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Doug Hodgson: The ‘forgotten Aussie’ and the importance of a mature transfer system

Although they embody far more, at their very core, every football club is essentially a business entity. Countless variables makeup a club’s balance sheet including sponsorships, merchandising, broadcast deals and ticket sales, but one major income stream that Australia is yet to fully exploit is the one that draws the most public interest – player transfers.

The cash injection received from player transfers can do wonders for a club, regardless of their stature and size. In addition to allowing clubs to reinvest the funds into their facilities and development pathways, a mature transfer system also encourages coaches to develop their youth instead of relying on proven talent.

As one of Australia’s early international football exports, Doug Hodgson was one of a group of young guns who caught the eye of international scouts and paved the way for many others to follow. His story is one of frustration and overcoming challenges, but ultimately shows that young players need resilience to make it in what is one of the world’s most competitive industries.

“As a player you have a small window and opportunity, you have to take it with two hands and make sure you have the desire and passion to succeed,” Hodgson said.

In 1994, Hodgson moved from Heidelberg United to Sheffield United for an upfront fee of £30,000, a figure which rose to approximately £70,000 with add-ons based on appearances. He was also joined by fellow Aussie, current Adelaide United Head Coach Carl Veart (pictured in top photo) in a deal worth £250,000.

Doug Hodgson making headlines for scoring on his debut for Northampton Town.

But despite earning a dream move to England, Hodgson’s path to the top was far from easy.

Following a car accident as a teenager, Hodgson was told by doctors he may never play again. A few years and a lot of hard work later, as a 20-years old he won Heidelberg United’s Best and Fairest award, earning a loan move to Sunshine George Cross where he was managed by Hull City legend Kenny Wagstaff.

“Kenny organised a trial with Hull City and I worked and worked to be prepared for it. At the end of the trial I was offered a two-year contract worth £450 per week. The club offered Heidelberg £20,000 but there was a transfer break down as Heidelberg wanted £140,000,” Hodgson recalls.

“As you would imagine, there was anger, disappointment, and frustration. I thought, here is a club that paid nothing for me, and I had serviced them as best as I possibly could. I won the Best and Fairest only for them to slap a price tag on me that wasn’t realistic.”

“I understand business and maybe they thought that was a fair price, but as a young kid, there was a lot of bitterness as I knew these opportunities didn’t come up often.”

It would take another two years for Hodgson to get another chance at his dream move. While playing in Western Australia (although still under contract at Heidelberg), Sheffield United came down under for a post-season tour. After seeing him play, Blades manager Dave Bassett was so impressed with the young Aussie that he offered him to join his team for the remainder of the tour as a trial, resulting in a deal being struck.

Hodgson possessed the talent and mental steel to become a quality player in England, and although his career was heavily injury affected, he still managed to make almost 150 senior appearances, most of which with Sheffield United and Oldham Athletic.

One honour that eluded Hodgson, perhaps due to injuries, politics or just plain bad luck was earning a Socceroo’s cap. This has led to him being dubbed the ‘forgotten Aussie’ in some circles.

“At one stage, while playing for Sheffield United in England’s first division I played 14 games straight and I won player of the month. Similarly, at Oldham in the second division I was voted player of the month when I was 29 and probably playing the best football of my career,” Hodgson said.

“There was an Australian national team camp happening in London at the time. I’m not saying I should of played because that’s unfair on the other players, but I should have been given the opportunity to go to camp. Not being able to represent my country was the biggest disappointment in my career. I eventually walked away from the game in England with 12 months left on my contract due to injuries.”

Despite the injuries and frustrations he faced, Hodgson built strong relationships in England and maintains connections with many of his former teammates and coaches today.

This is an enormous factor in international transfers that is seldom mentioned. Players who venture overseas often get the opportunity to network and learn from the brightest football minds in the world, eventually bringing that knowledge back to Australia.

