PUBLIC ACCOUNTS COMMITTEE

INQUIRY INTO USE OF STATE FUNDING BY FOOTBALL COMMISSION

TRANSCRIPT OF EVIDENCE TAKEN AT MONDAY, 24 AUGUST 2020

SESSION ONE

Members

Dr Tony Buti (Chair) Mr Dean Nalder (Deputy Chair) Mr Vincent Catania Mr Simon Millman Mrs Lisa O’Malley ______

Public Accounts Monday, 24 August 2020 — Session One Page 1

Hearing commenced at 12.13 pm

Mr Private Citizen, examined:

The CHAIR: Thank you very much, Mr Alexander, for appearing today to provide evidence relating to the committee’s inquiry into the use of state funding by the West Australian Football Commission. My name is Tony Buti. I am the committee chair and the member for Armadale. To my left is Mr Dean Nalder, the committee’s deputy chair, the member for Bateman and South legend! To his left is Mr Vince Catania, member for North West Central. To Vince’s left is Mrs Lisa O’Malley, the member for Bicton. To my right is Simon Millman, the member for Mount Lawley—as you are an ex‐Fitzroy player, Simon’s uncle is the great Kevin Murray. It is important that you understand that any deliberate misleading of this committee may be regarded as a contempt of Parliament. While your evidence is protected by parliamentary privilege, this privilege does not apply to anything you might say outside of today’s proceedings. I would also like to advise you that today’s hearings will be broadcast live on the parliamentary website. Would you please introduce yourself for the record. Mr ALEXANDER: Yes. Ron Alexander, ex–director general of the Department of Sport and Recreation, and a range of football positions: as a player in the AFL and coach in the AFL; I was on the board of Fremantle for seven years; I played a part in working through the licence with the AFL and the WA footy commission for Fremantle’s entry; and, obviously, was a part of West Coast’s first year. Currently, also president of the WA Football Commission’s life members. I have a background in AFL, in footy and in sports administration. I am interested in having a discussion about the future and the wellbeing of Western Australian football; there are always things that you can improve. The CHAIR: We will give you a chance in a minute to elaborate in an opening statement. Do you have any questions about your attendance here today? Mr ALEXANDER: No. The CHAIR: Would you like to make a brief opening statement before we ask you some questions? Mr ALEXANDER: Yes. I appreciate the opportunity to come along and discuss the wellbeing of Western Australian Aussie Rules. It is a big industry, there are a lot of people who follow it—all those things you know about why it is popular. I think some people in the general community wonder why so much money goes into it. At times it is more than a sport, just the same as Rugby League is in New South Wales and Queensland—people get immersed in tipping competitions and that, who do not even follow the code to some degree, and it does a lot of good in the community. It is a big beast and it is hard to run and it has got a lot of clever people and a lot of different blocs who like to control this or control that or be involved in those sorts of things, as in a lot of community organisations. It is, and I believe, the community sport. In Australian sport there has been a trend lately, and it is certainly happening in the Australian Sports Commission with their chairman who is in daily life, I think, a corporate raider—you would term him—and a range of prominent people who run a sport and after a while think they have some ownership and then they have a high‐profile CEO who then thinks they own it as well. Then they want to run it in a fashion like the Commonwealth Bank, as they say from time to time, where you might have a head office in Sydney or and the states become a franchise. They lose touch with their community when they do not have someone based in who knows the

Public Accounts Monday, 24 August 2020 — Session One Page 2 local politicians and the local mayor, and they can talk to them about current needs. It is a little bit like a federal government trying to run a local program; they are not very good at getting their feet on the ground. With a big sport like Aussie Rules there are a lot of players, there is a lot of money, there is an elite and there is a whole tail of community sport. It is about focus and how they get the money; how they do not get the money; how, for example, the football commission is elected; and how it once was elected. Is it representative of all of football? Questions that perhaps we can explore today are: Who controls football in Western Australia? Who controls the revenue stream? While I also chaired the commercial negotiations for the users of Optus Stadium, which is, obviously, rather pertinent here today, and in that exercise, my colleague David Etherton, Graham Brimage and I went to the Melbourne to speak with the AFL in regard to where does the money go, because Western Australia does not get it. It has two‐eighteenths or one‐ninth of the teams; it certainly does not get one‐ninth of the revenue coming this way. One reason they explained to us that they did not is because Western Australia is the richest football state. That is courtesy of a large Eagles membership; great support from the state government, through Optus Stadium and other funding; and also sometimes people do not give credit to local government who provide the ovals and facilities which help generate that sport. There are all those things that come together and so the AFL does not put as much money into this state as it does in other states because it is self‐sufficient to a large degree. [12.20 pm] I know when I was on the Fremantle board start‐up we borrowed $175 000 from the football commission to start the club up and had to pay it back the following year. A couple of years later, we had cash reserves of $125 million, which the WA footy commission took. They took the same amount out of West Coast—$125 million—to put the lights up, and that just about cleaned out the bank. Greater Western Sydney and Gold Coast, they got $200 million each over six years— $120 million for salaries and $80 million for promotion and work in each of their states. In a sense, the AFL say, “You’ve got plenty of money; get on with it”, but then where does the money go in Western Australia? I had a look at the 2019 accounts, and I think between the two clubs they generate $146 million in revenues. Approximately 3.69 per cent of that goes to the WA Football Commission, along with some other funding that they put directly into other areas and through their sponsors. There are lots of parts to it. I am interested to sit here today and talk about transparency in all electoral matters, the equitable direction of the wealth that is clearly here, who has oversight of the WAFC and the money, and who controls the sport. I think that the state has a responsibility to ensure that there is fair play in who gets elected and why—I would like to discuss that somewhat further—and enable, I believe, the West Australian Football League to deliver a lot of the development, because they are living where their constituents are. Then they can build volunteers and others who stay, as opposed to the WA Football Commission, which has done a good job to some degree, but they sort of visit and leave, a little bit like the federal government or a little bit like how the Australian Sports Commission would have our system work. The West Australian Football League, which has, I think, been very poorly managed in terms of being a level playing field. In my submission I put that, I would like to think quite clearly. Out of the last seven premierships, five have been by Subiaco, two by Peel, with a range of AFL players, and previously to that, a number of premierships by East Perth, with West Coast Eagles players in them. Some of the traditional clubs have not won a premiership for 20 or 25 years. If you were ever going to go on a West Australian Football League board, why would you when some clubs have an unassailable advantage? That has continued on for 15 or 17 years.

