NPLV: Both sides standing firm
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http://leopoldmethod.com.au/nplv-both-sides-standing-firm/

Lawyers have been called in by the 51 co-signatory Football Federation Victoria (FFV) clubs, who have withdrawn from the National Premier Leagues Victoria (NPLV) expression of interest and application process, to commence court proceedings against the state federation.

FFV Board approved the NPLV model on 15th April, and has remained firm that the ‘model and criteria in Victoria will not be changing’. On 2 August, FFV announced the members of the NPLV assessment panel, to be lead by current director of Football Queensland and former Brisbane Roar CEO, Eugenie Buckley.

Football Federation Australia (FFA) have publicly supported FFV’s model via a joint press release statement. FFA CEO David Gallop said that FFA is satisfied FFV have ‘followed the principles of the NCR’, and that each ‘state and territory member federation has the opportunity to shape the NPL criteria to fit their own circumstances.’

The clubs support FFA’s National Competition Review (NCR) outcomes, but have issues with many of FFV’s changes. The clubs claim entering into the NPLV will cause them to lose on average $142,000 a year. Whilst the co-signatory clubs and FFV are at loggerheads, Gallop believed that ‘these matters can be best resolved without the intervention of FFA’.

The NCR outlines the Elite Club Licensing (ECL) criteria, which is central to providing a consistent standard of club operations and player development across the top-level state competitions. FFA acknowledges that each state is different, and allowed each of the Member Federations to ‘adjust certain criteria to fit local conditions or characteristics’.


Most of the adjustments made by state federations are focused on phasing in the changes over time, with FFA wanting full compliance on the ten criteria of the NCR by 2016. For example, South Coast Wolves, who play in NSW’s NPL competition, currently does not have a facility that meets the required standard. However in their submission was a plan to build $14.5 million ‘Home of Football’ facility in West Dapto. Last week the Federal Government offered $7.4 million to start the project. Projects that require serious capital investment like these take time.

Each of the states has taken a different approach to implementing the NCR. Football NSW saw it as a chance to review all four tiers of their state league competitions, and align them with a path to promotion and relegation. Football Queensland decided to press ahead with both a restructure of men and women’s competitions, and focused on the structure of the top tier NPL.

FFV has followed a similar path to Football Queensland by focusing on restructuring the top level of football, and trying to ensure as much of the state has a direct pathway from grassroots to elite level football, by allocating NPLV clubs to zones, which is a requirement under the NCR. Queensland NPL sides are allocated a zone, or a cluster of amateur clubs, in which they are required to work with on developing local juniors.

Football NSW has clubs aligned to associations, however for many of the clubs (outside of the association teams) there is little relationship with the community clubs, and many have a link with their aligned association in name only. FFV wanted to avoid this issue by designating clubs to zones, as well as, making it part of the criteria of the club to work with the amateur clubs within their zone on developing players.

However, unlike in Queensland and NSW, FFV is not allowing any NPLV clubs to have an amateur component (sub-junior teams). In NSW, Rockdale City Suns, Sydney United 58, Marconi and Bonnyrigg White Eagles, all have amateur teams. In Queensland, clubs such as Brisbane City and Redlands have juniors. Palm Beach has 75 junior teams, and Moreton Bay United is backed by Albany Creek FC, who not only financially backs the club, but also provided:

“All the junior Technical Structure, fields, infrastructure and the organisational resources necessary to form the organisation which allowed MBU F.C. to move from concept to competing on the field in less than 4 months.”

FFV’s rationale for not allowing sub-juniors is stated in NPLV Frequently Asked Questions document:

“We believe having sub- junior teams playing in NPL competitions would rob community clubs for no good reason and those community clubs are likely to not engage with NPL clubs because they will simply see them as taking all their good players away.”

Under the current financial operating model for clubs, one of the main sources of revenue is sub-juniors. It not only provides revenue via registration fees, but also canteen takings, sponsorship earnings and fundraising. The clubs have raised this as an issue with FFV.

A spokesperson for FFV replied to Leopold Method’s questions via email, on whether FFV would allow clubs to have sub-juniors to ensure a viable operating model. If not, how would FFV propose or assist in providing an alternate source of revenue. FFV’s response to Leopold Method was consistent with previous statements to the media:

“The NPL model and criteria in Victoria will not be changing. FFV understands that some applicants cannot be fully compliant on all fronts on day one – as clearly stated in the application criteria.

So, it comes down to a balance between being financially viable off the field and competitive on the pitch and a logical approach would be to operate within your means from the outset and build momentum over the coming years.”

