Wednesday, October 29, 2008

Winning away, Ballymore and all that

This post is essentially a response to our Japanese correspondent the honourable Clayton san. Clayton wrote a comment on my response to the 'why the Roar don't win at home question.' This is the latest running story now that Craig Moore has actually played for the Socceroos again.

Clayton san posted the comment:
'Dunno, something felt a bit strange to me about your post. So the Roar go away from home and sit back on the counter, so they win. And that`s good. But its bad when other teams come to Brisbane and do the same to them?'
Well yes, in a way. I wanted to illustrate that as a tactic it is easier to deploy defence successfully than attempting to entertain the crowd. Mike Colman had pointed out that 'Roar' rhymed with 'bore' so I wanted to address that. What the Roar seem to do is hit teams away hard till they score and then sit back and defend. Against Wellington it worked. Against Sydney they let in a last minute goal and had to settle for 1-1. In any case, the point is that it easier to defend than attack. Boring is not good, but all teams have learnt that it is at least better than losing away. This is what I heard when listening to Aurelio Vidmar in his conference after Adelaide beat the Roar 0-1. He basically said the Roar are a very good team, if you play attacking against them at home, they will thrash you, so you defend and play on the counter.

Colman had made another point:
'Other "smaller" clubs like Central Coast, Newcastle and the ACL finals-bound Adelaide have gone forwards while the Roar for all their potential crowd support and world-class stadium have gone in the opposite direction.' 23 October 2008.'
I agree that being small is an advantage. The initial assumption was that being small would be a disadvantage and could lead to failure.

In his book 'It's Only A Game: A Life In Sport', the first FFA CEO John O'Neill documents how Central Coast where going to be rejected in their bid for an A-League franchise because their potential supporter base was just too small. However, I have come to believe that the reverse is true. That the salary cap works to protect the small teams at the expense of the ones with a larger potential fan base. It gives them more spare money to invest in club development rather than in supporting either the search for fans or the need to finance losses from home games. An article in the Sydney Morning Herald, 24 October 2008, by Michael Cockerill and Sebastian Hassett highlights this point. They argue that Sydney FC is currently in another round of fund raising from its shareholders to fund operating costs. They also state that 22% shareholder Russian oil and gas millionaire may switch to a potential western Sydney franchise as he is frustrated with his lack of influence at Sydney FC.

The cap means that the A-League has no prospect of a Chelsea or Man U. Which is good because it means that no team will grow to dominate and price the others out of talent available to the Australian market. But it does mean that teams find it much harder to leverage their potential fans to create advantage. There the key stat becomes net income to overheads. The teams with bigger overheads must find ways to control costs. And this can become a priority over building team support, marquee payments and guest players. My thinking on salary caps was shaped by an article in The Economist 'In a league of its own: America's national football league offers a business lesson to other sports' published on 27 April 2006. This article points out that American gridiron franchisees control and share all revenue, from gate-take to TV rights. Therefore, small teams have the same financial resources as large teams. But critically they also share the same risk. So if the big stadium are not filling because of negative tactics from the small teams, all teams feel this pain. There is also a strict salary cap. Indeed a balance has developed in which both large and small teams can win and be very financially successful. This is contrasted with the English Premier League which has always been barely viable financially and has increasingly become a place for billionaires to spend money with limited prospect of a sustainable return on their investment. Even the English Football Association has recognised this problem. The American Major League Soccer has learnt this sustainability lesson and adopted a small competition, some revenue sharing, a salary cap with marquees, and player purchases controlled centrally (for example this has prevented David Beckham's LA Galaxy from dominating). An excellent book on this is 'Inside The Minds: The Business of Sports - Executives from major sports franchises on how a team operates behind the scenes' published by Aspatore Books in 2004. For information on the viability of EPL, I recommend Stephen Aris' 1990 'Sportsbiz: Inside the sports Business' published by Hutchinson, and 'The Economics of Football' by Stephen Dobson and John Goddard published by Cambridge in 2001 (looks at relative long term success by size of fan base).

In the A-League, certain teams larger share of costs are essentially the seats in the home stadium and the support servicing costs on match day. Teams with bigger stadiums pay for the seating capacity, and extra for the services (like Spotless) for crowds that are smaller than anticipated. Of the teams with big stadium, only Melbourne has reached a critical mass. I recall from season one that Melbourne was one of several teams that received FFA assistance. Since, their exciting play and players (particularly their successful foreign players) has carried them to huge home support. Victory will be the only Victorian franchise for the foreseeable future. In this they have a massive advantage over Sydney. NSW has supported 3 teams and, from next year, so will Queensland. In later seasons, NSW may add Wollongong and a team from the western suburbs. It can also be noted that Adelaide trialled playing at a bigger field - for major games over new year - and while they seem to made money from it seem to have dropped the idea. They seem to prefer - a clear message to their fans about where they play, a full house even if some miss out (see their ACL home games) and the intimidation effect on visiting teams of Hindmarsh.

