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Rydalmere Lions FC: How diversifying income can lead to a financially sustainable club

At the grassroots level, many sporting clubs rely heavily on sponsorship dollars and player fees to drive their financial strategy. While this is a stock-standard approach, diversifying income streams can create enormous benefits for clubs and protect them from becoming overly dependent on one or two areas of business.

Based in Sydney’s inner-west, Rydalmere Lions FC is setting a new standard for economic diversification, branching out from traditional means and setting a positive example for the rest of the football industry.

After officially completing the takeover of a community bowling club, Executive Committee Member Elias El Khoury spoke exclusively to Soccerscene to discuss the club’s ambitious plans and the importance of creating a well-rounded commercial strategy.

“The COVID-19 pandemic has been disastrous, but it has also taught us a lot. Football needs to stand up on its own. Clubs can’t just rely on a sponsorship model,” El Khoury said.

“Diversifying income is critical. As a result of COVID-19 we’ve seen a number of clubs struggling and go public with requests for help, with some potentially going to hand in their NPL licenses. This is a direct result of sponsors either withdrawing their support, or being unable to support these clubs any longer,” El Khoury said.

With the takeover of the bowling club now complete after a four-year process, Rydalmere FC is in a position to use its new space to build its community presence and form a sustainable business model.

Rydalmere Bowling Club prior to being taken over.

“We don’t want to be seen as just a football club, but truly a community club. There have been some hurdles along the way, but we asked the council for a temporary license to operate the bowling club to prove ourselves. We’ve renovated the premises to make it livelier and give it a connection to younger families as well as traditional users,” El Khoury said.

“There are spaces to hire for social and corporate functions, other outdoor functions, barefoot lawn bowls and more. There are no membership fees at the moment, the local community is encouraged to use and benefit from the facilities.”

The concept of becoming a community-centric club is a deliberate strategy that the Rydalmere FC’s board is aiming to achieve. The concept creates a very beneficial two-way street where the club is supported by the people while also serving them with services that extend far beyond football.

El Khoury, a commercial lawyer who specialises in commercialisation strategy and business growth, believes many of Australia’s most successful clubs have shared this trait.

“All of the most successful current NPL and former NSL clubs have it in common – a genuine community connection embedded in passion. This is what drives football forward and keeps the likes of Marconi, Sydney United and so on going. Having that ingrained link to the club means patrons will come and support the club regardless of results on the pitch,” he said.

“The fanbase isn’t made up of the casual patron seeking entertainment but people with real ties to the club. Not that there’s anything wrong with the more casual patron, it is just a different type of model that requires a lot more from the club in terms of persuasion and selling that message of entertainment.”

It is only fitting that the biggest winners of Rydalmere Lions FC’s financially sustainable model will ultimately be the people.

El Khoury, along with the club’s other administrators have detailed their long-term plans to reinvest into the football ecosystem by tearing down barriers of entry that impact some families.

“Our vision is about creating pathways. In the end we want to create an environment where kids get to play for free, that way we are not limiting talent coming through the system. It would encourage more kids to attend and would remove finance as a restriction for some kids. Admittedly it’s a long-term goal, but with initiatives like the bowling club we can work towards creating the environment where player fees are zero, or as close to zero as possible,” El Khoury said.

Lions juniors lending a hand during renovations.

The idea of an ecosystem which provides equal opportunity for all kids is an exciting prospect, but Rydalmere Lions FC also believes by standing on its own two-feet, it will be able to allocate more resources towards player development turning football into a more realistic career path for the region’s next generation.

“Whether you’re for or against the transfer system, there is a need for pathways and funding to go back into grassroots football. It is so important for keeping clubs alive and dreams alive so unless money can flow freely, kids will hit a certain age group and disappear because football isn’t a viable career path,” El Khoury added.

“We know that as a club, in order to have a positive impact, we need to set our own standards first before leaning on FFA, Football NSW or other administrative groups. Four years ago, we built up a governance structure to create a sustainable business model so that way the club can rely less on funding from third parties to improve facilities and invest in technical resources to assist players in developing a career in the game.”

