ASC Chair John Wylie AM

Acknowledge: Minister for Sport Kate Lundy, AOC President John Coates and the AOC Board, NSO Presidents, Olympic Life Members, Distinguished Guests, Ladies and Gentlemen

Thank you for the invitation to speak today.

Can I extend first of all my warmest congratulations and admiration to the recipients of an Olympic Order of Merit today. Your contribution to Australian sport and the Olympic movement has been fantastic. It sets a great example for others, of which I will say more later.

I’d like to acknowledge the outstanding leadership shown to our Olympic sports by the President of the AOC, John Coates. Australia’s amazing Olympic reputation is due in many ways to John’s efforts and leadership over many years.

I’d also like to acknowledge today our Sports Minister Kate Lundy. I have worked with Government ministers responsible for various finance and sport portfolios for over 20 years, and I’ve never seen a Minister so passionate and utterly committed to her job and the community she represents as Kate.  She gives up an amazing amount of family time to attend sporting events of all descriptions, no small sacrifice when you’ve managing a family of 5 kids.  On behalf of all Australian sports lovers Kate, thank you for all the good work you do.

Ladies and Gentlemen, all of us take pride and rejoice in the fact that Australia is a sporting nation. Of all global fields of endeavour, this is the one in which Australians have earned the reputation of punching above our weight.

One of the bedrocks of this reputation is our national performance over the years at Olympic Games.  Something about the truly global nature of Olympic competition and the monumental pressure to produce your very best at a single moment in time, after 4 years of preparation and with the eyes of the world upon you, lifts Olympic achievement to another level in sporting respect.

The Australian Sports Commission (ASC) and the Australian Institute of Sport (AIS) have huge belief and pride in our Olympians and our Olympic movement.  It’s been in our DNA ever since the AIS was founded after the Montreal Games. 

That has never been more true than today.

Of the many changes recently announced by the ASC, one of the most significant was the adoption by the ASC, for the first time, of national targets for Australian achievement in international sport.

To summarise them, they are: top 5 in the Olympic Games; top 5 in the Paralympic Games; 20 world champions annually; top 15 in the Winter Olympics; and number one in the Commonwealth Games.

We have no doubt that these are tough targets to achieve.

But we believe that setting high expectations matters. It matters because the only way to achieve hard things is to set hard goals. It matters because taxpayers are having more than $180 million of their money spent each year on high performance sport programs, and have the right to expect accountability for that investment.

Of all the targets nominated above, there is no doubt which is the most visible to Australians: top 5 in Olympic Games.

The significance of the fact that the ASC has adopted this target cannot be overstated.  Your goal is now our goal. As a result, Australia’s performance in Rio now looms as a real test for the ASC and the AIS.

This alignment of goals ranks with the lead up to Sydney 2000 as the closest between the ASC/AIS and the AOC in the history of the ASC and AIS.

I think this is a courageous stance by the ASC and it is one of which I am very proud of given that:

1. We have dropped from 5th to 10th over the last 3 Olympics and getting back to 5th will require Australia to double its gold medal tally from London. This is a turnaround story;
2. It will be a lot harder to finish 5th in Rio in 2016 or in the 2020 Olympics than it was in Sydney in 2000. The world has changed. Developed countries have become better, smarter and tougher in international sport, no better example than the British. And our athletes now face an emerging class of competitor from the developing countries, supported by rising economic prosperity and Governments keen to prove a shift in soft world power;
3. We’re not asking for more Govt funding to achieve the targets; and
4. This is a vote of confidence in Australian sport and our sports men and women notwithstanding the negative atmospherics around Australian sport in recent times.

We’re taking this stance because we believe profoundly in the Australian Olympic movement and in the global competitiveness of our athletes. We believe you and they are capable of matching it with anyone. We do not accept, in fact reject categorically, the defeatist mentality of the Crawford report that it’s all become a bit too hard and we should simply lower our aspirations. Top 10 too hard next? What about aiming for a top 20 finish? That might follow the corporate manual in lowering expectations to the point where they can be beaten, but our sportsmen and women deserve better. 

More broadly and perhaps more importantly in the long run, we believe in the inspirational effect for all Australians of international sporting success earned the Australian way, with courage, humility and integrity. We believe these examples provide powerful role models that motivate Australians towards more active and healthier lifestyles. They also reinforce the positive values that sport best provides, such as resilience, character, humility, teamwork and inclusiveness.

To achieve these ambitious goals, the ASC believes that changes are now essential in the way we fund and administer sport. Today I want to explain those changes, why we’re making them and what we believe their benefits will be. The change program is being led by our CEO Simon Hollingsworth who, together with his management team, is doing an outstanding job.

The ASC’s change program can be considered under three broad headings:

1. Improving the financial performance and position of our National Sporting Organisations;
2. Improving their governance structures and standards; and
3. Changing the AIS’ role and high performance program delivery.

Today I’m going to concentrate on finance and governance. These are not typically subjects to get the pulse racing, but my experience leaves me in no doubt as to their fundamental importance to long term success.

In the six months since I took on the job of ASC Chair, my perspective on the financial circumstances of our NSOs is that they have on the whole become too dependent on annual Government grants.

In 2013, the overall average percentage contribution to the top 15 NSOs’ revenues that will come directly or indirectly from ASC or AIS grants will be 65%.  For a number of NSOs, the figure is as high as 80%.

Moreover, the degree of reliance on Government funding has been increasing steadily over the past decade.  Since the Sydney Games the overall percentage of these NSOs’ funding that has been sourced from commercial, sponsorship and philanthropic sources has halved.

