Fan-based ownership a solution for A-League?

November 20, 2010
Sydney FC fans during the 2010 A-League grand final.

There has been a lot of discussion about the problems within Australia’s national A-League football (“soccer”) competition, with some even fearing that it is on the verge of collapse.

Maybe that won’t happen, but there are signs that things aren’t looking good. In September, Newcastle Jets became the latest club to be provided with an emergency loan. The league’s governing body, Football Federation Australia (FFA) agreed to provide short term financial assistance so the club could pay its players.

This came after the FFA bail-outs of North Queensland Fury earlier this year and Adelaide United last year. Both clubs are now being run by the FFA, which also bought a controlling share of Brisbane Roar in 2009 after it too faced financial difficulties.

The Sydney Rovers, scheduled to enter the competition in 2011, has struggled to raise enough capital to join the competition. A November 11 article said the FFA had told the franchise time had nearly run out for it to show it was capable of joininf the A-League next year.

Crowd numbers are down at games and said the FFA was looking to cut mid-week fixtures, calling them “a financial disaster” for clubs. Clive Palmer, billionaire mining magnate and owner of Gold Coast, has introduced a “crowd cap” of 5000 to reduce running costs.

Despite this, the general consensus is the quality of the games is higher than ever.

There have been various reasons put forward for the problems. I’ve heard the following:

• A lack of free-to-air television coverage, which immediately cuts out access to 70% of Australian who don’t have Pay TV.
• Governance issues within the FFA. The FFA is accused of focusing too heavily on Australia’s World Cup bid and not enough on the A-League. Also raised by critics is the fact that there isn’t a separate body from the FFA, which manages Australia’s national teams and coaching programs, to run the A League.
• Too many “outsiders” and not enough “football people” involved in running the game.
• The league starts too early in the year, at a time when Australia’s other major football codes have their final series.
• There is too much incompetence within the FFA.

All of these points may well be valid — especially the first one. However, we need to be looking at the ownership model of clubs in order to create a successful league.

It is disappointing that a discussion about this, which began when the FFA bailed out North Queensland, has not been followed up.

Craig Foster, a former member of the Australian national team and a Fairfax sports journalist who is a strong critic of the FFA, raised the idea of the “German model” for Australia. The German model was described by football website on March 11 in the following way: “The basis of the German model is the 50+1 rule whereby a minimum of 51% of the club must be owned by club members.

“This still allows for considerable investment opportunities for private business to invest while preventing them from having overall control of the direction of the club. A Bundesliga [German premier league] club board is made up of delegates selected by the shareholders.

“That way the supporter membership associations … have a direct say on the management of the club.”

Some of the clubs are completely fan-owned.

This model hasn’t stopped clubs going bankrupt — some still do. But pointed out: “The system does seem to work overall and with a broad consensus within the game. The Bundesliga is not the most glamorous league in the world. However, it continues to turn a profit, has the highest attendances in Europe and among the lowest ticket prices.

“The existence of subsidised attendance costs, terracing and access to free football on TV can be directly attributed to supporters’ influence in the club’s decision making.”

There have been movements in England to extend the rights of football supporters to have a say in the running of their club. Some fans are organised into supporters’ trusts that are described by as “democratic, non-profit fans’ organisations aiming to influence how their clubs are run”.

In March, the Manchester United Supporters’ Trust had 128,000 members and was seeking to raise enough money to buy the club.

The trust has organise protests by supporters against US billionaire Malcolm Glazier, who has a controlling interested in Manchester United. Among other things, fans are furious at rising ticket prices.

A spokesperson for Arsenal FC’s supporters’ trust, Vic Crescit, told the March 14 he was confident for long-term successes for this model. He said: “Generally, I believe fan ownership, including majority fan ownership and board membership, will be commonplace in the future. I think we’ll look back in 20 years and wonder what all the fuss was about.

“The level of disaffection and alienation of fans will either be recognised and dealt with or the game will wither and die as a mass spectator activity. It’s as simple as that. I’m optimistic that it’ll be the former.”

This seems to me what we should be discussing in Australia. The current model is based on trying to encourage those with lots of capital to invest money in clubs.

This is inherently unstable, because capital investors can withdraw their money as quickly as they invested it, leaving the clubs destitute. It leaves clubs at the mercy of rich investors often driven by the profit motive rather than the good of the club or the sport.

It is also important fans feel connected with their club. As it is now, the many disgruntled A-League fans have no say in fixing any of their clubs problems; we just have to wait for white knights flashing cash to save us.

This is not sustainable or desirable. Moving to a model of ownership where fans have a real stake in the ownership and running of clubs seems to me the best long term strategy to establish a viable football competition in Australia.

[Tim Dobson runs, which provides a left-wing analysis of sport.]

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