Outside of Rydalmere Lions FC’s commercial strategy and community ties, the club’s short-term goals involve improving its infrastructure and seating capacity.

These are undoubtably exciting times for the club from Sydney’s inner-west and El Khoury is optimistic that on the back of a sustainable strategy, the future looks bright.

“Everyone is surprise with what we’ve achieved, but we want more. We have a strong supporter base and we want to build a grandstand for the spectators. This will expose us to a wider range of football competitions and potentially the National Second Division when it arrives,” he said.

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.

Q&A with Football NSW CEO Stuart Hodge

2020 has been a challenging year for all sporting administrators due to the coronavirus pandemic.

Stuart Hodge is the current CEO of Football NSW and has held the position since June 2017.

In a wide-ranging chat with Soccerscene, Hodge shares his thoughts on the notable events of the year gone by, the opportunities the Women’s World Cup will bring, a national second division and the future plans for Football NSW.

Q: We’ll start by speaking about the recent Australian Coaching Conference. Could you just expand a little on the process and preparation of organising an event like that virtually…and are there any plans or a strategic focus to host other industry events like that in the future?

Stuart Hodge: Yeah look obviously the impact of COVID this year has forced a re-think in many industries on how they deliver on conferences. For example, our state coaching conference in 2019 was held at Valentine Sports Park and was sold out with 400 coaches in attendance. We had some fantastic presentations made in person, but obviously with COVID and the restrictions in place we took the opportunity to explore a virtual coaching conference this year.

Arsene Wenger presented at this year’s Australian Coaching Conference.

It really allowed us to open up our coaching conference to a much wider audience and at the same time, we were able to attract an incredible calibre of speakers from around the world. Having Arsene Wenger present was a fantastic coup for us.

In the end, we had over 1800 people register, so our ability to be able to deliver education in this space was enhanced by the choice to do it online. The great thing is that those registered can go back and re-watch those sessions, so it’s not only a fantastic opportunity to be engaging with it on the day, coaches can go back in a few months’ time and refresh their learnings.

We had terrific support from the FFA, Football Coaches Australia and some of the other state member federations, with people from different parts of the world registering and involving themselves in that conference.

It gives us a real potential to drive this forward and use the platform now to potentially look at doing other types of conferences, such as Football and Law, Sports Medicine and Sports Science, Capability Building projects for clubs…there’s a whole heap of possibilities now that we can explore from our experience.

Q: 2020 has been a tough year for most, how has the organisation been impacted (both positively and negatively) and what did you personally find the most difficult about the COVID situation?   

Stuart Hodge: The most difficult (aspect) was the unknown. As people have said, there was no playbook for this. There was no manual you could pull out and say ‘these are the steps you need to follow’. It was unprecedented.

It was having different impacts in different states and so really the challenge of everyday, working with government and stakeholders on trying to understand where things were going to head…and trying to predict the future, was very difficult.

Some of the positives to take out of it I think, was the great spirit shown by the football community in coming together and working collectively to get football back onto the park.

We were having a tremendous amount of engagement with our associations, our NPL clubs and other stakeholders. There was just such a fantastic spirit of cooperation.

When I have gone out and about and spoken to some club presidents of community clubs, they said it was so important for football to be played, especially for young people, and for the many people who went through difficult times, football was that release. The physical and the mental health value of playing football was absolutely vital.

It wouldn’t have been possible without the tremendous efforts of volunteers, who implemented all of the COVID safety measures. Volunteers, who always do a fantastic job, were asked to do more and they stepped up and were fantastic.

On another positive note, we also launched our NPL.TV platform and is now up to over 25,000 subscribers who are registered to the service.

On the negative side, it was a very challenging time for everyone involved. For Football NSW, all of our stakeholders and employees it was difficult. We did have standdowns, there was a lot of uncertainty.

Q: In regards to the recent Football NSW vs Football QLD State of Origin series, what do you see as the benefits of this initiative?

