Unviable football clubs drain states billions of naira yearly – Guardian Nigeria

Tee Rasheed
30 Min Read

Rivers United won the 2021/2022 NPFL
Premiere leagues in some jurisdictions globally are money spinners. Players bask in comfort while plying their trade. But in Nigeria, the reverse is the reality, with allegations of state governors using them as “revenue points” for political jobbers. The sheer mockery of club
football made by these clubs has led to strident calls for the clubs to sell shares to investors and become publicly quoted companies. GOWON AKPODONOR reports that translating that to reality is akin to Waiting For Godot.

Recently, a survey by BudgIT (a civic organisation that applies technology for citizens’ engagement with institutional improvement to facilitate societal change) reported that 33 state governments cannot finance their recurrent expenditures without monthly allocations from the Federation Account.
 
The report, which said that the prevailing economic situation has made it difficult for most states to meet their obligations to citizens, added that states have increasingly started depending on the Federation Account to maintain their respective workforces and fund their developmental projects.
 
What this means is that without the Federation Account, most of the states will become insolvent and unable to meet their responsibilities.
BudgIT explained that going by its findings, many states would be in jeopardy if federal allocations were to be reduced owing to oil price fluctuations. It said only three states, Lagos, Rivers, and Akwa Ibom can function without federal allocations, with 16 others only able to function marginally.
  
In their paper, Financing State Governments in Nigeria, 1980-2007 (Pp. 204-215), Akujiobi, Linus Eze, and Akujiobi A.B.C, both of the Federal University of Technology, Owerri, said: “Governments in Nigeria are saddled with a lot of responsibilities that are geared towards the development of their areas. To do this, they engage in expenditure profiles that are at times overwhelming, especially when compared with their limited financial resources.”
 
According to the study, this problem of insufficient funding sources and over-dependence on external sources show “that while federal allocation, internally-generated revenue, and stabilisation fund, are significant sources of financing state governments’ expenditures in Nigeria, loans, grants, and value-added tax were not significant.”
 
These submissions imply that most states are barely able to keep their heads above water level, yet they channel their little resources to ventures that are not sustainable, including funding of unprofitable football clubs, which do not yield any return on investment.
 
With heightened economic uncertainties, many states are finding it increasingly difficult to meet their statutory duties, including the provision of basic facilities for their citizens, salary payment, and maintaining security in their states, before talking of embarking on developmental projects.

  
What is therefore agitating is the rationale behind the continuous funding of football clubs, some of which are maintained because of the political mileage that they give to the governors.  

Counting the cost of football clubs
       
The Guardian’s investigation reveals that each of the 20 clubs featured in the Nigerian Premier Football League (NPFL) spends between N230 million to N250 million per season.
 
An average player in most football clubs taking part in the NPFL earns between N350,000 and N500,000, with some star players taking home close to six digits, while a few earn above N1 million.
 
But an official of one of the NPFL clubs, who pleaded anonymity since he has no permission to speak on behalf of the club, insists that the average monthly wage paid to a player in the NPFL is N500,000.
  
“There could be slight differences, depending on the negotiating power and status of the player. But what I am giving you is the average monthly take-home of the majority of players featuring in the NPFL,” the official said.
  
“The new FIFA rules make it compulsory for a club to register 40 players in a season. What that means is that in a month, a club (whether privately owned or financed by a state government) has to part with about N20 million as salary for players alone. The amount does not include technical officials, some of whom earn between N1 million and N1.5 million monthly depending on their pedigree.
 
“By the time you add these technical officials’ wages, and some other support staff to the N20 million paid to 40 players monthly, you will get close to N240 million for the eight to nine-month duration of the league,” he said.
  
He added that each club spends between N3.5 million to N4 million in executing each away match. “This is because 25 players are taken for away games now, as against 18, which was the case in the past. So, you have to take into cognisance, expenses for accommodation, feeding of players and officials, and fueling of vehicles. Only a few clubs can afford air travel for their players occasionally, while the majority of them go by land to honour away matches. If a club wins away matches, some of them pay the players N50,000 as a winning bonus.
 
“A football season is between eight and nine months. We also have some clubs featuring in continental matches like the CAF Champions League, and the CAF Confederation Cup. The budget for such events is entirely different because there is no way a club will honour continental matches by road. It has to be by air travel,” he added.
 
The books of most Nigerian club sides have remained opaque over the years. And that explains why a few clubs in the past sold over 30 players each to the European market without accounting for such earnings.  
  
Judging from the poor record and state of the domestic league, stakeholders believe that state governments’ ownership of the majority of the clubs has hugely affected their evolution, development, and professionalism.
 