One of the key differences between clubs in the top level of NSW and Victoria is capitalisation. By allowing clubs in NSW to have amateur teams helps support the financial model. Five of the NSW NPL1 clubs are backed by associations, who can draw upon large cash reserves to fund the increase in coaching and operating costs; and claim it as ‘development costs’.

Also clubs like Marconi, Sydney United 58, and Bonnyrigg White Eagles, have financial backing of social clubs. APIA Leichhardt Tigers is supported financially by Wests Ashfield Leagues Club. The club has publicly admitted without this financial support it may not still exist.

Only Blacktown City and Sydney Olympic in NSW NPL1 operate without an amateur club or association supporting it. Vince Camera, who owns home building company Lily Homes, bankrolls Blacktown City. Camera rescued the club back in 2009. Financial stability seems certain for the club planning on laying a synthetic pitch at their home ground, Lily Homes Stadium. Sydney Olympic has publicly claimed they meet the criteria and have the financial resources.

When Football NSW conducted a competition review in 2012, prior to rolling out the NCR reforms in the state, Manly Warringah Football Association (MWFA), who runs NPL1 side Manly United, stated:

“Associations should be guaranteed a license so that either a ‘Federation Club’ can join them or the association can develop their own Representative team. The reason for this is that the Associations have the numbers and the financial clout to support such teams.”

Having around 16,000 players providing fees to the association has its benefits. MWFA at the end of 2011 financial year had a bank balance of $1.29 million bank (total of $1.607 million in cash and cash equivalents). Whilst full financials were not provided for 2012 financial year, the association made a surplus of $136,548. These are serious funds to be able to financially support the NPL model.

Leopold Method asked FFV if they rejected the financial model proposed by the clubs estimating a loss of approximately $142,000, FFV’s response:

“There are many variables in any financial model and all applications will have varying costs and revenue projection.”

Nicholas Tsiaras, who calculated the NPLV financial model, and is the co-signatory club’s spokesperson, previously explained to Leopold Method:

“The clubs could be insolvent from day one. If you as a director know this, you are liable under Section 558G of the Corporations Act.”

Section 588G of the Corporations Act 2001 provides for the director’s duty to prevent insolvent trading by a company. If club directors willingly know that they do not have the current cash reserves, and enter into the NPLV and incur loses, they will be held liable. Directors could be subjected to a civil penalty and/or personal liability to pay compensation. This is a fear the clubs have.

Leopold Method has been unable to access Victorian club’s financial records to be able to determine the hypothetical projections made by the clubs are accurate, and whether FFV’s claims that these figures are in fact ‘inflated’.

However, financial projections are based using historical financial data, with the aim of trying to anticipate the future. Leopold Method has cross-referenced the club’s NPLV financial projections with some NSW state league clubs. One of the key issues is the cash-on-bank the clubs have in carrying over to the following year. Unless there is a massive ramp up in revenue earnings, the clubs could run out of cash. In the article ‘Show me the money’, Tsiaras confirmed this as the club’s concern:

“All five clubs gave me access to their financial information. No one has got the cash.”

The clubs have requested for in independent financial model from FFV. In a follow up question by Leopold Method on whether FFV developed a financial model for NPLV, FFV spokesperson replied:

“FFV has provided a budget template that is to be used as a guide only. Each applicant will have varying costs and revenue projections.”

The clubs claim there will be ‘inflationary pressure on coaching costs, due to a lack of suitable candidates.’ Under the club’s financial projections, direct wage costs for coaching staff is forecasted to be at 33.7% of costs and 41.4% of total revenue. The wage costs do not incur a GST offset, and because the coaches will be seen as employees, this will bring on additional wage on-costs.

FFV believe that the staging in of coaching accreditation requirements, plus an increase in providing more C and B license coaching courses will put help keep the cost of hiring coaches down. In an interview with FourFourTwo’s Kathy Stone, FFV CEO Mitchell Murphy claimed that some of the costs floated by the clubs were inflated.

“Each respective applicant will vary in terms of a whole host of things, for instance one club may opt to pay a coach a lot more than another club will.”

Leopold Method again raised this issue of coaching costs, FFV continued the line of response:

“The payment of coaches is at the discretion of the clubs. FFV has consistently informed EOI applicants we will do everything in our power operationally and on a budgetary level to assist the coaching framework for successful NPL clubs.”

So then the argument moves towards revenue generation. Murphy again to FourFourTwo:

“I also believe that with some strategic thinking around that model in terms of sponsorship and revenue that they can get more dollars in through those avenues.”

It is the lack of specifics in revenue generation that the co-signatory clubs have an issue with. In a response via email to Leopold Method, Tsiaras said the ‘standard line is FFA is getting a sponsor’. In a presentation to the Expression of Interest clubs, FFV stated that FFA is looking for a $1 million naming rights sponsorship for NPL. However, splitting this across 8 federations, and if it trickles down their respective teams, will not go far.

