The gates are wide open for sport on the Gold Coast with two new codes entering the corporate stadium, but is the fan base there? Gold Coast United and the Gold Coast Football Club will make a dashing foray into the market dominated by the Gold Coast Titans, while The Blaze is under pressure to perform.
A GROUP of young lads kick around an empty water bottle on the chilly evening of July 8 outside Skilled Park, in a scene reminiscent of what you’d expect in the back streets of Madrid or Buenos Aires.
Gold Coast United has just won a thrilling 2-1 victory over English Premier League side Fulham and while the English squad may have been under strength, the result is a promising sign for billionaire Clive Palmer’s glamorous venture.
Soccer has arrived on the Gold Coast
From his corporate box CEO Palmer discusses how ‘football’ brings the citizens of the world together by celebrating what they have in common rather than what’s different, but when it comes to the business side the answer is simple – tax losses.
“In a lot of business you make money, football’s one you lose money – instead of giving it to the government give it to the community to promote a sport that creates more peace and prosperity rather than violence,” says Palmer.
“At the moment it’s certainly a great loss making enterprise – you’re not going to make a profit this year or probably for the next five years but what you’re building up is good team work, cohesion and of course you’re bringing a certain profile, advertising and benefits you get.”
He adds that the sport creates great networking opportunities and a time to relax while watching a spectacle that’s good for your blood pressure and longevity of life.
The goal is to win the A-League this year to attract more interest in the team next season, so that over time it will start to make a profit. The key factors, like in the mining business he is used to, are motivation, planning ahead and the milestones achieved along the way.
The competition begins
Southern Cross University sports business specialist Dr Dave Arthur says Gold Coast United has a great opportunity to capture the South East Queensland soccer market, but NRL and AFL are set to dominate the sporting landscape.
“NRL and AFL are absolutely leading the pack, they’re major sports in Australia – rugby league is there with an established franchise, they’re very well run and reasonably successful, the planets are in alignment,” says Arthur.
“Any new franchise has to do things even better and no doubt the AFL can do that – they seem willing to throw money and they’ve got a long term outlook.
“Soccer is in a similar situation with the A-League, the sleeping giant has awoken and with the World Cup next year it will come at the end of Gold Coast United’s first season – if their marketing department does their job right they’ll use the Socceroos in the side as a point of difference.”
He cites the competition between codes on three levels – corporate hospitality, sponsorship and the grassroots fans as the ‘bread and butter’.
“You might have a good side but you need community outreach programs and I think the Titans have done that very well,” he says.
As for the Gold Coast Blaze, Arthur takes the view that basketball in Australia is in disarray so it will need to harness its niche entertainment aspect if the team is to be successful.
“There’s a new league starting but I don’t think basketball occupies the minds of Australians as much as those iconic sports — as long as they don’t try be too big, they’re a niche sport and they can build on that.”
Given the fact that 10 years ago there were a lot of failed franchises, the industry has come a long way and Arthur thinks the new franchises are predicated on much better foundations – while he thinks there might be room for more, some may not fit.
“I wonder where a netball franchise is on the Gold Coast? Obviously, the ANZ competition has its own model but it would be really exciting to get a netball team here.”
“There’s rumours of a baseball national league and the Gold Coast has been strong there in the past.
“Super 15 would be really interesting on the Coast and it always associates with corporate types, but I’d wonder if we’ve got enough talent in Australia to put a strong rugby franchise anywhere – where are they going to play?”
Tourism is in for a boost with the new codes and he hopes there will be an effective cross-promotion of sports and events like the Gold Coast marathon.
“For instance someone goes to the AFL on Friday night and then goes to watch the NRL on Saturday night,” says Arthur.
“With the Gold Coast marathon I think you’ve got an icon event that literally attracts from around Asia and the world – it can only be good toward healthy ends.
“And it’s not just the marathon itself but you’ve got the half marathon, the kid’s events and they’ve done a good job to put the whole package together.”
Further down the track he also has the idea that if you can get people to participate in sport now then there will be benefits in 15 to 30 years for the economy.
“It’s long term and perhaps a long bow to pull but I can certainly see it happening in the future.”
Share resources or zero sum game
UQ economics professor John Mangan says the Gold Coast is a pretty innovative place and could benefit from new sporting codes if it finds ways to share resources – otherwise it’s a zero sum game.
“For businesses themselves they won’t grow much income for the economy, but might have a redistribution – for example, people that spend on going to games might cut back on retail spending, so it really is a matter of where the money is spent,” says Mangan.
“It’s a battle over turf and it’s a zero sum game unless they can feed off each other, sharing clinics, stadiums, dates and facilities.”
He believes the economic situation is more complex than a simple boost to the economy as the Gold Coast is already an established tourist destination.
“It’s more complex than that as the Gold Coast is not a struggling area and it’s not a place that needs a marquee event to attract people,” he says.
“There’s a couple of issues, like the increase in competition and whether the support will be there for more clubs, the extent to which fans are fickle and switching from the losing team to the winning team, as well as competition for sponsorship.”
In the sponsorship arena, Mangan foresees a greater selectivity for sponsors which could lead to shorter contracts which are not good for regularity in the business.
“Sponsorship’s a gamble and the economic impacts shift on to the club and it’s facilities. To think that the Bulldogs (NRL) went for 12 months without a sponsor and they’re a well established side – I wouldn’t be surprised if the Blaze go with a small scale sponsor.”
And when it comes to loss-making franchises, Mangan points to a love of sport as the key motivator.
“There’s a lot of altruism and while to some extent it’s a way to pay less tax, there are better ways to avoid it. It’s a combination of love for the sport if you have the ability to use money less efficiently, so you have to have reached a certain level of affluence before you can do that.”
It’s a description befitting of the Gold Coast United chairman.