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One of the WA Football Commission’s prime responsibilities is the wellbeing of the West Australian Football League competition. In fact, I have got a bit of history here. This is the West Coast Eagles prospectus of about October 1986, and I have given you a copy and a range of copies of attachments, which are in my submission. The start of the very first objective is —

 To secure the existing domestic WAFL competition and maintain its standard and viability. There are another three dot points there followed by the last dot point, which is —

 To maintain the financial stability and the current structure of football, in particular, keeping the eight WAFL clubs financially viable. That was the intent when the WAFL presidents voted—six–two I might add—to get West Coast into the competition. That was based on handing over the number one mantle and becoming basically the second level, which affected all the revenues, but there were commitments made, and I would like to discuss those as well. But also, the WA Football Commission, I certainly believe, as do a range of others, needs to be absolutely independent and needs to have the mandate to be able to manage the revenue streams. The CHAIR: Mr Alexander, when you say “independent”, what do you mean by that? Mr ALEXANDER: The way the voting system works is the WA Football Commission gets elected. The nominations come in via the chair of the WA footy commission and one commissioner; the chair of the council of presidents, who the football commission appoint; the chair of the Community Football Advisory Council; the chair of West Coast; and the chair of Fremantle. So, to start with, out of the six positions, the footy commission has two, and the two AFL clubs have two. The CHAIR: I think there is a 60 per cent voting block between the commissioners and the two AFL clubs. Mr ALEXANDER: Yes, straightaway, they do. Then they have postal voting, which occurs, and the commission has got 20 per cent that, West Coast 20 per cent, Fremantle 20 per cent—60 per cent again. The WAFL clubs have 30 per cent and the affiliates have 10 per cent. Then, to endorse who goes on the football commission, the WAFL clubs have 50 per cent, Fremantle 25 per cent and IPL 25 per cent. So, effectively, each WAFL club gets one‐ninth of a vote, so Fremantle and West Coast only have to convince one other. It is not unusual, and is not to be unexpected, that if you have the votes and you have a block, you seek to take advantage of that. Then, when the West Coast and Fremantle boards are timed to be renewed or someone has done their term, West Coast or Fremantle determine who they would like to nominate, then send their nomination through to the footy commission, who, as I understand, generally tick it off. But you cannot guarantee all of these things, because there is no transparency. No‐one tells you who is on these panels, no‐one tells you who nominated who and no‐one tells you who else would have liked to have gone on there and did not get a nomination. It is tightly controlled by a small group of people, and you could argue that the footy commission is electing the two boards and the two boards are electing the football commission. That does not seem to be particularly fair when the clubs between them have 148 000 members and not a single one of them gets a vote. When I was at Fremantle, we worked to have two member‐elected people getting voted on, and in my poking around and finding out what is going on now, about 18 months ago the Fremantle board approached the WA Football Commission to get rid of that opportunity. Clubs that have been most successful in the last 12 years or so like Hawthorn, Geelong and Richmond, they are all capable of

