Recently, there has been much talk of Perth Glory moving from nib Stadium to the Perth Hockey Complex in Bentley. Regular followers of the game out West will know the A-League existence of PGFC has had a somewhat bumpy relationship with Allia Holdings, the venue management company that runs (not owns) nib Stadium. In a rather incestuous twist, the owner of Allia just happens to be one Nick Tana, the man who co-founded and owned the Glory for just under a decade. Now the actual dealings between the club and the company remain commercial-in-confidence; which means it is nigh on impossible to get a hold of true hard figures about what goes on behind closed doors (believe me, I've tried). So the end result in print is the normal sort of Australian football fudgery - rumour and innuendo, compounded by lies, leaks, and libel among the great unwashed - that we are all unfortunately used to dealing with.
This case is no exception. If you read comments on the forums, newspapers, and websites running the story you'll note certain people calling Nick Tana a blood-sucking vampire costing the Glory millions each year, and also those so bitter about the club's current state that they've put all the blame on the man who kept the club in business in the first place - Tony Sage. To some, Allia Holdings are heroes, and to others they are heretics. Various leaks have also sprung up about the place from people with ‘acquaintances’ on both sides of the fence. Some claim the club is being run out of pocket to the tune of $125,000 per game just thanks to Allia - while others have said that the figure is nearly half that. Some have told fans that Paul Kelly himself could organise dramatic discounts on the hire of a video screen - while others have claimed that Nick Tana is playing hardball and trying to bleed money from a club that he lost money on all those years ago. Julian Assange himself would prefer extradition to the US to trying to sort this mess out.
Will We Be At NIB?
As someone who tires of this sort of activity very quickly, I have tried to get to the bottom of things. Contacting both the club and Allia on this issue brought initial responses along the lines of ‘Um, tricky situation, we'll get back to you after checking what we can say’. Following eight hours of pencil-tapping boredom and a notification to Allia that yes, I work in London so no, a talk in person or by phone probably wasn't practical, it was the venue management company who got back to me first.
While understandably refusing to divulge balance sheets or contract details, CEO Peter Bauchop was more than happy to summarise information that was already in the public domain. According to Bauchop, there are four main cost areas for a licencee at nib Stadium (i.e. Glory):
1. Licence Fee
2. Event Costs
3. Damages
4. Other costs (not Allia-related and paid to third parties, e.g. caterers and video screens)
The Licence Fee portion set out by Allia is agreed upon between themselves and the stadium owners, and is dependent on the stadium's annual operating costs and the type of event being staged. A community sporting event licence fee is priced at approximately $8,000 - $24,000. A commercial sporting event - like what the Glory provide - has a licence fee in excess of $24,000. But as Bauchop goes on to point out:
"Our position is [that] we have always delivered on setting licence fees at the lowest starting point. That is every community sporting event has been $8,000 hire fee (sometimes we even sponsor half of this) and commercial sporting events begin at $24,000 increasing on a per patron basis when patronage reaches over 10,000."
The Event Costs section of the Glory's Allia bill is determined by all the venue-based expenses incurred in running an event - security, ushers, ticketing staff, traffic management, utilities, cleaning, etc. The law defines requirements that must be met for each kind of sporting event - how many entry and exit points are required, how much security is needed per patron, how long the venue may stay open for, and so forth. Bauchop states "Event costs with the Glory-type setup are $50,000 to $60,000 unless something extra or unusual is required. Most of these services are subcontracted out... and we are not able to put any markups or commissions on subcontracted services".
Now, damages are usually $0 - evidently Perth fans are a docile lot compared to you crazy Eastern States hooligans - but on occasion they do occur and costs must be footed by the licencee. So according to Bauchop's figures you could say that a reasonable minimum cost for a Glory game of 9,000-odd spectators would be $75,000 to $80,000; that is, the amount of money that the Glory would owe Allia for the use of the stadium and its services. Allia also inform me that rent charged to the Glory is well under $10,000 YTD, but this has no relevance to the event costs. Bauchop went on to assert that for this aforementioned 75-80k, Perth Glory receives:
- 100% pourage of Beer, Wine, and Spirits.
- An annual percentage (unspecified) of soft drink pourage.
- An annual percentage (unspecified) of gross catering revenue.
- A clean stadium for their event to use as advertising signage
- All stadium inventory - seating, corporate areas, etc - except for naming rights, the House suite, and 20 seats of the grandstand.
- All ticketing revenue.
