Football Federation Australia is set to land $32 million in cash after selling two A-League club licences to Western Melbourne Group and Macarthur South West Sydney, the two new teams to enter the competition.
The Herald can reveal the next phase of A-League expansion will deliver FFA one of its biggest one-off cash cows despite the organisation resisting the temptation to offer the licences to the two highest bidders in the process.
FFA chief executive David Gallop and chairman Chris Nikou at the expansion announcement.Credit:AAP
It's understood Western Melbourne Group paid about $19m for their A-League licence to enter the competition in the 2019-20 season while sources suggest the Campbelltown-based bid will pay about $13m for their licence, beginning in the 2020-21 campaign.
The FFA is expecting to receive Western Melbourne's payment in one single deposit while Macarthur South West Sydney are likely to pay their licence fee off in instalments. Much of the collective $32m will be used for the bids to cover their own costs for the duration of this current TV deal, which expires in 2023 and only caters for distributions to 10 clubs in the competition.
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However, it leaves a profit of up to $5m in the coffers of FFA, who made no secret of their desire to boost their bottom line as a result of the expansion process.
"I think weve made it clear form day one that there was a number we needed to achieve to make sure this was affordable. Weve achieved that number. That has been part of the snakes and ladders movements of the past week or so," FFA chief David Gallop said.
The news follows suggestions the A-League expansion process became somewhat of a 'blind auction' with bidders asked to submit their offer for a licence, instead of being given set prices. Sources suggest one losing bid was asked to up their offer on expansion D-Day on Wednesday, when the FFA board met to resolve the process while others were asked to accept new terms.
"Its not appropriate to go into the negotiations that we had," Gallop said. "I already said some of those negations happened in the closing days and hours of where we ended up and it was really important that we achieved the affordability that we put in place. A-League licences are valuable assets."
Collectively, however, the winning bids were far from being most lucrative for FFA. The organisation was set to receive more in handing a licence to South Melbourne instead of Western Melbourne with the former NSL club claiming to have tabled up to $20m to enter the A-League. Southern Expansion from Sydney's south offered a licence fee of $16m, another $4m in operational expenses and were prepared to pay a further $1m more for a W-League licence.
The Macarthur South West Sydney bid was accepted into the A-League with an eye on the long-term population growth in the region. They claim to have a catchment of two million people in 10 years time and boast plans for a redevelopment of Campbelltown Stadium, a new council-funded Centre of Excellence and a desire to enter a W-League team at the earliest opportunity.
However, they will be not enter the competition until the start of the 2020-21 season with the primary reason being resistance from Western Sydney Wanderers. Set to return to Parramatta Stadium next season, the Wanderers wanted a season without nearby competition at their new venue before facing a new club close to their territory.
"We know theyre going back into Parramatta but weve also seen that being away from Parramatta for the Wanderers has had a significant impact on their business," Gallop said.
Western Melbourne Group trumped South Melbourne and reported favourites Team 11 on the back of their plan to become the first Australian sporting club to own their own purpose-built, modern football stadium, training centre, offices and academy on the one site. It was described as "pioneering" by a source close to the FFA board.
"There is an opportunity to do something quite unique and do something weve seen successful globally," Gallop said.
FFA will not be asking the successful bids to enter W-League teams in the immediate future.
Dominic Bossi is a football reporter with The Sydney Morning Herald.
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Football Federation Australia is set to land $32 million in cash after selling two A-League club licences to Western Melbourne Group and Macarthur South West Sydney, the two new teams to enter the competition.
The Herald can reveal the next phase of A-League expansion will deliver FFA one of its biggest one-off cash cows despite the organisation resisting the temptation to offer the licences to the two highest bidders in the process.
FFA chief executive David Gallop and chairman Chris Nikou at the expansion announcement.Credit:AAP
It's understood Western Melbourne Group paid about $19m for their A-League licence to enter the competition in the 2019-20 season while sources suggest the Campbelltown-based bid will pay about $13m for their licence, beginning in the 2020-21 campaign.
The FFA is expecting to receive Western Melbourne's payment in one single deposit while Macarthur South West Sydney are likely to pay their licence fee off in instalments. Much of the collective $32m will be used for the bids to cover their own costs for the duration of this current TV deal, which expires in 2023 and only caters for distributions to 10 clubs in the competition.
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However, it leaves a profit of up to $5m in the coffers of FFA, who made no secret of their desire to boost their bottom line as a result of the expansion process.
"I think weve made it clear form day one that there was a number we needed to achieve to make sure this was affordable. Weve achieved that number. That has been part of the snakes and ladders movements of the past week or so," FFA chief David Gallop said.
The news follows suggestions the A-League expansion process became somewhat of a 'blind auction' with bidders asked to submit their offer for a licence, instead of being given set prices. Sources suggest one losing bid was asked to up their offer on expansion D-Day on Wednesday, when the FFA board met to resolve the process while others were asked to accept new terms.
"Its not appropriate to go into the negotiations that we had," Gallop said. "I already said some of those negations happened in the closing days and hours of where we ended up and it was really important that we achieved the affordability that we put in place. A-League licences are valuable assets."
Collectively, however, the winning bids were far from being most lucrative for FFA. The organisation was set to receive more in handing a licence to South Melbourne instead of Western Melbourne with the former NSL club claiming to have tabled up to $20m to enter the A-League. Southern Expansion from Sydney's south offered a licence fee of $16m, another $4m in operational expenses and were prepared to pay a further $1m more for a W-League licence.
The Macarthur South West Sydney bid was accepted into the A-League with an eye on the long-term population growth in the region. They claim to have a catchment of two million people in 10 years time and boast plans for a redevelopment of Campbelltown Stadium, a new council-funded Centre of Excellence and a desire to enter a W-League team at the earliest opportunity.
However, they will be not enter the competition until the start of the 2020-21 season with the primary reason being resistance from Western Sydney Wanderers. Set to return to Parramatta Stadium next season, the Wanderers wanted a season without nearby competition at their new venue before facing a new club close to their territory.
"We know theyre going back into Parramatta but weve also seen that being away from Parramatta for the Wanderers has had a significant impact on their business," Gallop said.
Western Melbourne Group trumped South Melbourne and reported favourites Team 11 on the back of their plan to become the first Australian sporting club to own their own purpose-built, modern football stadium, training centre, offices and academy on the one site. It was described as "pioneering" by a source close to the FFA board.
"There is an opportunity to do something quite unique and do something weve seen successful globally," Gallop said.
FFA will not be asking the successful bids to enter W-League teams in the immediate future.
Dominic Bossi is a football reporter with The Sydney Morning Herald.
