Football Australia is set for a legal showdown with Macarthur FC amid claims soccer's governing body misled club owners when they applied for entry into the A-League.
Documents filed in the Federal Court claim FA breached consumer law and adopted unfair tactics when expanding Australia's top-flight competition to 12 teams.
A southwestern Sydney team was originally slated to enter the A-League for the 2019-20 season alongside a club from Melbourne's western suburbs, Western United.
While Western 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.
The remaining owners allege FA gave the green light on the condition the club would receive a TV rights windfall, court documents show.
The owners allege they were told by the governing body'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.
Macarthur would be granted $3.25 million per season in central distributions as part of the club participation agreement, the owners allege.
The Bulls' business plan, which was accepted by FA and attached to the CPA, JetBlack 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.
Spelling out a purported conversation, the owners allege Macarthur owner Sam Krslovic received confirmation of the higher payment during a December 2018 meeting with FA.
"Just to confirm we'll get the distribution of $3.2 million per season as is related directly to our licence fee of around $12 million," Krslovic said.
"Yes, you'll receive the distribution of $3.2 million," the FA in-house legal counsel allegedly replied.
But months out from entering the league in 2020, Macarthur were told by FA it would not be able to pay the $3.25 million per season.
FA 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 FA 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 FA'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 fork out 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 FA.
The matter is due to be heard in court for the first time on Tuesday.
"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," said Krslovic, who is Macarthur FC's CEO.
FA is yet to file a defence. It declined to comment when contacted by AAP.
