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FFA reaches agreement on ‘new era’ for Australian club football

Football Federation Australia has reached an agreement in principle on a venture that will see the men’s A-League and women’s W-League become independent organisations, ushering in a “new era” for the sport in the country.

The FFA today (Monday) announced that the New Leagues Working Group body it formed in October has agreed on recommendations to bring about the “evolution and re-invigoration” of its two elite leagues, as well as youth competition the Y-League.

The recommendations are predicated on creating two focused bodies within Australian football that will compliment and benefit one another. The FFA has hitherto overseen the leagues, but club owners have long sought independence. In April, the Australian Professional Football Clubs Association, which represents the A-League owners, responded to the release of a blueprint for ‘A-League 2.0’ by warning that the A-League could face a A$120m (€74.1m/$84m) shortfall in funding.

FFA chief commercial officer, Luke Bould, told SportBusiness in May that multiple business models were being assessed, stating that stakeholders had to consider football’s status as effectively the fourth biggest sport in Australia.

Under the plan outlined today, FFA said clubs will have full and perpetual use of their intellectual property rights with the mandate to oversee the running of the leagues. As such, clubs will have unimpeded control of all commercial rights associated with their teams.

The recommendations also foresee a governance structure for the leagues overseen by an independent chairperson and representatives of each of the 12 club license holders, with two additional representatives from FFA. The NLWG recommendations include a number of ‘Good of the Australian Game’ veto rights to be held by FFA.

The management of the leagues will be delivered by a dedicated organisation that in the first instance will be transitioned from FFA and evolved rapidly in the coming season and thereafter with clubs committing to providing the necessary capital and human resource investments.

The leagues’ management organisation will be responsible for the commercialisation and growth of the competitions’ intellectual property and commercial rights. In the interests of ensuring the whole of the Australian game benefits from the commercial re-focus of the leagues, a number of recommendations have been agreed upon.

These include an annual contribution from league revenues to FFA including for national team programs and grassroots initiatives. This contribution will be equal to 1.125 times the amount that will be distributed by the league to any individual club in the same year. The minimum contribution will be A$4.5m per year in the first instance and indexed linked to the Consumer Price Index (CPI) thereafter.

However, the leagues will be relieved of the licence payment obligation for the next four seasons, tying in with the current broadcast deal with Fox Sports, in order that investment in the long-term sustainability and growth of the league is maximised.

For the benefit of the national teams and grassroots programs, the NLWG has identified a number of ongoing funding opportunities that the leagues will provide. These include 10-per-cent yields from the sale of new club licenses or net profits from the sale of existing clubs, and a 10 per cent share of transfer deals of players sold internationally.

FFA will retain a 20-per-cent, non-diluting and non-voting, ‘carry’ equity share in the league. If a portion of the leagues are ever sold, 20 per cent of those proceeds would also be granted to FFA. The FFA stressed that fundamental to the NLWG agreed recommendations is the assertion that the Federation should be “no worse off” from the re-organisation.

The reforms are set to be fully finalised by August 1, with a view to introduction in time for the start of the 2019-20 A-League season in October.

FFA chairman Chris Nikou said: “The recommendations of the NLWG serve to align and unite Australian football’s interests like never before.

“Clubs would have greater control over the strategic and commercial direction of the leagues, in turn triggering significant new investment in the quality and marketing of all three leagues, and FFA would be able to focus its energies and resources on the national teams, grassroots and the overall strategic direction of the game in concert with all of FFA’s members, including the Women’s Football Council, State and Territory Member Federations and Professional Footballers Australia.”