The backers of a second New Zealand A-League franchise should expect to sustain heavy losses in the first three years of operations, at least, warns Wellington Phoenix general manager David Dome.
Dome told Newstalk ZB presenter D’Arcy Waldegrave any investor would likely need “north of NZ$30 million” to get through the first five years, including initial entry costs.
Main photo: David Dome … investors would need deep pockets to make it work.
His comments follow the announcement by the Australian Professional Leagues to seek expansion for the men’s and women’s A-League in favoured markets Auckland and Canberra.
“They still have to find someone who is going to financially back the thing, which is not an insignificant task in and of itself,” Dome said.
Needing more than $20 million and knowing of the past failures of the Knights and the Kingz, can a new investor make it work?
“That’s the question a potential investor has to ask themself. Can it happen? Can it work?” Dome asks.
“It’s $20 to $25 million Australian just to get in to buy your way into APL —which is what the Silver Lake investment has valued the club deal is worth — and you have to factor in millions of dollars of losses. I would probably suggest, maybe, between $2 million and $5 million in the first year and then maybe $2 million a year for a couple of years after that.
“You are north of $30+ million (New Zealand) just to get through the first five years at least, and then see where you get to.”
The pro’s and con’s of a second New Zealand franchise
Dome said there would be pro’s and con’s for the Phoenix, having a New Zealand-based rival.
He said the pro’s included raising the profile of football, and it would help having a team in Auckland where there was large interest in football, plenty of commercials (opportunities) and media.
“A derby, two derbies, a year would potentially be a good revenue generator for us and the other club,” he said.
In terms of the con’s, Dome said the clubs would be competing for the same players in the men’s and women’s space.
“Is New Zealand’s football pool deep enough to sustain two clubs chasing the same players? I don’t know. In the short term, it may be an issue. In the long term, it would and should enhance the development of players.
“Up until now, the Wellington Phoenix have been doing the bulk of the heavy lifting in the development of players and you can see that with the players coming through our academy and going on to pro contracts, not only in the A-League but overseas as well.”
D’Arcy Waldegrave also interviewed former All Whites and Wellington Phoenix coach Ricki Herbert about the prospect of an Auckland franchise.
Herbert said lessons would be learned from the past failures of professional football in Auckland.
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Listen to the full interview
Replay the 10′ 47″ minute discussion here (Ricki Herbert from the start; David Dome from 5′ 45″:
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