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Overgoverned and underfunded: The bind strangling Olympic sports

On average, the top 13 Olympic sports have 10 times the number of directors as AFL club Collingwood and seven times Richmond, yet their average revenues at $22m per sport are less than one third of Collingwood’s and a quarter of Richmond’s.

NRL clubs have similar board and executive structures to the AFL, although NRL revenues are about two thirds the AFL’s, with the Broncos turnover about $55m.

The top four AFL clubs by revenue – Richmond ($93m), West Coast ($88m), Hawthorn ($76m) and Collingwood ($73m) – have combined revenues of $330m, 15 per cent more than the top 13 Olympic sports. These four AFL clubs have one CEO each and a combined 34 directors. The 13 Olympic sports have 107 CEOs and 921 directors.

The Richmond Tigers top the AFL rich list in terms of revenue.

The Richmond Tigers top the AFL rich list in terms of revenue.Credit:Getty Images

Six of the Olympic sports have had three chairs in the four years since the Rio Games. CEOs have an average tenure of two years.

While the professional football codes are often mocked for the number of issues resulting in court action, the Olympic sports have 124 legal entities.

Sport Australia, in a push under chair John Wylie, has sought to modernise the governance of Olympic sports. “Australia is the most competitive sports commercial market in the world. Olympic sports’ revenues have been going backwards relative to professional sports, so it’s more important now than ever that their structure enables them to be well-run, competitive and stable,” Wylie said.

“Traditional federated structures of Olympic sports have their advantages but too often have led to a revolving door in the national boardroom, infighting, scarce resources spent on duplicated administration, a lack of national sponsorships and even a single national membership data base.

“Less cumbersome national structures can reduce duplication and waste, improve effectiveness and increase stability, while retaining a vital role for volunteers and ensuring that state government funding for sports is invested in the state in which it has been provided.”

 John Wylie.

John Wylie.Credit:Alex Ellinghausen

The antiquated structure of the national boards of some Olympic sports was reflected in a June decision by Sport Australia to cease funding for Equestrian Australia, which led to the sport being put into administration.

Board turmoil has resulted in eight directors resigning in 16 months, including three chairs. Only one of the remaining four directors had been elected by the members of EA.

A meeting of EA members on Tuesday voted to support a resolution by the administrator, KordaMentha, allowing constitutional reform and giving members the same voting rights as the six states.

KordaMentha expect to streamline the management structure and save millions of dollars in administrative costs outlaid on spaghetti bowls of committees at state and federal level.

However, the problem of board turmoil and burgeoning administrative expenses is not confined to the largely amateur sports. Cricket Australia, which had a board consisting of state representatives for decades, now comprises nine independent directors. Yet pressure from the state bodies persists, with a push for a new hybrid model of state and independent directors.

Both the AFL and NRL are ruled by boards of independent commissioners who basically anoint replacements for those whose term expires.

The problem with business-based boards is they sometimes have little connection with the grassroots and lack the corporate knowledge of a sport.

The AFL Commission overcomes this problem by allowing recently retiring club chairs to move immediately to the commission, while the ARL Commission imposes a ban on any new director having an involvement in the code over the previous two years.

While some Olympic sports have dismantled the federated model of state representatives with a mix of directors with business expertise and hands-on experience, the Sport Australia proposal, which has met with some resistance, insists on directors serving no longer than 10 years.

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This could have unintended negative consequences as election to an international board of a sport can take more than two Olympic cycles (eight years) to gain acceptance from other countries.

Australia is the leading Commonwealth Games nation but does not have a member on the Commonwealth Games Federation board.

Australian Olympic Committee president John Coates has been vocal in his resistance to Wylie’s governance reform, pointing out that the volunteer base of many Olympic sports, by necessity, often results in a duplication of roles. “A qualified water polo referee might also be needed on the state and federal boards of the sport,” Coates said.

Ironically, the AOC was the first Australian sporting organisation to de-federate, abandoning its state based structure in 1991 after Victoria, two years earlier, had convinced a majority of states to join them in nominating Melbourne as a candidate for the 1996 Olympics, won by Atlanta.

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