BY ELIUD OWALO:
As an ardent soccer fan, I’m not only concerned about the plight of our non-institutional local soccer clubs but also extremely worried about the possible adverse effects of Covid-19 on local soccer in general and the community clubs in particular. Our two leading soccer clubs, namely Gor Mahia and AFC Leopards have not witnessed any form of financial stability since the gaming company SportPesa cancelled all sports sponsorship in the country in August 2019. The withdrawal was informed by regulatory and taxation issues which the Government and SportPesa failed to level expectations on.
The withdrawal by the betting giants brought to a halt its four-and-a-half-year deal with the Kenya Premier League (KPL) reportedly worth Sh. 450 million, plus an annual sponsorship to both Gor Mahia and AFC Leopards. In the last deal signed in 2018, the firm financially supported the Football Kenya Federation (FKF) to the tune of Khs. 69 million, the Kenya Premier League (KPL) Khs. 259 million; Gor Mahia Khs. 198 million;and AFC Leopards Khs.159 million. The withdrawal left both the KPL and the two soccer giants with no sponsors. The same plight is extended to other community soccer clubs since the gaming firm was the KPL’s title sponsor. Since then, the aforementioned soccer clubs have struggled to pay players’ salaries for the past seven months. This is a very gloomy picture considering that apart from standard essential costs such as house rents which the players must defray, the same players just like all of us experience a high-dependency-ratio.
Local soccer had hardly navigated through the harsh economic times informed by the SportPesa exit when the global Corona-Virus epidemic came to the fore. Cosequently,the local football league has been suspended by the KPL, with the situation likely to continue over the next three months, or even longer. With no soccer being played, the implication is that the non-institutional Clubs like Gor Mahia and AFC Leopards Football Clubs are not getting any revenue by way of gate collections, yet this would have been their primary source of revenue at the moment. On the flip side of it, the Clubs have constant recurrent expenditures like payment of players’ salaries to meet, which are held constant despite the fact that the local soccer league has been suspended.
Informed by best-practice, our local football clubs enter into performance-based contracts with their players. Granted, one may argue that in the prevailing circumstances the players are not meeting their part of the contractual obligation because they are not playing any soccer.However,Covid-19 is a risk that could never have been effectively mitigated by both the clubs and the players themselves since it is a global problem that has arisen out of reasons beyond everyone’s control. It is therefore mind-boggling how the non-institutional soccer clubs are expected to generate revenue in the absence of gate collections to enable them pay salaries to the players, which on average ranges about Ksh.5 Million every month. In the same vein, I empathize with the players whose direct expenses are held constant yet now faced with a dwindling and erratic disposable income.
Of great concern, quite a number of the players have their contracts running out during the June transfer window and Ceteris paribus, they run the risk of complete loss of livelihood in the prevailing circumstances if their contracts are not renewed. My hypothesis is that the clubs may be reluctant to enter into new contracts with players in view of the current economic uncertainties, but the net effect is that the players equally have nowhere else to go based on the same. In a nutshell, the aforementioned non-institutional soccer clubs which are the bed-rock of Kenya’s football are on the verge of closing shop all together. If Gor Mahia and AFC Leopards collapse or operate at sub-optimal capacity levels, this will spell doom to Kenyan soccer. Worse still, this will have a catastrophic overall effect on the economy since soccer is a major contributor to our Gross Domestic Product (GDP) by way of both direct employment and the fiscal framework through taxation and public expenditure.
It is therefore my humble submission and appeal to the Government through the Ministry of Sports to urgently formulate and deploy a short-term policy intervention at macro-level to cushion the non-institutional soccer clubs in the country. This should entail either directly off-setting the players’ salaries over the next three months or provision of subsidies; which can be underwritten through the Sports Fund. Equally, any existing corporate sponsors to the local soccer clubs could also be granted tax reliefs over the next three months to facilitate the now much-needed impetus towards soccer sponsorship.However,in the long-term I’m a strong advocate of adoption of a sustainable business model to enable these clubs become financially self-sufficient.
However, in the long-run, I’m a strong advocate of adoption of a sustainable business model to enable these clubs become financially self-sufficient. This entails acceptance and effective management of change; establishment and operationalization of a professional secretariat; developing and institutionalizing elaborate structures but well-aligned to the Mandate and core business of the clubs; optimizing recruitment and contracting of players; exploring and exploiting possible internal sources of funds; prioritizing players’ welfare; building and sustaining strong brands; adopting innovative marketing strategies, including but not limited to effective merchandising; institutionalizing good corporate governance practices; pursuing feasible and viable investment options; developing sound performance management systems and cascading the same to the lowest levels with clear targets, expected outputs and performance indicators; developing elaborate & robust monitoring, evaluation and reporting mechanisms; prudent risk mitigation; and bench-marking with Global-Best practices in football management, among others.
Eliud Owalo is a Management Consultant and an Ardent Soccer Fan.