Open Letter to FNSW Membership & Broader Football Community

In 2012 the Board of FNSW developed a three year strategy to Grow, Promote and Develop the game in NSW.

This Strategy was based on a vision to be a unifying leader and supporting the FFA to enable Australia to become a world class footballing nation.

This strategy was clearly articulated and communicated on multiple occasions in a range of forums direct with FNSW membership and beyond.

The basis on which this strategy was built and the way in which it would be achieved was through effective governance, strong leadership and transparent communication.

This Saturday the voting membership will meet to consider a resolution to remove 4 Directors from the FNSW Board being Jeanette Jones, Simon Philips, Deputy Chairman Mark Reading and myself as Chairman. This resolution was signed by Tony Raciti (representing the Premier League 1 Clubs), Ross Gardner and Keith Pester (representing Interclub 1) and Andy Favalaro and Gino Marra representing the Southern Districts SFA.

Yesterday we received an email from Southern Districts outlining the reasons why they believe the Directors should be removed including Boundary definitions in the inherited constitution, FFA’s challenges with some HAL clubs, claims that the game is being administered by bureaucrats not member focused individuals and other completely false claims including that the Board has been discussing Super Associations. Whilst I do not intend to respond to many of these false and defamatory comments targeting not only the 4 Directors being challenged but also fellow Directors and previous Directors over the period referred to, I do wish to respond to their claims around the Men’s competition review 2016, Standing Committees, Federal Government grant and the sale of Columbia Court. These matters also being the subject of an article in last Sunday’s Sun Herald and other publications.

Before I do that, I would like to share just two of many highlights that this Board has delivered over the period of 2012 – 2015 in line with its strategic thinking.

Grow / Promote / Develop:

In 2012 total player numbers in FNSW’s area had dropped year on year and below 200,000.  Now in 2015, the registrations for winter outdoor competitions alone sit at 225,000 being a growth against 2014 of over 7%, with four associations being ESFA, Canterbury, Macarthur and Blacktown all growing by over 10% and Sutherland breaking through the 18,000 player mark for the first time in 2015. Referee numbers grew to over 5,100, also being double digit growth on the prior year. Summer Football under FNSW aligned and promoted programs also continued to surge. Futsal numbers at end of 2014 grew over 15%, returning to numbers above 10,000.

Valentine Sports Park:

In March 2015 FNSW re-opened the refurbished Valentine Sports Park at Parklea.  Anyone who has recently visited VSP seems to agree that it is now a spectacular venue, aspirational for all our players, coaches and referees as a place to play and participate. The project (at a total cost of $22 million) was delivered on budget, with strong governance control particularly from its Board and Project managers AVER, but also through a disciplined Project Control Group led by Directors Charlie Yankos and James Chetcuti. This facility is now proudly a Home of Football for FNSW and all its membership.

Now let me respond to the particular matters at hand.

Men’s Competitions Review

The Men’s Competition Review 2016 was conducted over a period of approximately 6 months from November 2014 to May 2015. The process involved widespread consultation with, and participation by, all relevant and potentially affected parties, including representatives from all levels of football in NSW, FFA, FNSW management and FNSW Standing Committees and Members. 

The process was led by two FNSW Directors (Jeannette Jones and Simon Philips) appointed by the FNSW Board as Co-Chairs. The Terms of Reference were made available via the FNSW Website. The FNSW Board approved all participants in the MCR 2016. There were at least 15 representatives on the MCR Working Group, including from the National Premier League competitions (NPL1 and NPL2), the State League competitions (SL1, SL2), Technical and Coaching, Referees and Grassroots Standing Committees, the FFA and FNSW Technical Directors, FFA Head of National Teams and FNSW Competitions staff.

Consultation with stakeholders, especially those affected by the MCR 2016 such as NPL1 Clubs, was extensive and detailed.  Luke Casserly and Erik Abrams from FFA participated actively in the process. The FFA provided a letter dated 6 March 2015 signed by Ange Postecoglou (and 7 other National Team Coaches) endorsing the proposed recommendations of the MCR 2016. In an effort to further consult and inform stakeholders, FNSW scheduled a forum meeting on 12 March 2015 and as the Chairman I sent a personal invitation to each Premier League club to attend and hear first-hand from Ange Postecoglou and other Senior FFA Technical staff. Unfortunately the NPL1 club representatives refused to attend and the meeting had to be cancelled.

The outcomes of the MCR 2016 were contained in a Recommendations Paper, which was presented to the Board at its April 2015 Board meeting. Given the significant debate required to consider the paper and align on outcomes, the Board was unable to complete its consideration of the MCR 2016 recommendations at the April Board meeting, but did so at the May 2015 Board meeting. The outcome of the Board’s deliberations and decision was summarised in a paper (2016 MCR Board Resolution – May 2015) which is available on the FNSW Website.

