Coronavirus crisis presents an opportunity to get football governance fit for purpose

The crisis caused by the COVID-19 pandemic and its impact on football should be turned into an opportunity to re-purpose the game locally

We’ve all heard the variety of maxims around a crisis: in essence, don’t let them go to waste.

Like other sport, football faces a crisis of existentialist proportions and yet the enforced break – that is likely to be months, not weeks – is also the opportunity to reset the game to be relevant and fit for purpose for the remainder of this century.

First, the crisis

A-League clubs

On 28 March we saw Professional Footballers’ Australia (PFA) react to Perth Glory’s Chairman, Tony Sage, standing down the club’s playing and non-playing workforce until 22 April when the FFA is set to re-assess whether the competition will proceed. Amongst the reaction from the PFA CEO, John Didulica – which implied that Sage is someone who doesn’t value people – the PFA also claimed the action was “unlawful”.

The PFA’s legal claim is interesting to say the least.

According to s524 of the Fair Work Act, an employer may stand-down an employee in a period in which they can’t be usefully employed for any cause for which “the employer cannot reasonably be held responsible”. No doubt within the broader Australian community, other employers have used the same provision of the Fair Work Act to stand-down employees also (think Qantas, Virgin, Myer and more).

In terms of the optics, which appear to place priority on players continuing to get paid while others in football and elsewhere in the community take a hit, it perhaps illustrates the reason why we have got to the point where owners like Sage have gone as far as they can possibly go because things have got as bad as they can possibly get (to paraphrase Tom Stoppard).

Didulica also warned other A-League clubs owners who may be thinking of doing the same thing that the PFA would take action in pursuit of “both the law and the sports (sic) broader needs at this time.” Does the PFA need a reality check?

After all, Sage is not alone in the local football world.

FFA has stood-down 70% of its workforce (presumably also drawing on s524 of the Fair Work Act).

Reports suggest that more A-League clubs will follow Sage’s lead and stand-down their entire staff. This is probably the slightly better option than the alternative of handing back their licenses, which is one course under consideration by some owners once it’s finally accepted that the competition will not be completed in 2019-20. With the news overnight that a Newcastle Jets player and a Wellington Phoenix support staff member have tested positive for COVID-19, even the most optimistic must see this.

Those said to be joining Perth Glory as a minimum include Central Coast Mariners, Newcastle Jets and Brisbane Roar.

Sage has said that he advised Perth Glory players and staff early because so many of them live interstate and overseas and he wanted to give them a chance to get home before any further, tighter lockdown controls on travel.

New kid not even on the block yet Macarthur FC, which is due to pay $3.5 million of its license fee by 1 July, is looking nervously at what’s going on – not least because the buyout by the new owners of former majority owner, Lang Walker, took up a lot of their available cash. In addition, the new owners apparently face a legal battle with former Football Director Ken Stead and General Manager Neil Favager. Chances are, the Macarthur FC owners will not pay the license fee payment because it will not be clear just what they’re paying for, and COVID-19 gives them an acceptable excuse to bail.

Revenue

On Wednesday, FOX Sports executives will sit down with FFA CEO James Johnson – the day the next instalment payment of approximately $12.5 million falls due.

It’s a fact that FOX Sports has been bleeding money for some time and is in deep financial trouble itself with a significant loan repayment due to banks by the end of July.

Since the COVID-19 crisis, and the cancellation of all sport, viewers who had stayed as subscribers to FOX Sports or their offshoot, Kayo Sports, have been leaving in droves, not merely to trim their own costs, but also because there’s nothing new to watch.

This, in turn, has an impact on sponsorship, gate revenue, memberships, events and other fundraising.

Will Johnson walk away from that meeting with the $12.5 million in the bank?

Pigs might fly; which is what then turns our attention to the state member federations and why they are playing hardball with their clubs about repayment of registration fees.

State member federations

Football NSW which, in 2019 declared revenue of $16.8 million and holds reserves of $45.3 million has demanded their associations and clubs pay registration fees that are due.

Northern NSW, Queensland and WA have demanded the same of their NPL and community clubs, more or less declaring that the refund policy is simply that there is no refund.