Public Accounts Monday, 24 August 2020 — Session One Page 4 electing their presidents and their boards, but the 148 000 Western Australian members of the AFL clubs are capable of electing the honourable people in front of me now, capable of electing the Premier, the minister and their local mayor, but they do not get the opportunity to elect their football club. Also, I think it is getting to be a time where the clubs have matured. Areas of the constitutions have been gamed, and you can argue that one small group is controlling one of the AFL clubs and those sorts of things, but it is almost time to set the clubs, if you like, free, to a degree, of the WA Football Commission and allow the members to vote as they do in other states, but for the WAFC to have still an overall right if something goes wrong—the finances collapse or they have crazy boards or whatever—to put their head in, because not everything is broken over here. Our system, basically, is a very good one. A number of years ago, South Australia sold their licences back to the AFL for $56 million. My read of South Australian football is that it is not going that well. Western Australia, the Western Australian footy commission and others have retained the licences, and I suspect that the AFL is just playing a waiting game. They would like to have them back, because they appoint the boards of a range of the clubs like Greater Western Sydney, Gold Coast and, I suspect, Brisbane and, I think, Melbourne, as well as Adelaide and Port Adelaide. We have, basically, a good system but it needs some independence and it needs some rigour, transparency and integrity, and part of that is to allow the members to have a vote, not necessarily just a very, very small group of people. When you look at how many people actually control the two AFL clubs, it is only a handful of people. [12.30 pm] The CHAIR: Before I hand over to Mr Nalder, can you just tell us what you see is the role of the WA Football Commission? The second part of that question is: you of course know the state funding agreement between the state government and the West Australian Football Commission for $11 million. Basically, under the agreement, it has to be put to the development of community football and talent development. What do you think is the basic role of the West Australian Football Commission and, in your view, what does community development football and talent development actually mean, or should it mean? Mr ALEXANDER: The WA Football Commission is there to look after all of football. As we often see, even in junior football, when someone starts to get talented, the father gets really keen on the talent side of things and concentration starts to happen in that area. I think the West Australian Football Commission certainly have paid a lot of attention to the two AFL clubs and their success and the revenue stream. That is obviously very, very important. One of the problems is that the WA Football Commission, even though it is the overall leader in the state, cannot control the revenue streams, so you have a fundamental flaw or problem at the start. I have never seen this. I have got to say that you are commenting on something you have never been privy to, but when the minority shareholders were handing back their shares after West Coast went broke in 1989, the football commission, helped by the state, had bought 75 per cent of the shares, but a couple of the minority shareholders would not give their shares back until there was a deed of separation between the WA Football Commission and West Coast Eagles. The reason for that was the moneys that went from West Coast to the football commission were being taxed because there were private investors in IPL, the owners of West Coast, so there was a deed of separation in force then, which required West Coast to pay a percentage of profit. That percentage is easily seen. You only have to go to West Coast’s annual accounts and the percentage and how it works is there. When Fremantle was being set up by Peter Tannock and Jeff Ovens, with some assistance from myself and others, it was determined that the best way to ensure a revenue stream is going to be guaranteed is to have a percentage of revenue. That was what was operating with Fremantle. Again,

Public Accounts Monday, 24 August 2020 — Session One Page 5 in my recent investigations and having a look at this, I find that that has now been changed too, so Fremantle are giving a percentage of their profit. That allows what is coming to be a little uncertain, because if people get overenthusiastic with their spending, the profit is less. In my submission, you can see where I have detailed some of the spending by the different clubs. I know a little bit about high performance facilities because I was intimately involved in the Western Australian Institute of Sport’s headquarters, which were for 150 people, with the Western Australian Institute of Sport administration, coaching staff, medical staff et cetera, with 150 athletes, for $31.7 million, which was adjudged the best in the world at the time in 2016, which is not surprising, I guess, given that it was the latest one that was done, so it probably should have been. Who determines value for money? Getting back to your question, Mr Chairman, this is the WA footy commission’s role. There is the need for independence. There is the need to be able to control the major revenue stream, and the WA Football Commission cannot, and as we are told by the AFL, “You’re the richest state”, so they do not fund this state as much as they do others. Community sport and talent: my view of community sport is that is what sport is for in the first place. We want to play. We all want to see people enjoying all the benefits that come from sport of just getting out and about and enjoying yourself and being on the sidelines and talking to other parents and that sort of thing. That is really what it is about. Then, when people become talented, it is good for people to be able to pursue that path if they are enjoying it, if they want to do that and if there is a good pathway. Keeping those pathways open is important, but our belief, certainly when I was involved in the Department of Sport and Recreation, I found bipartisan support for a stadium, I found bipartisan support for supporting community involvement through the community sporting and recreation facilities fund. I am sure you guys are aware of that—one of the great funds where the government puts in one‐third of a project and provides great facilities for people. Then we need the pathway. We do not want to get to the stage where we are concentrating too much money on our pathway, because there is also then a lot of carnage of people who, if you like, do not quite make it. It does not make them worse people, but they can get built up and they feel like failures and it is pretty unfortunate. A good pathway is important. How much do you spend on it? Do you take over the colts out of the hands of the local WAFL clubs and then, if you like, almost downgrade the West Australian Football League because the talent is going to the younger age than they are able to get to play in league football? The West Australian Football League is a great competition and also gives them the chance, if they play in it, if they do not go at colts age, to be a bit battle hardened before they hit the AFL, and a little bit more experience. I think the talent is important. People love to watch it. They love to see Western Australians doing well. You love to see if someone is thriving to be able to do that. Community football is just fabulous. Some are doing very well. Amateur football, I believe, has about $2.4 million in cash reserves, which is pretty good. I am currently number one member at East Fremantle. I am also a paying member at East Perth and for Dockers’ tickets. To the best of my knowledge, Fremantle has got $14 000 in the bank. A lot of WAFL clubs have their backs to the wall. Again, the WA Football Commission’s role is to look after them all. I know Michael Fitzpatrick on a range of times was staggered that West Coast had $40 million cash at bank. You do not want to bring down successful people; you want to get other people to come up to that standard. It is important that people who do well can take advantage of their own efforts, and that is important. Having said that, the AFL say, “You’re the richest state; we’re not going to fund you.” Rural sport is struggling in some areas. In places like Bunbury it is doing okay, but in other areas it is cash starved. There has to be a couple of things that happen—good programs where people can help themselves. There is some of that happening now in the West Australian Football League. The Swan Districts Football Club has some good ideas of how to engage the community because you cannot just survive