Bauchop finishes by claiming that "It has been independently assessed that we give back far more rights / revenue opportunities to our licencees [than] what is normative for stadiums in Australia". Interestingly, he also claims that David Hatt's report did not recommend moving to the Hockey stadium at all; and considering that $11 million has already been spent on improving nib Stadium with another $88 million to come, Glory's current home would seem to be a far better option from an infrastructure perspective than a complex built to suit hockey specifically. He claims that as far as he understands Glory are committed to nib, and Allia are committed to hosting them - signing off by saying:
"The best outcome for our stadium in all aspects (commercial or otherwise) is a very strong and sustatinable Perth Glory that has success, fantastic home matches with large crowds, and we are committed to doing what we reasonably/realistically can do to assist".
A Glorified Lie?
Now, while that last part does sound suspiciously like a politician's vote-winning speech, you must admit that the figures provided do come quite substantially under the figures used by The Sunday Times and The West Australian. To help clarify this Paul Kelly, CEO of Perth Glory, gave me a call to straighten things out. To kick things off, I asked the most pressing of quesitons.
As part of his review, has or has not David Hatt recommended a move to Perth Hockey Stadium?
PK: First things first, I haven’t read the report - it’s currently with Tony. Now with regards to the hockey stadium, we have a memorandum of understanding with Football West. Part of that MOU is to seek joint ventures, shared accommodation, shared services, training facilities etc. Some of this is to look at Perth tertiary institutions; and we currently train at one. Part of the overall scope of football in WA is for Perth Glory and Football West to work together on these things. Now because of this report - we’ve got Ric Charlesworth, who’s a hockey name and a hockey person - and Rachelle Hawkes actually works with us and she’s a triple Olympian in hockey - people are always going to put two and two together. Now the report itself, I haven’t read it, Tony’s just told me bits and pieces - and it will say that we need to align ourselves with a tertiary institution. And look, that’s part of the MOU and the discussions that we have with Football West anyway.
But when you say you need to ‘align yourself with a tertiary institution’, does that mean moving your stadium?
It could mean anything. Now our training facilities are at UWA; we do have AK Reserve, but we use UWA as well. Football West for example have been looking at their own operations, and they’ve been speaking to ECU. Now the reason we’re looking at Curtin as one of the better options is because of what they do with hockey there. Ric Charlesworth has suggested we look at what they do with their elite hockey development programs, scientific testing, player development, sport science, all those things. You’ve got to remember, we’ve just had a very embarrassing season. So we’ve got to look at all options that could help us improve.
Let’s assume this move is true - obviously the Hockey Complex needs a lot of work to bring it up to A-League level. Now The Sunday Times have said it’ll cost $50,000 a game at this alternative stadium, whereas Allia tell me it costs $75-80K for nib. Surely you’d need to bring in turf, move seating, etc - all of which is going to add to this 50K figure each game? Is it really worth it? Would it not make the costs the same anyway?
Everyone’s making these quotes and saying these things [in the media] - there’s only been about four informal conversations with Curtin! There’s nothing documented, there’s no paperwork, there’s no formal approach to Curtin uni - yet everyone’s coming up with these conclusions and making these assumptions.
So Glory haven’t provided any quotes or figures to the papers that have come up with these stories?
We haven’t supplied anything. Hockey may be different - they may have provided some info. They’ve run World Cup events at the stadium, they know how much it costs, they may be providing some figures. Let’s be straight - we’d know what it would cost to move to another stadium. And you’re right, it would be expensive. But if we can move to another venue that can guarantee us cost savings when compared to nib, we’d be mad not to have a look into it. Losing money like we are, we have to look at costs savings - and the biggest cost we have is playing at nib. It costs us 120, 130 thousand dollars per game.
Talking to Peter Bauchop though, he puts Allia’s cost to you at about $80,000 for each game which has an attendance of under 10,000 people...
Well we’ve got $22,000 which is spent on A/V - video screen, PA, sound wiring, etc. Now you could argue with Allia that this should be there anyway. The archaic nature of the stadium is that we have to pay for a big screen to go in, we have to pay for audio to go in - now we could go somewhere else and that stuff could already be put in, or there could be better arrangements, better deals, to put it in each week. We also pay for parking at the stadium - for every car we pay a transport fee. There’s a whole host of things. Now you can’t just say it’s Allia’s fault here - they have their costs, and that’s between us and them, but the overall cost for us to put a game on at nib is in the region of $120,000 - $130,000. I’m not having a go at Allia at all. We like them welcome upgrades at the stadium - but we can’t afford to play there if it keeps going the way it’s going. We need help to reduce the costs. Now with regards to this hockey stadium, it could be a state league ground, it could be anywhere. Look, if we see somewhere that ticks all the boxes and reduces our costs - we’d be crazy not to entertain it!
