By Fred Edoreh
Recently, the League Management Company engaged club owners for solutions to stably steer the Nigeria Professional Football League (NPFL), post Covid-19 lockdown, but it was greeted with the familiar misinformation attacks by pathological disrupters of Nigerian football who suggest that the only way to advance the NPFL is a return to the old order whose rapacious and ill-conceived deals left the league in squalor until the League Management Company (LMC) came to rescue it.
Inimically praying for the failure of the current broadcast and commercialization partnership with NEXT Digital TV and even calling on club owners “to rise up” against the LMC, they conveniently hid the fact that the old Nigeria Football League Limited (NFLL) ran a transaction in which the league broadcaster paid $5.4m per season to a middleman who only pinched N150m (barely $1m at the time) to the league and its 20 clubs and kept $4.4m as profit.
At a point, the league could no longer fulfill its obligations, including indemnities for match officials, as it revolved in indebtedness to the agent which lent it money just to keep it afloat to enable collection of new season payment from which the old season debts were further deducted from its bare bones.
Even before the first tenure of the TV deal was due, the NFLL jumped to knot the niggardly arrangement till 2022 and moved to further expand the rapacity by considering to award the title sponsorship of the league to same middleman for far lower than what was actually asked of a telecommunications company on pitch. Such was the lowliness with which the NFLL steered the league.
Ironically, because of the possible private benefits its leaders enjoyed from the skews, the tussle for succession became so feisty that the protracted multiple disputes in several courts boomeranged with a judicial declaration that the NFLL was not incorporated correctly, thus unknown to law and therefore an illegal body.
That declaration led the NFF, the clubs and the sports ministry to seek a different legitimate vehicle to save the league. Thus was the League Management Company Limited (LMC) birthed as a non-profit organisation acting in the interest of the participating clubs in the NPFL and also the NFF as is the case with the FA Premier League Limited in the UK, DFL GmbH in Germany, the LFP in Spain and other such bodies in France, Portugal and various European countries.
The NFF and the clubs deliberated extensively on a new governance structure and, with the endorsement of the congress, the supreme governing organ, they settled for a hybrid of several structures from the more developed leagues in which, like in the EPL, the participating clubs nominate their representatives, rotated every football season, while a joint “selection committee” with the NFF appoints an independent chairman and two other independent directors on a four years tenure, to constitute the board. This has ensured stability on the LMC board which thenceforth has operated seamlessly without any rancour including during the seasonal change of club designate directors and or the reappointment of the independent Chairman and Directors for another term.
The LMC submits its project plans, budgets, calendars, sponsorship deals, funds distribution formula, prize system and media plans for approval by the NPFL assembly (the members) which also approves the nomination of a reputable external auditor to entrench best practices, including the publication of its annual reports and filing of its audited account with regulatory authorities as required by law.
The LMC came into being in 2013 and quickly salvaged the league from the obnoxious transactions of the NFLL by eliminating the middle man and negotiating directly with the league broadcaster to free up the full value of the rights which it raised to USD $8m per season (paid directly to the league), with effect from 2015, but with advance payments to keep the league afloat while it smartly left the broadcaster to fulfill its old contract to avoid encumbering the league with disruptive legal entanglements.
Still, some hirelings with false claims as players representatives wrote to threaten the broadcaster with legal actions if it discarded the old deal for the new one. The broadcaster did not bulge and thus followed a staccato of sponsored frivolous litigations and petitions by chronic litigants whose disingenuous ploys have kept potential broadcast partners and brand sponsors at bay to the detriment of the commercial fortunes of the league.
Over seven different cases with one even at the Supreme Court are still pending while about twenty others have failed or been dismissed by the courts. The renewed attack on the LMC/NEXT TV deal is therefore not a surprise.
Despite the onslaughts, the LMC has resiliently steered the league away from the ugly past in which clubs were tasked to pay participation and players’ registration fees, insurance, provide match balls, pay match indemnities and other charges. Now, the clubs register at no cost and recieve various pay outs and bonuses depending on inflow of revenue while the LMC provides insurance, match day branding, official match balls, media presence, indemnities and various other organisational costs.
This is in addition to ensuring the league is operated on the foundation of a world class Rule Book and framework on club licensing regulations and seamless enforcement and adjudication processes, besides the introduction of Domestic Transfer matching System – DTMS in partnership with FIFA (the first league in Africa to do so) which optimized the transfer system, among several other innovative strategies to move the league forward.
As it strengthened the broadcast, corporate trust, transparent distribution of funds to clubs and heightened match day experiences to create a boom in match attendance and social media following, Nigerians witnessed and still testify to that revival which reverberated in improved and impressive spectatorships in various centres, from Enugu to Kano, Lagos, Aba, Bauchi, Owerri, Ibadan, Akure and others.