Public Accounts Monday, 24 August 2020 — Session One Page 6 on handouts. That is a bit harsh, really, given what the prospectus said, I guess. But you have to actually help yourself. I think a lot of clubs are starting to do that, but they can also have a hand to do that. The WA Football Commission’s role is clearly to look after all of WA football, and that is a tough job because there are a lot of different circumstances happening in all our vast land, a lot of different people and a lot of opportunities. Mr D.C. NALDER: Ron, you talked about community football and the WAFL. Do you have any sense of the relativities of revenue that is flowing to those compared with what is occurring in other states, in other jurisdictions? We are supposedly a rich state, but what I am taking from you anecdotally is that a lot of it is centred around the AFL clubs; not much is flowing through to the WAFL clubs and not much is necessarily flowing through other areas. Do you have a sense of how we compare? [12.40 pm] Mr ALEXANDER: Look, I think our model is good. As I mentioned, I did the maths the other day, and it was $146 million total revenues in 2019—$88 million for West Coast and $57 million for Fremantle and a total revenue of $146 million. Of that, $5.31 million went to the West Australian Football Commission. Mr D.C. NALDER: Was that $5.31 million? Mr ALEXANDER: It was $5.351 million to be precise, according to the 2019 financial statements. But also I hear of other amounts that allocated separately by Fremantle or by West Coast or by their sponsors like BHP and others to a different country area or a different part of football. I am not across all of that. I am sure that West Coast and Fremantle would say they put money in other areas but I am not privy to that. In other states, I think the VFL over there gets pretty well looked after— country football. When I went over to see Simon Lethlean, who at that stage was 2IC of the AFL, to get an understanding of that, apart from saying you are the wealthiest and you can pretty well look after yourself and all those sorts of things, he said we need to get more value for money requests, and if we can see a good reason to do that funding, we will consider putting it in. So, the AFL do put some more money in here, but they have bigger fish to fry, with a number of clubs, like North Melbourne, St Kilda, the Bulldogs and Melbourne, all struggling there. So they put extra money into those. They put the money that I mentioned into the pioneering states because they want to grow and take on New South Wales and Queensland, and those sorts of things. Nevertheless, it is my contention that when the community here, through the state government in particular, invests in a sport, it should not be, almost, because you are putting money in, we are not. You know, it seems like it is always good to bash the AFL, but they have their own problems trying to make things work, particularly in COVID times. But in normal times, they determined to go and put investment out there and more money into expansion teams. Then they give them a lot of advantages in the draft, which then makes it difficult for West Coast and Fremantle to achieve. But it should not be incumbent then on the state government, because they choose not to put in a reasonable amount given that our clubs derive one‐ninth of the revenue, or help, from them. It should not be a case of where, we are going to put it here because the community of Western Australia, to a degree, is looking after us and are saving us that problem. An example is the stadium. The AFL put $30 million into the MCG’s northern stand, $15 million into Metricon in the Gold Coast, $5 million into Adelaide and zip into Optus Stadium. There is a reason why we should have the here: we have already paid for it. Mr S.A. MILLMAN: It is like we do not get the GST distribution because we are making too much from mining royalties. Mr ALEXANDER: You are gonna start it up!

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Mr D.C. NALDER: You talked about the voting blocs and some of the transparency and some of the money flow. You also talked about that the WAFL does not seem to be sort of operating as well as it should be. What would your recommendation be? Mr ALEXANDER: I think we have to know who controls football in this state. I have a handout there. Perhaps if Alan could pass it around. There are a number of attachments in there. There are things to learn from history. This is an article by Bevan Eakins in 1999. Without getting too political, some of it is self‐explanatory, what happened there. Brian Cook was the CEO of West Coast and did not see eye to eye with the chair of West Coast who wanted a change of CEO, and so engineered a change of CEO. If you get a change of CEO, a CEO you want, it gives you the opportunity to be more involved in football affairs and have a say in what happens. Some of what happens is somewhat prophetic, if you like. If you have a look at the very back page—if you turn the page over—where it says if you — Eliminate the WAFC and the minority shareholders could once again have control, as they did in the late 80s when the club was bankrupt … With the voting bloc, it is hard to argue that the WA Football Commission is actually independent. The CHAIR: Is your view that the WA Football Commission through its nomination and appointment process has led to football being controlled by a certain clique, or a certain group of people, in WA? Mr ALEXANDER: Some parts of WA football and potentially some of the revenue streams. That is what happens in politics, and that is what happens when you have blocs of votes, and that is what happens when you have opportunity. So do you get grumpy with people for taking advantage of opportunity or are they just clever? Nevertheless, I would have thought that the state government does have some role to investigate to see that the constitutions are delivering what you would hope they are, given the amount of money that is made available and the amount of facilities that are there and able to be used by the clubs. The CHAIR: Are you prepared to say who you think controls football in WA? Mr ALEXANDER: Sorry? The CHAIR: Are you prepared to say who you think controls football in WA? Mr ALEXANDER: I am prepared to write it down for you. I would rather actually just write it down than give it to you because I have got to live in this state. What we do have is, you know, big sports attract really interesting people, wealthy people, A‐listers, and so the clubs become very, very powerful. But you ask yourself who actually controls the clubs when 140 648 club members do not do not get a vote. Is that okay that community moneys are committed, stadiums are built and not one member of either of those clubs gets to vote? As I mentioned earlier, the clubs are mature. If their members then want to vote these people and all that sort of stuff, that is okay so long as there is some transparency in what is happening, but at the moment there is not. Mr D.C. NALDER: Is there enough transparency around where the money goes within those clubs? Mr ALEXANDER: Well, you know, they are in the ASX, so they have proper accounting and all those sorts of things. But one of the interesting things is that we are all here because there was a leak. It sounds terrible, there was a leak of who was getting paid what at the WA Football Commission. I can find out in 30 seconds how much the people in front of me are getting paid because I can go online. When I was the director general at sport and rec, my salary level was up there. The Premier’s salary level is up there. There might be a case for not having the players’ salary levels up there, a case for not having the coaches’ salary levels up there, but as soon as a manager wants to have the player change clubs anyway, that soon gets discussed and gets thrown out anyway. But should people not

