The founder of Cotton On, Nigel Austin, is notoriously media shy, so it was a bit of a shock to see his name plastered all over the back page of Melbourne’s Herald-Sun newspaper this morning.
According to the reports, Austin’s business has approached Gary Ablett, the star player at Australian Rules club Geelong, with a ambassadorial deal that the paper claims could be worth as much as $300,000.
Not that Austin can’t afford it – his fortune, shared with wife Tania, was valued at $154 million last year by BRW magazine. His Cotton On chain has been one of the most successful new chains to emerge in Australia in recent decades, with a focus on affordable fashion for the youth market.
But Austin – who is probably cringing at the publicity this morning and did not comment for the story – is likely to find himself in a bit of controversy over the arrangement, if it goes ahead.
AFL clubs are governed by a strict salary cap, but players can increase their earnings through so-called third party agreements, which are independent from any club salaries.
However, there have been concerns that clubs with wealthy supporters are in a better position to retain and attract talent because these supporters can offer lucrative third-party deals.
These concerns were heightened in recent years when Carlton Football Club captain Chris Judd received a lucrative third party deal with Visy Industries, which is a sponsor of the club and is owned by the Pratt family. Richard Pratt was a former president of Carlton.
Last week, Geelong Football Club president Frank Costa (himself a Rich 200 member) revealed that the club has been trying to find third-party deals with local businesses to keep Ablett at the club.
Club officials have since backed away from Costa’s comments, saying that Costa got it wrong. The club says that while it has been contacted by a number of businesses wishing to set up arrangements with Ablett, the clubs has not initiated these deals as this is not allowed under AFL rules.
Ablett’s manager, Liam Pickering, refused to confirm the Cotton On deal, but stressed any deals Ablett does with third parties were completely independent and not organised through Geelong.
It’s a complex area and one of the biggest issues in footy at the moment.
Nigel Austin, who typically reveals so little about his business, might be in for an unexpected few days in the spotlight.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
