Football followers around Australia should vote for the Gillard Labor Government and give thanks to the Brisbane Roar’s Bakrie Group.
That’s the take-out from FFA’s 2011-12 financial statement.
Without the sale of Brisbane Roar – for what appears to be $7 million – and the waiver of the $4 million loan made to FFA when Frank Lowy ascended to power as Chairman in 2003, the FFA’s $1.5 million surplus (or profit) in 2012 would have been a $9.5 million deficit (or loss).
The financial statement also shows that while the Government’s Smith Report in December 2011 commented on the need for cost containment within FFA, expenditure increased by 9.2% from the 2011 financial year to 2012 (when expenditure for the World Cup Bid is excluded).
Rather than ‘razor gang’ like cost-cutting, expenditure on:
- travel and marketing and media expenses each increased by around 4%
- employee and team expenses increased by 17%
- administration expenses increased by 18%
- payments to executive employees increased by 34%, and
- broadcasting expenses increased by 86%.
All of this expenditure may be appropriate but the financial statement only shows the ‘bottom line’.
Revenue in 2012 was $84.6 million, an increase of $4.6million on 2011 (when revenue for the World Cup Bid is excluded) or 5.7%.
However, $7 million of the 2012 revenue is “profit on disposal of assets” – Brisbane Roar – and the $4 million gift from the Gillard Government is included in the one line of $76.9 million total operating revenue.
The high value placed by the market on Brisbane Roar is potentially good news for FFA who will also be looking to sell Western Sydney Wanderers sooner rather than later.
That show of market confidence in the A-League, together with the ‘blue skies’ forecast by CEO David Gallop because of Manchester United’s visit next year and the new broadcast deal, should have FFA in a position to stop the ‘tax’ on players – particularly junior players and their mums and dads.
The last time player registration fees were presented as a separate revenue item in the annual financial statement, they totalled around $6.4 million. They are set to increase by CPI again this year under a policy introduced by former CEO Ben Buckley in 2007, although many junior associations are hopeful that Gallop will either eliminate or reduce the ‘great big tax’ on junior and amateur participation in light of the “blue skies” financial position.
However, FFA insiders say this is highly unlikely. They say there is little more than $5 million per annum left for FFA out of the broadcast deal once the commission and others costs are taken out, the ‘in-kind’ contribution excluded and the A-League clubs receive their payments, and they are unlikely to share the windfall from the Manchester United visit.
Other matters to note in the 2012 financial statement include a loan of just over $900,000 to an undisclosed entity and the writing-off of FFA’s longstanding $500,000 investment in the Central Coast Mariners – the latter in the same year as Brisbane Roar was sold for $7 million.
The Westfield sponsorship is disclosed as $1.25 million and NAB as $847,000 due to Directors’ interests declarations relevant to Lowy, Brian Schwarz and Joseph Healy. Lowy and Philip Wolanski continue to hold a financial interest in Sydney FC as of 30 June 2012.
The Federal Government, as part of their objective to make their Budget surplus in 2012-13 more attainable, also advanced grants of $11.1 million prior to the end of the financial year for Western Sydney Wanderers and the 2015 Asian Cup Organising Committee. This advance does not impact on revenue or expenditure on the year in question but on cash flow at 30 June.