Public Accounts Monday, 24 August 2020 — Session One Page 8 be aware of the level that the executives are getting? It is just the same as when there was shock and horror when the level of executives in the WA Football Commission were getting a fair chunk, somewhere around $9 million or $10 million, not all to them, but to other areas that were not considered to be football development. Why should we not understand how much the key executive in West Coast and Fremantle get paid? Why is that such a secret? Why are not the club members allowed to know? Integrity, I think, is guarded by transparency. Transparency delivers good reasoning: Why is someone getting that? How can we afford it? Why are we paying so much when we have WAFL clubs with their backs against the wall and all of those sorts of things? But you have to be careful because some of this is not necessarily fact, it is speculation. Some of those numbers in my report I got from a Gareth Parker article in 2014 on the average level of salaries—for the top nine at West Coast it was $300 000, and for the top 15 at Fremantle it was $190 000. I did not get that from any accounts or anywhere; I am not sure it is available. I do not know how Gareth got that; I hope he is right. [12.50 pm] Mr D.C. NALDER: Is that a problem that flows all the way through the system, though? Is there a lack of transparency within the WAFL as well? Mr ALEXANDER: Well, I dare anyone at the table to tell me how the system works and who votes for who, because when you first try to understand it, it is quite difficult. But then, when you work your way through it, you can see that there is the opportunity for the system to be gamed, and there is the opportunity for people to do exactly that. In the past, people have had the CEO installed that they want to have installed, not facing any election or selection panel—those sorts of things. Again, you ask the question: who controls the sport in Western Australia, and who controls the major revenue stream? What does the deed of separation look like? There are all these unknown factors when the state is committing community money. Now, a charitable status, as I understand it, is where the community runs everything. Well, the community does not get much of a chance in some of this exercise. They say people will not know how to elect the board; they will elect all footballers and have a board of footballers. In the papers I gave you there is a governance document that a friend and I worked on. That goes right through from 1989 about how it did work and how it was independent, then after the Crawford report there was a weighted voting system that was brought in. So it works all the way through, and in fairness to the clubs—who are largely doing a good job, so I do not want it to be all one‐sided here—why would it not be time to set them somewhat free from the WA Football Commission? Then you could have proper electoral processes, some transparency, and you could have their members electing them. Then they can determine who they want, rather than the WA Football Commission determining who they want. Mr S.A. MILLMAN: How would you put in place protections to make sure an independent board of each of these clubs, which would have a fiduciary duty to the club, would still meet its contractual obligations to the football commission in terms of getting AFL money down through to the grass roots via the footy commission? Mr ALEXANDER: I think they still have to be owned by the WA Football Commission. In the back of the document I have had a look at that as well, and I have put down the bottom of the page that a devolved governance model needs performance measures around it, particularly around financial membership, governance and culture, and a hard look at that every five years. The football commission has to have the capacity, if the board goes off the rails or they spend all their money on a trip to Wave Rock or whatever it might be, then they can step in; they must have the ability to step in. But I stress that we want to see these licences kept. It is a good model and it can and does deliver, but who determines what a value for money spend is? Who determines, when someone

Public Accounts Monday, 24 August 2020 — Session One Page 9 has a big year, what happens with that money? Is it the football commission? Is it West Coast? Is it Fremantle? Fremantle has struggled somewhat, because West Coast has been so successful and well run. It has had good teams and it has driven big revenues—$88 million a year for a sporting club is a fabulous result, and they should be congratulated for that. But when you are in an organisation, you can tend to want to keep your money, and that is not unusual. So who determines where the revenue streams in Western Australia go? The big revenue streams and others decide not to put money in, because we are a wealthy state. Mr D.C. NALDER: Am I interpreting this correctly: whilst you are not saying there is corruption, with the lack of transparency, are you saying that there is a higher risk of future corruption if there is not that transparency within the money flows and the board appointments? Mr ALEXANDER: No, I would not use that word at all. I do not think — Mr D.C. NALDER: Or corruption of process? Mr ALEXANDER: I do not even know if it is corruption of process, if the process is there. Is it unusual for people to use the process? They have a view of what they want, so if you have 25 per cent of the vote and you want to see something happening, it is human nature to be doing that and trying to have some influence on that. In the 1989 establishment of the football commission, John Firman from the Department of Sport and Recreation was on that commission, so he had oversight from a government official. In trying to have proper oversight and who is independent, that is a difficult process. But by having blocks of votes, that almost sets it up to be able to be gamed. The CHAIR: Could I put it maybe a different way. It depends what you mean by corruption, but in your submission on page 2, you talk about the election process and then you have your recommendations. The fourth recommendation is that conflicts of interest may be disclosed, including but not limited to close friendships, alliances, commitments and allegiances to clubs or factions. Are you saying that there are potential conflicts of interest in football administration in where the money goes at the moment? Mr ALEXANDER: I think there is basically a ruling class in WA football. Mr V.A. CATANIA: What do you mean by a ruling class? Mr ALEXANDER: There are people who basically, I believe, run football in this state. Mr V.A. CATANIA: A small number of people controlling outcome? Mr ALEXANDER: Yes, absolutely. The CHAIR: Considering that the government state funding agreement, whether the West Australian Football Commission wanted to call it football money or not, it still is money that the government has decided football will receive, or the commission will receive. As a former administrator of a government department, do you consider that as a major issue that the government should be concerned about? Mr ALEXANDER: There are a couple of things there. You can certainly argue that it is football money because when we were doing the arrangements with West Coast and Fremantle, as I said, it has largely been bipartisan. Both sides of government wanted both clubs to be doing well, so for both clubs to be doing well, you want them to have good money in their football departments. You do not want to build a new stadium and then beggar the clubs. They have good returns. The other day when I was watching the live streaming of Wayne Martin’s appearance before you, he made mention of the fact that he believes the revenue streams have increased since the two clubs went to Optus Stadium. That comment, I thought, was generous.

