A game of two halves

The past 18 months have been anything but “beautiful” for the round-ball game. This national sport has had an undeniably turbulent history and the pandemic made life even more difficult. But Football Australia is finally kicking some serious goals — from the Women’s World Cup to a new board led by chair Chris Nikou and CEO James Johnson.

Throughout its troubled history in this country, soccer has struggled both on and off the field. But the pandemic has thrown up a whole new set of challenges that Football Australia (FA) is now converting into opportunities. Soccer has weathered the greatest crisis in the game’s history. Now, the board of Football Australia — stewarded by chair Chris Nikou and CEO James Johnson — is on the front foot, capitalising on opportunities in a bid to reboot the national sport. Civil war is not a term Nikou uses lightly.

But his characterisation of Australian football’s administration three years ago could not be more on the money. The conflict was so fierce that FIFA threatened to dissolve Australia’s governing body — then known as Football Federation Australia — and install an Orwellian-sounding “normalisation committee” to bring stakeholders into alignment.

Fortunately, football’s back-office brawling has died down since then. Like all codes, the nation’s most popular participation sport is busy negotiating the rocky post-COVID-19 pandemic terrain of broadcast rights, sponsorship and brand realignment.

Nikou, a partner at law firm K&L Gates, has been at the helm of FA since the worst of the warring ceased in November 2018. First elected to the governing body in October 2014, he is the longest-serving FA director, a survivor of both the board battles and the Lowy era.

The Lowy family had loomed large over football for almost 20 years. Patriarch Sir Frank Lowy AC, founder of the Westfield empire, was the game’s original white knight, reviving the sport’s fortunes after the shambolic National Soccer League (NSL). During his 12-year reign as chair, he rebranded “soccer” as “football”, established the A-League and oversaw the Socceroos’ qualification for three successive World Cups.

Lowy’s much-welcomed appointment had been recommended by the Crawford Report into Soccer Australia in 2003, which identified mismanagement at the highest levels of the game, but when Lowy handed over control of the FFA to son Steven in 2015, the decision was also slammed. Cries of nepotism were linked to a lack of diversity on the FFA Congress, which elects board directors and approves changes to the constitution. A-League owners, frustrated that their voice and the voice of professional football was not being sufficiently heard on the 10-seat body dominated by state member federations, demanded reform — and so the civil war began. Such were the hostilities, FIFA convened a Congress Review Working Committee to look at ways of extending the franchise to bolster A-League representation and include essential football family such as the Women’s Council and Professional Footballers Australia. But the proposed 29-seat body was rejected by Lowy and company as a power grab by the clubs and the stalemate dragged on until FIFA’s extraordinary threat of direct intervention forced a reluctant Lowy to fall on his sword.

With such a tumultuous recent history, it’s little wonder Nikou is keen to focus on the game’s future. “There has been a different chapter of governance for different times,” he says. “When Sir Frank was given the steering wheel, it was because the NSL had its issues and it was important to have a restructure. Now we’re having another reboot and FA is well positioned for the next chapter.”

That reboot has for the most part been successful. The A-League and W-League have been decoupled from FA, giving A-League owners the independence they craved and bringing the professional game into line with major European competitions. FA also issued two new A-League licences, expanding the professional game’s footprint, and presided over the successful bid to host the 2023 Women’s World Cup.

It also has a relatively new board, with ex- Socceroo Mark Bresciano and ex-Matilda Amy Duggan MAICD rounding out the business, legal and administrative smarts of Joseph Carrozzi, also slammed. Cries of nepotism were linked to a lack of diversity on the FFA Congress, which elects board directors and approves changes to the constitution. A-League owners, frustrated that their voice and the voice of professional football was not being sufficiently heard on the 10-seat body dominated by state member federations, demanded reform — and so the civil war began. Such were the hostilities, FIFA convened a Congress Review Working Committee to look at ways of extending the franchise to bolster A-League representation and include essential football family such as the Women’s Council and Professional Footballers Australia. But the proposed 29-seat body was rejected by Lowy and company as a power grab by the clubs and the stalemate dragged on until FIFA’s extraordinary threat of direct intervention forced a reluctant Lowy to fall on his sword. 

It also has a relatively new board, with ex- Socceroo Mark Bresciano and ex-Matilda Amy Duggan MAICD rounding out the business, legal and administrative smarts of Joseph Carrozzi, Robyn FitzRoy, Stefan Kamasz, Carla Wilshire OAM and Tim Holden.