While funding requirements have been increasing steadily for Australia to remain competitive - and the Australian Government has stepped up to the plate by investing record amounts - the plain truth is that our sports have in a relative sense become less able to fund this task themselves and more dependent over time on Government.

That is not healthy and, without a national lottery as in the UK, leaves our sports exposed to a potential forthcoming era of Government spending austerity.

So what is to be done?

We believe that as a first step, sports need to increase the size and diversity of their funding base. This will mean being innovative and creative in increasing revenues and reducing costs.

These measures should include:

1. Increasing commercial sponsorship outside the Olympic cycle.  In consultation with partner sports, the ASC will launch a new sponsorship support service based in Sydney or Melbourne that is affiliated with, but not embedded within, the ASC;
2. Increasing broadcast exposure and reducing costs of obtaining it – clearly a critical enabler to increasing commercial sponsorship revenue. We think there is an interesting opportunity to develop a dedicated and exclusive multi-sport broadcast channel for sports that currently struggle to attract broadcast coverage individually. By pooling content and resources, your sports could produce a commercially viable broadcast product;
3. Increasing philanthropic support.  We want to use the Australian Sports Foundation to attract more philanthropic funding for sport. The arts sector is today doing a better job in capturing the philanthropic dollar than is Australian sport. Many of the recipients of the Order of Merit today are great examples of the impact that motivated individuals with the philanthropic spirit can make. But there is still a large untapped opportunity for Olympic sports in our country to harness the financial support of people, particularly high net worth individuals.  These are usually talented and driven individuals who like to succeed, so they can contribute a lot more to your sport than money; and
4. A more collaborative, less siloed, approach by sports to sharing services by reducing costs in back office and support functions.

Many of these strategies will not produce quick wins given lead times for new commercial initiatives to produce dividends and the economic pressures facing the private sector at present.

But they will in time make your sports stronger, more powerful and more resilient.  Not just financially, but psychologically, the effect of which should not be underestimated.

We at the ASC are instituting our own improvements by introducing an evidence-based model for high performance funding decisions that takes into account sports’ likely contribution to goals. We’re also going back to first principles to ensure we understand sports’ finances as well as the sports themselves. Hopefully with this we are making better and more informed funding decisions. We are also sending some important messages. We’re sending a message that with taxpayer funding comes accountability. We’re sending a message that funding decisions will in future be based on rigorous evidence and analysis. 

I am pleased to add that in a financially constrained environment, the Commission is doing its bit to provide targeted new funding support for sport.

We have increased DAS funding from the ASC by $2 million per year, which together with a commitment of $1m next year from the Commonwealth Games Association, will increase DAS funding next year from approximately $8.3m to $11.3m. We believe putting more money in the hands of athletes to allow them to concentrate on their training and preparation is one of our most important priorities.  Together with the AOC’s medal incentive funding and matching grants by some sports to athletes, athlete funding in Australia is moving in the right direction to becoming more globally competitive.

We have also reserved $5m pa for new leadership development initiatives for emerging high performance and coaching talent, for seed funding for improved innovation and technology in sport and for improved cross sport national talent ID.  Wouldn’t it be great to see the sports in this room start to turn the tables on professional sports and win back emerging talent through a new Olympic draft much like the AFL draft, with the lure of something most professional sports can never offer – wearing green and gold at an Olympic Games?

A close cousin of the financial reforms I’ve mentioned is some simple but important governance reforms.
We recently announced some new governance principles for all sports receiving more than $5 million in ASC funding per year.  We made them mandatory because evidence shows they usually drive long run success and effectiveness in organisations.   Good governance doesn’t guarantee success, but its absence almost certainly guarantees failure.
These principles include requirements for:

1. A single national governing body for each sport, and national organisations that work cohesively between national and state levels. We expect the three peak cycling bodies to merge as per the recommendation of the Wood Review, and are pleased they support that.  Likewise, we believe it is in the best interests of athletics for Athletics Australia and Little Athletics to merge, and are very pleased that AA and LAA are showing real leadership by coming together to undertake a review with the ASC into a potential merger.  Some sports may want to go further and move to an AFL type model by rolling up State associations into a unitary national body - we encourage that;
2. Best practice Board nomination and election processes, with a Nominations Committee, a Chair elected by the Board not organisation members and improved gender balance. Some sports have very effective Chairs today who are elected directly by members; we are confident they will be supported by their Board colleagues when they offer themselves in future for election by those colleagues as Chair of their Board, and that their sports will be structurally sounder for making that change;
3. Improved financial reporting, in particular for NSOs to commence reporting on a consolidated national basis including their state associations. We think this will not only present a more realistic picture of the true financial position of sports, it will also promote thinking within the sports on a genuinely national basis. The AFL provides a powerful example of the benefits of this; and
4. Improved supervision by NSOs over sports science practices.  We require, and believe the Australian public expects, a total and unequivocal commitment to the principle of anti-doping and integrity in sport. Australians love to win, but not at any cost.
   As with our financial reforms, these governance reforms are structural changes with an eye to long run benefit not short term wins.

With these changes, we and you can’t guarantee the Australian public particular outcomes. Everyone who loves sport knows only too well its glorious uncertainty, both positive and negative.

But the ASC has great confidence in the future of Australian sport and the Australian Olympic movement.  We believe you will succeed and prosper into the future as you have in the past, and want to do everything within our power to enable that success.  If sport steps up, I can guarantee that the Commission will step up right beside you, but it can’t be a one-legged race.

Congratulations again John to you and your AOC colleagues for your leadership in Australian sport. The ASC looks forward to many future successes together.