Why Palmer is confident of an FFA own goal

The Football Federation of Australia may have little recourse against the mining magnate with a perfect record in the courts.


When Westfield founder Frank Lowy started to remake the way soccer is run in Australia, one of the keys to ensuring the long-term viability of the national league was to get lots of rich blokes (and yes, they are all blokes) to own the various clubs dotted around the country.

In Sydney, Lowy himself took a stake in a local club, although he has since sold and healthcare billionaire Paul Ramsay is now an investor. In Brisbane, two local paint entrepreneurs were the original owners. In Newcastle, Nathan Tinkler replaced property developer Con Constantine as owner. The Adelaide team was owned by construction magnate Nick Bianco and was later bought by a consortium led by rich list member Rob Gerard. In Perth, mining magnate Tony Sage is the owner.

And when the Gold Cost entered the competition in 2009-10, Lowy had found the ultimate deep-pockets man in mining billionaire Clive Palmer, who has a fortune of somewhere between $1 billion and $5 billion.
Palmer enthusiastically backed the team at first, pouring money in, buying players, predicting premierships.

But then the trouble started.

Frustrated by low crowd numbers, Palmer threatened to lock fans out of games to keep staffing costs down. He controversially sacked a number of players. His relationship with the Football Federation of Australia, which is led by Lowy, deteriorated as quickly as Gold Coast United's on-field results.

Things came to a head last weekend when Palmer appointed a 17-year-old rookie as captain, sacked his coach and told a newspaper that rugby league was a better game than soccer.
Rumblings that FFA were set to strip Palmer of his licence have grown louder and louder.

Clive's position? Just try me.

"We will injunct them in the Supreme Court and we will fight them in court to a standstill," Palmer said last night of the threat by the FFA to take his licence.
"I have been involved in major business transactions in my life and unfortunately in 68 litigations and our record is 68 to zero. So if they want to come on that turf and get off the football ground I would be more than happy to accommodate them."

Palmer's appearance on SBS television last night was partly about clarifying his comments about his love of soccer.

It's not the game he doesn't like, Clive says, but the way it is run.

"When we compare football with rugby league we see the chief executive of the NRL earning less than a million dollars, we've seen the five top executives at FFA paid over $5 million," Palmer told SBS.
"We've seen the situation of the FFA being insolvent and they had to get $8 million from the Australian government. That's a matter of great concern."

Palmer claims he's pumped $18 million into Gold Coast United and says that would be the biggest individual investment in sport in Australia.

But he simply cannot get a return on his investment.

"Someone has to point out the fact that owners are losing an average of $4 million per club which is very disconcerting. And there is no light at the end of the tunnel."

Watching Palmer last night you could just tell he was relishing the stoush with the FFA and he knows they would be wary about taking on an experienced and well-funded litigant.

But he must be seriously reviewing his options with Gold Coast United. Palmer, like hundreds of rich men before him, has learned the hard way that sporting clubs are basically money pits, where the ever-increasing costs of putting a team on the park eat away at the relatively limited revenue streams a club can access (basically memberships and TV money).

The smart course of action would be to withdraw his support for the club. But he might be so keen to continue his stoush with the FFA that he'll plough on.

The FFA must be pulling their hair out with this fight, but Lowy and his team would also realise that Palmer's problem – losing $4 million a year – is also their big problem.

Rich guys have deep pockets, but they also drive a hard bargain and don't like wasting money. Palmer's push for a better deal may well find support amongst his fellow club owners – even if he himself doesn't have their total support.

This article first appeared on SmartCompany on February 21. Republished with permission.


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