Miron has promised that Gold Coast will keep its fans by playing attacking football. Win or lose he did so at the Roar. So far it seems that he will have both a relatively small home ground and massive financial backing from Clive Palmer (I wonder whether the financial crisis and declining commodity prices have affected this). Miron has had a few arguments in the press with the Roar and, in particular, Craig Moore. He may have scores to settle over the way he feels he was treated when he was the Roar coach (an alleged meeting between management and Frank at an airport). He also poached 5 of the Roar's middle managers this year which I feel has impacted their strategies. Given this, I am surprised that Miron seems to be very visible at Roar home games in a commentary deal with Foxtel. I wonder what the Roar think about that.

This brings me to the next part of Clayton's comment:
"Against the cross bar had a post saying that the Roar could be off to Ballymore next season. And they could be changing names. What do you think about these possibilities?'
The Ballymore issue has been covered in the Courier Mail. When the Roar went through its financial issues in season two Ballymore was an option. In the end, this option was used to negotiate a better deal with the State Government for the use of Lang Park. Recently, it has been reported that the Ballymore move is for training only. The Roar has been looking to finalise its separation from the Queensland Lions club (no longer owned by the Dutch club and not to be confused with the Brisbane Lions AFL team). It has also been reported that the Roar's contract at Lang Park lasts until the end of next season. I feel that this is probably too far away - a season and half - to have much impact on the Roar's destiny. Next year's conditions and the development of Gold Coast's fan base will have more impact. So going to Ballymore is unlikely next year. If they did move it may be harder for some fans to get to but it also may be less comfortable for visiting teams, because the other viable that does impact home team performance is home packed the stadium feels. 11,000 at 24,000 seat Ballymore would be much more intimating than the same at 52,000 seat Lang Park. Winning regularly at Ballymore could lift the fan base. Perhaps the lift of 32,000 against Sydney at the end of last year explains why the team played so well.

As far as the name goes, it has been mooted that Queensland could be dropped for Brisbane Roar. I would strongly recommend that they do not do this. Why not keep all the fans outside Gold Coast and Far North Queensland? Equally, changing the name Roar would be like the team starting again. I would recommend against this. Changing the name will do nothing for results and is likely to alienate the fans, give them a result to reconsider their support. A brilliant book on keeping fans is 'The Elusive Fan: Reinventing sports in a crowded marketplace' by Irving Rein, Philip Kotler and Ben Shields published in 2006 by McGraw Hill. Again this should be compulsory reading for the FFA and A-League franchises. The A-League also has a lot to learn about keeping fans in Australia from AFL. When you have a name in the marketplace you need to built, perhaps re-position, but to start again is very dangerous. This is because reputation management is a very difficult practice, and in particular markets it can only be learnt through experience.

Finally, Calyton commented:
'There is a lot of pressure on at the moment, but the Roar should have been expecting tougher times this year. Couldn't expect Adelaide and Melbourne to play as badly as they did the year before. So that is 6 decent teams and only 4 playoff spots ... '
This is a good point. The strength of the A-League is that any team can win. The question was 'what could they have done differently?' They may feel they did the best they could. In the off season their chair John Ribot resigned and Jayco sold its stake. I think Ribot's sports business wisdom had been a major asset. This year they have focused on keeping their current squad and not losing what they see as key players to the Gold Coast. The FFA has had two CEOs with sports management experience, rugby union and AFL, rather than football experience. This ensures than the head rules on decision making. For example, the Roar has close Dutch connections and acquired Dutch 2nd league striker Sergio Van Dijk.

Paul Downward and Alistair Dawson's 2000 'The Economics Of Professional Team Sports' published by Routledge attempts to answer the question of whether dominant teams kill public interest in professional sports.

Anyway, I have found that economists like writing about what their discipline can teach about sport. What I have found interesting is how few owners and potential owners have read them. Still probably a good thing as it may have put them off. You need to be an iconoclast to invest in football.

1 comment:

Anonymous said...

dear johnsan,

i am honoured that my earlier comments got your writing juices flowing ...

very interesting read.

an interesting point i found in football365 - nick hornby`s fever pitch (great read, maybe you recommended it to me) starts and finishes with failure. traditionally, the majority of football fans are used to their team sucking / going through hard times. its only recently with champions league spots, uefa cup spots, and the big four that there seems to be prizes for all.