The A-League salary cap should be reduced and the competition ‘must live and grow within its means’, according to a federal government report into soccer released on Thursday.
The Smith Review of football also gives a tick to Australia’s failed 2022 World Cup bid process, and recommends Football Federation Australia maintain overall control of the A-League.
But the report’s key finding is that financial stability needs to be the key priority for both the FFA and A-League.
And the report’s main recommendations to achieve it are reducing the $32 million a year spent on players’ salaries, and ensuring cheaper stadium deals for clubs.
The report states players are currently paid around 40 per cent of income generated by the A-League, compared to approximately 20 per cent paid in the AFL, NRL and Super Rugby.
‘Salaries have increased at an unsustainable rate, out of step with the income the product generates and at a time when the Australian dollar is extremely competitive in the international player recruitment market,’ the report by Australian Sports Commission chairman Warwick Smith says.
‘At a minimum the salary cap must be frozen, but it would be appropriate to explore options to reduce the cap.
‘Options to adjust or remove the minimum player payment which artificially inflates incomes must also be considered.
‘Unless this happens, given the proportion that player costs represent in clubs’ total cost base, A-League clubs will, in the absence of a considerable increase in their revenue streams, struggle to move to a position of sustainability or profitability for the foreseeable future.’
Australia’s $45 million World Cup bid was given the thumbs-up in the report, saying it was FIFA’s flawed bid process rather than any quality concern with Australia’s submission that undermined its chances of success.
In other key findings, the report recommended:
The time was not right for A-League control to be fully separated from the FFA;
No expansion of the A-League beyond 10 teams until the competition is financially strong, or a tangible financial benefit can be achieved by expansion;
FFA head office must look at reducing its own costs; and
An annual operating plan for the A-League should be developed in collaboration with club owners.
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