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Football Australia CEO James Johnson: “There are strategic objectives to gain from a second tier”

James Johnson has faced unprecedented challenges during his first 11 months as Football Australia CEO.

But despite the global pandemic impacting almost every facet of the game, the code appears well-placed to thrive under his leadership moving into the new year.

In an exclusive interview, Johnson spoke with Soccerscene to discuss the unbundling process, the state of sponsorship, infrastructure challenges, and the growing push for a national second tier.

Q: With the unbundling process nearly finalised, how is Football Australia planning to reform its business model, and what will those reforms look like?

James Johnson: So, we’ve principally unbundled but have not formally unbundled. The clubs are operating the leagues and the league is already responsible for its own sponsorship deals, so the unbundling is already happening day in day out.

The actual written documents – we call them longform agreements – have not been signed yet, but they are close. We have agreed on all the main points principally, but there is still negotiation the fine details of the agreement. We are very close to being able to sign this off and very confident to get this finalised in time for the beginning of the A-League/W-League season.

It is going to be a different model post unbundling. It is a model that is not complicated, but sophisticated. It demonstrates that the sport is maturing.

Football Australia’s role post-unbundling will be as the regulator of the professional game. This means we will regulate the transfer system, the player status rules, we will regulate club licensing, and the domestic match calendar.

We will still have a very important role, but the league will become the operator of the competition, so all of the operation matters will be for the clubs to run.

This has been a long journey for clubs, and it is a big opportunity for them to step up – and I am confident that they will. I think they will do the game proud and will be there to regulate the competition but also to support and grow the competition.

“It is a big opportunity for clubs to step up – and I am confident that they will.”

 

Q: Has Football Australia considered partnering with private enterprise to develop football related infrastructure projects to combat the shortage of grounds, but also prepare for the Women’s World Cup?

James Johnson: Infrastructure is key to us. If we go back to our 11 principles, infrastructure is an important part of that vision.

Infrastructure for the game across the country is a challenge. At the top level of the game, we have some issues of non-football specific stadiums, which affects the elite level, but the bigger challenge for us is actually at the grassroots.

We have such as large base of participants that simply, there is not enough fields for children to play, and that’s not ok. But it is a challenge that we recognise. Our opportunity is to leave a legacy in relation to the Women’s World Cup for our infrastructure at community level.

We see a big opportunity for participation growth in the women’s and girl’s space. Currently, girls make up only circa 22 per cent of the overall participation base, but we believe this is going to grow substantially over the next seven years. We believe that by 2027 we can achieve a 50/50 split, which would see a considerable growth of our base.

This means participation will rise, but there is no point in these numbers rising if we do not have new facilities to support children to play the game.

This is going to be a key part of our ask to government. Football is the biggest participant sport in the country and our children, in particular our young girls, need support as they will be playing more football, more often.

Q: Due to the recent decline of sponsors as reported in the Australian, could we see an expanded footprint of commercialisation opportunity?

James Johnson: With the unbundling occurring in the league, our business model will change. If we look at broadcast, the most economic value in the broadcast revenue stream is through the professional leagues, which provides the most content to fans week in and week out. Post-unbundling, the league will be licensed the rights associated with the professional leagues. Naturally, Footballl Australia’s own business model will change.

Football Australia won’t be as reliant on broadcast as we have in the past. This will be something for the clubs and the league as that will be their big revenue source. It means we will change and have a bigger focus on two key focus areas, sponsorship, and government.

To touch on sponsorship, it’s at an interesting point. As a result of COVID-19, we are seeing a lot of interest in investing into the community and investing into women’s sport. This is because businesses want to be seen as being part of the resurgence of the community post the pandemic.

On top of that, we have got the Women’s World Cup coming to our shores in 2023, so there is huge interest in sponsoring the women’s game, particularly the Matildas. We’re very excited about the sponsorship space, it’s a different market today than what it was eight months ago and we are well-positioned due to the strength of our community and brands of our national teams, coupled with the interest of the 2023 Women’s World Cup.

We have really focused on creating strong links between our national teams, in particular, our Matildas and our community – this is a great strength of our sport and positions us well against other sports in Australia.

We’ve got a lot of big sponsors knocking at the door. We announced a deal with Priceline just last week and we’re looking forward to announcing several new sponsorship deals by early 2021. We are very confident and very well placed in the sponsorship space.

“We’ve got a lot of big sponsors knocking at the door.”

 

Q: How can Football Australia utilise digitalisation and O.T.T to improve revenue streams for the game?