Around the country, state member federations are clinging to the hope that junior competitions, as a minimum, will take place in 2020 so they can maintain their principal source of revenue.

As we have revealed previously, the state federations draw between 50% and 70% of their revenue from registration fees. No competitions, no registration fees. No registration fees, no revenue. No revenue, no money to pay employees.

Football’s annual wages bill

In total, the annual wages bill paid to employees of FFA and the nine state member federations is in the vicinity of $60 million.

The combined salary cap for the A-League (with 12 teams) is a little under $40 million.

If we include non-playing staff at A-League clubs, player payments and non-playing staff at NPL clubs, staff at regional associations, the Matildas on contract and the Socceroos’ match fees, that adds up to a sizeable total wages bill for football in Australia. It’s impossible to give an accurate figure, but it’s probably somewhere in the vicinity of at least $150 million (more in a World Cup year).

Anyone to the rescue?

With the Federal Government handing-out relief to employers in many industries, there is a view in Canberra that the sports industry should not be left out.

We all know the arguments: sport is an important part of our culture, it contributes to social inclusivity, it has long-run health benefits and more. Once we as a society get through this, we will all need opportunities to re-engage and re-connect with one another, and sport is one important way to do this.

Other sports are pushing the NSW Government to divert some of the billions of dollars they’re spending on stadium upgrades and redevelopment to instead help local sport. So far the Berejiklian government has said no.

FIFA President Gianni Infantino has already stated that the FIFA Council is “discussing the possibility of establishing a Global Football Assistance Fund to help members of the football community affected by the crisis”.

Considering FIFA’s reserves in their most recent published financial reported totalled USD$4.4 billion, 82% of which is in cash or cash equivalents, this is precisely the type of ‘rainy day’ scenario where FIFA should be dipping-in to their deep pocket to help its 211 member federations. But even if FIFA gave away the entire $4.4 billion – which they will not and should not – each member federation would receive about USD$20 million. That is not going to solve Australian football’s financial challenges.

(Exercising its soft power, FIFA gave USD$10 million to the World Health Organisation to contribute to efforts to fight COVID-19 earlier this month).

However, regardless of whether financial relief does come from government(s) and/or FIFA, it’s certainly unikely to come from FOX Sports or any other potential broadcaster – whose own business models are under severe pressure – and it will not be enough to fill the gap caused by a big black hole in football’s finances. If it does come from government, it should also come with expectations of structural adjustment to the way the sports industry is governed and managed.

What’s next?

We start again. Ground zero.

Ask some fundamental questions and re-purpose the game from the top down and bottom-up.

• What services does a national sporting organisation need to deliver?

• What are our priorities?

• What governance structure do we really need to run a sport?

• What do we need to do to meet the Sport Australia preferred model of ‘One Management’?

• Do we really need ten federations and multiple layers of associations to administer the game?

• Are we making the best use of technology?

• What is the ideal, sustainable model for a competitive domestic structure that gives the most opportunities to more young people, and is supported by a community?

• How much should professional players be paid?

• How much should senior administrators be paid?

• What is the most efficient and effective way to ‘cut our cloth’ to meet the new normal we all face?

All those who love the game and want to see it prosper and be sustainable and continue to be part of the strength of the Australian community engaging with one another and the world, need to do put aside:

• their job titles

• their sense of entitlement

• their scrambling for the best seats and champagne and lobster at VIP events

• their salary expectations

• their turf wars

• their differences

• their power plays, and

• the attitudes that exclude some sections of the football community.

Neither the FFA Board nor the FFA Congress have the answers, individually or collectively. Recent history is littered with ample demonstrations of this.

In the post COVID-19 world, it’s not about what football can do for you, but what all of us can do for football.

Many people in the wider football community despair that nothing will change within Australian football because we will ‘never get the turkeys to vote for Christmas’.

If the FFA Board and the FFA Congress are genuinely not capable of doing what’s best for football overall – and the jury is definitely out in respect of most – then perhaps it’s time for the rest of us to work around them to find what will best serve the football community, our players and our sport for the long term.

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All the best for a speedy recovery to the Newcastle Jets player and Wellington Phoenix support staff member who have tested positive.