“I coached the U-15s at Northampton Town and the Sheffield United Reserves. Neil Warnock was grooming me to become the next manager of the club but mentally I found it hard to accept the way my career ended,” Hodgson said.

Since returning to Australia, Hodgson has brought back a raft of knowledge which he has used to teach the next generation. Some of his key accomplishments include coaching seniors and juniors at the NPL level, being involved with New South Wales’ youth program, and leading an U-14 youth team to the Victorian championship.

“I have contacts and will open a door for someone if I can if they are good enough. We need to remember though that different kids develop at different ages and its important to focus on education and make sure they are always moving forward,” Hodgson added.

Five of the 10 largest outbound transfers occurred during the NSL era.

On the flipside of the coin, for Heidelberg United, the windfall received from Hodgson’s sale meant covering debts and ensuring the club’s financial viability during a tumultuous time.

“In those days, most clubs were running on overdrafts and volunteer work. We had small sponsorships but really relied on the community to raise funds. There weren’t many player transfers, but we had some success with guys like Doug Hodgson, John Anastasiadis, and before that, Yakka Banovic who joined Derby County,” said former Heidelberg President Peter Tsaklis.

“We were paying about $60,000 per year just for registration into Australia’s top league and there weren’t any grants or assistance from the government at the time. The transfer fees were much needed but we barely able to use the funds to improve facilities at the club, as most of it just went towards running costs,” Tsaklis added.

This was the norm at the time, where if a club was lucky enough to receive a large transfer fee, the funds were often used to balance the books. Or, if they were in a stronger financial position, used to make sorely needed investments and upgrades that they otherwise would not have been affordable.

One example of this occurring was the sale of Socceroos legend Mark Viduka, who was famously transferred to Dinamo Zagreb from the Melbourne Knights. The fee helped the club fund its stadium redevelopments and officially named its grandstand in his honour, a grandstand which today still houses one of the NPL’s most passionate fanbases.

Although Viduka’s exact transfer fee is unlisted, incredibly, five of the top 10 largest transfer fees ever received by Australian clubs occurred during that era.

To add to this, despite the mammoth deals regularly taking place around the globe, the $1.7 million Leicester City paid for Zeljko Kalac in 1995 still remains the largest transfer fee received by an Australian club.

These statistics are not emphasised to criticise the current league or administration, but they do highlight what an enormous opportunity exists in Australian football.

Australia’s transfer system has fallen far behind the rest of Asia’s key players.

Much of the rest of Asia seems to have evolved in their abilities to produce and sell talent. According to data gathered by Optus Sports, Australia’s outbound player sales in 2019 totalled $2.698 million, a number dwarfed by our rivals Japan ($49.39 million) and South Korea ($37.45 million).

If the game’s administrators can over time build an ecosystem that incentivises player transfers, the prospect of adequate financial reimbursement could lead to more clubs focusing on developing players rather than looking for short-term results, ultimately leading to more opportunities for youth and clubs tapping into one of the most lucrative income streams of all.

Pararoos captain Ben Roche: “Football has the ability to start important conversations”

Ben Roche has played 54 times for the Pararoos – Australia’s only national team for people with cerebral palsy – and captained the team around the world. He spoke to Soccerscene about what the Pararoos have done for him, the future of the team after the exclusion of the sport from the Paralympic Games, and how the footballing community can further embrace the squad. 

Q: How has the exclusion of 7-aside football from the Paralympic games impacted the Pararoos?

Ben Roche: For us, it almost instantly had an impact. Obviously, for the young kids pushing to want to play for the Pararoos, their attention has turned to other sports, and for Pararoos players who are in the program who had the ambition to be Paralympians have chosen other paths, which means you can lose key players and things like that. We’ve had to work hard to grow the game and we are probably in a stronger position than we’ve ever been in, in ensuring that we qualify for the World Cup.


Q: Funding has been an issue for the Pararoos, where does most of it come from?