James Johnson: This is not a new discussion. When I was at FIFA a few years ago, there was talk of moving to O.T.T platforms and when I was at Manchester City last year, we were talking about it with other European Clubs.

It is going to happen one day within the industry, the question is when. We are developing the knowledge inhouse, so we are ready to go when the transition in the market starts. Whether that is this year, next year or three years’ time, that is a question mark at the moment.

If you go back to the 11 principles, it is in there. We spoke about potentially creating a Special Purpose Vehicle (SPV) for the purposes of trying to bring capital into the sport because O.T.Ts require substantial investment. The SPV was a practical consideration on how we get money invested in the creation of an O.T.T. This could be something we could partner our new professional league with or it could be something we look at ourselves.

What we’re doing in the meantime is really pushing our digital networks. We saw a big opportunity during COVID, while there was no professionalised live sport, to really push great historic matches and other content.

The overall approach resulted in record numbers across Socceroos and Matildas digital channels, with over 48 million video views across the network. We believe we can build on that in 2021, with Australian national team fixtures coming back online across the globe.

Johnson supports the idea of a national second division, but says the conversation is still largely conceptual

 

Q: What is your opinion on the growing momentum for a National Second Division, and has Football Australia done any modelling as to how the division may look?

James Johnson: A second tier competition on a national level can work. Circa 75 per cent of the 211 FIFA National Associations have second tier competitions, so it should work, but we have some very specific challenges in Australia. We are similar to countries like the United States, Brazil, and India. We live on a continent so the logistical costs for a competition are extremely high.

If I look at the A-League budget, there is a lot of spend on travel and accommodation. There is a huge cost to run national level competitions in Australia. So, there are challenges with having a second national competition in Australia, but there are certainly opportunities as well.

We want a second-tier competition, we think at the moment it is still a theoretical conversation, a conceptual conversation. Where we want to get to with this conversation – and this is our continual message for the clubs that would like to participate in a second-tier competition, as well as the AAFC – we want the conversation to be practical. We need to see how this can work in a practical sense.

We want work to be done around how much each club can put on the table, not only to run a second-tier competition, but also how much additional funds can clubs put into centralising the administration. We are yet to see this practical work.

It can work. I hope we get there, and I think that we will, because there is a lot of strategic football objectives to gain out of a second tier.

There are more opportunities for players, coaches, referees, and administrators, and more meaningful match minutes.

This is what we want but we need to crunch the numbers and we need to make it practical. That’s what we haven’t done as a code yet.

We have taken a strategic decision this year (in 2020) to really focus on the unbundling process, and that’s almost done. That will then free us up, because the other competition related time has been spent on changing the FFA Cup, because these are existing competitions and they’re good competitions, because it is the only open national level competition in our country

I think a lot of the interest in having a second tier we’ve started to shape within the parameters of the FFA Cup. Things such as having access to the Asian Champions League and the open draw. These are all very football purist dreams and we’re already starting to realise them through the FFA Cup.

We are an organisation that has established and operated competitions in the past. Thus, as we get the FFA Cup up and running again in 2021 and as we unbundle the A-League, we are going to have time and resources to focus on the practicalities around a second tier.

A new year brings optimism for Australian football

Stadiums have been forced to adapt during the pandemic, introducing new procedures and innovations allowing fans to attend matches safely.

As always in Australian football, 2021 is set to be a big year.

After a year which was continually disrupted by a global pandemic, the game’s future seems to be much brighter in 2021. Here are some of the reasons why:

An Independent A-League and W-League

After years of infighting, the A-League and W-League were finally unbundled from Football Australia on the last day of 2020.

A new organisation of A-League club owners, under the moniker of Australian Professional Leagues (APL), will now take over the operational, commercial and marketing control of both leagues.

Essentially, the league’s power brokers will now have more incentive to invest and market the leagues as they now have the impetus to attract and organise their own business dealings.

Chair of APL and co-owner of the Western Sydney Wanderers, Paul Lederer, spoke of the importance of the deal: “This is an historic moment for the future of football in Australia – for the fan, for the player, for the whole game.

“It’s now time to earn and deliver the future our game deserves. The handbrake on the game is off; owners can finally invest in what they own and create value for the entire footballing ecosystem.

“Players can plan their careers in Australian football, fans can reconnect with the game that they love, and clubs can create meaningful moments for the whole Australian football family.”

Domestic Transfer System

One of Football Australia’s ‘XI Principles’ outlined the need to stimulate and grow the Australian football economy, with the establishment of a new and modern domestic transfer system mooted as a proposed measure.

