Monday, June 11, 2007

Lessons from other codes: AFL

The Australian Financial Review Boss magazine volume 8 for June 2007 ran an article by Andrew Burrell Team Players Pages 22 to 26 about chairs of 3 AFL clubs - Dalton Gooding from West Coast, Richard Colless from Sydney and Eddie McGuire from Collingwood.

The AFL is under pressure from bad player behaviour and drug taking, and weak responses from clubs. But it was some of the other things these successful people said about their code that caught my attention.

The leadership challenge comes at a time when the AFL has never been better off financially. Crowds and TV viewers are flocking to the game, and it has a five-year $780-milliontelevision deal with Seven and Ten networks... Last year revenues rose 6 per cent to a record $215 million and the league's operating surplus jumped 8 per cent to $140 million. Other measures, such as aggregate club profitability (up by $2.9 million to $11 million) and record memberships (up 1.95 per cent to 519,126)... page 22

Eddie McGuire advises that Collingwood is set up as a '52-week event company'... and 'you probably have more people on your staff than you would if it was a privately run business ... it's all about winning games of football, and giving your supporters something to enjoy on the weekend and something to talk about through the week... Match days are like staging 11 Rolling Stones concerts a year. We run the biggest restaurant in Australia 11 times a year... We're an internet company, we're a gaming company, we're a hotel business, we're a travel agency... ' page 24

So for McGuire the financial performance is a means to and end. And I think this is true for all A-League team owners who crave that something that owning and controlling a successful team brings.

Sydney Swans' Colless talks about the directors role in keeping the club solvent balanced by protecting its 'history and culture... as long as you're not in danger of going out of business, the members will take the P&L and the balance sheet for granted.. ' and focus on 'players and coaches' Well all codes know this. Lose a few games and the coach gets hammered.

Colless was brought into Sydney in the mid 1990s when 'We had a 26-game losing streak, turnover of about $3 million and around 3000 members.' An A-League club would be out of business if it lost 26 games. These guys backed their product. We need to be prepared to do the same for the A-League.

Colless also talks about the establishment of the player leadership group in AFL teams as opposed to a single leader. Last season when criticised for not naming a captain, the Roar's Frank Farina asked rhetorically why you need a captain. Colless and other AFL leaders have thought about this issue. They see a clear role for a group of senior players taking the weight off the coach and mentoring junior players and even making some decisions.

The author also make the point that 'at most AFL clubs there is a high level of clarity involved in the organisations' reporting structure and demarcation lines.' page 25 This does not appear to be the case for most A-League clubs, where the owners seem to get to say a lot about who they buy and how the coach operates. In the AFL, the Chair and Board would talk to the CEO, like most companies. I am not sure this is the case in football - from Chelsea downways (ah Mourinho?).

West Coast Eagles Gooding - who I understand to be backed by key WA mining industry participants plus Hungry Jacks and SGIO - and is the wealthiest AFL club ($40 revenue) - says emotion is the difference between a listed company and a club. He says that a listed company is about share price, but at a club it is about performance. 'You get a flogging on the weekend and the whole world is calling for the coach's head - that's a fairly big crisis for your organisation.' page 25 I agree and I have seen it at A-League level watching crowd behaviour turn on Miron and, perhaps in a more ugly way by parents at junior level.

Gooding points out ' We've tried to instill the factors you'd use in running a business into running a football club. Ever single person at the club has Key Performance Indicators, and we try to make everything measurable and accountable.' This is easier said than done. But if you can set it up in a meaningful way it is the way to go. You get clarity on what is working and what isn't.

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