But there have been missteps — most notably the botched handling of the sacking of former Matildas coach Alen Stajcic in early 2019. The FFA’s lack of transparency and inability to communicate directly to the public why Stajcic was terminated led to press speculation that factors outside of football management were at play in his demise. Then deputy chair Heather Reid issued an apology after wrongly implying Stajcic was fired for untoward conduct. Reid was controversially voted off the FA board earlier this year.

Too much communication is never enough might well be Nikou’s new mantra. “Boards have to make difficult decisions and the popularity of the decision shouldn’t impact the decision that needs to be made,” he says. “Whether we’re talking about that issue [or] just more generally, the more you communicate on issues, the more people can understand your thought processes — even if they don’t agree with you.”

Good teamwork

Crossed wires and muddled messages is not something Nikou has had to worry about in his relationship with Johnson. A former FIFA and Asian Football Confederation executive, Johnson took on the top job, when previous CEO David Gallop resigned at the end of a 2019, a year that saw the abrupt sacking of Matildas coach Alen Stajcic. It was reported the FFA wanted structural change and needed a boss with genuine football DNA to implement it. Johnson fit the bill. He had patrolled the midfield for the Australian under-17s and Brisbane Strikers. He’d also proven himself a shrewd operator at FIFA, managing difficult relationships between clubs, leagues and players.

Within three months, those negotiating skills would be tested to the limit. Coronavirus exposed fault lines in all the major sports codes, but it also enabled fresh thinking and rejuvenation. It’s safe to say Nikou and Johnson’s rock-solid bond was forged in the heat of the pandemic fire. In a regular year, FA would have eight board meetings. In 2020, they had more than 20. There were also meetings between the FFA and member federations, A-league and W-League clubs.

But that didn’t make the decision to pause football at all levels — including the A-League, which was more than halfway through its season — any easier. With reduced revenue from registrations, sponsors, ticket sales and broadcast fees, the FFA was forced to stand down 70 per cent of its staff and oversee a controversial wage cut for players. And in the middle of the crisis, A-League naming rights sponsor Hyundai announced it was severing ties, leaving a $6m black hole in the game’s finances.

“If we look at the history of our sport, 2020 was the most difficult year,” says Johnson. “It was extremely difficult.”

But whatever tough calls had to be made, he knew the chair had his back. “The first conversation Chris and I had when I took over the job was about trust,” he says. “When you go through a period like we did, that trust gets tested — and that trust was important for me personally.”

Nikou agrees. “All the decisions required additional dialogue between me and James. We communicated every day, either by speaking, WhatsApp or other [digital] means. I always felt confident that between us we could apply the right solutions.”

The biggest hit to football’s bottom line came from its major broadcast partner: without content, Fox Sports was threatening to withhold a quarterly payment of nearly $12m and demanded a lower rate for the rest of the season — and the last year of its contract. Negotiations were fierce. The FFA took a haircut of $25m, down to $32m from $57m, which was brutal, albeit similar to cuts experienced by the richer NRL and AFL.

The big reboot

Johnson says that in a period of unpredictability, it was essential for football to secure its immediate future. “There was really only one option at the time, and it was also a point where there was a lot of uncertainty around the country because of COVID-19. The outcome was good.”

Shelling out an estimated $4m to cover the cost of a hub to house all 11 A-League sides in one location to play the remaining 33 games of the season — a logistical triumph and a necessity for the FFA — added to football’s cashflow problem.

In November, it was reported the FFA had suffered a $1.8m loss for the year and an 18 per cent drop in revenue. It had been a baptism of fire for the new CEO.

But neither he nor Nikou had been sitting on their hands during the worst of the pandemic. In line with the governing body’s desire to reboot the game, the XI Principles for the future of Australian football were launched last July, to much fanfare. A brave and visionary move during a national lockdown, it articulated a blueprint for Australia to become a “leading football nation where everyone is inspired to live and love the game”. It also took the focus off the protracted wage dispute between players and clubs and allowed the football family, cooped up inside, to dream again. Wedged between the usual motherhood statements, Principle VII (specifically mentioning a “fit-for-purpose governance framework”) calls for modern, effective and efficient governance by shifting to a “One Football” model that maximises opportunities and minimises duplication. Like many Australian sports, association football has evolved as a federated system, with states and territories administering their own domains. In all, there are 10 different legal entities — comprising 10 chairs, 10 CEOs and some 70 directors — plus a plethora of commercial arrangements. It’s a complex, labyrinthine system that leads to overlapping of responsibilities as well as competing aims. FA estimates that by implementing a modernised governance framework, savings in excess of $20m could be achieved. The big question is how? Member federations are notoriously reluctant to relinquish powers.