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The CHAIR: Whether it is football money or not—we could argue that all day—under the agreement, there is a clause, 6.4, that talks about the return of money if there is any excess money. Obviously, there never is, but if there is, is to be returned to the state. Therefore, the state government has determined that the funding it hands over is state funding. Mr ALEXANDER: I agree, because the money has gone into state Treasury. Once it goes into state Treasury, it is community money, and it is earnt from the community; members go in and pay their money. It is not free money, so there is a role of looking after the community by the state as well. When it goes in, it has to come out, and there is a seven‐year review period for it to go in there. It is reasonable for the state to have oversight of the major sport in the state, when it set it up in the first place, and the rules and voting and everything that was set up to be independent has now changed. The CHAIR: So the question is: the fact that it is state funding and the fact that you are saying that there is a ruling class, should governments be concerned about that? Mr ALEXANDER: Absolutely. That is why I think, in history, it has come to a time where that sort of interplay between the footy commission, the two AFL clubs and issues with the West Australian Football League, I believe that our clubs have matured to the degree where if clubs in other parts of the world—East Fremantle, East Perth, and West Perth will have to elect their presidents and their boards. As I mentioned, people in local government councils, state government and federal government all have to get elected by Western Australians and those 148 000 members. I think it is time to look after those members and trust them with having a say. West Coast—1987. It is well over 30 years old and a sophisticated club with good staff and $88 million in revenue. They are to be congratulated for that sort of performance. That is absolutely important. So they should have the opportunity to be transparent on what is happening there and they should have to report to their members. [1.00 pm] Mr V.A. CATANIA: Ron, you have been the director general for several years and chairman of the negotiations on Optus between all the parties involved. Was that not the time to try and facilitate change in what you are saying today—how football in Western Australia is controlled by a select few? Was that not the time to have that change during those negotiations, knowing the power that the government had by having a fantastic new facility—as in —and knowing that both Fremantle and West Coast basically had nowhere to go but to the Perth Stadium? Was that not the time to create the level of change needed to be open and transparent for football in Western Australia? Mr ALEXANDER: I think there was a range of agendas going at the time. One of the agendas we had was that we were negotiating, when the grand final being played at the MCG became available, to have that here. That was not accepted. Football, at one stage, were not going to go to the stadium. They were wanting to stay at Subiaco, even though you could argue that—they had actually applied in 2017 to get funding to renovate Subiaco, as the WACA had at one stage. All those agendas were at play and we were trying to work with the football commission at the time. It would have been good to get that one in as well, but in trying to get across the line what we did—I think that was one body of work that, if we had gone down that path as well, it might have been too much to be able to make it work. Mr V.A. CATANIA: In those negotiations, at any time did you, as chairman, or the committee that was formed to have these negotiations ask the football commission how they would allocate funds to country football, amateur football and WAFL clubs, or even question how their administration