The intent of the “flat” youth structure envisaged by the MCR 2016 outcomes is to increase opportunities for boys from 13-16 years of age in areas serviced by both NPL 1 and NPL 2 clubs. There is also to be increased opportunity for youth in the (old) State League 1 (to be renamed NPL3) areas, as well as a more limited option to Youth in SL2. The outcomes of the MCR 2016 are all about increasing opportunity for FNSW participants, not restricting opportunity to only the current elite group of clubs. This is why the Board has specified that A-League clubs enter with no advantage over incumbent clubs.

The amount of Premier League youth opportunities per head of total playing population has been (and remains) dramatically underrepresented in the FNSW footprint compared to the other Australian Member Federations. Prior to the changes proposed in the MCR 2016, FNSW had one NPL1 club for every 14,881 registered junior players compared to the second largest ratio being Football Queensland that has one NPL1 club for each 4,773 registered junior players. Victoria has less than 2,000 junior registered players for each NPL1 club. As you can see, even with the changes announced in MCR 2016, increasing the number of NPL1 Youth League teams from 13 to 26 will still leave FNSW well below the ratio of any of our state counterparts.

In addition to providing more opportunities for the development of our elite boys, FNSW and FFA are together investing in developing football coaches – both in quantity and quality.

Standing Committees

Article 3.7 of the Constitution required the Directors (in 2007) to establish 9 Standing Committees. These 9 Standing Committees met and functioned effectively for some years from about 2007 through until about 2012.

By Articles 3.7(c)-(d) of the Constitution, the Directors have the power, subject to consent from FFA, to establish By Laws with respect to Standing Committees. In 2013, on the recommendations of FNSW management, the Board resolved to revitalise the Standing Committees by overhauling the By Laws relating to Standing Committees. There were no changes made to the Constitution, nor any changes made to the voting structure or numbers of any members of FNSW.

The major change was, in order to reflect the changes in competition structure following the (first) Men’s Competition Review (2012), to consolidate the Premier League Standing Committee and the Super League Standing Committee into one Standing Committee (renamed the Men’s Premier Competitions Standing Committee). Another change was the renaming of the Juniors Standing Committee to become the Grassroots Standing Committee.  Most importantly, there were no changes whatsoever made to the voting structure or the number of members of FNSW. The 9 Standing Committees referred to in the Constitution have continued to operate (with differing frequency of meeting) over the last 2 years since the introduction of the revised By Laws.

The Directors are supportive of the establishment of a Zone (Associations) Council. This is something that was required to be established under article 3.5 of the Constitution (as introduced in 2007). However, no steps were taken to establish this Zone Council by the previous Board, and the current Directors are unaware of any request having been made by any Associations for such a body to be established prior to the meeting of some Associations which occurred on 7 July 2015.

As agreed at that meeting, co-chaired by myself and Gino Marra from SDSFA, the Associations were to be contacted by myself to develop the terms of reference for an Associations Consultative committee and once finalised, presented to the Board for consideration and a meeting to be called. This was done within the month of July 2015 and responses were received end of July and early August with a reminder being sent to those associations that did not respond. This work is near completion.

Federal Government Grant

In 2010 the Federal Labour Government announced that they intended to contribute to the funding of a new Home of Football for FNSW at Riverstone to the value of $8 million against a Project budget of circa $70 million for an infrastructure that would include, amongst other things, 9 purpose built quality football pitches (with the ability to be developed to 15 football pitches in future years), a boutique stadium (approx. 3,000 seats), indoor swimming pool complex, Multi-purpose indoor sporting centre including two international sized Futsal courts, an advanced gymnasium, Football NSW offices, licensed club and function centre, hotel accommodation and a private football college. The proposed Federal Government funding was conditional on an extensive list of conditions in relation to the Riverstone project being satisfied.

For a variety of reasons, including most of the proposed Riverstone site being located on flood-prone land, concern regarding the lack of commercial viability of the project and the developer going into administration, this project did not proceed. As such the Federal Government funding also could not proceed.

When the Board was considering its options, it was well aware that moving away from the $70 million Riverstone project and replacing it with a $22 million project to refurbish Valentine Sports Park would significantly affect its ability to obtain funding from the Federal Government. The Board knowingly resolved on 23 February 2012 that the preferred option was the VSP redevelopment. The funding impact was orally brought to the attention of all voting members by the former Chairman, Robert Sestan at the AGM in 2012.

Our Project managers, AVER, noted in their papers of 25 March 2012, when this option was considered, that the $8 million in Federal Funding was not locked in and as it was originally against an alternate project for $70 million, funding would be affected and the project would likely need to budget for more self-funding. The Board resolved to move to the VSP option with a reduction in the total project cost of some $50 million. In the opinion of the Board at that time the former Riverstone project had no viable business case and would have had significant negative impact on debt levels to FNSW and its membership. The only way that the $8 million in Federal funding could have been secured would have been to proceed with a project which, in the opinion of the Board and its external advisers, would have jeopardized the future financial viability of the whole organisation (and therefore football as a whole in NSW).

