year history, three A-League clubs have died or been killed off.

Another is now on life support.

One is being induced ahead of time after its forerunner was stillborn to make a round, TV-friendly number.

Five existing clubs have had ownership changes.

Every club is losing money.

So too is Football Federation Australia, which runs the league.

People talk about the bad old days of the NSL with clubs disappearing and crazy politics.

Is what's happening now much different? Or less concerning?

There can't be that many bad businessmen congregating in the A-League.

Which leaves just bad businesses, and bad business.

The quality and entertainment value of the competition is not in dispute.

The product is excellent, and getting better.

In season one, the good games stood out. In season seven, the bad ones do.

But no matter how good a product is, if it is made and sold inefficiently, it won't be financially sustainable.

The federal government review of soccer released last December accused the A-League of living beyond its means, and said it wouldn't survive if steps weren't taken.

It took particular aim at clubs' two biggest costs and those unique to football business - player wages and stadium rents.

It also warned against expansion until financial stability was achieved.

"Costs must be reduced - player salaries and stadia deals represent costs disproportionate to revenue. The A-League must live, and grow, within its means," the Smith Review said.

In the context of the Newcastle Jets' decision to hand back their licence, Gold Coast United being killed off and the attempt to float Western Sydney in the space of a week, the words in that report take on even deeper relevance and gravity.

Maybe a fully professional national soccer competition in Australia simply isn't viable.

Passionate fans, great players, excellent entertainment. Just not enough money to make it all work.

If the A-League is to be viable, there needs to be a massive rethink about its business model, salary cap amount and structure, and the FFA's insistence on big stadia when smaller might be more sensible in some markets.

Yes, AFL and NRL clubs have financial issues too.

But certainly in the AFL's case for those clubs that need welfare, they are awash with enough money to be the "bloody bank" Frank Lowy insists the FFA is not.

When you're the biggest show in town, you can ride it out and throw enough money at problems to turn the financial tide.

There's no such luxury for the A-League.

It needs to be economically sustainable.

Right now, it's not.

For those who disagree, ask yourself this.

Today, as it stands, would you invest your money to run a club in the A-League?