SKINS leaderboard

There’s not much to be gleaned from FFA’s financial report for 2016 which is due to be presented to the Annual General Meeting next week.

What we can tell is that FFA revenue has remained static over the past twelve months to see its financial position worsen slightly by $646,000 to an overall loss of $387,000. Last year, FFA realised a modest surplus of $259,000.

Revenue in 2016 (excluding interest) was $103.4 million, consistent with last year’s result of $103.1 million (excluding interest and one-off Asian Cup revenue). Comparative total adjusted expenditure increased by a little over $2 million to $106.3 million, 85% of which is due to an increase in grant distribution to $32.1 million, mainly to A-League clubs.

FFA has opted not to provide a breakdown of revenue since 2010 so it is difficult to assess the progress and the relative contribution of the revenue centres - broadcasting, sponsorship, and gate receipts from FFA-hosted matches. There is also no information on revenue or expenditure related to the A-League, which is one of the contentious issues between FFA and the ten A-League clubs.

The last time a revenue breakdown was given in 2010, sponsorship was leading the way with $27.1 million, which was around 28% of total revenue. The broadcast deal contributed a further $21.2 million (22%), while gate receipts from FFA-hosted matches reaped $11.5 million. The ‘tax’ on the game’s participants contributed just under $7 million.

Related party transactions

Because FFA is obliged to let us know of any transactions related to its Board members, we do learn a little more.

The Chief Financial Officer of Caltex, Simon Hepworth has been on the FFA Board since October 2014. The Caltex naming rights sponsorship of the Socceroos announced in March this year is reflected in the 2016 accounts with a $1.9 million contribution. This suggests the Caltex sponsorship is either generous or heavily front-ended. 

Westfield’s co-founder, Frank Lowy, was on the FFA Board until November last year, when Steven Lowy, Westfield’s co-chief executive, assumed the role of Chairman. Westfield significantly increased their sponsorship by two-thirds to $2.5 million in 2016 taking their total contribution since 2006 to about $13.5 million.

The level of the NAB sponsorship is not given as director Joseph Healy has left NAB. In the six years it was reportable, NAB contributed a little over $6 million.

Like many non-profit entities, the FFA Board is voluntary but a Director may be paid for “services rendered” if approved by the Board.

They approved payment to long time FFA Board member, AFC Executive Committee member and FIFA Executive Committee member, Moya Dodd, of $113,636 for unspecified ‘consultancy services’ in 2016. Ms Dodd received the same amount the previous year and $225,000 in 2014, taking her total fee for services rendered in three years to just over $450,000.

As a FIFA Executive Committee member since 2013, Ms Dodd would also have received a US$300,000 annual payment from FIFA. The additional benefits for Executive Committee members, which are currently under review, include first-class travel, a US$500/day allowance, and a hotel suite and one additional hotel room while on FIFA business around the world.

Moya Dodd with AFC friends Sheikh Ahmad from Kuwait and Sheikh Salman from Bahrain.

Ms Dodd’s law firm, Gilbert Tobin, separately received a total of $55,000 for legal services in 2010 and 2011.

The only other Board member to have undertaken work for FFA for payment is former Director, Ron Harvey, who received $160,000 over three years for international relations consultancy services from 2005 to 2007.

FFA executive management

FFA’s top management team continues to be well-rewarded. In 2016, the ten executives received an average of more than $500,000 each – up from an average of $448,000 each in 2015.

If each of the executive members had foregone their pay rise, 247 W-League players could have received $150/week for the 2015-16 W-League season

Player and other employee expense

FFA gives the cost of team and administrative employee expenses in one line item - $23.5 million in 2016. In a World Cup or Asian Cup year, this figure increases to between $32 million and $35 million, offset by the contribution from FIFA for participating in the World Cup.

Are sport finances a secret?

When FFA decided not to give a revenue breakdown, the reason cited was commercial considerations. They reasoned that other sports do not do so, and they followed suit.

This is largely true in Australia which is a reflection on both the standards of the Australian Sports Commission, which sets governance and financial reporting standards for national sporting organisations, as well as ASIC.

However, the AFL does publish a concise financial statement that gives comparative data and detail of their distributions, while the NRL publishes a descriptive overview of its revenue and expenses (starts p84). 

FFA’s position is also in contrast to other football federations. For example:

  • The FA in England revealed in their last financial report that £124 million of their £318 million revenue was from broadcasting; £58 million from sponsorship and licensing; and £56 million from Wembley Stadium. Unlike the FFA, they give the cost of national teams (£15 million) and the administration (£30 million) separately. The FA’s biggest expense is investing in the game by way of grants and programmes of £117 million. The FA has to pay tax and last year realised a modest surplus of £3 million.
  • US Soccer has total revenue on a similar scale to FFA (though obviously in USD) of $102 million, $37 million of which is from sponsorship, broadcast and licensing; $34 million in gate receipts from national team games; and $9 million from registration fees. US Soccer’s biggest expense is the cost of national teams who account for $69.8 million, while total administration is quite efficient at $15.3 million. Like FFA, US Soccer is not required to pay tax and made a surplus of $8.5 million last year.
  • There have been many matters that FIFA has famously not divulged, but its annual financial statement is relatively comprehensive and is the minimum standard to which FFA should aspire. 

While the financial statement prepared by FFA meets the ‘bare bones’ of legal requirements, this is not sufficient for a national sporting organisation – and especially one that claims the A-League needs the FFA to survive. On the current level of reporting, it is impossible for anyone to have any knowledge of, and therefore confidence in, this claim.

In the past, the state member federations have demonstrated they are spectacularly unable to ask challenging questions of the FFA Board on the financial statements.

For example, the US$465,000 payment that ended-up in Jack Warner’s bank account in the Caribbean does not appear in the 2010 or 2011 financial statements, nor is it referred to in the final report to government on the separate accounting for the World Cup Bid monies. To this day, FFA’s members have not asked where the money came from, and how it was accounted for.

However, this year, with the A-League clubs in-synch and determined to get some genuine change from FFA by March next year – ideally separate administration, but at least three Board positions – the A-League representative at the FFA Annual General Meeting should be demanding answers to some obvious questions.

  • What is the breakdown between the A-League, the W-League, the NYL, the national teams and the rest of FFA operations in terms of revenue and costs?
  • Why did the executive management team give itself an average 13% pay rise between 2015 and 2016?
  • What consultancy services did Moya Dodd provide for $450,000 over the past three years? Were they the subject of competitive tender?
  • What is the mean salary of non-executive staff?
  • What is the breakdown of revenue between broadcasting, sponsorship and licensing, gate receipts and player registrations?

SaveSaveSave

SaveSaveSave


Categories: Analysis | Football Business

ffa, ffa finances

You might also like: