Australian Football – Are we ready for Promotion and Relegation?

With the National Premier League season almost finished across Australia and the FFA Cup in full swing where Hyundai A-League Clubs are pitted against National Premier League clubs in the Quarter and Semi Finals, the debate around a national second division and a promotion and relegation system has intensified in recent weeks and months.

As an A-League CEO and senior administrator within the game of football, I believe that these conversations are healthy for the continued prosperity of our game.

Whilst I am not a proponent of promotion and relegation in the sense of an immediate time frame like several other traditionalists and purists, we do need to set a clear roadmap towards a possible promotion and relegation system, whether it’s a medium to longer term ambition or not.

This week I was interviewed on the Outside 90 podcast the Daily Football Show hosted by Mark Van Aken and Adrian Houghton on a dedicated show on the topic of promotion and relegation.

During my interview I put my thoughts forward around the way I see we can make progressive steps towards what many are calling for – a national second division, promotion relegation etc…..

Whilst the opinions I expressed are my personal views only, I believe that these views are up for debate and discussion as they are conversations that need to be had to develop the vision for the future of our competitions’ structure.

The Whole of Football Plan which was unveiled by FFA in 2015 is a good plan for Australian football and a document which can become the blueprint for our sport provided we are prepared to continually review and refine as circumstances and priorities evolve over time.

I see the process towards promotion and relegation a long road ahead embarked upon cautiously in the following stepped process in priority order as follows:

STEP 1 – FINANCIAL SUSTAINABILITY

The underpinning of the financial model of the Hyundai A-League and its current ten (10) clubs is crucial.  There is no point embarking on an expansion strategy or implementing a second division with promotion and relegation until the commercial model is rectified to financially underpin the league as it stands and its existing 10 clubs.

The current model sees most A-League clubs lose money each year and this has been the case since the new A-League was launched 11 years ago which has served the league well to date by unlocking private equity investment.

Pleasingly the FFA and the Clubs are currently working diligently and collaboratively to review the 11 year old A-League commercial model with the desired outcome being to devise a model which provides a fairer and transparent distribution of a A-League generated revenue and IP between the A-League Clubs and other FFA priorities under their remit.

At the same time, the new broadcast deal negotiations are well advanced with the current rights expiring at the end of the 2016/17 A-League season and there is much anticipation around a new and improved financial deal with a free to air component to complement the great work Fox Sports currently perform for the Hyundai A-League.

Improvements to the current commercial model and broadcast deal will deliver a more sustainable league and this needs to be completed and implemented before we can even contemplate expansion, a national second division and promotion and relegation.

Over the next 12 months the A-League is also embarking on a major brand refresh  in readiness for season 13 (2017/18) to coincide with the new broadcast rights. The refresh is both welcome and timely given the brand was developed 11 years ago.  The brand refresh will play a key role in shifting the perception of the league in the hearts and minds of our growing football community.

For season 12 there will also be a major shift of our target audience in our marketing efforts towards families and grassroots which is a welcome shift where we can “fish where the fish are” and begin focusing on connection and engagement of our large and growing participation base rather than just boasting the participation numbers as we have in the past.

STEP 2 – EXPANSION OF CURRENT A-LEAGUE

Once we have developed a stronger A-League commercial model and negotiated a new and improved broadcast deal which have both delivered improved financial sustainability of the A-League and its existing clubs, the priority needs to shift towards developing a road map for expansion of the current 10 team Hyundai A-League initially to 12 and eventually to 14, 16 or more.  This needs to be done in a careful and considered manner.

Currently there are nine (9) Australian clubs with playing rosters of 23 each representing only 162 Australian players (i.e. 207 players less 45 visa players) being given an opportunity to play A-League. If we add the mature age rookies clubs can recruit outside the 23 playing roster (1 x mature age rookie each club), this number increases to 171.

The Whole of Football Plan demonstrates that whilst the Australian population will increase from 23.6M to 30M in 20 years time, the football community will double from 7.5M to 15M and the participation base will also double from 2M to 4M.  It also shows that registered participation will more than triple from 600K to 2M in 20 years.

The above statistics personify the need to develop a road map for expansion sooner rather than later and at the same time ensure that expansion considers compelling statistics as to where the growth will come from so that we are able to cater for that growth with an A-League presence.

Expansion would provide more opportunities for our players and coaches for full time careers in their chosen sport within our own environment as opposed to obscure leagues overseas.

Our off-season is way too long and our season is too short in my view and expansion can help address this issue.

The question as to ‘Where do our priorities lie for possible A-League expansion?’ is a whole science in itself.  The Whole of Football Plan states the following:

“Every major Australian centre with a population over 500,000 has the market size to host an A-League club”

We have so many crucial regions of Australia unrepresented of A-League and a presence would help further develop football in those areas.  Currently we have four (4) teams in NSW, two (2) in Victoria, one (1) in Queensland, one (1) in Western Australia, one (1) in South Australia and one (1) abroad in Wellington, New Zealand.  If we overlay the registered participation numbers and the regions that remain unrepresented, we may find some use to this information providing the solution.

