Saturday, February 17, 2007

Building a new club: Melbourne Victory's success

Melbourne businessman Geoff Lord's decision three years ago to throw in A$500,000 for a 50 percent stake in a brand new national football club licence in the just as new Football Federation Australia-sanctioned A-League has come up trumps. It its second only season Melbourne Victory FC as won the 2007 national league premiership, qualified for the 2008 AFC Champions League season and faces up for tomorrow's cup final on its home ground against Adelaide United as red-hot favourite. The club's on-field success is matched by its average home game crowds of around 30,000 at Telstra Dome and the likelyhood of breaking even in the current financial year.

Another indication of the value of the business is the swelling corporate support for the club. The corporate coterie attached to club known as Victory in Business has grown its membership from 16 to 700 in the last 12 months. Moreover, the club's revenue line is set to grow in 2008 following the renegotiation of key sponsorships such as Samsung which has signed on as the naming rights sponsor for another year in a deal that is likely to inject A$750,000 into the club's coffers.

"This might sound like a funny thing for a businessman to say but we're not actually trying to maximise the profitability of the club, although we want to continue to maximise the cashflow so we can put it back in the game," Lord told George Lekakis of the Sunday Herald Sun. "The club has taken a position that the biggest stakeholders in the club are the people -- the members and the supporters."

He is continuing to push for an extension to the Victory's five term of exclusivity in Melbourne, Australia's second biggest city and is concerned about rumours of an application from a section of the city's Greek-speaking community reportedly associated with Victorian Premier League club South Melbourne. "I know there are moves by some ethnic groups to apply for a club licence but I think that it shouldn't be allowed," he said. "It would be against the spirit of the new competition which is aiming to de-ethnicise the sport by ensuring that clubs are ecumenical."

According to George Lekakis, Melbourne Victory has raised an additional A$5 million of equity capital from a broad group of 20 local businessmen including he owner of Metricon Homes, Mario Biasin, MaxiTrans director Jim Curtis, the chief executive of JM Financial Group Harry Cator and local millionaires Joe Mirabella and Michael Catalano. Although still the largest single shareholder, Lord's stake has diluted to 20 percent.

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