When will FFA sell Western Sydney Wanderers?

Cameron Spencer

Football Federation Australia owns and operates premiership holders Western Sydney but wants to sell to appropriate investors. Just how close are they to the right fit?

The A-League's most recent entrant and now Premiership holders Western Sydney Wanderers are still owned and operated by Football Federation Australia. The club, founded in part to help offset the loss of Gold Coast United in early 2012, required an investment of several million dollars from the federal government to fund operations, infrastructure and salaries as no buyer was procured before the 2012/13 season. Having won the regular season and qualified for the Champions League next year, there is an imperative to find independent ownership, though the federation is moving cautiously.

One obstacle to outright sale of the club is an admission that the federation have not yet settled on a preferred method of future ownership. Said FFA CEO David Gallop in April, "We are in a very preliminary stage looking at some models of ownership." That includes considering a German-style 51% fan ownership scheme, though the FFA has wisely indicated that more research is needed to determine viability in Australia. Likewise, WSW executive chairman Lyall Gorman has advocated patience in explaining the process behind a potential sale, saying, "We just can’t afford to take a risk with this brand, because it’s one of the jewels in the crown. It’s going to be a very careful process to transition it to any new group of owners."

The community aspect of the Wanderers brand is partly what made it so appealing in its first season in the A-League. Of any club in the league, apart from perhaps Melbourne Victory, Western Sydney would be the most likely to have enough local support to even consider such a plan. Though the sample size is far too small to make that determination at this point. A ten-game winning streak, the premiership and a berth in the championship final certainly made supporting the new club easier for fans in the west. Shifting ownership to fans, even at this the apex of interest, could be a disaster if things go sour in subsequent seasons. Additionally, said Gorman, "The club has probably got another year of incurring operating losses before we can grow our financial base, and you’re certainly not going to put your costs of financial losses on your fan base and members."

So even if fan ownership is in the future for Western Sydney, it is unlikely to take place before the 2013/14 season. That leaves three options:

  1. Keep the club under ownership and operation of the FFA;
  2. Sell a percentage of the club to independent investors while leaving the remainder under FFA control; or
  3. Sell it all to outside investors, leaving fans and the FFA without immediate control in 2013/14.

Of these three choices, the first seems by far the most likely given it is already June and the season will begin in four months. That said, the federation is not in a position to ask for more millions from the Gillard government, nor are they well situated to fully fund, at a loss, this or any club.

One potential problem for the Wanderers' sale is their incredible success in year one. While Gorman describes the problem this way: "It’s not just about money, or how much money, it’s about whose money, and what they bring to the table in terms of preserving and growing the tremendous building blocks that are in place, and which, fundamentally, are built on a very strong community engagement model," the fact is, A-League clubs need money, almost irrespective of the source. Attendance troubles, delinquent salary payments and other financially-related issues have plagued A-League clubs from the start. Now that the Wanderers have established themselves as a club that does actually sell tickets and performs on the field as well, that should dramatically increase their value in the marketplace. Rumors of a valuation of $20m persist, which would be a boon to the federation and the league. But that figure is also high enough to immediately eliminate well-meaning investors of more limited means.

"There’s no doubt the FFA’s core business isn’t owning A-League clubs, and clearly there is going to be an ownership transition," Gorman added. The biggest question is whether that transition begins sooner rather than later.

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