This is reflected in the way that they are run; the manner in which contracts are routinely breached, and in the way that players’ remunerations are delayed or forfeited in most cases.
 
Giving his perspective on the issue, a former Dolphins of Port Harcourt’s Media Director, China Acheru, who left the club in 2016, said the side’s yearly budget as at then was about N600 million for a season. This, he said, was apart from what was set aside for continental and FA Cup engagements, which budgets were handled straight from Rivers State Government House.
  
He said: “To play a match in the South East and South South states then costs about N700,000; S’West games cost Dolphins between N1m and 2m, while matches in the North cost from N1.5m to N2m depending on the part of the North.
 
“North Central matches cost about N1.5m, while matches that were to be played in the core northern states like Borno, Adamawa, Kano, Kaduna, Bauchi, and others cost up to N2 million. Dolphins’ average salary in 2016 was N300,000 up to N500,000. That was before the defunct LMC came with minimum wage, which jacked up players’ salaries,” Acheru explained.
 
For ex-Super Eagles player, Edema Fuludu, most states’ governments are funding clubs to satisfy certain interests. Fuludu, who played for various clubs in the Nigerian league, including Bendel Insurance, BCC Lions of Gboko, and Julius Berger of Lagos before taking his career to Turkey, regretted that till today, the value of the domestic league cannot be quantified because of the absence of data.
 
“The nominal value of an average Nigerian club could be put in the region of N10 billion. This is because it is just government money that is available for the payment of salaries, honour matches, and for the day-to-day running of the club. There are no real assets except liabilities.
 
“Even the players that are supposed to be the real assets are most often not owned by the clubs, which is very unfortunate. Therefore, the real value of the average club side is in the negative, with more liabilities than assets (tangible or intangible),” Fuludu stated.
Where is professionalism, business-end of the game?
The views of Ahmed Shuaibu Gara-Gombe, a former chairman of Gombe United, which is featured in the NPFL, who said that the structure of most of the clubs hampers the development of the league appears to align with that of Fuludu.
 
He said: “Looking at the market value in the case of our league or our clubs, we must enthrone corporate governance, as well as imbibe the principle of accountability, transparency, prudence, professionalism, and financial discipline/fiscal responsibility. All these are missing principles in both our league and our clubs. Our league doesn’t even know the net worth of the clubs and the clubs don’t know the net worth of their players. The aggregate of all the teams’ net worth gives us the value of the league.”

  
Gara-Gombe continued: “On the other hand, the teams don’t know the net worth or value of each of their players, the value of their team bus, the value of their players’ camp, the value of their stadium if they have one. It is the aggregate of all these that determines the value of a club. These are absent in virtually all the clubs because they are owned by governments.”
  
According to Gara Gombe: “The clubs just collect anything they see as a sponsorship fee since they don’t know their worth. Indeed, our teams are like paupers; you give them N20 million to start the league and they celebrate and praise the governor to high heavens; the club wins the league and is given N100 million, and the whole country celebrates.

NPFL defending champions, Enyimba of Aba

  
NPFL defending champions, Enyimba of Aba
“A country of over 200 million people with about 70 million television audience, and 24 million football audience on television alone, yet we can’t pay a player N700,000 a month. None of our clubs has a yearly general meeting; none files yearly returns with the Corporate Affairs Commission (CAC). They don’t pay taxes, and they don’t have audited accounts and balance sheets. Some even have less than N1 million as share capital. With all these, it seems we are simply not ready for football business in Nigeria,” he stated.
 
Also painting a gloomy picture of the country’s domestic league is a former IICC Shooting Stars winger, Adegoke Adelabu, who said that the followership of a club side says a lot about its pedigree and value.
  
“How many people pay to watch our league matches,” he asked. “When I was managing EKO United FC, the highest gate-taking we had in Lagos was in our game against the Shooting Stars of Ibadan. It was about N39,000.00. The reason was that a lot of people wanted to see how we would perform against 3SC. By the time I gave money to the people who sold the tickets and transport money for some players who did not travel with our bus, the money was not even enough. How then do you expect the club owners to make money after paying salaries, medical bills and other miscellaneous expenses?
 
“That is why only the government can afford to throw money around without any form of accountability. But going by the astronomical increase in everything, it is difficult for one to say precisely, the market value of a league club in Nigeria. I cannot remember how much we bought Eko United, but I remember that I disagreed with the amount proposed by the previous owner, hence I was compelled to just accept the name and look for players within two months before the league started. I started from scratch, but I was confident of what I wanted to teach the players and they still thank me till today when I meet them,” Adelabu stated.
  