Last week Football Australia released a Domestic Transfer System White Paper, which will set the wheels in motion to revamp the current model into one which falls in-line with the rest of the global game.

It’s an area where Australian football is falling behind, with FIFA reporting in 2019 that Australian clubs only received US$1.9 million in international transfer fees, compared to other Asian nations like Japan who garnered US$29.4 million.

Football Australia CEO James Johnson has placed significant importance on the issue and the implementation of a proper domestic transfer system will finally reward a broad range of clubs across the Australian football pyramid.

“The establishment of a modern Domestic Transfer System in 2021 by Football Australia will seek to remedy the ‘gap’ that has been created in the Australian football ecosystem by providing opportunities to progressive clubs at all levels of the sport to generate new revenue streams which can be deployed into the ongoing training and development of players, and the clubs themselves,” he said.

“We believe that the implementation of a fit-for-purpose system will have transformational benefits for football in Australia and particularly our professional and grassroots clubs by reconnecting the game and stimulating growth,” Johnson concluded.

National Second Division

The Australian Association of Football Clubs (AAFC) is set to release a report on the progress of their plans for a national second division in the coming days, in a move which should enthuse the Australian football public.

A national second division (eventually with promotion and relegation) will bring a range of benefits to the football system here and will be a unique identifier which separates the game from a range of other sports played on our shores.

There does seem to be some hesitance from A-League clubs however, to immediately green-light a national second division.

Chair of the APL, Paul Lederer, recently stated that a national second division wouldn’t eventuate within the next two years, claiming that expanding the A-League to 16 teams was a more urgent priority.

Speaking with Box2Box, AAFC Chairman Nick Galatas responded to Lederer’s comments. “It doesn’t really bother us much because I don’t think the issue will come down to Paul in the end. It’s not really about him”, he said.

“I was surprised to hear the comments, I’ve got to say, but equally had he said the opposite, it wouldn’t have mattered much either.

Ultimately, the decision will come down to Football Australia as the APL does not have the appropriate regulatory functions.

The current FA administration is much more willing than previous administrations to introduce a second tier, previously listing the need to continue the development of a framework for a national second division, in their ‘XI Principles’ document last year.

New Broadcast Deal

Fox Sports re-negotiated their TV deal with the A-League and other Australian football properties when the competition went into shutdown during the COVID pandemic.

The deal was reduced in both dollars and length, with Fox Sports paying just over $30 million for a one-year agreement which runs out in July of this year.

There is a possibility that Fox may pass on extending that deal, but that does present the game with opportunities to seek out a new broadcast partner or to take things into their own hands and build up their own streaming service.

The game’s TV deal with the ABC is also set to expire this year, with the need to find the right balance between free-to-air exposure and broadcast revenue becoming increasingly important.

New potential broadcasters that may be interested in striking an agreement include:

Optus Sport: Currently have the rights to competitions such as the English Premier League, UEFA Champions League, J-League and K-League,

Stan Sport: Recently entered the market by signing a deal with Rugby Union’s Super Rugby competition and are reportedly interested in securing the NBL rights in the future.

DAZN: Have started to dip their toes into the Australian landscape through other sports, after broadcasting football in multiple countries across the world.

Whatever the case, Australian football does seem to have options outside of Fox Sports, who have broadcasted the A-League for the past 16 seasons.

With many exciting possibilities to look forward to, the game should be in a stronger place by the end of 2021.

Football Australia announces Domestic Transfer System White Paper

Football Australia have announced the release of their Domestic Transfer System Transformation White Paper.

Developed throughout the fourth quarter of last year, the White Paper will be discussed and consulted with key football stakeholders over the coming months.

Principle III of Football Australia’s XI Principles identified the need for stimulation and growth of the Australian football economy, with a new modern domestic transfer system earmarked as a proposed measure.

The White Paper identifies several key elements of a properly functioning transfer system for consideration and discussion in the context of transforming the domestic transfer system.

These include:

  1. Administration of Transfers
  2. Training Rewards and Young Players
  3. Loans
  4. Player Eligibility Rules
  5. Registration Windows
  6. Transfer Fees
  7. Special Provisions Relating to Contracts
  8. Agents
  9. Dispute Resolution and Player Status Resolution
  10. Private Academies; and
  11. Recent amendments by FIFA (Coaches and Women)

Football Australia will conduct a planned engagement process with clubs, players and other members of the football community early this year.

