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The big money reasons why clubs like Spurs, Athletico Madrid and Juventus are in Australia

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It is that time of year, when the big European soccer clubs come to town to perform in front of excited fans wanting to see the heroes in the flesh that they usually can only watch on television in the early hours of the morning.

All will be playing in the top-level European Champions League this upcoming season and Juventus kicked off the tournament with a match against A-League club Melbourne Victory on Saturday evening in front of a crowd of about 24,000 in a 100,000-capacity arena.

That attendance would have disappointed the organisers, London-listed TLA Worldwide (chaired by Melbourne entrepreneur Bart Campbell), and means this year’s event will fall short of last year during which more than 220,000 fans packed the MCG over three nights to watch Cristiano Ronaldo’s Real Madrid take on Manchester City and AS Roma.

Organisers have been reluctant to reveal ticket sale expectations for this year, after being very keen a year ago to spruik the huge 99,000 crowd for one match between Real Madrid and Manchester City, though attendances are expected to pick up for the matches later this week.

But big crowds or not there are millions of dollars of reasons why the big clubs have  come to Melbourne.

Though organisers or the teams themselves will not reveal the details, it is understood Spurs and the other two European teams in Melbourne will be paid at least $5 million each in appearance fees and have all their travel, accommodation and training expenses covered.

It is a big sum for the tournament organisers TLA to bear but they are understood to be receiving about $8-10 million from the Victorian state government to assist in bringing the top teams to town.

Stimulus for Victorian economy

The government’s theory is that big events help stimulate the local economy as interstate and international visitors arrive in their droves to watch their favourite global soccer stars – Victorian Sports Minister John Eren claimed a year ago that helping fund the ICC at the MCG for three years would be worth about $150 million to the state economy thanks to tourists visiting for the matches.

For the teams, Australia provides an important market to break into given the strong merchandise sales for English Premier League clubs and a hardcore group of fans who watch the games every week, as the stunning move by Optus last year to buy three-years’ worth of EPL rights for about $60 million annually shows.

Australia’s proximity to Asia is also important. Spurs is sponsored by Asian insurance giant AIA and the club’s director Donna-Maria Cullen says: “We are seen as a challenger brand and so is AIA. The AIA partnership has been great for us in the Asian region and we have really helped them link their brand to health and youth football development in China, for example, and also in Australia through the AIA Vitality Mini Roos program.”

The club last week announced its second Asian sponsorship deal, with South Korean tyre manufacturer Kumho. The company also sponsors AFL and NRL clubs.

Cullen says Spurs also have a big supporter base in Australia and a significant and fast-growing social media presence throughout Asia, making it important the club visits the region.

“We have 400 million fans around the world, including 170 million in Asia and 40 million in China. For Spurs we are very popular on Facebook in Indonesia, and a good presence in Bangkok, Thailand as well. We also translate our social media into Chinese, Thai, Hindi and Spanish as well.”

Spurs, however, may provide a cautionary tale for state governments and organisers wooing the big European clubs at great expense.

A year ago they played in Sydney against Sydney FC to an audience of 70,000 at ANZ Stadium. A good proportion of those fans would have travelled from interstate to see a team that then had last visited Australia 30 years previously in 1985.

It will be interesting to see whether Spurs can attract the same crowds only a year later, especially after naming a weakened squad. Similarly, Juventus played in Sydney two years ago and also against Melbourne Victory in 2008. The Italian team has left many of its stars at home.

In a twist, Spurs’ great rival Arsenal show what the scarcity factor can do. Arsenal have not been to Australia for 40 years and tickets recently went on sale for two Arsenal matches in Sydney next year,  and already about 75 per cent are sold.

It is expected that a similar situation will unfold if a rumoured match featuring Chelsea at the new Perth Stadium in 2018 eventuates.

Whether the public will keep paying big money for similar teams year after year remains to be seen though.

© 2016 Financial Review | This article was written by John Stensholt and appeared on the Financial Review website on 24 July, 2016

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