The Guardian’s investigation also revealed that most states’ owned clubs are operating in contravention of the CAF licensing rules, which the African football ruling body has laid out for every professional club operating on the continent.
 
An important feature of the Club Licencing Criteria is that member associations are responsible for granting licenses. In this case, the Nigeria Football Federation as licensor is the body that operates the licensing system and grants the necessary licenses.
  
Clubs are expected to be quoted concerns with at least 30 per cent of their equity held by investors through public subscription. The criteria also stipulate that: “If the license applicant (club) does not fulfill any ‘A’ criteria requirements, then it cannot be granted a license to enter CAF inter-club competitions.
 
As part of the club licensing regime, clubs are expected to have at least N400 million in their respective accounts before the commencement of each season. However, it is on record that many government-owned clubs still owe their players because of inadequate funding.
 
A club official, who pleaded anonymity, told The Guardian that most times when state governors proclaim that they have budgeted huge amounts of money for the season, what these clubs get is not up to three-quarter of the quoted amount.

   
“They will tell you to manage the little that eventually gets released to run the club. Some governors are not interested in winning any title; they see the club as an avenue to make money for themselves and their associates. That is why some of them are holding on to these clubs,” he said.
  
Incidentally, the NFF has statutory club licensing clauses in its statutes, with a club licensing manager, whose job is to ensure compliance by all the clubs.
 
An NFF official, who spoke only on condition of anonymity, told The Guardian that it has been difficult to implement the club licensing regime because state governors don’t want to hand off their clubs.
  
He said: “There was a season when we refused to register clubs that refused to sell shares to investors to become publicly quoted companies. But we were overruled by the government because some governors went to the highest authorities and even threatened to sack top NFF officials. So, we backed down. But we cannot continue like this; states must release these clubs to make them viable entities. They are not funding these clubs enough, yet they don’t want to let go of them. Some states have up to three clubs, with sundry officials, some of whom are political allies, who must be settled for helping the governors to power.”
 
According to the official, monies budgeted for the clubs are not expected to be accounted for because that is the way these officials are ‘settled’ by the governors/owners of the clubs.
 
In the developed world, clubs at the end of the season publish their books to show their expenses and profits, as well as project into the coming season. “But here, nobody expects you to publish your profit and loss account. The poor record and state of the Nigerian league notwithstanding, a few clubs in the past had sold over 30 players each to the European market without accounting for such earnings,” he said.  
Sharp contrast between private, state-owned clubs
In contrast, the few privately-owned clubs in the Nigerian Premier Football League (NPFL), Remo Stars, Sporting Lagos, and Doma United know that they must make money from their operations hence they have several activities that draw fans to their games.
 
In a country where most professional football clubs are run as public service arms of the government, Remo Stars, owned by sports entrepreneur, businessman, and politician Kunle Soname, stands out as a modern sports management model in Nigeria.

 
Soname, who owns a European football club in the Portuguese Second Division, Clube Desportivo Feirense, in the last three seasons, has transferred the European club management style to Remo Stars.
 
Remo Stars is funded through sponsorship deals obtained from the various companies of its proprietors.  For the 2016 to 2018 seasons, Remo Stars signed a shirt sponsorship deal with Bet9ja, a sports betting company owned by Soname. And currently, they have a shirt sponsorship deal with Valuejet, an airline also owned by Soname.
 
The club’s overall market value is said to have risen to about €1.73 million.Sporting Lagos, owned by Shola Akinlade, co-founder and CEO of Paystack, a leading Nigerian FinTech company, has introduced fan-based initiatives that ensure a carnival-like atmosphere in every home matchday with families trooping to their Mobolaji Johnson Arena home to be part of the fun.
 
Managed by former chairman of MFM Football Club, Godwin Enarkhena, Sporting Lagos has introduced a season-ticket holding programme that gives the fan a sense of ownership of the club.
 
Unlike some other clubs, whose jerseys are hardly marketed by the teams, Sporting Lagos jerseys and other memorabilia are easily accessible to fans, who usually wear them to matches.  
Don’t substitute sponsors, but tactics
Although former national team captain, Segun Odegbami, is an advocate of clubs being run as businesses as obtained in other parts of the world, he does not support the current call “for governments, state and federal to hands off the running of sports in the country if not backed by empirical evidence. So, I want to look at the sector subjectively too, but through the lens of football.”
 
Odegbami described the Nigerian environment as peculiar, saying that through the years, attempts to run football clubs as successful business concerns have failed.
 
“That should indicate that something is not right with the present way of running things and that the whole matter requires deeper and more critical thinking beyond the chorus of empty, clarion calls.”