Stuart Hodge: It’s a tradition that goes back to the 1800’s for NSW and Queensland to play each other in football. It’s a treasured rivalry and from my understanding the last time it was played before this was 2003. I think there’s a tremendous pride in playing for your state. We see it happen in Rugby League, when the Blues play Queensland, it’s such an amazing occasion.

Rale Rasic at the Football NSW jersey ceremony.

We believe, the quality of our NPL is fantastic and also believe in the pride of representing NSW. We think it’s a great concept to bring back for our senior players. There’s been a great reaction from them. We had a fantastic jersey presentation with Rale Rasic in the build-up, and also Robbie Farrah. You can see it means a lot to the players, it’s another level.

It’s a tradition that was unfortunately lost and as a sport, we’ve decided to embark on a history and heroes project. We want to start recognising those who have contributed to the game at all levels and all aspects. Historically, football has not done enough of that. So this match was part of our push to start recognising the traditions of the game. The history project will also start to look at the naming of assets to appropriately reward those heroes’ service to the game.

Q: With the winner of the FFA Cup now getting a half spot into the Asian Champions League, do you think this will incentivise NSW member federation clubs to further lift their standards and professionalism across the board?

Stuart Hodge: It certainly provides a wonderful opportunity. But obviously in order to be eligible for that, the clubs need to meet certain requirements by the AFC. This does offer an incentive for clubs to look at what those requirements are and how they can develop and grow in order to meet those levels.

It’s a great chance to play off for that ACL spot, but not only that, because you would have had to win the FFA Cup to get there, which obviously no NPL club has done yet and is a huge achievement in itself.

I applaud the FFA for this incentive, to really try, in many cases, and lift the profile of the FFA Cup. I think it’s a fantastic competition, we see some great matches especially those involving member federations clubs against A-League clubs.

You really see how much it means to those federation clubs when the results go their way, and the large crowds that come along to see a Sydney club play against one of the Sydney A-League clubs.

The way they (FFA) have broken the competition into zone areas for the Round of 32 I think is also going to create some more of those derby games which are a fantastic aspect of the tournament.

Q: What’s your overall view on a national second division with promotion and relegation, is it currently realistic?

Stuart Hodge: I think everyone in football would ultimately like to see a second division with promotion and relegation. It’s something that is very unique to our sport and we see it happening all over the world. But, it has to be with the right circumstances all put in place. I think having the discussion around the second division is healthy, similar to the FFA Cup, the notion that a second tier may come at some point is also important to inspire those aspirational clubs to continue to grow and develop.

Q: How big of an opportunity is it for girls playing football in New South Wales to witness a Women’s World Cup in their backyard? 

Sam Kerr celebrates her goal against Brazil at Penrith Stadium in 2017.

Stuart Hodge: The Women’s World Cup will provide an incredible legacy opportunity for the game of the football, even beyond just girls. We’ve seen when the Matildas have played in NSW, the superb crowds of boys and girls coming to watch them.

I remember going out to Penrith Stadium, when the Matildas played Brazil, it was sold out with a fantastic atmosphere.

It’s incredible to see how the Matildas are just embraced here in NSW, they are so popular here for boys and girls. The Women’s World Cup is going to take all of that to a whole new level. I think the opportunities that will present for the game, not only for inspiration purposes for new players, but also encouraging those in the game to embrace a World Cup on home soil. It’s a once in a life time chance.

Q: Should this help with factors such as facilities in the future, due to the expected participation boom?

Stuart Hodge: It’s time for football to capitalise on this. We are engaging with the NSW Government and they are a tremendous supporter of major events. It’s about promoting a legacy for the game.

In the past, the government have provided legacy programs off major events which have included facility funding, funding for programs and more…and it will be important to connect with them in that process.

We know that facilities are a challenge for our sport, in NSW and around the country. We have a lot of football projects and facility investment that is required (to deal with the expected participation boom). The Women’s World Cup gives us an amazing platform to really advocate for our cause.

Q: Overall Stuart, what are your goals and vision for the organisation in a post COVID setting?  

Stuart Hodge: We have the XI Principles that the FFA have set out, and gives some guidance and direction for where the game may head. We just have to be positioned well to capitalise on the legacy of the Women’s World Cup and use that to benefit all of the game.