Ben Roche: We don’t actually receive government funding anymore, we used to get a little bit from the Australian Sports Commission, which was cut in 2015 because of their winning edge policy, which means if they don’t think you’ll win a medal funding will be cut or limited. Since then we have survived off donations through the Australian Sports Foundation. With the work of Football Australia, they set a fundraising page and we try to raise $200,000 plus each year to go towards getting a team to a tournament, a couple of camps, and hopefully a national championship to identify the next generation. Unfortunately, there isn’t really any sustainability for us, we are always pushing to raise those funds and take the program to the next level. 

Q: It is a pretty horrific way to fund Paralympic sport, isn’t it?

Ben Roche: Yeah, it came to light this week that the Paralympians don’t get any funding if they win a medal, like the Olympians who win do. The Paralympians don’t get anything for doing the exact same amount of work if not more, and that isn’t the way it should be.

Q: What brought about the change in funding?

Ben Roche: The Australian Sports Commission at the time, they have to allocate across sports, and they probably saw that the sports might be better allocated to individual sports which they thought could secure more medals, whether that is athletics or swimming, I don’t know. For me I am a big believer in football being the game played around the world, and cerebral palsy is the most common physical disability for children in Australia. For me that is perfect, you’ve got the world game and the most common physical disability, what a perfect format. We’ve worked really hard to get that message out there and show what the power of football can do. It doesn’t matter whether it’s coming from poverty, or having a disability, or having a different background, football has the ability to start important conversations. For us that is where our messaging comes into it, our goal is to create inclusive opportunities for people across the country. Not just for cerebral palsy and things like that, we want to lead the way for inclusive football in all versions of the game. 

Q: How Important has football been to you?

Ben Roche: It has shaped everything I’ve done. I joined the Pararoos when I was 12 years old, and it has taken me around the world. It’s been really eye-opening in terms of that, but it has also put me in front of role models with cerebral palsy and other disabilities who have successful careers, families, social lives, and all those kinds of things. Being able to see that at a young age really shaped who am I today, and gave me the confidence to go and do the things I’m doing. I love football so much that I’ve been working in it, I was working for Football Australia as a team manager because I wanted to be in and around football, and it’s something I am extremely passionate about.

Ben at his first tournament with the Pararoos in Argentina.

Q: How important is it to have visible role models like these growing up?

Ben Roche: It’s massive, for me it was meeting those role models that shaped me. I launched a few programs across the country for people with disabilities, and the conversations I get to have with kids, and the conversations I get to have with the parents as well, the amount the community means to them is huge. For me to see someone who has faced similar challenges doing great things is the best thing I could have come across. By us having a successful Pararoos program we can hopefully empower and not only support these young kids that may want to play football but support them in their careers and everyday lives.

Q: Could the wider football community better embrace the Pararoos? 

Ben Roche: I don’t blame them for not doing so, we weren’t really a common name and still aren’t among the football community, which has been a big push for us to put emphasis through social media and get our messaging out there, to include us in conversation along with the Socceroos and Matildas. I hope that when people do get to see it, it’s something they can get behind. The game is quite fast-paced, it can be high scoring, really physical and we don’t hold back. I’d love to see the Australian football community embrace it more – and I’m not saying they don’t – but the more we can get them behind us the bigger reach we can have.

Q: What is the future of the Pararoos program in Australia?

Ben Roche: COVID has made the last couple of years tricky, just in terms of being able to fundraise for the program. For us we are really interested in taking it to the next level, to not only further develop the men’s program but a women’s program too, which more information will come out for in the next couple of months. We are looking to really create more opportunities throughout Australia, not only have our state teams which are filtering into nationals but also launching academies and programs that will feed into inclusive opportunities. On top of that hopefully we can keep having important conversations around disability.

If you want to help support the Pararoos you can donate through their website.

Creating upside: Four lessons for Australian football from US investors in Europe

It is often said that the United States has the biggest and best sporting market in the world.