That there has been a lull in the 2018 and 2019 NPFL seasons in terms of payouts to clubs was because the broadcast partner withdrew, not because the LMC dropped the ball but because of exogenous factors like high cost of production logistics and low advertising patronage, not excluding the drop in the value of Naira-To-Dollar and the flux of competitive new technology platforms not distinctly captured in the contract.
In a review of its business strategy, the broadcaster opted for the purchase of only the right to air contents from the league, just like it does with the foreign leagues, closed its league production unit in both football and basketball and cut down on staff, not only in Nigeria but in Ghana, Zimbabwe and Kenya as well.
Seeing how some of the advanced and most glamorous leagues are caving in to financial pressure with just few weeks of disruption in cash flow under the COVID-19 pandemic, it is remarkable that the LMC through forward-looking prudence has been able to sustain the league for two seasons and still maintainrd its high technical standard despite the loss of broadcast revenue.
Challenged to seek alternative strategies to produce the league contents for TV, the LMC found no indigenous Nigerian company with the technical and financial capacity to step in. Even the attempt to partner the national network to fill in the gap failed due to the sorry fact that, for years, there was no investment to boost its capacity.
Part of the problem is that, despite the glorification of the “yester-years,” even when the Naira was at par with the Dollar and Pound, the league system did not bequeath any legacy in critical broadcasting infrastructure, fans and ownership structures nor business, commercial and media framework upon which the present day league should have stood.
Then, fans were only exposed to the local football scene but, today, the competition brought by the foreign leagues is snuffing out the domestic game with higher visibility projected through powerfully funded media and new technologies. Leagues deficient in broadcast, telecommunication infrastructure and funding to propel exposure are condemned to lose their fans and market.
So, through the years, our league has been groping with handicap in the intense, pitiless competition. Even when the league had TV partners, only one or two matches were transmitted live per match day whereas, for the league to optimise revenue, all ten matches should be on TV.
It has been estimated that Nigeria loses over $200m annually to the foreign leagues through fans consumption of their products and endorsements by local brands. The government should have understood that investment in critical infrastructure to deliver competitive visibility of the league to wide national and global audience brings huge socio-economic benefits through inherent potentials for youth engagement, national mobilisation, enterprise generation, business opportunities, tourism inflow and both foreign direct and domestic investments.
The EPL which has now captured our fans and feasts on our market was jump started in 1992 with a grant of £200m for the provision of critical media infrastructure and stadium upgrade by their government which now enjoys billions of pounds in taxes annually with other valued added to the economy from it.
While, for example, the CAF Champions League rakes in only about $30m annually, Africa should be concerned that the UEFA Champions League taps over €300m from the region alone. With Nigeria as their premium market, the top foreign clubs harvest even more.
Understanding the trend, the Minister of Information, Lai Mohammed, instructively initiated a review of the National Broadcast Code to push advertising and sponsorship support for domestic sports. Even at that, the products have to be available in the right quality, reason why he is also seeking funds to re-equip the Nigeria Television Authority to be able to produce quality, internationally marketable contents and buy rights on sports and entertainment properties to retain large audience, attract advertisements and sponsorships and deliver profit for steady innovations and expansion.
The football family in Nigeria, in a move championed by the LMC leadership has severally taken this message to the Federal Government Economic Management Team (EMT), Nigeria Economic Summit Group, the Central Bank, the Sovereign National Wealth Fund, the organised private sector and even foreign investors through a deliberate program code named “Football Means More”.
“Football Means More” is a comprehensive blue print of the LMC outlining strategies for legislation, investment, infrastructure, promotion, protection and general support required to jumpstart and situate domestic football as a key contributor to the Gross Domestic Product (GDP) of the Nigerian Economy as obtained in other jurisdictions, articulating the roles of various stakeholders in the process and identifying the potentials and outcomes for partners and investors.
The NPFL: Between us and our game (Part 2)
Many stakeholders in Nigerian football are understandably anxious to see the advancement of the Nigeria Professional Football League (NPFL), not only for national pride and the pleasure of sporting entertainment but as well for the economic opportunities it contributes to nation building.
Just as debates about the effectiveness of players, coaches and tactics in teams often get emotive with almost every fan claiming expertise in coaching, so too do conversations about strategies for the enhancement of the fortunes of the league become animated with mixtures of facts, knowledge and, sometimes, pitiable ignorance.
Beyond the incurable pessimists driven by their loss of entitlement from the dismantling of the plunderous old order to perennially throw spanner in the works, genuine stakeholders need to recognise the deficits from where our club football is coming and the political disruptions that have slowed down implementation of some novel programs, to perspectively situate issues with the correct vibes.
Faced with the drawbacks in the domestic business and infrastructural architecture and building practically from ground zero, the LMC has kept focus and searching even beyond our shores for solutions on re-engineering an enduring foundation for the production, commercialisation and redirection of the competitiveness of the NPFL in the global football economy, for now and the future.