Public Accounts Monday, 24 August 2020 — Session One Page 11 was set up and, where we are today, questioning whether or not the commission has too many people paid at a certain rate? Were they part of any discussions? Mr ALEXANDER: Yes. Part of the intent was to also help the West Australian Football League because, as you can see from the first plans in that prospectus, there was a commitment to help the WA Football League. Part of the money was to assist them, but part of the money was also to go into development. I think the WA Football Commission would argue that some of those salaries that they had were part of development, but the tricky part with what you are suggesting is that when you have revenue of about $30 million and $11.2 million or $10.297 million goes into that, it is easy enough to pull out all the development and attach it to the $10.297 million or the $11.2 million, just the same as I am sure when you are trying to get the numbers of how many people play a sport. I am a professional sports administrator and I know some of the tricks because they have promotional numbers. Have you heard of promotional numbers? The CHAIR: Yes. Mr ALEXANDER: Well, you are up‐to‐date; that is very good. You play at Mt Lawley, Hamer Park, and then school plays and then you are in an elite squad—that is three! They do not take the numbers. You can sometimes divide them by two—generally not by three. Everyone is in a race to impress the local government and the state government about their numbers, so you have so many things at play. Trying to ensure that money is well spent—always the best way to ensure it is well spent is to have transparency of it. If they had been loading one at a time into those sorts of salaries, people would have put their hand up and they might have got a good explanation on why it was a good investment. Mr V.A. CATANIA: What you are saying today has been around for a while in terms of questioning the elite‐ness of a select few that control football. It is not a new development that has occurred; it has probably been there for—basically, since the Eagles and Dockers have come in, we have seen that change occur. Mr ALEXANDER: I would recommend that everyone reads the Bevan Eakins article because that is a history lesson and that is when it started. Mrs L.M. O’MALLEY: It is interesting you talking about how we count the numbers. We have had some conversations when we had the commission in here around data and data collection. Data is only good if it is accurate, obviously. Then the decisions made around funding and where it is put are based on the numbers, so if the numbers are inaccurate, we are not getting the right result. I guess that leads me to my area of questioning around the community‐level, grassroots, and how we get the funding to those clubs. It is kind of below that WAFL level and looking at your amateur competition, women’s football, junior competitions and the masters. If we look at the flow of funds, we are talking about the funding coming in at the top end from the AFL clubs and government into the commission and down to the WAFL. My question is: what do you see the WAFL clubs’ role should be in ensuring that the flow of funds then reaches down into those clubs below and those facilities? Earlier, you also talked about the interaction with local governments—so, local government authorities being involved in this process. We do have the community sport and rec funding, but if that is not enough, in your opinion, should there be more coming directly from the commission via those AFL clubs and then down through the WAFL out to those community facilities? What are your thoughts on that? For example, my district is East Fremantle District. If we look at some of the junior football clubs, for example, how do you think that money should be coming in? Mr ALEXANDER: That is where the WA Football Commission does have a big role. Not everyone is pure in these exercises, because if the WA Football Commission was sitting here, people from it would likely say, “When we give to the money to some of the WAFL clubs, they go and spend it on

Public Accounts Monday, 24 August 2020 — Session One Page 12 buying the next player from Port Melbourne or a retiring AFL player.” That does happen because they want to win a competition. Another thing I would like to talk about is the WAFL competition, but you have all those sorts of issues. Part of what the WA Football Commission and the AFL were trying to do with setting the colts aside was making sure that money got through to the talent. Like anything, when you are planning to spend, you have to know where the good spends are and you have to know how to get the money through. When Minister Waldron was setting up the KidSport program, which many of you would know about with vouchers to the kids of parents that have a health card or pension card in the house, I went and had a discussion with the Auditor General on how we were going to do the administration, because we wanted as much money as possible to go out to those kids, not through the Department of Sport and Recreation’s administration. I went to ask for forgiveness from the Auditor General to start with. With this exercise, the footy commission has to do its work to know where the money does need to go, who can actually look after itself a bit, programs that they can do to also help themselves, but what do they need and why, and why is it a good spend. [1.10 pm] That takes some doing. Then trying to actually do it yourself from head office, you know, is pretty difficult. I know people who have been on the footy commission long term and they say, “Ron, they say get the footy commission to do it and have a football development trust, and then we have the clubs to do it, and then we change our minds and do it this way.” I can see the frustration that the footy commission have, with not enough money to go to everyone and trying to do the things that they can, but then they have to be able to do the work. They have to be the oversight, they have to be the policy and they have to be ensuring value for money—that what the football supporter spends and the money that comes into the state from the AFL is value for money. Who determines what is value for money? You are saying about junior development and the young kids. I know that East Fremantle has one boys 17‐side, and I think East Perth has only got one 17‐side as well. With the dropout that we have and with people deciding to do other things, I am sure they are doing some research into those sorts of things. There is a lot of good work being done by football here. We have some clever people there. But every now and then you have to sit back and go, “Okay, where is the spend? What particular rural area needs some help?” As we know with the drift to the city, that becomes hard with numbers sometimes. But where are the needs? We should publish that and ensure that some programs go there, but then if you do not have the dollar, you do not have the dollar. You determine what your need is, and who determines the need? Mrs L.M. O’MALLEY: With the WAFL clubs’ role in that, the WAFL clubs are closest to their communities and closest to the community football space. Can you see a more active role for the WAFL clubs in that—in gathering that information? Mr ALEXANDER: Absolutely. You know, it becomes a matter of trust. As I said, it is a two‐way street. It is not all, “Let’s bash the WA footy commission”, because the footy commission does some very, very good work—make no mistake. As I said, sometimes WAFL decide it wants to go and recruit a player from somewhere, so that does happen. The footy commission has to have control over what the agenda is. There are a lot of good people. There are a lot of complaints about them hiring consultants. I would have thought in a sport like football, if you wanted to go and consult and do that, get your terms of reference and then there are clever people at Fremantle and West Coast and the footy commission, and there are sponsor programs at Fremantle and BHP and others, at West Coast and Channel Seven and The West Australian. There are people with high‐level skills who would love to get involved in looking at the need and all those sorts of things. I am not sure you have to pay a whole lot for consultants when people love to get involved in football. You just need some good leadership in that particular area and get on with it. You are quite right: all those areas,