FFV will also be looking to for a naming rights sponsor, similar to IGA’s sponsorship of NSW NPL. Leopold Method asked FFV if they had developed a marketing plan for NPLV:

“After the 30 September when licences will be announced FFV will then be in a position to develop an effective and high level marketing plan that will ensure that NPL competition is showcased.”

In the article ‘The best laid schemes of mice and men’, the issue about how Australian football administrator’s implement change was examined:

“To make change, one needs to appeal to the rational and emotional level of the football community. What looks like resistance is often a lack of clarity (rational), and what is deemed to be laziness, is often due to exhaustion (emotional).”

It is this lack of clarity about how revenue will be raised to cover the costs that is causing the greatest angst. On one hand, clubs are being told that their directors will be held liable if they willingly enter a competition knowing that it will not be financially viable. FFV has not helped this by not providing their own financial model or a detailed marketing plan, addressing the issues of costs and revenue generation.

When this stumbling block is presented, the arguments arise that people are putting up roadblocks to change. FFV has stated that ‘consultation with stakeholders around Victoria was the most comprehensive of any Member Federation’. The 51 co-signatory clubs, claim that there has been a lack of consultation, dispute this.

On 1 August, eight additional women’s clubs put their name to the list of co-signatory clubs, bringing the total of ten Women’s Premier League out of twelve whom have withdrawn from the NPLV application process. With most of the attention focused on the men’s competition, this should be seen as a significant step.

Some clubs are better at developing women’s football than others. Why not keep the application for men and women’s competitions separate like in NSW? This question was posed to FFV, and the response:

“The NPL model and criteria in Victoria was approved by the Board after thorough consultation with all stakeholders. As stated recently by FFA CEO David Gallop, ‘each state and territory member federation has the opportunity to shape the NPL criteria to fit their own circumstances.’

FFV has always been a federation committed to women. It is common sense to incorporate women teams which aligns FFV’s strategic goals.”

Out of the existing VPL clubs, only South Melbourne has a team playing in the current Women’s Premier League. Only three clubs who compete State League 1 Men’s competition – Box Hill United, Heidelberg and FC Bulleen – also occupy the top tier women’s competition. The rest of the WPL teams respective men’s sides are scattered across the lower levels of state league:

■Cairnlea FC – State League 3 (North West)
■Preston Lions – State League 2 (North West)
■Altona City – State League 3 (North West)
■Sandringham SC – State League 4 (South)
■Bundoora United – State League 5 (North)
■Casey Comets – State League 3 (South East)
Football NSW separated the process of reforming their men and women’s competition, as the FFA had not presented the outcomes of the Women’s NCR to the state federations until November 2012. FNSW realised from its existing competitions that some clubs are better at running women’s sides than others. Only five of the men’s NSW NPL1 sides have a Women’s Premier League teams, whilst another two have Women’s State League sides. Four of the clubs – Blacktown City, Bonnyrigg White Eagles, Rockdale City Suns and Sydney United 58 – do not have a women’s state league side. Both Inter Lions and Northbridge, who play in NSW WPL have men’s sides playing in State League 1 (NSW’s third tier).

Football Queensland’s with their reforms has had to stage their women’s competition. Currently the women’s NPL competition is for U18, U15, U14, and U13s. Only two out of the twelve NPL sides – Brisbane Strikers (called Souths Strikers) and Palm Beach Sharks – has a full compliment of women’s sides.

FNSW taking a pragmatic approach, and Football Queensland staging in their women’s competitions, it will be interesting to see if FFV can set up their elite women’s competition in full by next season.

Highlighted in the FFA Women’s NCR document, is the need to have consistency in age groups across all the state competitions. Football NSW aligned with FFA’s desire to have 1st Grade, Reserve Grade, U17, U15 and U13. Now the federation is working on the details for application.

FFV’s model will have one less senior side (which is optional) and an age group not in line with the Women’s NCR – 1st Grade, U18, U15 and U13s. Interesting that FFV has decided on this model since FFV General Manager, Tim Frampton, was involved in FFA’s Women’s NCR working group.


NPLV applications close this Friday 16 August, and the licences will be announced on 30 September. The 51 co-signatory clubs have instructed lawyers to commence court proceedings and will meet on Monday 26 August to develop a “New NPLV” model. For the rest of the football community it is the waiting game. Both sides will make various claims and counter-claims, as the public tries to make sense of it all.

If it goes to the courts, the only losers are the players and parents who pay registration fees, as both sides dip into the funds underwritten by those who play the game. That will be the saddest part of the story.