In 2015, the Adelaide Football Club celebrates its 25th season of existence, a centerpiece of which will be its glorious new home at the Adelaide Oval. Less than a year ago, Andrew Fagan replaced long standing incumbent Steven Trigg as CEO of the club. The Australian Business Executive recently secured an exclusive interview with Mr. Fagan, a man boasting over twenty years experience in Australian sport.
Mr. Fagan started working in the sporting sector with the Australian Sports Commission and the Australian Institute of Sport in Canberra in 1993, holding a variety of roles over almost a decade of service within policy development and international relations, as well as acting as a management consultant to national sporting organisations on business improvement.
In 2002, he joined Canberra’s Super Rugby team, the ACT Brumbies, taking over initially as General Manager. After a successful stint in the role, he was appointed Brumbies CEO in 2005, remaining in charge until 2013, when he made the move to the governing body of the sport, joining the Australian Rugby Union for the 2014 season as head of national teams, competitions and rugby operations.
In September 2014, the opportunity arose for him to join Adelaide FC in his current role, which he commenced the following month. But what made him want to cross codes into football?
“I’d long harboured a desire to work in the AFL,” Mr. Fagan says. “I’m a career sports executive—when you work in the industry like I do, you’re watching all codes closely, not just the ones that you’re working within.”
The size of the AFL enterprise, its scale and influence in Australian sport, not to mention the professionalism of its operations, was enough to tempt Mr. Fagan into the change. “For me it was an opportunity for change and challenge and to apply my skills in the same industry but a different code.”
On accepting the job, Mr. Fagan believed the Crows had been a good club since its inception in 1991, but had yet to establish itself as a truly great club. Mr Fagan says “I set the benchmark for ‘great’ deliberately high. That’s what our members and our fans expect. And our Board. To be great, we need to regularly compete in finals and win another flag (the last was in 1998) in addition to deepening our connectivity and engagement with our members, corporate partners and the broader community”.
In addition to these concerns, the club has courted a degree of controversy over the last few seasons. Mr. Fagan says of the club’s potential, “I viewed it as a club with a really strong framework, but in many ways an undervalued stock – it is one of a select few Clubs that have all the raw ingredients to become a true great within the Australian sporting framework. The potential upside is significant and truly compelling.”
Flying as One
The last two years have seen the Crows go through a process of change as big as any club in the country. Mr Fagan says “we moved our home ground to Adelaide Oval following a $530million upgrade, acquired our own AFL license from the South Australian National Football League, established a second team to play in the State League, bedded down a new constitution, welcomed in a new Chief Executive, appointed a new Senior Coach as well as a number of other staff and program changes”. Off the back of this change, Mr Fagan thought it was the ideal time to also realign the club’s key values and strategic focus.
“Coming to Adelaide Football Club,” he tells us, “I thought it was really important to define what success looked like for us as a club and to draw a figurative line in the sand and say, after all of that change, lets reset our strategic agenda—and that started with a new vision and new values and brought to life with new marketing creative.”
“The vision that we created was ‘Bringing people together to achieve great things’. The vision enabled us to apply a variety of measures across the footy club by which we’ll define success and govern behaviour.”
The highest profile element of this vision comes on the field, bringing together 45 players and coaching staff with the aim of developing a leading football program in the country and once more delivering success by playing in finals and winning flags.
But the club’s vision is to also incorporate the bringing together of 50,000 people each week in a sold out Adelaide Oval, delivering leading sporting entertainment experiences of a large scale, as well as ensuring 600,000 fans in the community are part of something remarkable that positively affects their lives.
“If you don’t have a clear vision,” Mr. Fagan insists, “then the only thing that your supporters can fall back on is the performances on the field, which won’t always be flag winning, particularly in a heavily capped and equalised competition. It’s also about delivering a profit for the organisation that enables you to continue to reinvest into your football, membership, and commercial and community programs so that you can continue to improve year on year”.
This new vision is supported by the core values of courage, authenticity, high performance and team first. All this has been brought to life through the concept of “We Fly As One”, a unifying ethos around which a cohesive PR, advertising and marketing strategy has been developed.
The hallmark of the club’s 25th season presents an excellent opportunity to celebrate the club’s roots, and to strengthen a future bond. Features of this celebration will include a 25th season logo on playing apparel and on the caps of the majority of the Club’s 60,000 members. The Club has also launched a weekly TV show with broadcast partner Channel 7, which will include a regular look back on great players and historic moments.
This year has also seen the club’s inaugural Hall of Fame induction, which Mr. Fagan tells us “recognised the players, coaches and administrators who have impacted significantly and positively on the football club over the past 25 years.”