Coming out of COVID we want to make sure our associations are strong. We’re embarking on an NPL improvement project which will look at the next three years and how we can boost the governance and the structures of the competitions, in order to maximise those factors.

Football NSW will continue our player development programs and really look at how we can contribute to plugging the performance gap that the FFA has identified.

Finally, continuing to support and grow community football through investment is a high priority of our organisation.

 

 

 

 

Former South Melbourne FC president weighs-in on second division

Former South Melbourne FC President George Vasilopoulos has provided his insights into the National Second Division, stating he believes many issues which prevented its formation in the past still exist.

But despite the financial and geographic barriers, Vasilopoulos remains optimistic that the inception of a promotion/relegation system could reignite Australian football.

“People have been wanting to do it since the National Soccer League was established in 1977. Can you imagine how exciting it would be? People would fill up stadiums to see their team challenge for promotion,” he said.

“It would give football fans a new lease on life. There would be more sponsorship, more members, and more support.”

Reenergising the A-League is a current priority for the game’s leading administrators. With average crowd numbers stagnating over recent seasons despite growing participation, Australian football is at somewhat of a crossroads.

“The A-League started very well. I was so pleased to see large crowds attending the games but over time hit a bit of a downturn,” Vasilopoulos said.

“It takes time to build things and I am keen to see how it will play out, but recently crowds have gone down. This naturally leads to a reduction in sponsorship and money. Administrators have to work harder to find dollars which creates pressure.”

As an administrator for almost 30 years, including a 13-year period as President of South Melbourne FC from 1989-2002, Vasilopoulos attended many meetings to brainstorm a second division’s viability.

Unfortunately, the league never materialised, and he believes many of the issues that administrators faced then are still obstacles today.

“The second division has always been discussed. It would be a huge benefit for the sport, but the issues today are the same – there is a tyranny of distance in Australia and the key question remains, how will it all be funded?” he added.

“We could never come up with a legitimate strategy to make it work. Flying teams and their staff regularly over long distances is extremely expensive, not to mention accommodation and all of the other costs associated with it.”

The feasibility of a National Second Division may lie in modern solutions, with a conference style system touted to minimise travel proving a popular idea.

“Conferences with the winners playing off in a tournament is a brilliant idea. That would generate interest for fans and viewers who would know there is a massive prize at the end of it all,” Vasilopoulos said.

“You see how people react to knockout football with the popularity of the FFA Cup. There’s a lot of interest in seeing lower league clubs challenge for the cup but having a prize like promotion at the end of it would take it to another level.”

With a conference system a legitimate option to solve travel concerns, administrators are beginning to piece together a realistic model for the division. Although much work remains to be done, the formation of the Australian Association of Football Clubs (AAFC) Championship Partner Group will only bolster funding and support, with the group’s 35 member clubs aiming to launch the second-tier in 2022.

“Having these strong, historic clubs like Marconi, Sydney Olympic, South Melbourne, Heidelberg and so on supporting the division will only help to get it off the ground. Generating that interest in the grassroots is important but if these clubs want to go up, then someone must come down and creating a system that involves relegation may be a real challenge,” Vasilopoulos said.

“Relegation may make it impossible financially. There are a wealthy people behind these clubs who contribute a lot of funding. Would a person want to put money into a club, millions of dollars if they are at risk of being relegated?”

“It’s difficult because there is definitely merit to a second division with promotion and relegation, but clubs would need financial support.”

Vasilopoulos added that a short-term solution could involve promotion without relegation, at least in the interim to top up the league and build momentum before eventually bringing in relegation down the track once the system has matured.

“From this season there will be 12 teams in the A-League. If they want to bring in a system slowly, they could have promotion playoffs for the first few years without team’s in the top league facing relegation,” he said.

“In the old National Soccer League there were 14 teams. We could create a system where for the first few years the winning second division team gets promoted and builds the league’s numbers up. This would give FFA time to create a sustainable system over time.”

For more information on the Championship Partner Group, visit here.

 

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