• Do our priorities lie in the the South East of NSW covering the Cronulla to Wollongong region?
• Does Victoria need a third team?
• There have been murmurings from Geelong?
• Recently Football West in WA put their hands up for a second licence, is it WA?
• I have also recently heard that Tasmania is working in the background to develop a business plan for an A-League club to be based out of Hobart.
• Do we create new A-League franchises or do we entertain existing traditional clubs which served the sport so well in terms of producing players in the 1970’s, ’80’s and ’90’s often dubbed “The Golden Generation”?

Whatever the case be, these decisions need to be made with caution and based on strong research as well as strong and viable submissions addressing all the criteria from a variety of priority regions and clubs, be they newly formed consortiums or existing National Premier League Clubs.

There are around 600,000 registered football participants in Australia and around 2.5M people engaged with football.  A close look at the breakdown of these numbers state by state could also be a telling tale.  Almost half of football’s registered football participants come from NSW, so a push for another club from that vast region is compelling and which will need to have a distinct geographic value proposition with the Greater Western Sydney region covered by Western Wanderers, the Inner Sydney and East Sydney area by Sydney FC and of course the Northern NSW region by Central Coast and Newcastle.

FFA deserves credit in the process they undertook in developing the Western Wanderers brand and the success that has become of this Club.  The key learnings from this process along with the learnings from the past mistakes such as Gold Coast and North Queensland Fury will serve FFA well when it comes to identifying and delivering new A-League clubs in strategically placed regions when the time is right.

STEP 3 – NATIONAL SECOND DIVISION

There is no doubt that the introduction of the FFA Cup and National Premier League (state based competition) have been successful initiatives implemented by FFA.  Together, these initiatives have managed to engage the football community and re-engage and raise the profile of Australia’s “traditional clubs” with long and proud histories.  I can only see how it has reinvigorated my old club South Melbourne who have a spring in their step and new purpose with their role in Australian Football – which in turn has intensified their well documented aspirations.

My view on the current National Premier League is that we are spreading our next tier of playing talent across too many leagues and clubs.  My calculation suggests there are over 100 NPL Clubs.  Assuming each club has a playing roster of 20 players, this translates to 2,000 players across 100 NPL Clubs.  On current data, the number of players making the step up from NLP to A-League is not compelling.  I have several thoughts on how to reverse this trend:

• I often wonder whether a national second division across two (2) conferences of 10 teams would provide a better platform to migrate the best next tier 400 players to further improve the quality of the league and the opportunities for players (and coaches) to prosper to an even higher standard competition, enhancing  their abilities to be recognised by A-League clubs.
• Concentrating the next best tier of talent in a high quality national second division would further enhance the current NPL system and the opportunities for these players in the A-League.  An example could be one conference comprising of Tasmania, Victoria, South Australia and Western Australia and another conference comprising of ACT, NSW, QLD.
• A national second division could also potentially unlock new private equity investment in these clubs where they can build upon their foundations and brands for when one day football is actually ready for promotion and relegation.
• In the first instance and possibly for 5-10 years (possibly longer) I don’t envisage there would be promotion and relegation
• A business case on the viability of a national second division would need to be developed, however, some of the considerations would need to include hybrid A League minimum set of criteria around financial strength, membership, playing facilities, up-front capital to kick start the league, on-going working capital, junior academy set-up, facilities and the list goes on.
• Given the success of the FFA Cup broadcast, I would also envisage that there would be an incremental broadcast deal that could be negotiated.  Sporting content is still relatively cheap in comparison to other content. On the back of the success of the FFA Cup, a broadcast element would be a key objective notwithstanding that digital disruption enables a number of new platforms to exploit.

STEP 4 – PROMOTION AND RELEGATION

Whether promotion and relegation is 5, 10 or more years away, I am of the view that until we embark on a process, this will remain a distant reality.

The Whole of Football Plan states:

A-League competition expansion will come as a product of sustainable commercial growth, via a managed process of “in and out” as circumstances arise, rather than a relegation and promotion system based purely on results. This is critical to retain the strategic market placement of clubs which underpins the commercial viability of the league.

The above is a valid statement in many respects.  Do we really want to see a situation where our competition is not truly national?  Football was the first national competition of any sporting code in Australia when the Philips Soccer League was launched in 1977 and has been the cornerstone of our national competition ever since.

Pleasingly, new Chairman, Steven Lowy was quoted in a Herald Sun article written by Matt Windley in May 2016 titled Promotion and Relegation still firmly on the agenda of FFA Steven Lowy where he acknowledged that promotion and relegation was certainly on the agenda at FFA board meetings for discussion.

There are many purists who would disagree with the views I have expressed and the process I propose as a roadmap towards promotion and relegation and would prefer we implemented it immediately under the current model.

The question I pose is, if we were to implement it here and now, how sustainable would it be?  Are our foundations strong enough to achieve this at the present time?  I would suggest not, however, as many would agree as would disagree.

As the debate continues, our beautiful game will continue to prosper in Australia.

#WeAreFootball

Peter Filopoulos