So, there we have it - no problems with Allia, no movements at the moment, but the club would entertain the right option popping up. While I had Kelly on the line though, I just couldn’t quite resist asking a few more questions...
So given then that the club’s looking at cost-cutting, making a saving of say $20-30,000 would be a good step to staying at nib - now we’ve got two marquee players who we essentially pay that much each game, surely if we didn’t employ even one of those marquees, the cost savings would be significant? I should point out that there’s clubs on the table that have finished a lot higher than us without a marquee player!
Players are contracted - everyone says, get rid of this, get rid of that - but we’ve got contracts to honour. You can’t just tear them up.
At least one of those marquees is out of contract, though...
Robbie is out of contract, yes. We’ve put an offer to him - it’s significantly less than his current deal.
So let’s just say then if he comes back on a lower wage, the club’s got a choice - pay for a marquee or pocket those savings. Surely that would help reduce cost?
We would consider any cost cutting exercise we can do. We can’t compromise putting a product on the park next year that ensures that we’re competitive and giving entertaining football to our fans. But yeah, you’ve got to understand we lost 3.8 million last year - and we lost 4 million the year before that. So cutting down player contracts would be in the mix; you just can’t cut the contracts mid-term. You’ve also got to have a minimum squad, and you’ve got to pay a minimum of the cap. Everyone’s always critical, but you’ve got to understand that there’s things that restrict what we can do.
Sure - but there are teams that have spent a lot less than Glory and have performed a lot better on the field.
Sure, but you look at Adelaide, you look at Brisbane - they were pretty much bottom of the league last year. The FFA stepped into both clubs, they had to take drastic action, and they pretty much had a cleanout. But you know, I take my hat off to those clubs, because they’ve resurrected themselves. You look at us though, some of the contracts we have, and we can’t pare ourselves down the way that Brisbane or Adelaide were pared down.
But we got pared down pretty badly under the FFA too though - so why didn’t we recover?
That we did... and I do remember that... There was severe cuts then as well, but unfortunately at that time and since that time this club hasn’t lived up to it’s expectations. And I’m sure people will form opinions - and some of them justifiably so, that whether it’s bad management, bad coaching, bad recruiting, it’s been an absolute array of things - that it has remained so lately. The culture at this club needs to change.
And how will we find out how it is changing?
Well, we’re waiting on the report - and there’ll be recommendations and actions in that - and I would think that would be the start of the revival of this club. We just have to learn from the mistakes of the past five, six, years - and particularly the last year. [Passionately] Look, everyone at this club is embarrassed by what happened last year. People think that we just sit back and take it for granted, but we’ve got a core of people here that are absolutely embarrassed by last season... and rightly so. Now we’ve got to find the ingredients to make this club a success next season. The report will help us do that - and part of the report, you’ve got to understand, is that it will point the finger internally just as much as it will externally.
I think people fear that it will be used as a whitewash though, in much the same way as previous internal enquiries from Glory administrations - a couple of token appointments here and there with no real change. What do you say to that?
Oh look, I know I’m on record as saying this club needs to change. It needs a culture change. We need better recruiting strategies, we need to focus locally on WA talent and bring that through - you know, we had one game this year with nine WA natives in the team, and that’s something we should aim to have the majority of the time. Yeah we weren’t good at doing that but we’ve got to bleed people in, we’ve got to get them to A-League standard, and that’s going to be a process - it won’t happen overnight. I’m on the board of Football West, I have been for five years, and I was one of the original members. So I want to see that. But it won’t happen overnight. There’s probably about twenty different things we need to change - other clubs [over east] probably only have two, three, five things. I have tried to rack my brains to think of just one root issue here - but the fact is there’s more like ten.
Well, thanks for your time Paul. Shall we say in summary that Glory are currently set at nib, but you are open to other options?
Yes. We’d look at options - we have to - but the primary thing for me is getting this playing roster right and getting results on the park. You know Ian brought the young lads in, he put local lads out there, he put the effort in and he mixed it up, but he knows he’ll live or die by the sword. If we start the next season like we have gone this season, it won’t be long before the axe is wielded. And that could be Ian, it could be me, it could be the board. It’s really important we get it right.
And as far as final sentences go, I don’t think that I could have put that any better.