“It was an emotional night. Over 700 special guests attended the black tie event and from the speeches delivered, it was clear that although we are only 25 years old, we already have much tradition and heritage running through our blood”.
“It’s a really important year for the club,” Mr. Fagan stresses, “given all the change the club has worked through, we are both reflecting fondly on the past and respecting and celebrating the achievements of the club, but also looking to redefine its future—what we stand for, what we wish to achieve and how we intend to get there”.
The club’s AFL licensing is another area where change has occurred in the last two years. Since its inception, the Crows’ license has been owned by the SANFL. The club represented the State in the AFL, but did so without true independence.
Mr. Fagan says: “That also meant that the state body, the SANFL, had the right to Board representation, profit share and the ability to influence a range of decisions.”
That arrangement has now changed, with the AFL providing the license directly to the Club, which changes the operating landscape for Mr Fagan and the Crows.
“It provides a greater degree of independence for the Club. Our constitution now provides the ability for the members to elect a couple of individuals to the Board. We had our first member-based election earlier this year, which was another historic moment for the Adelaide Football Club. It also allows for us to retain our profits to invest back into the business of the Club”.
“However, it’s important to note that our commitment to state football still remains,” Mr. Fagan is quick to remind us, “we’ve entered into a 15-year agreement with the SANFL that provides for an annual game development grant to be provided to them to support their operations.”
The next decade and a half will see the club investing somewhere in the region of $11.2 million to the state’s footballing body, a significant contribution that will aid the development of the sport in the area.
“The profitability of professional sporting clubs right across the country is challenged,” Mr. Fagan tells us, when asked to shed some light on the issues around staying financially viable in the business of sport. “I’d probably suggest that in any given year there might be in excess of 70% of clubs across all the major codes that might lose money.”
Operating within one of the most competitive sporting markets in the world, and considering the modest size of the Australian economy, it is by no means an easy task for AFL clubs to stay profitable.
“It’s tough at the best of times and the revenue streams for the most part remain traditional right across the industry—sponsorship, corporate hospitality, events, membership, match day ticketing, merchandise, licensing and broadcasting are the predominant revenue streams, and this is the same for the major clubs and codes across the globe.”
Many clubs are responding to these challenges by tapping into new revenue streams, with some branching into the gaming market and other related businesses. Mr. Fagan is well aware that clubs need to operate well in order to be profitable and successful, and must then take advantage of that success if and when it comes.
“In the AFL, all of this occurs in an environment which is equalised,” Mr. Fagan explains. “As you become stronger and more profitable, then you are required to contribute more into the collective bucket to support the clubs that need it most.”
Draft picks on the field and revenue sharing off the field go some way to leveling things for clubs, ensuring there is fairness and equalisation in both the financial and sporting aspects of the game.
The Crows rank roughly seventeenth or eighteenth in the AFL for non-football revenue, a fairly typical position for a club that doesn’t enjoy the benefits of gaming revenue. Last year, around $90m was generated from gaming by the 10 Victorian clubs alone.
“It’s a significant amount of return that they generate,” Mr. Fagan explains, “and for many it’s the determining factor as to whether they’re profitable or not, or whether they are able to spend to the limits of the football and player payments cap”.
The Crows have survived to date on more traditional revenue streams, but the Club needs to keep up with the increasing costs of the industry by looking at alternative means of generating revenue. Whether it is gaming, broader hospitality, facility management, or elsewhere, Mr. Fagan knows the club will need to be open to new ideas going forward that do not rely explicitly on the team’s on-field performances. “It’s an ongoing area of focus for us,” he says.
In 2014, the Crows enjoyed the highest average attendance in the AFL, clocking in at roughly 48,000 per match, in much part driven by their 60,000 members. Mr. Fagan attributes this fantastic support to the level of passion for the sport in the state and city, which is also home to Port Adelaide FC.
“Football is extremely well supported in the state of South Australia,” Mr. Fagan tells us, “and it’s a positive environment in which to operate, compared to the East Coast of the country where the battle for hearts and minds cuts across multiple Clubs and sporting codes”.
“We equally have benefited from a move from our traditional home at Footy Park in West Lakes, to the new, revamped Adelaide Oval, following its $530 million upgrade. We’ve got an absolute world class venue in the middle of the city, which would be the envy of Clubs not just in Australia but around the world”.
Mr. Fagan is adamant the club will not take this level of support for granted, as the Crows look to invest back into the local community through a range of programs and by ensuring the match day program and membership support reflects the superb backing the club receives going into each game.