Nikou says it’s about locating synergies. “What we’re looking at are the duplications and how we can eliminate them for the common good, which then helps us free money to drive the sport and assist their members.”

Johnson is tasked with making it happen. He identifies three areas where change is needed: roles and responsibilities, sharing of resources, and structural change. He says robust conversations about the first two are already in train and feels confident of a breakthrough.

“It’s about the approach. If you talk about the issues logically and start looking forward, it becomes easier. You don’t get pushback. If you try to shove it down people’s throats and people don’t understand the logic behind it, that’s when you get pushback. The reality is, we have a good group of members who want constructive change for the sport.”

Revamping the transfer system is another area that will generate much-needed dollars for soccer’s coffers. Principle 3 of the 11-point plan estimates European football’s transfer network has a value of US$7.35b, of which Australia gleans a minuscule US$1.9m. Gone are the days when international fees for local talent the calibre of Mark Viduka, Mark Schwarzer and Harry Kewell — the “golden generation” — kept clubs in the black. Starting with an emphasis on producing quality young players, the idea is to develop a best-practice system that all levels of the game are aligned with and can access.

“We’ve had a system in place for 16 or 17 years that doesn’t necessarily fit,” says Johnson. “It conflicts in a lot of ways globally. Economically, a good transfer system creates revenues and incentivises clubs to develop players, so that in 10–15 years they’re actually getting the benefit.”

What comes next

Johnson says that after a series of stakeholder discussions and white papers, the next step is brainstorming a set of rules and regulations for implementation in 2022.

Of course, the key factor in any financial turnaround is a good broadcast deal. The previous contract, brokered amid the turmoil of the pandemic, ended in July. In many ways, inking a 12-month agreement last year was a shrewd strategy. There are more players in the market now and the COVID-19 pressures that impacted negatively on the game’s value no longer apply so stringently. A $200m, five-year deal to broadcast A-League and W-League soccer on Network Ten and US streaming service Paramount Plus has now been negotiated with ViacomCBS.

“We bet on the market being different 12 months later,” says Johnson. “It was a different strategy compared to what FA had in the past. You’ve got the A-League and W-League, which the Australian Professional Leagues (APL) has the rights to [since the “unbundling” from FA] and FA has just acquired the national team rights from the Asian Football Confederation along with the rights FA already has. And we’re in the market at the same time as FIFA, to sell the Women’s World Cup. We were able to go to a number of providers and say, ‘Here is every bit of national team content’. A good deal for national teams is important, but equally important is the reach that the broadcaster gives to the sport.”

A broadcast bonanza is central to the A-League’s health. FA still owns a 20 per cent stake and regulates the competition. The APL fought long and hard for operational and commercial independence from FA and both organisations see a bright future ahead.

Nikou says that his relationship with APL chair Paul Lederer — who also runs Western Sydney Wanderers — remains strong.

“I’ll pick up the phone because I’m Melbourne- based, but when I’m in Sydney I’ll try to catch up for a coffee. There’s certainly been a period of transition and we’ve been assisting them to get to the next level.”

Women’s football is also eyeing the next level. The successful bid for the 2023 World Cup was a major coup for the game and already it’s bearing fruit, with the federal government announcing $12m in funding to help with the Matildas’ Cup preparation and the advancement of elite women’s football in the country. FA has also sought to capitalise on the biggest global event in women’s sport. It formulated Legacy ’23, a plan to provide a meaningful World Cup legacy for women’s football in terms of increased participation, better community facilities, and leadership and development.

The board has enthusiastically embraced the 40:40:20 gender target and Nikou says Legacy ’23 will “broaden the pool of candidates” across all areas of the game through tailored educational programs that ensure greater female representation.

Football is often called the “beautiful game”, but the past 18 months have been anything but. They have been about doing the hard yards. The pandemic has dictated a no-frills approach to development and a reappraisal of the game from the grassroots to the elite level. It has not been smooth sailing, especially for the two men at the top of the football pyramid. Yet, they are both cautiously optimistic about the sport’s future — and having weathered the greatest crisis in the game’s history, it is fair to say their chair-CEO relationship has never been stronger.

“I can be quite an intense person by nature,” admits Johnson. “I get frustrated and Chris knows when I’m frustrated and can usually manage me as a person. That’s really helped us.”

Nikou sees the bigger picture. “It’s important to have a little bit of a laugh along the way. This takes up a lot of our personal lives.”