General A-League discussion

Forget the European Super League, it seems Australia could be where the action is for soccer investment.

The struggling A-League — which from July will be owned by the 12 entrepreneurs, investment groups and, in the case of Melbourne City, a city state — is in the market for private equity investment that is said to value the competition at more than $200m.

That would be a hefty valuation, given the league’s 12 teams are losing tens of millions of dollars annually, television ratings have slumped and COVID-19 has hit already falling attendances.

But officials are said to have been in talks with various parties to inject some much-needed capital into the league in a move that might also be tied to a new streaming broadcast deal from next season.

Sources say the owners group, which has fought for control of the league for years, is unlikely to be prepared to relinquish majority control but would be willing to sell down as much as 29 per cent to a buyer.

One party said to have looked at the numbers is US firm Silver Lake, which put $US500m into City Football Group in 2019 for a 10 per cent stake. Majority-owned by Abu Dhabi, CFG owns a global network of clubs headed by English Premier League giant Manchester City and including Melbourne City.

CFG director Simon Pearce is a major mover and shaker in Australian soccer, and numerous former CFG officials are now running the sport in Australia.

One mooted deal would see Silver Lake take a 25 per cent stake in the A-League, valuing it at $200m-$250m.

Sources say there might even be another unsolicited offer on the table from other investment parties, which could involve a global streaming service such as DAZN or other broadcasters.

That offer is said to value the league at up to $400m, surely a bet on future growth rather than current financial performance. Outside observers suggest that number is probably at the more speculative end of the spectrum.

Nine Entertainment and its streamer Stan have also shown interest in the A-League rights, currently held by Fox Sports.

The league is hopeful of getting other interest, including the likes of Optus Sport, which currently holds EPL rights, though its ratings are down.

Foxtel walked away from a six-year deal with Football Federation Australia reportedly worth $60m a year last year as the pandemic threatened leagues worldwide, instead signing up for one year worth about half the previous annual value. Sources close to key A-League clubs say a new TV deal is likely to be put to owners in tandem with an equity injection, with offers from streaming services said to be well ahead of Foxtel’s best current offer.

The A-League will appear on a commercial free-to-air TV channel for the first time after clinching a landmark broadcast rights deal with Network Ten that secures the competition’s short-term future - and includes the sale of a small equity stake to Ten’s owners, ViacomCBS.

The Herald and The Age can reveal the A-League and W-League has signed a five-year contract with Ten and its streaming subsidiary Paramount+ worth $200 million in cash and commercial contra, according to sources, and contains triggers for a further three-year extension.

The deal guarantees one A-League match each week, on Saturday nights, will be broadcast live on Ten’s main channel for the duration of the agreement, preceded by a magazine-style discussion show - ensuring a level of free-to-air coverage hitherto only dreamed of in the league’s 16-year history.

In a further sign of the company’s commitment to growing the sport, Ten’s owners ViacomCBS have bought a 2.5 per cent share in the Australian Professional Leagues, the club-run body now in charge of both the A-League and W-League after securing independence from Football Australia at the end of last year.

The other five A-League games each round will be behind a paywall on Paramount+, which is aiming to use football as the cornerstone of its launch in Australia, where it will be available for $8.99 per month from August 11.

One W-League match each week, on Sunday afternoons, will also be shown on Ten’s secondary channel, 10Bold, with both free-to-air matches to be syndicated on 10Play, the network’s free streaming service.

The APL has also agreed to share responsibility for broadcast production, a move rarely undertaken by major sporting competitions in Australia. This ensures a minimum standard of production will be upheld across both the A-League and W-League and the ability to scale the number of cameras used at matches up or down based on the importance of certain fixtures.

“We are thrilled to partner with the Australian Professional Leagues to become the new home of football for both the A-League and Westfield W-League, giving all Australians access to more football than ever before,” said Beverley McGarvey, the chief content officer and executive vice president of ViacomCBS Australia and New Zealand.

“Ensuring broad reach on free-to-air, as well as extensive access on Paramount+, we are committed to showcasing the sport in innovative ways and exposing it to a plethora of programming opportunities across all our platforms, including those of our parent company ViacomCBS.”

It brings to an end the A-League and W-League’s long association with Fox Sports and gives the APL a sturdy platform from which to rebuild the domestic game after a concerning decline in TV ratings, crowds and general interest over the last few years.

The deal includes a significant portion of contra and advertising support, and APL is hopeful that Ten can provide the A-League and W-League with the same level of visibility and primacy in the summer months as it once did with cricket’s Big Bash League.

Ten’s interest in the A-League was first reported by the Herald and The Age. It marks Ten’s first foray into sport since losing the BBL rights to Fox in 2018.

The network’s offer was strongly preferred to the one tabled by Nine - the owner of this masthead - and Stan Sport, which sources say was significantly lower in financial terms.

The A-League has previously been shown on another one of Ten’s secondary channels, One HD, which was rebadged in 2018 as 10Bold. However, the competition has never before been broadcast on the primary channel of one of Australia’s three main free-to-air networks.

It is the first major local content deal clinched by Paramount+, which is emerging as a major player in US sports broadcasting and has ambitions to become the No.2 streaming service in Australia behind Netflix. Later this year, Paramount+ will take over the rights currently held by Stan for television shows and movies from Showtime, which is owned by ViacomCBS, as well as content from Nickelodeon and film studio Paramount Pictures.

Paramount+ shows the UEFA Champions League and Italy’s Serie A in the US, and is believed to be interested in complimenting its A-League and W-League coverage by securing other football rights in Australia. The AFC Champions League and FFA Cup, which involve A-League teams, loom as logical next steps, but sources say Paramount+’s ambitions for football in Australia are much higher.

The financial element of the deal is a boon for A-League clubs and above expectations. In the first year, it contains $32 million in cash - with Football Australia receiving a 20 per cent share, as per the APL’s independence terms brokered last year - and a further $11 million in contra, which will be gradually reduced over the term of the contract.

The clubs are set to receive a further windfall from a pending private equity deal. The APL has been engaging US merchant bank Raine Group since last year in search of a capital investment of between $100 to $150 million, which would further underpin the A-League’s planned reboot and the APL’s wider digital strategy.

“Fundamental to our strategy is a determination to ensure that we connect and engage with every Australian,” said APL managing director Danny Townsend.

“This agreement starts that process by giving the game unprecedented reach and the backing of an absolutely iconic and globally renowned broadcaster. Football is played all over Australia, and the creative power that this partnership will deliver can unlock what we believe is an audience the game has never managed to reach before.”