Frank Lowy AC key note speech

This is a transcript of FFA Chairman, Frank Lowy AC’s speech delivered at today’s Melbourne Heart Business Luncheon.

This is a transcript of FFA Chairman, Frank Lowy AC-s speech delivered at today-s Melbourne Heart Business Luncheon.

When I accepted the invitation to appear here today I was looking forward to talking about the fantastic story that is football in Australia today.

Things are going better now than at any time since our reform of the game started in 2003.

Unfortunately, over the past couple of weeks there has been an outbreak of commentary that has created a lot of controversy, and this is unfortunate, because most of it is a sideshow to the main game.

Even so, some of the things that have been said are so outrageous that I feel compelled to set the record straight here today.

Then I can move on to talk about some of the very positive things that are going on in the game and what our priorities are for period ahead.

The first thing to say is that I understand why some issues make the headlines.

When someone says outrageous and controversial things headlines will follow.

And with each passing day it seems the statements emanating from the Gold Coast are more illogical, more confusing and ever more damaging to our game.

But I am surprised when these ramblings are taken seriously and given credence and picked up by others.

Let me knock over the more outrageous claims that have arisen over the last week or so, one at a time.

It has been said that the FFA lacks transparency and is somehow siphoning off money, away from clubs to spend on other activities.

First let me deal with transparency and governance.

The directors of FFA have a combined 150 years of experience in corporate Australia working in, founding, advising and serving on the boards of major Australian private and listed companies.

We know what corporate governance is and what our responsibilities as directors are.

The integrity and governance standards of FFA are exemplary.

This was emphatically vindicated in a recent study conducted by Dr Jeremy Pearce and Lisa Thomas.

Dr Pearce has extensive senior management experience in both the public and private sectors and has worked as a consultant in corporate governance and board advisory with the World Bank and KPMG.

Lisa Thomas is legal counsel with KPMG.

The authors analysed the governance models of 10 top Australian national sporting organisations - athletics; AFL; cricket; golf; netball; rowing; swimming; tennis; yachting and the FFA.

Let me quote their paper:

“...the FFA has the most detailed and stringent requirements for establishing director independence on the board.

“To this end, the FFA-s constitutional arrangements with respect to director independence, both equal and exceed the recommendations of the ASC...”

They conclude that, and I quote: “the FFA delivers the most robust ‘independence- governance regime of all the organisations considered.”

To get that ringing endorsement is gratifying because we worked long and hard at the start of the reform process to put in place a constitution that would serve the long-term interests of the game and not the interests of any individual or group of constituents who might have a particular agenda at any given time.

This was at the heart of our consideration when we began the reform process after I was approached by then Prime Minister Howard to take on the job.

His government supported the game financially and also supported the new board-s determination to create a structure that would not be vulnerable to the factional politics and sectional interests that characterised the previous regime.

And remember how that previous regime left football. Football was dead and buried. We had to start from scratch.

So the constitution and governance was critical not just for the long-term good of the game but to demonstrate to government (and to broadcasters, sponsors and fans) that football had learned the lessons of the past.

The support we received on this basis from Prime Minister Howard was carried through to Prime Ministers Rudd and then Gillard.

So from this general point about the FFA governance structure let me move to the next point - the role of clubs and the suggestion that clubs should have more power in decision-making about issues that impact on them.

The fact is that we all have a role to play in our sport.

FFA has its role. The clubs have their role.

The FFA-s role is to execute the strategy determined by the independent board which is elected by the state federations and the clubs.

The clubs- role is defined by the terms and conditions each club signed upon joining the competition.

Fundamentally the role of clubs is to field their team.

They must provide a professional and dedicated administration to support that team, and most importantly, to build a strong supporter base.

Most clubs have these ingredients, or at least are well on the way to achieving them.

I don-t think any fair-minded, independent observer could say the same about the Gold Coast, especially given what has been said in the past few weeks.

The disrespect shown to the game, to the fans and to players has been breathtaking, and I am at a loss to understand the motive behind it all.

