The A-Leagues' $150 million dollar question

There hasn't been much speculation over the location of the A-Leagues' 2024-25 expansion teams, not since competition administrators -- the Australian Professional Leagues (APL) -- announced that Auckland and Canberra had already been tapped as the preferred markets.

Even plans to add a further two teams for the 2025-26 season haven't ushered in feverish speculation, with a Queensland franchise widely expected to fill one of those slots.

But while there might not be much to machinate about regarding the destination of the new outfits, just who will take up the licences to operate these new franchises -- who will be expected to field men's and women's teams from inception -- and how they will meet the APL's asking price is the significant question looming over the coming years. For these new licences won't come cheap.

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Holding a preference for consortiums made up of both international and local parties, the APL intends to recoup AU$25 million for each of the four licences on offer or, in other words, AU$100m in new investment within the next two years. That's just under a quarter of the AU$425m that the entire leagues were valued at when the APL sold a 33% stake of the A-Leagues to private equity firm Silver Lake in 2021.

And even this is understating things somewhat. In addition to the APL searching for investors in four new franchises, the Newcastle Jets are entering yet another offseason propped up by the stewardship of a collection of rival club owners, with Jets coach Arthur Papas declaring that a new owner is the "biggest signing we can make" over the coming months. Perth Glory owner Tony Sage, meanwhile, is looking to sell and has been forced to deny claims that the APL has needed to step in to ensure Glory players are still being paid.

It's not an outrageous assumption, then, to observe that the top tier of Australian football will be searching for almost AU$150m in new investment over the coming years. That is a ridiculously daunting task for a code that continuously battles for attention inside the crowded Australian sporting market, to say nothing of its minnow-like status in the ocean that is global football.

But speaking to ESPN, APL chief executive Danny Townsend and newly minted commissioner Nick Garcia believe that the appetite, both locally and internationally, is there to fund the leagues' latest round of growth.

"What we've kind of found is, certainly the global money, isn't price sensitive," Garcia said. "And [investors are] not just buying the licence, they're taking a share in the APL, it's a much bigger proposition. There are not many places you can go in and you can control your destiny, be a part of controlling your destiny, at the elite level as well as the club.

"It's also attractive from a player development point of view. It's a safe environment, English is the first language, and the high-performance utility is brilliant in terms of hardware and software and coaching capability. So if you're thinking about developing young talent, this is a good place to go."

Garcia was initially brought into the APL as its chief operations officer but has now moved into the commissioner role following Greg O'Rourke's departure at the end of the 2022-23 season. The executive worked for global investment group Y11 Sport & Media prior to arriving at the A-Leagues but has also worked in the partnerships divisions of both Manchester City and the City Football Group (CFG).

The increasing number of global footballing groups was something he pointed to as being beneficial to the A-Leagues plans for growth, not just because they bring footballing IP and global networks to startup sides, as well as the ability to streamline and share costs, but also because new FIFA rules surrounding the number of players one club can loan makes the ownership of owning multiple clubs around the world a more attractive proposition. He said that while formal discussions were yet to occur, media reporting had seen the league receive interest from several consortiums interested in investing in a Canberra or Auckland licence.

"Our intention was always that it would be an ideal scenario to be a mixture of local businesspeople, who can unlock the town, they care about the community and want to give back through football," he said. "But also global money that would bring football IP, so particularly investors in sport, multi-club propositions and stuff like that.

"Within the consortiums that have approached us we've had a mixture of both, which is really positive."

However, declaring an interest in spending money and actually being willing to do so are two very different things. That's why Townsend was quick to clarify to ESPN that while Canberra and Auckland had been tapped as the two preferred markets for the 2024-25 season, it wasn't a fait accompli that those two would ultimately be where the newest teams landed. While he didn't expect any such action would be needed, if sufficient investment and backing aren't found, he said, the league is prepared to look elsewhere.

"We have said that they're our preferred candidate cities," said Townsend. "If we don't find the right investors in those two cities, we'll pivot to another city. Because what's happened over the course of the time that we've been market, there's other cities going: 'Why can't we have a go?'

"We're like: 'Just wait, you can be a part of [expansion plans for teams] 15 and 16. We've got our two preferred candidate cities.'

"But we expect that we'll be launching those two cities."

And as for those other markets, those who would ostensibly be front of the line for 2025-26 even if their use as a backup wasn't required?

"Gold Coast, Brisbane, Tassie," said Townsend. "Obviously, Wollongong have been banging on the door for a while now.

"I get a sense of we'll know in the next sort of a [seven weeks] as to where we are with [Canberra and Auckland] and so far we've got enough evidence to be confident that they'll both get up."

According to Garcia, the ideal scenario for finalising ownership and beginning the process of putting in place the foundations of two new teams would occur "probably 14 to 16 months" before the start of the 2024-25 season. In the short term, however, there is also the matter of Glory and the Jets. A report from The West has floated that a new, local owner of the Glory could be unveiled within weeks, with officials from the APL crossing the Nullarbor in late May to help negotiations.

The future of the Jets, however, has been the subject of less concrete information. Townsend told ESPN that he believed that the Jets' licence would fetch "close" to $25m when it was sold and that ongoing conversations were taking place with "a couple of different buyers." He also clarified that the licence wasn't held by the APL but, instead, by the four club owners that formed a consortium to keep the club afloat when Martin Lee had the licence stripped from him in 2021. Thus, responsibility for the sale of the licence ultimately fell to those owners, with the APL only able to provide the same kind of assistance they are giving to Glory owner Sage in his efforts to sell the West Australian club.

"It's not the APL's job to sell these clubs," he said. "Clubs are owned by individuals and they sell their clubs.

"We can help but ultimately it's not our responsibility to do it. We certainly want Newcastle to change ownership and we want them to have great owners. The reason why those four owners stepped was that we're here to protect licences, not protect owners necessarily.

"Ultimately those licences need to stay in the cities they are because their fanbases deserve them, and that's why they stepped in. And when we find the right owner for that club it will change hands but it needs to be the right owner. And the same goes for Perth Glory.

"I've had a number of experiences in business previous to this where you look at a market and you ask if you give up on the market or do you give up on the people who are running that market.

"If you look back over time, none of the owners that we've had over the period of the A-League have been quality owners in Newcastle. So you don't rule the market out, you just get the right owner and do it properly. The Knights are a great example; there is parochial support for sporting teams in Newcastle if you get it right."

Ultimately, though, with the league betting big on expansion in the coming years, all of a sudden it's not just the Jets arriving at a critical juncture in the search for investment. Across the next two years, the APL must themselves answer a $150m question, a dilemma upon which a significant amount of its future plans hinge.