Football Australia Chief Executive Officer, James Johnson, said of the developments: “2020 was a difficult year.  Despite this, Football Australia took the opportunity to return to its football core and saw the organisation take transformative steps which culminated in the establishment of a bold and innovative vision for the game in the form of the XI Principles.

“To highlight a significant year for the game in 2020, we also successfully secured hosting rights for the 2023 FIFA Women’s World Cup, underwent an internal reshaping to ensure we are ready to implement our strategic agenda, renamed the organisation, revamped the FFA Cup and recently announced the unbundling of the Professional Leagues,” Johnson added. 

“The publication of the White Paper, following the Transfer System webinars late last year, is another significant step as we look to bring to life the XI Principles and we are excited to lead with this strategic initiative in 2021.

Johnson outlined the importance of the creation of a modern domestic transfer system, explaining it is a vital link in the Australian football landscape. He believes Football Australia’s role in regulating both the Professional Leagues and growing the game more broadly, will create many more benefits in the football ecosystem. 

“The absence of a domestic transfer system has meant that Australian football has been unable to fully integrate into world football by embedding itself in the global football market which has led to lost economic and sporting opportunities for our game over many years,” Johnson said.

“In 2019, FIFA reported that Australia received just US$1.9 million in transfer receipts from a market currently valued at US$7.35 billion for men alone. This low figure received by Australian clubs is in stark contrast to many nations of a similar or lower international ranking than our National Teams, and to many countries with significantly smaller populations than Australia. It also highlights that Australian clubs, from the professional right down to the grassroots, are missing out on vital funds that could be used to underpin and enhance the sport.

“The establishment of a modern Domestic Transfer System in 2021 by Football Australia will seek to remedy the ‘gap’ that has been created in the Australian football ecosystem by providing opportunities to progressive clubs at all levels of the sport to generate new revenue streams which can be deployed into the ongoing training and development of players, and the clubs themselves.

“We believe that the implementation of a fit-for-purpose system will have transformational benefits for football in Australia and particularly our professional and grassroots clubs by reconnecting the game and stimulating growth,” Johnson concluded.

The Domestic Transfer System Transformation White Paper can be viewed here.

Newcastle Jets licence terminated by Football Australia

Newcastle Jets’ A-League and W-League licence has been terminated by Football Australia and Australian Professional Leagues (APL).

The termination takes immediate effect and has been implemented due to the club’s failure to pay off its debts.

Football Australia said that the unpaid debts meant that Newcastle Jets had breached the Club Participation Agreement.

Newcastle will continue to play in APL competitions such as the A-League – a new licence will be issued to an entity owned and controlled by a consortium of existing APL club investors for the interim until a new owner for the Jets is found.

Football Australia Chief Executive Officer James Johnson said that the current financial position of Newcastle Jets Club Pty Limited, the company which owns the club, left Football Australia with no other choice but to terminate the licence.

“There were clear failings to adequately capitalise Newcastle Jets FC to meet the minimum requirements set to run an A-League and Westfield W-League club, and to operate a company in accordance with Australian law,” Johnson said.

“Following the recent announcement of the unbundling of the Professional Leagues from Football Australia, it’s pleasing to see a group of existing APL club investors stepping in to assume control of Newcastle Jets FC in the interim.

“It is important for Football Australia to remain separate to the ownership of the Clubs so that it can effectively carry out its responsibilities as the governing body of football in Australia and regulator of the Professional Leagues.”

Chinese businessman Martin Lee took control of the Jets in 2016 for a reported $5.5 million. Football Australia and the APL’s actions mean that he is now left empty handed.

In November, SBS The World Game reported that a western Sydney group was close to buying the club for around $8 million. This prospective ownership group later pulled out of the running to take control of the club.

The APL consortium has appointed former NRL interim CEO, Shane Mattiske as the Executive Chairman of the Newcastle Jets.

“Today is a very positive step in the history of a great club which has strongly represented Newcastle, the Hunter and Northern NSW for two decades,” Mattiske said.

“The uncertainty that has overshadowed the Jets in recent times has been removed and the club now has a strong financial foundation to support its drive for further success in the A-League and Westfield W-League.

“Today’s announcement recognises the importance of the Newcastle Jets to Australian football and the strong commitment APL has to football in the Hunter and Northern NSW region.

“There is no question that the future success of the Jets will rely heavily on the support of the local community and I look forward to working closely with the many passionate supporters of this great club.

“The club needs all its supporters to stand up and strongly get behind their team.”

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