Last line of this article clearly says "Funds are collected from New Zealand Football"
The business of playing ball in the A-League
Last updated 05:00 01/02/2014
DAVE BURGESS
KENT BLECHYNDEN/ Fairfax NZ
Owning an A-League football club is historically not for the faint-hearted. Quite the opposite really. It's for people with plenty of dollars and, some may argue, no sense.
Since the A-League's inception in 2005, two teams - Gold Coast United which reportedly lost A$18 million (NZ$19.4m), and North Queensland Fury - have closed down.
The Auckland-based New Zealand Knights also went belly up, threatening to mark the end of the professional football era in New Zealand. But in stepped property developer Terry Serepisos, who in 2007 established Wellington Phoenix. While the team eventually made it to three consecutive A-League finals series, off the field it was a financial battle. Serepisos said he had to inject personal funds of up to $1.5m a season to keep the club afloat.
But as the global financial crisis took hold, the Serepisos empire crumbled. In 2011, he lost control of the Phoenix and was declared bankrupt.
Former Wellington city councillor John Morrison had seen the writing on the wall and worked hard geeing up wealthy local businessmen to rescue the club. It was taken over in 2011 by Welnix, a consortium led by former investment banker Rob Morrison - now club chairman - and economist Gareth Morgan, who says there was one main reason why some of the capital's best and most successful business brains signed up to save the Phoenix.
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"Just because the council asked us to. John Morrison came and said you have to save this thing otherwise we are going to lose it. I saw it as social work."
The consortium took over the club even though it hadn't seen financial accounts from the Serepisos era.
"I've never seen a set of books to say if the club ever ran at a profit. I suspect it hasn't. It was a voyage of discovery," Morgan says.
Governing body Football Federation Australia (FFA) forecasts the owners of A-League clubs will this season lose a combined A$8m to A$12m (NZ$8.6 to NZ$12.9m). That is an improvement on the 2011/12 season when the 10 A-League clubs incurred combined losses of almost A$27m (NZ$29.1). That fell to about A$20m (NZ$21.5m) last season.
A-League boss Damien de Bohun says the mission is to have a "commercially sustainable, world class competition.
"We think this year there could be as many as four clubs . . . and maybe up to six which, if they don't actually make a profit or break even, it will only be by a few hundred thousand dollars.
"Another thing to point out is the Hyundai A-League is now the 15th most attended football competition on the globe."
Welnix was issued a five-year A-League licence by Football Federation Australia. It expires after the 2015/16 season. In its first year of ownership (2011/12 season) the eight-strong Welnix consortium had to collectively pump about $2m into the club's coffers.
Morgan says the figure fell to about $1m last season. He expects it to be below that for this season.
"Our mission was to build the club to stop the bleeding. You've got to say we're on course to achieve that.
"But it is a bit of a freaky experience being involved in something where the aim seems to be to break even. It is quite hard to orientate myself to that."
The Phoenix has several revenue streams. For a start it receives central funding of A$2.5m a year (NZ$2.7m), up from A$1.9m (NZ$2.05m), from the FFA.
Phoenix general manager David Dome says the FFA funding is used for a specific purpose. "Our position is that . . . it pays for the player salary cap and that's what we stick to."
A-League head de Bohun says the new four-year, A$160m (NZ$172m) broadcast deal was key to the increased level of funding. "We have matched the salary cap for the first time . . . So in effect the FFA pays for the cost of the players. The rest is up to the clubs."
A-League clubs may also pay marquee players outside the salary cap. The most notable example is the A$4m (NZ$4.3m) a year, two-year deal between Italian superstar Alessandro Del Piero and Sydney FC.
Club owners make their own decisions on whether to fork out big bucks for marquee players, which obviously has an influence on the bottom line, de Bohun says.
However, Dome says there is no evidence in the A-League that this sort of model is successful and the Phoenix would not go down that path. The number of players on the Phoenix's books can be fluid, with temporary injury replacements and loan players, but there is generally a roster of 22 to 24.
The Phoenix has moved to performance-based contracts for players which take into account how many appearances they make and how well the team is performing.
Office staff at Phoenix HQ in Vivian St numbers eight, including Dome, while head coach Ernie Merrick can call on a team of seven to assist in preparing the team. They all have to be paid from revenue outside FFA funding.
The club's most lucrative sponsorship is with Chinese telecommunications giant Huawei but just how lucrative it is remains a closely guarded secret.
Funds from Football New Zealand are also collected to recognise the club's role producing players good enough to earn international selection.