Managing a Football Club in Nigeria – The Financing Aspect

Is it possible to manage a football club in Nigeria that will be financially profitable?

Well, there’s no club in Nigerian football history that have operated as a business enterprise, so there’s no record or data to support an alternative answer.

 

However, government and private owners of football clubs in this country are in dare need, desperately looking at ways of managing a football club that can sustain itself financially from its enterprise. It has remained nothing than a wishful thinking over the years…  And this article make an attempt to give guidelines to this intent.

 

It is not rocket science really, there are several clubs around the world that operates as business enterprise and has recorded a continued growth in profitability. But here in Nigeria, there’s no club that have ever achieved that feat.

 

Most clubs in Nigeria are financed by their state government from tax-payers money or by a private owner disbursements from his other businesses…and the club hardly yield any substantial revenue from its day to day activities.

 

The truth is most state governments and private owners cannot continue to sustain the ever increasing liabilities, huge amount of money spent to maintain the club.

 

The challenges has grown even bigger nowadays

 

    Never before had club owners faced as many complex challenges as confront them today. Team managers are faced with the daunting challenge of coping with a situation in which traditional revenue sources like entry ticket sales are declining, at the same time the cost of running the club such as players’ salary and bonuses are rapidly escalating. This “double whammy” is placing a great financial pressure on government and private owners.

 

The club management can no longer afford to sit on the armchair waiting for government allocations or disbursement from the private owners. They will have to go for other sources of financial revenue for the club. They have to set up the club to start running as a business enterprise.

 

Years ago, I submitted a final year research project on “Marketing Myopia in the management of football clubs in Nigeria…” Some of the challenges I found out then, was the structure and system of operations in clubs. The recruitment of unqualified personnel to manage the club, lack of accountability (not properly auditing the club’s financial books) and lack of financial growth plan.

 

As it is today, only an entrepreneurial spirited person, well-schooled in football business management and with a resounding pedigree, can be allowed to manage a club. The right person will then set up a structure and system that will seriously work towards harnessing other sources of financial revenue available to the club.

 

Here, we will share the major sources of financial revenue in football and how club management should start making attempt to take advantage of these sources here in Nigeria.

 

 

1.     Public or Private Owners’ funds

The public are made to own a club without knowing it. The state government funding the club through allocations they get from the federal government or by internal tax payers’ money.

 

Private owners also fund their club by the wealth they generated from other businesses. Some private organizations such as churches or companies may also own a club and fund it from members’ contributions or company’s fund.

 

These are the most common ways clubs are funded in Nigeria. But these source of funding are hardly enough to run a typical club through the football season. The need to look at other sources.

 

The Internal and External revenue sources requires aggressive marketing approach to achieve. And we will discuss them in detail in our next post which will be dealing on the marketing aspect.

 

2.     Internal Club Enterprise Revenue

Ticket Sales: clubs sale ticket to spectators to allow them enter the stadium arena to watch their home games. The number of spectators that attend each match determine how much revenue the club can make from this source of revenue

 

Licensed products: For a fee the clubs can license a sportswear manufacturer to cloth the club and as well sell replica jerseys of the club to fans. The sportswear manufacturer will then pay to the club an agreed percentage of its monthly sales called Royalty.

 

Confectionaries: The club could also make money by giving businesses that sell food and snacks the exclusive right to sell in and around the stadium. The business owners could pay a monthly or yearly fee/rent to the club.

 

Transfer Market operation: The club could make huge amount of returns trading players in the transfer market. The club could establish a model where it sign players on low scale and sell them to bigger clubs for a huge amount of transfer fee.

 

3.     External Club Enterprise Revenue

Sponsorship: the management can get a company to pay sponsorship fee so their brand can be associated with the popularity of the club and enjoy a lot of media exposure, goodwill and increased sales.

 

Advertisement: companies can advertise on the perimeter sideboards around the pitch where the club play their home games (i.e. their home stadium) and pay advertisement fee to the club.

 

TV Rights: A television station can decide to pay for the right to broadcast a league or competition which the club is participating. A percentage of the fees the TV station paid will be given to the club.

 

Endorsement: The club’s players can be endorsed by a brand for advertisement purposes and a percentage of the payment called endorsement fee will be disbursed to the club.

 

Fund Raising: The club can get its fans, associates and other stakeholders to raise fund for the club, perhaps to run a peculiar season or execute a project. I expect clubs that qualified for champion

 

All these revenue sources require a well thought out business plan and an aggressive marketing approach in order to achieve a significant milestone in the club’s finances. It will take writing a book to explain all of the details here.

 

We at GreenHunter Sports International are positioned to assist clubs achieve these feat in Nigeria. With a fee you can consult with us and we get to work to assist your club set up all the financial machinery required to get the club running as a business enterprise.