Interest in 16-team A-League expansion cools
George Clarke |
Plans to expand the A-League Men from 12 to 16 teams before the expiration of the current broadcast deal in 2026 could be shelved, potentially leaving a black hole in the competition’s budget.
The Australian Professional Leagues (APL) has already given the green light for a franchise in Auckland to participate in next year’s competition, while a deal for an ALM side in Canberra is nearing completion.
American billionaire Bill Foley has bought the licence to run Auckland, while it’s understood a overseas conglomerate with Australian connections is in the box-seat for Canberra.
But AAP sources have indicated the APL is privately hesitant about its hopes of getting two additional expansion franchises over the line.
The APL had hoped to command $100 million in franchise fees – $25 million per club – from Auckland, Canberra and two other sides by the start of the 2025-26 season.
Franchise expansion fees are a common buy-in tool in America’s Major League Soccer to give the competition financial surety.
But several sources suggest Foley and the preferred Canberra bidders paid closer to $18 million rather than the $25 million initially touted.
Expansion fees of $100 million would have eased the competition’s cash flow until the expiry of its current $40 million-per-year TV deal with Network Ten, which runs out at the end of the 2025-26 campaign.
The contract was signed in the midst of the COVID-19 pandemic in 2021 and followed the competition’s unbundling from Football Australia and a split with longstanding broadcast partner Fox Sports.
The APL were confident that by the end of the five-year Network Ten deal the A-Leagues would be in a stronger position when negotiating broadcast rights for the 2026-27 season and beyond.
Their logic was that four extra teams, who would also provide additional capital, and a renewed excitement in the league buoyed by the relationship with Ten would lead to a more financially rewarding broadcast deal.
But the partnership has been littered with shortcomings, most notably its clunky streaming platform Paramount+.
The APL has also had to spend north of $10 million a year on broadcast costs after outsourcing production to industry-newcomer Global Advance, who were founded in 2020.
That expenditure, coupled with founding digital arm KEEPUP, keeping ownerless Perth afloat, and the costs of hosting Wellington and the Glory away from home during COVID-19 has led to the APL chewing through the most of the $140 million cash-boost it received from US private equity firm Silver Lake in December 2021.
With Auckland signed off and the Canberra deal nearing its final stages, sources say the APL is uncertain over pressing ahead with more expansion.
The prospect of a potential $50 million shortfall has left several clubs concerned next year’s central distribution could be reduced.
The financial uncertainty led to the dismantling of KEEPUP and mass redundancies at head office earlier this month.
“The plan remains to expand to 15 and 16 teams by 2025-26 but like any business we’re always reviewing our plans going forward in the best interests of our clubs and fans,” said A-League Commissioner Nick Garcia.AAP