  
Said the ex-international: “Rather than delve into abstract theories and using examples from environments and cultures like the USA and the UK that are completely different from Nigeria’s to drive the argument for governments’ divorce from clubs, I want to use my experiences in one of the most popular football clubs in the country, a club that should ordinarily attract unprecedented followership and business to wade through the labyrinthine perspectives that stand as obstacles for a different school of thought.
 
“As there is no law that forbids any other individual or organisation from setting up private clubs and running them to achieve what state governments have failed to do, I ask, what stops those that are canvassing for government’s divestment to set up their own and be successful so that they can be the new light?
 
“The story at the end of the day is that several such private clubs were set up in the past. Every single one of them failed to become a successful venture. Name them, they all ‘died’ after a few years.
 
Beyond Ibadan and Shooting Stars FC, in other parts of the country, individuals set up private clubs. They include Abiola Babes FC, Alyufsalam Rocks, Raccah Rovers, Ranchers Bees, Asaba Textiles, etc. They all went into extinction under the pressure of unidirectional funding – down a drainpipe. None could survive as a business, making a profit to sustain itself.”
 
He noted that even Abiola Babes FC, which was owned and funded by the richest man in Africa in his time, “had to be disbanded after serving its other political objective of promoting the man in African football. The same thing happened to Leventis United FC, and even Stationary Stores Football Club. They were financially asphyxiated.”

 
Odegbami said that other clubs owned by the Federal Government and states’ parastatals also went under because they didn’t have the power to attract massive followership as a result of their different kinds of ownership structure. These clubs include NEPA Football Club, Airways Football Club, P and T Football Club, Super Stores Football Club, and ACB Football Club among others.
  
Odegbami emphasised that “the only clubs that have survived the Nigerian environment through decades are the ones owned by states’ governments. That tells us something. They have survived because in every case, successive governments, even without understanding why they must do so, continue to put money into ventures that do not yield any financial return yet, must continue to be funded. There is an inherent power within the clubs that makes it impossible for state governments to discontinue funding them. That is the power that must be identified and harnessed to power a feasible and authentic revolution in the business of football, and by extension, other sports, in Nigeria.
“Bendel Insurance, Sharks of Port Harcourt, Kano Pillars, Shooting Stars, Enugu Rangers – it is a long list of these ‘perpetual’ clubs that have continued to exist despite the clarion calls by some stakeholders for state governments to hand off their running and to allow private investors to take them over and start to run them professionally and profitably.
 
“I once sat with a governor of a state and listened to him lament the huge expenditure that his government was “wasting” on a football club that he did not identify with, had no sympathy for, would never be attracted to its matches for fear of being harassed by fanatical fans of the club should the team lose a match. He only saw the club as a financial burden and a drainpipe for his government. When I asked him about surrendering the club to private ownership, he said he had tried doing so several times but failed.”
  
In explaining the philosophy behind some state-owned clubs, Odegbami recalled that Enugu Rangers was founded by the Igbo after the Civil War to achieve on the football field, what they could not achieve on the battlefield – a fast track to reabsorbing the Igbo into the mainstream of Nigerian life without the tag of a defeated army.

 
He said: “The club ruled Nigerian football and extinguished any such thoughts. The birth and rise of Rangers International kick-started a cultural and ethnic revolution that birthed Shooting Stars Football Club in Yorubaland, Raccah Rovers in northern Nigeria, and, later, Bendel Insurance in the Midwest, Sharks FC and Calabar Rovers in the South South, BCC Lions and Plateau United in the heart of the Middle Belt, and so on.
 
“All these clubs had political, ethnic, cultural, or nationalistic colourations. Such clubs do not die. The state governments that gave rise to them found out that they could not simply hands-off them, as the price for doing so would be downright catastrophic. Some governors could lose elections or a huge chunk of political followership in the states.
 
“So, these powerful clubs will continue to survive and will be funded by state governments, attitudes must change with fresh understanding about the relationship that must exist to help the clubs to eventually become profitable businesses…In a new dispensation, states and the citizens would willingly embrace the idea of funding their clubs until the power of followership and patronage of the clubs’ programmes and activities become entrenched and large enough to attract external marketing opportunities and other social and commercial activities that will power the club’s turn around as cash cows and profitable businesses.
 
“But this also can only be possible if the governments allow experts and good corporate governance to take over in the running of the clubs. Governments must remove political considerations that diminish the influence of professionalism; they must start to see football clubs as major social and economic contributors and allow professionals in the various arms of the industry to take charge. This will encourage rich investors from home and abroad to come, invest, and take the clubs beyond mere football playing entities, and build new outlets and activities that will yield additional revenue to the clubs using the power of their followership.”

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