According to the latest number from Forbes, the average value of a franchise in the National Football League (NFL) is $3.48 billion USD, a 14% increase on 2020.

In the NBA, the average franchise value is $2.202 billion USD, having steadily risen year-on-year since 2015 which was the first year that the average value crept over the $1 billion USD mark.

Even in the much-maligned MLS, the average franchise value is a cool $550 million USD up from $319 million USD in 2019 – a remarkable 72% increase.

So, with such a booming sports economy on their own doorstep, why are American investors turning to European football?

That was the question The Athletic Football Podcast hosts, Mark Chapman and Matt Slater, sought to answer in the latest episode of their podcast.

In two revealing conversations with US sports investors Michael Kalt and Brett Johnson, there were some potentially interesting lessons for Australian football to learn.

Kalt, who rose to sporting fame as part of the investment group that helped transform the fortunes of the Tampa Bay Rays in the MLB, now leads consortiums investing in European football clubs with current investments in AS Nancy in France and Oostende in Belgium.

Johnson is co-owner of Ipswich Town and also the owner and director of Phoenix Rising Football Club, which plays in the second tier of US football.

So, what do they like about European football?

Why don’t they invest the same sizeable funds into MLS teams?

What can Australian football learn?

Below we highlight four key lessons.

Upside Counts

The majority of clubs that Kalt and his consortiums look at investing in are loss-making businesses.

They don’t make money.

So why, when you have significant investment capital and can invest in a booming domestic sports market, do you choose to take your money to Europe and put it in loss-making clubs?

For Kalt, there are three things a club has to have to prove its investment value.

  1. Asymmetric Upside via promotion or European qualification
  2. Room for commercial improvement
  3. Training profits (EG: Player Transfers)

On the first point, Kalt explains the uniqueness of promotion and relegation and continental competition created pockets of value in Europe that offered much lower costs of entry in Europe.

“Can you buy them when you’re up underlying your downsize risk, meaning you’re not paying full price for a club that is recently promoted or in the top league or coming off European competition and you’re paying full price,” he said.

“If you look at the clubs we bought, we’ve bought clubs like Nancy, historically a club that has been in Ligue 1 and bounced back and forth. It has the infrastructure of a Ligue 1 team. It should be a first division, mid-table club, so there’s headroom there and not a lot of downside risk.

“That’s the sort of situation we look for, where there is an asymmetric upside, either through promotion or European qualification in a smaller club where we think we can compete in the top four or five teams.

On what he termed, “Training Profits”, which most readers would refer to as player transfers, Kalt thinks it’s incredible that a club could generate a sizeable portion of its overall value simply by trading players.

“This is a massive mover in this,” he said.

“When you create that value in American sports, the only way to really monetize it on the player basis is to make like exchanges. To say, I have a player that has demonstrated his worth and the market will pay way more for him. He’s got three or four years left of club control … your only path to monetization is to keep that player and hope the club plays better and people show up and you generate more revenue in the stadium.

“Or you go and try and trade the player for younger, more controllable talent and hope that that talent does the same thing.

“In Europe, you create value, and the market comes to you and says ‘okay, today we’re willing to pay ‘x’ for that player, and, by the way, that ‘x’ might be some significant portion of what you played for the club!’

“That system, combined with analytics to create that value, which is how we started looking at this … is why it’s so intriguing.

“You reinvest some of that back into the club and you can reduce your downside.”

Europe’s football culture and ecosystem are, obviously, significantly more developed than that of Australia or the United States.

But what is interesting to take from the conversation is the factors that make for a worthwhile investment for Kalt and his ilk.

They want to invest in clubs that have room to grow.

None of this is to suggest that the incorporation of promotion and relegation in Australia is going to send a flood of overseas investors ready to throw their money at ‘B-League’ or National Premier Leagues clubs.

But it does inherently create potential upside in investing in the secondary tiers of Australian football, particularly for local investors.