The Federal Government therefore returned the $8 million grant amount to the Infrastructure Fund for future allocation. This Infrastructure Fund was later used to provide $3 million to FNSW for its reduced commitment to infrastructure (at VSP). Another $5 million was provided direct from the Federal Government to the FFA for what would go on to be the primary funding to start the Western Sydney Wanderers.

To satisfy myself as to the genuine nature of these transactions, I recently met personally with Simon Crean, the then Minister of Infrastructure responsible for the original grant, who informed me that FNSW would have under normal circumstances forfeited the full amount of the previous grant given the original project did not proceed.  However Mr Crean informed me that he had been involved in discussions with other Ministers and the department at the time to encourage them to provide some of the funding to FNSW against their reduced Infrastructure spends and that $3 million was as a result of this support.

In subsequent Senate Estimates hearings that included some questioning in relation to funding of sport, it is on the public record (via Hansard) that the previous project funding of Riverstone did not go ahead because the conditions relating to the Riverstone project were not satisfied.

Columbia Court

As part of the strategy at the time to move all operations to a new site at Riverstone, the previous Board and management, purchased a building at Columbia Court in neighbouring Bella Vista to accommodate FNSW staff and related operations. The building was purchased for $8.7M exclusive of GST. Settlement on the purchase this building took place in May 2009. A further $443K in costs were spent as part of this transaction.

Following a complete review of the Balance Sheet and consideration of potential impairment to the value of the building, management commissioned an independent valuation of the building at Columbia Court as at 31 October 2011. This valuation valued the Columbia Court building as at 31 October 2011 at $5.75million, nearly $3million less than the price paid for it in May 2009.

Early in 2013, FNSW was approached by Norwest Industrial and Commercial real estate agents, who had a potential purchaser interested in the building at Columbia Court. Following their inspection, an initial offer was received from the potential purchaser, being the Bedford College. Following continued negotiations, Football NSW received an unconditional offer of $6.2million to purchase the property at Columbia Court from Bedford College.

In understanding whether this offer was at a fair/market value, the following steps were undertaken by FNSW Management:

§  Independent valuation from Wayne Wotton & Partners – $5.75M – this was commissioned with a second valuer following feedback from the Board

§  Independent valuation from Jones Lang Lasalle – $6.2M

§  Independent market appraisal from Raine & Horne Commercial suggesting a sale price in the region of $5.9M – $6.2M

As a result of these independent valuations, and the fact that the offer which had been received exceeded one and equalled the other two independent valuations, FNSW management recommended that the Board approve the sale of the Columbia Court property for $6.2million plus applicable GST. The reasons given for this recommendation included the following: 

§  The asset at Columbia Court is not a football asset either directly or indirectly in terms of a financial benefit for the organisation.

§  Sale of this asset at a fair price reduces FNSW exposure to debt in paying out the current bill facility attached to the property, reduces risk associated with the short term nature of the lease, and allows FNSW to re-focus on core business activities.

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          At its meeting in June 2013, the Board unanimously agreed to accept management’s recommendation with respect to the sale of Columbia Court. The building was sold for the offer price of $6.2 million soon after this meeting.

          It should be noted that the original purchase of the Columbia Court building was not referred to the FNSW membership for approval and it was not necessary for such approval to be sought for the sale of the building. Based on the advice which the Board received both from FNSW management and external valuers and advisers, I am firmly of the view that the sale of the Columbia Court building was not only in the best interests of FNSW and its members, but that if the sale had not been completed, there would have been even greater capital losses incurred and the redevelopment of VSP could have been jeopardised from a funding point of view.

In summary

Football in Australia and NSW has undergone significant change over the past decade. There is widespread understanding that the game we love will never reach its potential without a vision and the hard decisions that are needed to make progress. As a football person who loves the game and has served at club, association and state level, I understand how and why the prospect of change is sometimes accompanied by doubt and differing opinions.

However, the alternative is standing still and seeing other sports grow in the space that is rightfully ours. I’m proud to say that this Board and the members of Football NSW have embraced the challenge and have over the past three years have together set the game on a path to grow, promote and develop.

As a Board, we do not for one minute believe we get everything right. However, we have worked diligently, consulted widely and deliberated carefully in the best interests of Football NSW. We stand behind our record of creating a better environment for all our clubs, associations and participants.

The meeting this Saturday was called because petitioners representing 5% of the voting members decided that removal of myself, my deputy and two other directors was the only way to address their grievances.

They have presented no alternative vision for Football NSW nor have they made a substantial or compelling case for such a drastic action. My response to their list of grievances comes in the interests of transparency and good governance, not because of any material flaw in any of the decisions they have attacked.

Now is not the time for an indulgence in disunity that has marred football in the past. Now is the time to consolidate our unity of purpose. I trust that this Saturday the voice of the majority will send a clear message to those who doubt the resolve and commitment of the Football NSW stakeholders.

Thanks,

Greg O’Rourke,

Chairman FNSW