WHEN Frank Lowy demands that Australia qualifies for every World Cup, and calls it a “precondition of our success”, it’s obvious why.

The prestige both at home and internationally from being on the biggest stage of all feeds into every aspect of the business, from sponsorships to encouraging children to take up the sport.

“This is the reality of what we have achieved: we are here at the World Cup for the third time,” says Lowy. “Part of the job of whoever is running the FFA is always to make sure we are here every four years. It is a precondition to our success.”

But the one place it has less effect, at least in direct terms, is the bottom line. Thanks to the collective bargaining deal that delivers the Socceroos themselves a third of all commercial revenues their brand delivers, and also to the desire to give Ange Postecoglou the “no excuses” culture and resources he demands, the substantial prize money is quickly eaten up.

media_camera Travel makes up a significant part of the cost it takes to compete at a World Cup.

“I think there’s an idea out there that we walk away with $20m,” notes David Gallop, Football Federation’s CEO. “It will be a fraction of that.”

In headline figures, FFA receives around $12m from the world governing body, FIFA, just for qualifying and taking part.

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Nearly $8m of that is designated as prize money, and the balance of $4m is termed “cost reimbursement” – but for the whole qualifying campaign, which in this case took in 14 games, half of them away, from February 2012 through to June last year, [itals] and [enditals] for taking part in the World Cup itself.

To put that $4.5m in context, Postecoglou has had his squad assembled since mid-May, first in Gosford, then Sydney, and finally in the Brazilian city of Vitoria – and FFA estimates that whole period of around six weeks will cost $7.5m.

media_camera It costs roughly $450,000 to assemble the Socceroos for one match.

Of that, $3.45m is in player payments. Each of the 23-man squad will earn $150,000, made up of $113,500 from the prize money cut and $35,500 from the match fees. (The players currently get $6500 each for a normal international and $7500 for the World Cup finals games.)

Then there are other costs associated with extra FFA staff attending the World Cup, plus some of the senior sponsors and corporate partners.

It quickly adds up, which is why FFA estimates it will be ahead by $2m-$3m by the end of the World Cup: a healthy margin, but hardly game-changing.

“The Socceroos are an important brand opportunity for football, but the A-League is the financial backbone of the game,” notes Gallop.

“The perception that the Socceroos are the rainmaker is not accurate – it’s clearly the A-League and the investment that the owners have made in the competition that carries the momentum for the game these days.”

That is a fairly seismic change, part driven by the increased revenues of the A-League, but also the diminished commercial standing of the national team.

One of the things held against former Socceroos coach Holger Osieck – on top of the results since qualifying – was the open disdain with which he treated any requests for commercial appearances, public opportunities or media work by his squad.

It’s no coincidence the Socceroos have been without a sponsor for a year since Qantas ended its long-standing affiliation. The twin 6-0 defeats that cost Osieck his job late last year hardly helped the search for a replacement.

“With the Asian Cup on home soil, and the involvement of companies like Hyundai and Nike, we remain optimistic that other companies will join the dots and see that we’re in a regeneration phase for the team and the game generally,” says Gallop of that search.

It becomes something of a vicious circle, for without that money every Socceroos game has to be maximised for income – limiting them to big venues.

media_camera Socceroos coach Ange Postecoglou at training.

“We want the Socceroos to play more matches in Australia, and particularly in some of the cities where we haven’t been to recently, like Perth and Adelaide,” says Gallop.

“But we can’t do that easily – it costs roughly $450,000 to assemble the Socceroos for one match., $150,000 in match fees, and $300,000 in business class travel, hotels, match fees and catering.”

THE Socceroos are one of the best-rewarded teams at the World Cup, but Football Federation CEO David Gallop has signalled a rethink of their terms and conditions.

The team’s collective bargaining deal expires in a year’s time, and Gallop wants to introduce a staggered pay scale with reduced fees for games against lesser opposition, given their reduced box-office appeal.

Already that has been met with anger by the players union, but Gallop is adamant.

media_camera Frank Lowy demands the Socceroos qualify for every World Cup.

“FFA certainly doesn’t begrudge big pay for big games, and at no time have we suggested that there be pay cuts for WC games,” he said.

“We merely highlighted that we already have implemented a different structure for lesser games like the East Asia Cup in 2012. The PFA’s feigned surprise was a bit silly given their agreement to that approach then.”

But the PFA said different payments was not the way to move forward.

“We are genuinely surprised by David’s repeated comments about reduced match payments because his concerns were not tabled with the PFA in the recent CBA negotiations and any reduction would be contrary to an express clause that FFA would not seek any cuts,” said CEO Adam Vivien. “The best way to determine player payments is to look at the overall financial picture and not at each game in isolation.”

Originally published as The economics of playing at a World Cup