Either a club owner believes in the game, and wants to make his investment pay off in the long run, or he doesn-t.

The very least you could say about the Gold Coast is that there has been a spectacular failure to connect with the local community to get fans to turn out for the game, despite the fact that the club serves possibly the most vibrant region in the country.

Getting crowds through the gates is what will solve problems, not arguing about who controls what.

That is why the idea of a separate body to run the A-league is madness.

The A-league could not survive if separated from FFA.

This was the major finding of the recent Smith Review.

FFA has spent nearly $250 million on behalf of the league - $30 million per annum for the past seven years plus set-up costs and special assistance to clubs.

FFA currently subsidises the A-league from other FFA revenue by approximately $8 to 10 million a year.

From our current broadcast deal each club receives $1.25 million and I am confident that when we conclude our new broadcast deal that we will be able to provide clubs with funding that will cover, or come close to covering, the player salary cap.

This will remove the single biggest cost burden from clubs and free them to focus on other important issues.

Ladies and gentlemen, the FFA is there to assist clubs in whatever way it can.

But it cannot do everything and be all things to all clubs in all situations.

FFA is not a bank. It can-t always be there to bail out clubs that haven-t played their role.

The clubs have to play their role, like the two Melbourne clubs, and most of the other clubs do.

I-d like to deal quickly with another misconception that has emerged about licence fees.

Newcastle Jets has claimed it was somehow misled on licence fees at the time of acquisition of its licence.

Before the current owners arrived Newcastle was an established club, with a tradition, a proud history and a strong supporter base.

It was obviously a club with huge potential provided it could attract a committed owner and professional management.

So FFA invested substantial funds to sustain the club prior to the new owner arriving.

A commercial agreement was reached between the new owner and FFA which reflected these facts.

It was not a licence fee of the kind all clubs must pay in the first place but a purchase price for what was a going concern.

I concluded the final negotiations with Mr. Tinkler in my office.

There was no pressure and it was a commercial arrangement that we both agreed to.

And what happened to that money? - it was ploughed back into the game to offset the considerable sums that FFA had spent to save Newcastle and other clubs like Brisbane and Adelaide, both of which FFA has supported

Financially and with management at times when without that support the clubs would have gone under.

And it is worth noting that, the new owners of Brisbane paid a higher price than Newcastle because it reflected the current standing and potential of Brisbane Roar.

Now, all three are thriving clubs making a positive contribution to the a-league.

So where is the crime here? FFA puts in money and executive support to help clubs that are critical to the long-term competition and recoups that money when the now-viable club is on a secure footing.

Ladies and gentlemen, I might be chairman of FFA - but in my bones I am a club man.

If there is one criticism that irks me more than any other it is the suggestion that I don-t understand the challenges that face club owners.

I was a club president for 20 years.

I was also one of the founders of the national league many years ago and I was also the chairman of that league for a while.

I know what went on then - and why it eventually failed.

Do we want to go back to that era?

When I was asked by the government to help lead the reform of football in 2003 my fundamental starting point was that a thriving, national club competition must be absolutely at the centre of any plan to realise the full potential of our game.

Clubs are our lifeblood. They provide the pathways. They build the supporter base. They provide the passion.

Without strong, healthy, sustainable clubs football will go nowhere.

I am determined to see this process through and it is my objective to see this happen during my term as chairman.

So please, believe me when I say my heart is with A-league clubs and their owners. I-m sorry that I had to spend so much of my speech today addressing these issues.

But I need to let some people out there know that they are wasting their time trying to pressure me or FFA by making sensational claims that generate headlines.

I get upset at the headlines, but it doesn-t distract me from the main goal.

I-ve been around a long time and I don-t react to media criticism from people who don-t know what they-re talking about.

So the critics need to understand that shouting at FFA through the media won-t work.

It-s not productive and it-s a distraction.

Worse, it derails the very positive story we have to tell our broadcasters, our sponsors and our fans.

I will always be prepared to talk calmly and rationally with people of good will if they have a different idea or a constructive suggestion.