We have already seen in the most recent round of A-League expansions that there was potentially a lot of money left on the table by unsuccessful bidders looking for a way into Australia’s top flight.

The implementation of promotion and relegation could unlock similar pockets of value in Australia.

The addition of a domestic transfer market will also go a long way to increasing the upside of clubs in the A-League and potentially below.

Franchises Limit Upside

When discussing MLS specifically, Kalt believes one of the major obstacles facing the growth of MLS was to be the American attitude of, generally, not being as interested in watching sports that are not “the best”.

But perhaps the most interesting thing Kalt had to say about the investment value of MLS franchises is that their value was largely being grown by the expansion of the competition and the prices being paid for new licenses, dragging the value of the existing licenses up by association.

“Valuations five, six, seven years ago you had a 50 or 60 million cost of entry, which – candidly – still seems a little high given the economics of these clubs,” he said.

“But when you see these club trading at 200, 300, 400-million-dollar valuations, it’s hard for me to get my head around and I know it’s hard for a lot of people in the business to get their head around.

“I think a lot of it, historically, was justified on, ‘well, you buy in now because the next expansion franchise is going to be worth ‘y’’.

“But you’re not going to have a league with 60 clubs, so you’re running out of the ability to do that.”

This sounds alarmingly similar to the A-League, where hopes for the growth of the sport are so consistently pinned on expansion.

They might equate to growth for the value of A-League licenses and the value for the investors who own them, but it’s not enough alone to drive true value in football.

MLS’ One Big Tick

It wasn’t all bad for the MLS. Kalt had to give credit to the MLS for at least one thing.

Infrastructure.

“The amazing thing that they’ve done is that they’ve created the infrastructure for soccer in the United States that never existed before.

“They’re not just sticking teams in and hiring a bunch of over the hill stars and having them play in football (NFL) stadiums and hoping they can sustain it.

“They’re doing the right thing and the league is sustainable, whether at half-billion-dollar franchise valuations is a more debatable proposition.”

This is a crucial lesson for the A-League.

Over 15 years into this journey and there remains embarrassingly little football-specific infrastructure.

There has been some good ground made in recent years by some clubs, but overall, after 15 years one gets the feeling there is very little to show for all the investment made in the A-League.

We’ve had some great seasons, some great matches and some great players grace the league…but if the league collapsed tomorrow, what proof would there be that the A-League and its clubs actually existed?

This has to be urgently addressed.

Gratification Bonus

Another reason cited as key for both Kalt and Johnson in their investment in European football was the sense of gratification of investment in clubs and their surrounding communities.

Now let’s not get carried away. No one is suggesting for a second that these investors aren’t backing in European football for humanitarian reasons.

They’re in it because they see value in their investment.

But can they make themselves feel good about making money in the process?

Well, that’s a bonus. The benefits for the community, however, can be very real and tangible.

Research from 2019 shows Manchester City’s involvement in the title chase with Liverpool was worth £220 million to Manchester’s economy.

According to the think tank Centre for Economics and Business Research (CEBR), spending on match-day tickets, merchandise, and hospitality can boost a city’s economic growth by 1.1 percentage points.

At the lower level, Ipswich Town co-owner Johnson felt there was a great sense of satisfaction to be taken from investing in the surrounding community.

“It’s critical to be engaged with the community,” he said.

“I view [these clubs] as beacons. In England, these communities live and die by the success of these clubs and it’s been painful for these fans have been watching this beautiful asset punch below its weight class.

“It’s not just enough to win, you have to try and make improvements broadly.”

A big part of Kalt’s model was being able to choose clubs with room for improvement because it would be easier to keep the fans onside as things improved.

“Coming into a club that is perfectly run as the next owner is not a situation I would ever want to be in,” he said.

“You want to come into a situation where there’s headroom … you want to have some goodwill built in.

“We’re going to stabilise this, and you know your club is going to be around in a year.”

The question for Australian football is, how do we create value and the feel-good factor around our clubs that encourage the investment they require?

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