Public Accounts Monday, 24 August 2020 — Session One Page 13 if you ask someone in football, “Where is the most need right now, and how do you know?” they can probably tell you, but do they have the money to do it all? Mrs L.M. O’MALLEY: I would say it is the growth in female participation and ensuring that there are facilities that are capable to meet that need at the community level. Mr ALEXANDER: There is an easy answer for that. If you put more money into the community sporting and recreation facilities fund, local government would be able to help you out. It is like , when basketball decided to go indoors. All of a sudden, the community was caught unaware and it was trying to scramble. It is the same with women’s sport. All of a sudden, women have decided they will move away from some sports and go into others, and then there is an overload on those facilities that they have. I think the AFL and the WA footy commission have done an outstanding job in women’s sport. They have done an outstanding job in regulating a range of things—trying to address racism in a multimedia day where some idiot gets online and does silly things, in reducing head injuries and all that sort of stuff. The AFL is a sophisticated organisation, but they spend a lot of money. I know a couple of years ago I went through their media headquarters at Docklands and they had 120 people in their media department, so it is a big beast and chews up a lot of money, but attracts a lot of attention and has got a lot of clever people involved in running it. But we should know where the money needs to go. There needs to be an agreement. There needs to be some transparency on where the money is going and who is determining that. There needs to be transparency on the spend. There needs to be transparency on the salaries of the footy commission, the local clubs, the AFL clubs. Why not? Why are we not allowed to know what the marketing manager gets paid at the footy commission or West Coast? Why are we shocked that it is a big leak? It is ridiculous! The CHAIR: I am mindful of the time, Ron. We do want to go into closed session shortly, but you did mention that you would like to make some comments in regard to the WAFL competition. Could we get to that, and then we will go into closed session. Mr ALEXANDER: The WAFL competition has been around for so long it has been the bedrock of football here, and well loved. Now, it has become the second level. There were certain promises made to it, which was good, but the competition now is racked with advantage of different clubs. Mr D.C. NALDER: Subiaco, for example. Mr ALEXANDER: Subiaco were getting 400 tickets to every AFL game at . They still had their headquarters there. I understand that they would get up to 150, 200 people in their old clubrooms and charge them $200 a ticket, which worked out about $40 000 a game, and then around about $100 a seat for the other 200, which was $20 000. That was $60 000 a game, 22 games of the year, which worked out around $1.3 million or $1.4 million a year more than the other clubs were getting, so why are we surprised? People have been clever. Subiaco is called the whitegoods club. That sounds terrible, and I do not know whether you are allowed to say it at a parliamentary accounts committee, but that is what people say. Whether that is true or not, I do not know, but I do know that it is amazing that a club can go through undefeated and win the grand final by 83 points and they win five of the last seven—Peel won the other two—while all the rest just cannot do it. There is supposed to be a scheme by the West Australian Football Commission in place where you get a value on each player and you can only have so many players happening there, but I think Subiaco has still got $3 million in the bank. The football commission, for goodness sake, has to ensure that if each of you are running a football club, when you turn up on the whatever of March that the first game is on, that if you have been clever and got a decent coach and you have hired players all under the rules, you should have an equal chance of doing well. People lose interest in a competition when you get to half‐time and it is a one‐way street. One of their key roles is to ensure

Public Accounts Monday, 24 August 2020 — Session One Page 14 there is a level playing field and a strong West Australian Football League, and that is not happening. They are struggling. They are working hard; they do a lot. As I said, I know they are all trying to look at the good system implemented by Swan Districts. There are lots of people doing a lot of work. What has happened there? How come that has been so poor for so long? I know, Lisa, East Fremantle’s last premiership I think was in 1998. The CHAIR: Leave the Subiaco issue out of the equation just for a sec. You talked about Peel Thunder, which has won two premierships, being aligned to the Dockers, and East Perth being aligned to the Eagles. Then last year, we had the introduction of a West Coast Eagles reserve team. What do you think was the motivation behind all those decisions? Mr ALEXANDER: I think the two AFL clubs see that clubs in the eastern states have a scheme with Box Hill or Prahran or wherever it might be. You know, we want what they have got. The CHAIR: Are you saying that the motivation was for the best interests of the two WA AFL clubs rather than the WAFL competition? Mr ALEXANDER: Look, I guess the two AFL clubs would say, “We’re driving revenue. You’ve got to be interested in our wellbeing. Our wellbeing is best served by having a team in your competition, and sending players out willy‐nilly to the other eight clubs is difficult for us.” Sometimes you have got two worthy causes and you have to pick one. The people who were running the footy commission at the time decided where their allegiances were or what they wanted them to be or what the best thing for football was. One of those things they might have decided on. I do not think it has helped the competition particularly. I have not really looked at it close enough or spoken with some of the WAFL officials to really understand their core beliefs, so before I knock that, I would want to understand it a little bit better. I think if I was at West Coast or Fremantle coaching, I would like to have a team in the WAFL as well. I can see their reasons for wanting to have that. The CHAIR: The committee has resolved to conduct the rest of the hearing in closed session. Could I please ask people seated in the public gallery to leave the room, and thank you very much for your interest and attendance today. [The committee took evidence in closed session] [1.34 pm] The CHAIR: Ron, we are really mindful of the time here. Thank you for the evidence before the committee. I will read the closing statement. We will forward a copy of this hearing to you for correction of transcription errors. Please make these corrections and return the transcript within 10 working days of receipt. If the transcript is not returned within this period, it will be deemed to be correct. This applies to your open one and your closed one. New material cannot be introduced via these corrections and the sense of your evidence cannot be altered. Should you wish to provide additional information or elaborate on particular points, please include a supplementary submission for the committee’s consideration when you return your corrected transcript of evidence. Obviously, with the open session, once you return it, that will be posted online; that is the open session, not the closed session. Thanks very much for your attendance. Mr ALEXANDER: I appreciate the opportunity. You have got an important job; it is a big industry. The CHAIR: It is indeed. Hearing concluded at 1.35 pm ______