FFA faces $15m shortfall but experts say it's not panic stations

Football Federation Australia is staring at a $15 million black hole if Hyundai joins a growing number of sponsors in severing ties with Australian soccer - but a sports marketing expert does not believe the situation represents an existential threat to the code.

As new chief executive James Johnson prepares to hit the marketplace, FFA is facing the prospect of losing one of its biggest corporate backers, with the Korean car manufacturer baulking at an extension to their current deal, which expires in June and encompasses the naming rights to the A-League.

FFA chairman Chris Nikou and chief executive James Johnson are the men tasked with reviving the fortunes of the round-ball game in Australia.Credit: Sam Mooy

It comes after the expiry of deals with NAB, Caltex, Aldi and Harvey Norman, while bet365 is also yet to commit to FFA beyond this season.

A source with knowledge of FFA's inner workings claimed the total yearly contribution of those sponsors, including Hyundai, is approximately $15m - more than half the $28.9m in sponsorship revenues in FFA's most recent annual report.

It paints a bleak financial picture for the round-ball game, which also faces uncertainty on the broadcast front, with no guarantees that Fox Sports will renew the current $58m per annum deal due to end in 2023.

But key figures within the sport remain bullish about the challenge of replacing departed sponsors, and while far from satisfied with continued downward trends in A-League TV ratings and attendances, they are not panicking about its future.

What the FFA's got to do a better job of is selling the value of its product, and helping sponsors tap into the power of the sport.

RMIT associate professor Con Stavros

Con Stavros, associate professor of marketing at RMIT University, said he would not be overly "stressed" if he was FFA because a degree of sponsor churn is natural in Australia - so long as the game can learn to promote a coherent vision for the future which sponsors could buy into.

"There's plenty of sponsors out there for them. What the FFA's got to do a better job of is selling the value of its product, what it actually means, and helping sponsors tap into the power of the sport," Stavros told the Herald.

"Often it's not one reason [why a sponsor quits]. Sponsors do look at what other sponsors are doing. If you get a couple ending their sponsorship, there could be a bit of herd mentality that comes with it.

"Most Australian sports have not struggled to get sponsors. If you look at Australian cricket, for example - run me through all the people who have sponsored all the different products and I'd struggle because there's been so many. It's become more unusual to actually have a sponsor for more than 10 years."

Stavros said while the A-League was clearly struggling, the broader outlook for the sport was more positive than negative, making it an appealing proposition for sponsors.

"It's been a long relationship by most relative factors in sport and that's a good sign in itself," Stavros said of the Hyundai deal.

"If I was going to be a sponsor, I'd say, the A-League could be better, but the participation, the Matildas, the Olyroos qualifying for the Olympic games ... there's good stuff there, I'd be excited by the sport in general."

FFA's bid to gain new sponsors will be groundbreaking on a number of levels. Firstly, previous partners like NAB and Caltex have been procured not through a traditional process but because executives from those companies have either sat on FFA's board, or were closely aligned with Sir Frank Lowy or his son and successor as chairman, Steven.

Hyundai is preparing to walk away from its long association with Australian soccer.Credit: AAP

Secondly, this will be the first time Australian soccer has tested the marketplace since the separation of the A-League from FFA - which won't occur legally until 2023 but has been operationally finalised. Existing sponsorships will need to be "unpicked", according to one source, to determine if partners wish to attach themselves to the A-League, national teams, grassroots programs or a combination.

Sources close to FFA and clubs remain hopeful that Hyundai will stay on board with the game - if not as the A-League's naming rights holder then perhaps as a lower-tier motoring sponsor or through the Socceroos or Matildas.

The sources also claimed FFA were "very close" to finalising deals to bring in at least one new corporate partner, something that has not been achieved since the demise of the Lowy-led board in late 2018.

In his maiden press conference last month, Johnson said he planned to "talk and listen" to the game's sponsors, but insisted no other sport could offer them what football does.

"We have the largest participation base in the country, so on that point alone it's a very good sport to be involved in," Johnson said.

"The other opportunity we really have to tap into is the concept of being local but global ... so how can we add value to our partners in the future by opening up doors and opportunities that the global game provides? These are the levers I'll be pushing to try and bring investment into the organisation."