CORPORATE governance in sport has never been more integral to the success of sporting codes as they scramble for scarce sponsorship dollars. But what are the leaders of our leading sporting organisations doing to ensure growth – both on balance sheets and in the stands?
At a recent Australian Institute of Company Directors (AICD) leadership forum three senior representatives got together to talk up the topic. A noticeable absentee was Gold Coast United chairman Clive Palmer, but that didn’t prevent the others from pitching the power of their respective brands.
Gold Coast Titans managing director Michael Searle (pictured), Gold Coast Football Club (GCFC) chairman John Witheriff and Gold Coast Blaze co-owner Owen Tomlinson discussed the governance issues and the individual challenges facing their high profile franchises.
The Titans are by far the most established of the three clubs, given the National Rugby League’s (NRL) was able to engage with a strong Gold Coast base of supporters shortly after establishment.
GCFC doesn’t have the same luxury, but chairman John Witheriff is optimistic the club can engage the ‘Gold Coast spirit’.
“If you want to learn anything from the Titans, the thing that they have done exceptionally well is that they have created this connection between the football club and the city, and if you don’t do that then you will fail,” says Witheriff.
“This (the new AFL franchise) needed to be linked to and be a part of this city. The core of the viability lay around this concept that if it was a community-owned club then we would be able to pick up on two things: the people’s passion for the Gold Coast and the people’s passion for the game.”
Witheriff says the club has received a ‘surprising’ level of sponsorship revenue from national corporations looking to break into the South East Queensland market.
“There is a growing awareness of this market and the accessibility through sporting teams.
“So I think that’s been something that we haven’t banked on,” he says.
“There’s also a growing desire for corporate Australia to deliver their corporate social responsibility by utilising sporting teams and we’ve found other sources of revenue in that space.
“The real challenge for us now is creating a game day experience that’s going to cause people to want to come and take a premium seat. If we can do that I think we’ll achieve our financial targets.”
When it comes to the Gold Coast Blaze, co-owner Owen Tomlinson says his sport doesn’t have the ‘rich history’ of AFL or rugby league in Australia, but points to upgrading facilities and a higher national profile as the key to finding a major sponsor.
“The sport drives us no better than our love of the Gold Coast, but basketball in Australia is bigger on the world scene than it is here,” says Tomlinson.
“We, as basketball on the Gold Coast, need a home of basketball. We have the Carrara basketball centre which is past its used-by date – being realistic – and it’s embarrassing that we’re the sixth largest city in the country and we couldn’t host any nationals or major titles.
“We have to continue doing our best to entertain the fans and raise the sport’s profile, but we do need the business community’s help.
“That’s the reality – we do need it especially because we haven’t got the TV contract these guys do.
“This year we have One HD and Channel 10 which is sensational for us and the product as it reaches a far bigger market. We just have to make it work and we need everybody here - and these are not the best of times obviously.”
Structure and stability
Having consolidated the Titans’ position as the Gold Coast’s leading sporting franchise in both sponsorship dollars and fan support, Searle has turned his attention on the future viability of the game as the NRL restructure committee chairman.
Researching endlessly on the corporate structures of the world’s biggest sporting competitions (American NFL and Major Baseball League, European Premier League etc), Searle is charged with the much-anticipated establishment of the game’s independent commission.
“For us to continue as a sporting business we needed to obtain some stronger corporate governance and the opportunity to move an equity partner (News Ltd) out of the game,” he says.
“So we will end up with a single entity controlling the whole game of rugby league, the first time in the history of rugby league that its corporate governance will be on a solid platform in our opinion. We believe our position is an evolution of the game of rugby league.
“At the moment it’s costing (the NRL) about $400,000 a month just in the licence fee that goes to News Ltd and the overall greater savings around the efficiency review that we have conducted is about $11 million a year.
“From a corporate governance point of view, the game will have a solid platform with independent directors that have strong business acumen and a new model that will allow greater cost savings and also better planning for moving forward.”
At GCFC the club must achieve stability to properly amalgamate into both the national competition and the Gold Coast’s corporate sponsorship.
Witheriff says leadership confidence is integral to the club’s stability and has implemented a board structure that will prevent a mass resignation or conflict of directors such as seen at the North Melbourne Kangaroos in 2007.
The GCFC board consists of eight directors who are elected by club members into specific offices of four terms. The model has been designed so at any one point, no more than two positions will be up for election.
“The issue about stability is that if you see clubs that are completely effectual, they may have a situation where a faction takes control of the club that then gets rid of the management, then the coach and ‘everything will be fine’,” says Witheriff.
“Quality performance comes from stability, commitment to continuous improvement, and a club driven by benchmarking. So if we are going to get the governance model right we have to focus on the question of stability.
“If you’ve got these three components it doesn’t matter if one faction is in charge or another. It might be different nuances, different outcomes and different people, but what you’ll end up with is a better outcome where you’ve got stability.”
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