Macarthur FC takes Court action against Football Australia over consumer law breach

Macarthur FC is reported to have filed documents in the Federal Court claiming that Football Australia breached consumer law and adopted unfair tactics when club owners applied for entry into the A-League.

As reported by Australian Associated Press, Macarthur owner Sam Krslovic claims to have been misled by the governing body when they applied for entry into the A-League.

With Football Australia intending to expand the top-flight competition to 12 teams, a southwestern Sydney team was originally slated to enter the A-League for the 2019/20 season alongside Western United from Melbourne's western suburbs.

While Western United got off the ground in time, the Macarthur Bulls did not kick a ball until the 2020/21 campaign after its major backer, late billionaire property developer Lang Walker, sold back his club shares.

Court documents have the remaining owners allege Football Australia gave approval for Macarthur FC to enter the competition on the condition the club would receive a TV rights windfall.

The owners allege they were told by Football Australia's then-Chief Operating Officer, Mark Falvo, in 2018 they would have to pay more than $10 million to secure an A-League licence.

The Bulls finally agreed to pay a licence fee of $12 million.

The owners allege, Macarthur would be granted $3.25 million per season in central distributions as part of the club participation agreement.

The Bulls' business plan, which was accepted by Football Australia and attached to the club participation agreement (CPA), was on the basis the club would receive $3.25 million per season.

The club was also informed there would be a minimum distribution amount of $1.2 million inserted into their CPA.

Recalling a purported conversation, the owners allege Krslovic received confirmation of the higher payment during a December 2018 meeting with Football Australia.

However, months out from entering the league in 2020, Macarthur were told by Football Australia it would not be able to pay the $3.25 million per season.

Football Australia allegedly said Foxtel, the competition's then-TV rights holder, was unlikely to extend its broadcast deal and FA was concerned about solvency issues.

The club owners claim Football Australia knew as far back as 2018 that Foxtel was not likely to renew terms, which left the governing body facing a shortfall in revenue.

That awareness is shown through Football Australia's bid to insert the $1.2 million minimum distribution clause into the CPA, the owners say.

Macarthur's owners are seeking compensation for the $9.6 million they've had to invest on top of a $5 million loan to keep the cash-strapped club afloat.

The owners also seek damages and the potential voiding of elements of their contract with Football Australia.

The matter is due to be heard in court for the first time on Tuesday.

Krslovic, currently Macarthur FC's Chief Executive, was quoted by AAP as saying “we've been trying to address this amicably for the best part of five years and we are sad that we have been forced to take this step.

Football Australia is reported to have not yet filed a defence.
With AAP.

Image: Macarthur FC players celebrate winning the 2022 Australia Cup Final at Sydney's CommBank Stadium in October 2022. Credit: Shutterstock.