“We do that in a number of ways,” he explains, “some of it’s through supporting not-for-profit organisations, community organisations and charities. A number of years ago the Club established the Crows Foundation, which has since provided over a million dollars in donations to causes right throughout South Australia.”
The club’s community engagement team will work with more than 150 schools over the course of the coming year, with the newly developed program ‘Growing with Gratitude’ providing the central platform. Based on the five habits of happiness, the program helps to develop emotional and physical well-being, build resilience and promote positive thoughts and behavioural habits. Within the next 24 months the Club expects more than 100,000 children annually will participate in the program.
In addition, the Crows will continue to work with local football clubs, including junior clubs, to support promotional activities and encourage development. “We’re nothing without the support of the community,” Mr. Fagan says. “We understand that our fans sit at the centre of our universe and we have an obligation to invest back into the community that supports us.”
To help support the game day program, Crows fans benefit from a levy paid to the state government that helps provide free transport to those attending football, charged to the club at a cost of $700,000 per year. “The concept of providing free transport to those attending the football is a positive one,” Mr. Fagan says.
“The event experience doesn’t just start at opening bounce and conclude at the final siren,” he continues, “it’s actually from the moment you leave home. It’s your ease of getting to the venue, the experience itself, both in and around the precinct, in the bars, clubs and restaurants and the engagement activity inside the venue and outside the venue, including live bands and DJs, social media interaction on the multiple big screens, a dedicated Kids zone, Crow Radio and a strong Crows look and feel through dedicated branding and member’s passionately sporting the Club’s colours”.
The scheme helps to ease congestion on game day, and provides a safe environment for fans. Several parties benefit from the new stadium, including the Club, the government and local Adelaide businesses, and Mr. Fagan believes the current arrangement is the ideal solution for all parties: “I think a model where we’re all sharing is an appropriate one, and I’m very comfortable in supporting the government at the current levels to provide free transport.”
The club’s loyal, passionate supporter base helps provide numerous opportunities to offer great hospitality, as organisations know they can be part of an experience at an incredible venue where the fans have an extraordinary depth of passion for the game.
“Adelaide Oval is world class, a leading venue,” Mr. Fagan says. “In 2014 we ranked number one in the AFL for match day corporate hospitality, and I expect that to be the case again in 2015.”
Equally important is the support offered by corporate partnerships, a vital component in the financial model of any professional sporting club. “It’s no different here,” Mr. Fagan says. “It’s fantastic that the Adelaide Football Club has enjoyed a number of long standing partnerships.”
A 25-year partnership with Toyota, established at the very beginning of the club’s existence, is now recognised as one of the longest standing partnerships in Australian sport. The club has likewise profited greatly from an agreement with Foodland, a great South Australian brand, which has been associated with the club for the same period of time.
“What I’m most proud of is that when I’ve met these people over the last six months, they’re not only enjoying business return, but they are genuinely passionate about the footy club and the place that the footy club holds in this community.”
Retaining sponsorship is an ongoing challenge for the club, as it continues to foster close relationships within the SA business community, whilst also nurturing a true national brand. Within this goal, the club is also focused on providing opportunities for an increasing number of national and multi-national brands to associate with it.
“We are finding that we are able to present a compelling proposition, based around an extraordinary venue, a highly engaged membership of 60,000 plus, average attendances of nearly 50,000 enjoying a great match day experience and TV audiences of 600,000 plus per week, peaking at 1.3million”.
As the Crows Fly
In this time of change, a new communication platform has been established to help push the club forward into the future, focusing particularly on the digital space, with the intention of more effectively engaging with its national supporter base.
The club no longer looks to merely provide content, but also to produce content. The Crows Show is now aired weekly on Channel 7 in Adelaide, and is already receiving strong ratings. Likewise, the club’s website and social media platforms are all increasing at a rapid rate due to the investment made in video content.
As our interview concludes, Mr. Fagan is keen to communicate one last key point to us: “Just touching up on the footy,” he says. “We’ve gone about looking to develop a leading football program in the AFL that will deliver the success that we want. It’s a journey, but we’ve started strongly.”
With a brand new senior coach in Phil Walsh appointed in October, just days after the new CEO’s arrival, Mr. Fagan is confident things are looking up for the Crows. The on-field performances are a central platform to all the club does, and a positive start to the new season has put them in a great position to begin working on the next 25 years’ worth of memories.
To view this editorial as it appeared originally in The Australian Business Executive magazine, click on the cover image below.
This Adelaide Crows FC business profile has been made possible by the generous support of:
By Nicholas Paul Griffin