This month, Newcastle United became the richest club in world football – due solely to majority ownership by the Saudi Arabian Foreign Wealth Fund. With Premier League clubs being used to rehabilitate reputations for foreign entities, could the same happen in the A-League?
World football has a problem with ‘sportswashing’ – which the Macmillan dictionary defines as “when a corrupt or tyrannical regime uses sport to enhance its reputation” – as exemplified by the purchase of Newcastle United by the investment arm of the Saudi Arabian government.
This same government assassinated journalist and dissident Jamal Khashoggi in the Turkish consul in 2019, and now they have been allowed to purchase a football club in the world’s most-watched sporting league to rehabilitate their reputation on the world stage.
The World Cup in Qatar might be the biggest sportswashing event of all. The host nation of the 2022 tournament has a horrid reputation with human rights abuse, and over 6,500 migrant workers have died in the country since the World Cup was announced, with the total number likely significantly higher.
Countries like Australia will have no qualms sending their national teams – helping legitimise Qatar on the world stage and sportswashing away the human rights abuse and death toll that the event has created.
Australian football – and the A-League – will face a reckoning with sportswashing in the future, the question is how can it be combated?
Australian football has fought its fights against possibly malicious owners, both domestically and foreign. Clive Palmer and Nathan Tinkler promised the world, but left the Gold Coast without a club – and the Newcastle Jets penniless respectively.
Foreign owners have also done their damage. On January 4, 2021, Martin Lee’s ownership of the Jets was terminated after he failed to inject any money into the club since October 2019, while also failing to pay any of the club’s debts.
ABC’s Four Corners revealed a director – Joko Driyono – for the company that owns the Brisbane Roar with the Bakrie family – was jailed for 18 months for match-fixing Indonesian football matches.
According to Indonesian business records, he remains the president director of Pelita Jaya Cronus, the holding company for Brisbane Roar.
Does the ownership model of the A-League create accountability for owners, and do Australia’s corporate regulators do enough to ensure that malicious owners can’t drive clubs into the ground for personal profit or gain?
Take the Martin Lee example. Under the current franchise model of the A-League, he has no personal liability for the debt accrued by his ownership, and faced no repercussions for running the club into the ground before the A-League took back the license.
He simply abandoned the club after it was no longer of use to his business interests in Australia, and returned to his home country.
The A-League must avoid this as an example, while also ensuring that promises of rich domestic benefactors are balanced against the likelihood that it could be too good to be true.
The current franchise model does have its advantages, in regards to the Australian Professional Leagues having the power to take back the license of a runaway club like in the case of Clive Palmer’s Gold Coast United, or when an owner fails to inject money like Martin Lee.
Currently, the vast majority of NPL clubs are run by a board of directors who are personally liable if funds go missing, or the club goes into severe debt.
Melbourne Victory is the only publicly listed company in the A-League, and that ownership model brings responsibility to shareholders and liability for directors.
Foreign investment at the A-League is at an all-time high, with five of the 12 clubs being either foreign-owned or controlled.
One club, Adelaide United, has its ownership completely hidden from the public. The Australian footballing community currently has no idea who finances the only professional club in South Australia.
A transparent fit and fairness test must be implemented for A-League ownership, one that keeps potential malicious actors away from the game, while protecting fans and clubs.
One way to achieve this would be to ask corporate regulators to take a more hands-on approach with A-League entities during the purchasing of a license.
The downside of this approach would be that the Australian Securities and Investments Commission (ASIC) is capable of auditing companies’ finances, but foreign entities like Martin Lee’s businesses and Pelita Jaya Cronus can easily circumvent scrutiny.
Personal liability for owners and directors would force them to create sustainable businesses. While it might scare away some bad investors, those with good intentions will embrace the concept of a more stable A-League.
Another way to combat sportswashing would be to introduce the truly membership-based model championed by clubs in Germany.
The 50+1 model means that the majority of the club must be owned by local fans of the clubs, and if this was pursued in the A-League it would grant huge protections against owners who don’t act in the best intentions for the club long-term.
The Australian Professional Leagues need to ensure that those who want to invest in Australian football are doing so for the right reasons, instead of purely personal gain.
A true fit and fairness test, one that examines whether the owner is financially, ethically, and morally capable of owning an A-League team (or second division team) with the utmost accountability will be one of the best investment’s the APL can make for Australian football.
Without it, it will be a wild wasteland of Palmers, Tinklers, and Lees for years to come.