Separation from the A-League gives football an opportunity to be fit-for-purpose

Football should not be perennially broke, but now is the time to refashion the way it's organised

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Rumours abound about the financial status of Football Federation Australia (FFA) in the context of the separation of the A-League. Sources suggest that, just like any divorce, it's the devil in the detail of who gets what and how much that will make for interesting reading in the final settlement.

Of course, that assumes either party would actually publicly share the details of the financial settlement; 'transparency' is not the first word that comes to mind when it comes to football administration anywhere.

However, while there is speculation about how FFA will cope financially once the A-League assets and liabilities are stripped out of its balance sheet, the game overall is not broke – despite the fact that long time Australian football fans have been conditioned over a lifetime to accept that reality.

Key to this perception of being serially bereft of funding is the 'great big player tax' imposed by the state member federations and FFA on every registered player.

When the tax (or national registration levy) was introduced last century, it was promoted to mums and dads of young players on the basis that every player in the country would contribute $1 towards assisting the Socceroos and Matildas to take part in training camps and international friendlies as preparation for a big pay day of FIFA tournaments. Back then, the national body had no broadcast deal, no big money sponsors, no licensing agreements and not much scope for gate takings. The total revenue for the national body was equivalent to $7.5 million in today's terms (1992 cf 2018), so paying the national registration levy was something parents did unquestioningly to support the game we loved.

The national body's revenue last financial year was $132.6 million.

But 30 years later, the great big player tax remains a last bastion of 20th century sporting finances. In football, the money flows from the bottom to the top; in other major sports in Australia, it is redistributed from the top to the bottom with the real impact being at grassroots levels where the costs for kids to play is minimal, if not entirely free.

How important is the great big player tax?

In the financial year ending in 2018 – a World Cup year, so FIFA's increased contribution is included – the combined revenue of the ten federations (FFA and the nine state member federations) was a little less than $200 million for a combined surplus of $1.4 million.

FFA collected revenue of $9.4 million in registration and affiliation fees in 2018; an internal analysis by FFA forecasts that figure to be $11.2 million in 2019.

While most will not be surprised to know that Football NSW, which has more players than anyone, collects the most money in registration fees (approximately $9.7 million), the other member federations are not too shabby either. For example:

• half of Queensland's total revenue of $8.2 million comes from registration fees ($4.1 million);

• Western Australia collected $2.9 million (42% of total revenue);

• South Australia, $1.6 million (31% with a one-off government grant excluded from revenue); and

• the ACT, $2.9 million (~60%).

  
  

To put it another way, the great big player tax contributed 20% of football's 2018 revenue, with registered players paying a total in the vicinity of $40 million towards Australian football coffers across the ten federations. This excludes the share of registration fees retained by Associations and/or clubs.

Board members or executives of a football federation say off-the-record that registration fees have to be maintained for football to survive. But do they?

How much money does football have?

Between them, FFA and the state member federations have a combined total retained equity of $93 million.

A little more than half of that (52%) belongs to Football NSW but even the six smaller federations of Queensland, Western Australia, South Australia, Tasmania, the ACT and the NT have combined retained equity of $14.5 million.

Almost $39 million (41%) of the retained equity is in cash or cash equivalents – coincidentally about the same amount of revenue from the great big player tax. South Australia is holding the largest cash reserve of $10.5 million followed by FFA with almost $6.5 million. By comparison, the ratio of total cash reserves to total revenue in Australian football is double the ratio of cash reserves to revenue of FIFA.

	Revenue ($m)	Retained Equity ($m)	Cash Reserves ($m)
FFA	132.6	6.9	6.5
NSW*	15.1	48.8	5.6
Northern NSW	8.8	13.4	4.6
VIC	11.7	9.8	4.4
QLD	8.2	2.9	1.9
WA	6.8	2.0	1.2
SA	5.2	4.8	10.5
TAS*	2.4	0.8	0.8
ACT	4.9	3.6	2.7
NT	1.6	0.6	0.5
Total	197.3	93.6	38.7

FFA & state member federations: revenue, retained equity, cash reserves (2018). Sources: Financial Statements

Opportunity to recalibrate

When the A-League/W-League specific revenue is taken out once the separation is finalised, FFA's revenue is expected to be in the vicinity of $45-$50 million in a non-World Cup year (costs will also reduce).

Even at a reduced total of $120 million, football operations nationally are not insubsantial – but could they be better organised and managed?

Why does the sport feel and talk as if we're continually broke?

Would football be better served by one single, national, unified entity – something like the Sport Australia 'One Management' model?

The late 19th century federated model on which football is based may have been appropriate once, but is it appropriate today?

For example, do we need ten Boards with at least 70 Board members, and ten staffing structures that spent $38.4 million on employee expenses in 2018? Coincidentally, that's about the same as the cash reserves – and the great big player tax.

When we consider the $40 million collected in registration fees, the $93 million in retained equity, the $38 million in retained cash, a total annual staff bill of $38 million – and even the PFA being gifted $2 million for its base grant ($250,000) and the Player Development Program ($1.8 million) – are ten federations to govern and manage one sport what we need?

How football is structured is a vital issue for its sustainability and development as we head into the third decade of the 21st century. We need to make the most of all the assets we have as a sport across the nation for the good of the game as a whole.

Now is the right time for the FFA Board and its soon-to-be new management team to consider options for a fit-for-purpose governance framework for football in Australia. This requires the FFA Congress and its constitutent organisations to put their important role as custodians of the sport first, and not about what suits their state-based silos.

With the A-League gone, there is now an opportunity with the right vision, leadership and boldness to refashion football. The sport should be structured to enable the sport to maximise its potential at all levels – financially, on-the-field, and off-the-field.

And that should start with putting football and football players, fans and volunteers first.

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* Please note that all dollar figures quoted are based on 2018 financial reports, other than NSW (2017) and Tasmania (2016). The latter only publishes a summary prose report of its financial statements and, at the time of writing, had not updated since 2016.