By grazorblade - 25 Mar 2024 11:07 PM
Hi all
We are hearing constant stories about why a league clubs are unsustainable. My question is why are they unsustainable?
At the moment the current salary floor is about 2.5 million australian dollars and 2.3 million is provided via the tv deal with more provided via sponsorship. Crowd averages are a bit down from the 10-14k averages we had before covid, but we still get 8k which is healthy for that salary. To see how healthy, I looked at leagues all around the world, the transfer value of a league grows exponentially with crowd averages and the fit is quite good. For the mathematically minded, see
https://docs.google.com/spreadsheets/d/1eI_KaPrIcEmt6EnbCSa8FcSWNq-3p7JsjgxBYF13fzs/edit?usp=sharing
We are actually a bit of an outlier with our crowds having much bigger crowds than you would expect for our transfer value. You would expect for a crowd average of of 8000 per game a squad value of 10 million euros, well above the current salary floor. So I'm trying to dig into why our model is so expensive and how we can fix it. Some possible explanations
1) more travel than comparable leagues. This is undoubtedly expensive, but aafc modelling for the 2nd division indicated that it probably only costs clubs 300k to do the domestic travel. It doesn't explain why clubs are losing 7mil a year in melbourne victory's case and 2 million in newcastle jets case
2) lack of privately owned stadiums: in investigating this, I found that privately owned stadiums are rare. There aren't that many even in the eredivisie let alone the k league. It is possible that we have a uniquely expensive lot of stadiums. If so, does anyone know how much stadium costs are per year
3) lack of revenue sources apart from tv, merch and gate receipts. This is possible, apparently the qld lions make a ton of money off pokies as do most nrl clubs. This isn't the most ethical solution, are pokie funded sports clubs the norm outside australia? AFL and NRL do seem to rely a lot on profitting off gambling addicts. Other more ethical sources of funding would include having community teams where any joe bloe can pay to play for a season and of course there is the bar and restaurant part of a club.
4) lack of tapping into the transfer market. Last year we made nearly 1 million oz dollars per club (about 600k euros). This has only recently been rising and perhaps a DTS would make the distribution of these funds more equitable across the league as well as inflating prices as euro clubs would have domestic competitors. But i doubt this can explain the massive gap between a league losses and the financial status of similarly attended leagues.
Does anyone else know what on earth is going wrong with our massive costs and poor revenue compared to similarly attended leagues world wide? A good diagnosis is the first step to fixing the problem
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By LFC. - 28 Mar 2024 12:08 PM
+x+x+x+x+x+x+xWe are hearing constant stories about why a league clubs are unsustainable. My question is why are they unsustainable?
I'd argue that they are sustainable and that it's the business model that is not. Seems pretty obvious from the outside... I'm sure it's obvious from the inside as well. Stadiums are one aspect. Lack of transfer/loans economy is another. Lack of risk/reward is another. It's amazing what happens when there is a cherry at one end and a trapdoor at the other. Don't know for sure (and no-one really knows until it's done and there is actual current data), but a winter comp could bring higher and more consistent crowds. NST numbers will definitely provide some valuable data in this area.A focus on the core demographic rather than the casuals. Casuals come and go. You can give the core demographic what they want and still have the casuals. I dont think the NST will do anything of the sort mate...at least not for a while.. Attendances will be way less than the Aleague (although some matches will rival/pass some of the smaller A league clubs) The stadiums will have a much smaller capacity anyway so it would be like comparing apples and oranges, sure they are both fruit but the APL wants a corporate, slick, shiny "professional" matchday "product" to pitch to the investors.... NST just wants to attract core fans and compete on the pitch... two different aims. It may be not completely like-for-like comparable, but it will be a professional national competition run in the winter (as far as we know). Even with the smaller venues, if the majority of the NST clubs are packing those venues week in week out, it does add validity to winter competitions. See this is what I find problematic. Prior to the A-League, Australia never had a fully professional league. John Warren was an advocate of a fully pro league- players could give up their day jobs, focus on football only, the football standards would get better as a result etc. Makes good sense. Today many of these blokes playing in the state leagues are in $100k jobs during the week. What sort of revenue would their clubs need to generate to convince them to give up their day jobs to play in the NST full time? (if they don't then they're part time footballer ie semi-pro, not pro)
Enz, point is more than anything today it no matter what it was long ago....so over used.
Moving on from Johnny's days the next best model imposed on our game gave a false dawn model following other codes and as if its a concert atmosphere looking ahead that having failed as it was going to football wise has us/well more so those hopefuls of the model in the false pretence thats the bar.
Well it isn't thats the facts as it currently stands.
On one hand we had a messed up ethnic model on the other people think we should have 40k filled stadiums - sorry the game here is humble/small/governance mess and made up of diehards from grass roots up not the AL type of fan football relies on.
Its a real shame Low....y brokered the game this way for with all that dough and backing could have set up a viable 2 Div P/R with sone credible exisiting Clubs having battered their heads to get inline to turn Pro and maybe introduce some new Clubs so it could have had a blend of old and new and using smaller stadiums and slowly build the League up instead of top and nothing below.
Its NOT our game.
dr, how can we be anywhere near those other 2 codes wage structure wise, we don't have the resource the other 2 codes have let alone supporter base.
Given the difficulty of selling any of these Franchise's ie Newy, how long it took for PG, will always be a struggle without a sugar daddy/consortium/ME King having the $$$'s happy pissing at the trough for where is the ROI ? 10/20yrs ?
Correct Ange did say how hard it is in Oztralia, and nothing is going to change anytime soon with this current model that doesn't suit the game and the core supporters below !
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