Saturday, June 10, 2006

Inside Australian football's financial turnaround

The World Cup is a financial boon for all football associations but particularly for those directly involved such as Australia which is in the finals for the first time since 1974. "The most significant benefit is the prize money that FIFA has set aside, which was for this World Cup Sfr332 million," John O'Neill, chief executive of Football Federation Australia, told Simon Hoyle of the Sydney Morning Herald. "That means we got Sfr1 million to assist with the costs of preparing for the World Cup, plus another Sfr6 million appearance fee. So that's Sfr7 million straight to our revenue line." Should the Socceroos progress beyond the group stage, the prize money will increase dramatically.

The "World Cup effect" is already worth A$20 million to FFA, whose total turnover in 2005-06 will be about A$49 million. That includes the Sfr7 million of World Cup money, sponsorship income of about $12 million, and gate receipts, "somewhat enhanced by the game against Uruguay and the sell-out against Greece", of about A$11 million. The sale of broadcasting rights will pull in about A$2.3 million for the year, government grants about A$5.4 million, merchandising about A$2 million, and "miscellaneous" activities A$4.3 million.

O'Neill says broadcasting revenue will soar to about A$16.3 million from next year on, as a direct result of the Socceroos' success to date. "I would suggest that if we hadn't qualified, I think Foxtel would not have looked on us as favourably," O'Neill says. FA's sponsorship income is forecast to rise to $17 million, as existing sponsors renew and new sponsors sign up. Gate receipts will decline as World Cup fever subsides. But Australia's new place in FIFA's Asian Football Confederation will help underpin television interest.

"The whole windfall effect of the World Cup cannot be underestimated," O'Neill emphasised but added that it's only one part of FFA's plan to rejuvenate Australian football. "I have been in this job just over two years," he told Hoyle. "Going back to when I joined, the P&L and balance sheet of [FFA predecessor] Soccer Australia was a disaster. On and off the field the game had lost its credibility. The game had no content [and] the Socceroos hadn't played at home for 31 months."

The Socceroos' appearance at the World Cup over the coming days in Germany will support FFA's plans. "Sponsors came to the table with some reservations, a fair degree of caution and relatively modest amounts of money," O'Neill said. "But that's where we had to start, to get people in the door. Once they were in the door, they got a worthwhile experience."

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