In fact, before all this controversy blew up a couple of weeks ago I had begun an orderly process of contacting clubs to arrange to talk face-to-face about how we can work more closely together in a meaningful way.

I have already met with Tony Sage from Perth Glory and while we didn-t agree on everything we did agree on some important principles.

I will meet with Heart and Victory today.

I hope to get to the other clubs over the next few weeks.

Before the controversy with Gold Coast blew up I reached out to Clive Palmer - this was at the end of January.

I emailed. I phoned him and left messages. I sent an SMS.

I offered to fly to Queensland on a Sunday to meet face to face.

What did I get? I got the brush-off.

In fact, some days later I eventually got back a message that let me know that he was less than interested in finding a solution to the problems at his club.

Eventually, we had a two-minute mobile phone call which led nowhere.

The reason I wanted to fly to Brisbane was to speak directly with Clive - not through the media.

Once you start talking through the media you lose the opportunity for a meaningful discussion.

I have no interest in engaging in a public slanging match.

And I have no desire to become involved in litigation.

It has been my practice always try to resolve things through discussion and negotiation if possible.

Litigation should always be a last resort.

Nevertheless, we need to move forward and I can assure you that I appreciate this issue must be resolved for the good of the game and the integrity of the competition.

Moving forward is what my consultation with club owners is all about during the next few weeks.

I want a collaborative process.

I want to hear directly from clubs so that their views can be taken into account as we put in place a new and formal structure to give clubs a meaningful role in the decision-making process about the strategic issues that affect the a-league.

So what are FFA-s priorities now?

The continuing success of the Socceroos remains high on the agenda.

I believe they are doing well and are on their way to Brazil. We wish them well for the game tomorrow night against Saudi Arabia.

Of course, we had a bad outcome with the Olyroos last week.

There is no point making excuses about the result but it is worth remembering that we must now qualify through the much more competitive region of Asia rather than Oceania, and that was one important factor.

However, we have already started a thorough review to establish the reasons for this disappointing outcome.

Planning for the Asian cup is well underway.

We have appointed a chief executive in Michael Brown who comes to us with a formidable reputation at cricket Australia.

We are now putting together the board that will form the local organising committee.

The Asian Cup will not only be a spectacular showcase for football, it will enmesh Australian football with our region and raise its profile of football enormously both here and throughout Asia.

This is a huge opportunity, not just for football but the whole of Australia.

46 nations that are closest to us, that are part of the world-s fastest-growing region will compete for the cup.

16 of them will finish up here for the play-offs and we will be putting in a combined effort with government, business and the tourism authorities to make the most of the opportunity.

Football offers Australia the chance to connect with these Asian powerhouse nations on so many levels in ways that other sports could never do.

Whether it-s people-to-people relationships, club-to-club, business, government, trade and tourism - football can be a common theme across all these activities.

I want to make sure we give it our best shot - not just for football, but for Australia.

As I said earlier, the priority will be to continue the work of making the a-league sustainable.

Ladies and gentlemen

The nonsense that football fans have had to endure these past couple of weeks has masked the fact that we have a great story to tell.

Football is in a good place now, with a bright future.

It is in the best shape since the reform process began.

There are 1.7 million Australians actively playing our game.

In the a-league this season attendances are up 36%; TV audiences are up 52% and club membership is up 20%.

In the past 12 months there has been significant new investment in Newcastle Jets; Adelaide United; Brisbane Roar and Wellington Phoenix - all of which at various times have been supported by FFA to survive through rough patches during these important foundation years of the a-league.

It is a bright future, and Melbourne Heart is doing its part to make it bright by organising fantastic events like today that reach out to the wider business community.

So I appeal to you - ignore the headlines and look at the trend lines: bigger crowds; bigger TV audiences; more club members and great football matches to watch.

That is our future and that is what we all want - FFA, the clubs and of course the fans.

I look forward to working with you to bring it about.

Well done, good luck for the rest of the season, and thank you for inviting me to speak to you today.