After the exit of the former league broadcaster, the LMC rallied to secure an advanced engagement with FOX Network Group whose top delegation subsequently met with representatives of Nigerian big corporates, the leaderships of the NFF, LMC and club owners, in a confidential breakfast meeting at Eko Hotel in March 2018, to unveil its partnership plans towards a complete turnaround of the NPFL and Nigeria’s football within the same framework it did with Netherlands Eredivisie.
Prior to the meeting, FOX had already penned a Non Disclosure Agreement (NDA) with the LMC in which it had also agreed on due diligence undertaking and a draft Joint Venture Agreement for the optimization of the commercial and media rights of the NPFL.
Unfortunately, the political attacks on the NFF after the 2018 World Cup and the toxic climate that was generated against the nation’s entire football structure scared them away and destroyed the opportunity.
Undaunted, the LMC kept pushing and finally struck the current partnership with NEXT TV Digital to produce the league matches, highlights and magazine shows. NEXT will also pay for broadcast on OTT while both parties will market the products to willing mobile, terrestrial and cable television concerns to ensure the widest distribution of the league contents as well as activate various social media and digital marketing platforms to reach and earn revenue from Nigerian and global audience.
The plan also includes establishing NPFL TV, a channel to drive the distribution and commercialization of NPFL contents.
Interestingly, though NEXT TV has not fully rolled out, it has made financial commitments to the LMC and it is with that sign-up fund, revenue from other existing partnerships and savings from the prudent management of previous sponsorship funds that it has sustained the league deprived of its broadcast revenue.
In this digital age, despite the need to grow physical match attendance, much of league spectatorship and revenue streams would be through personal electronic devices and with over 170 million mobile phones in Nigeria and the league also exposed to audiences beyond our borders, the OTT presents a huge new market for the future.
A match with say 30,000 stadium spectators can as well have a home and digital audience of over one million. If we have just 500,000 subscribers from even just home fans and the Diaspora at $5 per month for full subscriptions, just the OTT can deliver a revenue in excess of $30m a year.
With added revenue potentials from Mobile, Cable TV, Free to Air TV, Video on Demand, advertising, sponsorship and other revenue streams under this commercial structure, the league, in the long term, can gross over $100m annually while at same time creating a visible platform for clubs to develop their direct revenue capabilities.
Indeed, the digital market has begun to disrupt the conventional television broadcast system with even higher bids for sports and entertainment properties. It is therefore only reasonable to change the old mindset and begin to re-position now.
In pursuit of expanded commercial framework, the LMC, with the endorsement of the NPFL clubs, reviewed its marketing strategy since 2015 and opted to jettison the title sponsorship system, which had been from 2006 to the advent of the LMC in 2013, in preference for multiple sponsorship segment model based on industry differentiation. This is with a view to optimising commercial windows through cumulative revenue from multiple sponsors which will be higher than from a single title sponsors holder.
It is on this backdrop that it signed with Star (NB PLC), OCP, 1XBET and others, and the activation of the on-going broadcast and re-commercialisation process is expected to attract and drive in other elite sponsors into the NPFL at the right value.
It is therefore incredulous that those who should understand the trend are kicking over the absence of a title sponsor when the EPL adopted the same model, eliminating title sponsorship driving by multiple sponsors since 2016 (now no more Barclays League but English Premier League) which goes to validate the decision of the LMC.
It is the successful gestation of the new commercialisation design that will provide the life blood for clubs to invest in facilities, organisation, logistics and welfare to achieve profitable commercial outcomes and the elevated outlooks that we all desire.
True, rules are meant to be enforced but, given the peculiarity of our environment, the LMC has considered that the expulsion of clubs based on strict applications, when virtually all the clubs are in shortfall of critical infrastructure and funds to achieve desired standards, will serve only to blow hot air.
No doubt, the outlook and performance of the clubs leave so much to be desired but, reasonably, what is needed in the circumstance is consensus building for collective push towards the right new direction.
It is for this reason the LMC introduced the program code named “Beyond the Three Points” so as to keep engaging and reminding the clubs of the work that needs to be done outside just playing football so as to create the right environment for the business of club football to thrive.
For instance, with perhaps Nigeria’s most successful club, Enyimba, having a social media community of about 120,000 to rank 63rd in Africa, compared to Al Ahli’s 27m and Zamalek’s 12m, the clubs should understand that they need to up their presence and engagement in the social media market, especially seeing how some of the top European clubs earn millions of Euro per annum from various social media and digital formats.
Still, their ability to provide sellable exclusive contents would depend on production capacity and skilled personnel both on individual level and from the processes the LMC is putting in place. But, even now, they can challenge themselves to increase their presence through resourcefulness and creativity to provide windows for advertisers and sponsors to associate and reach their followers.
It is about eyeballs and this applies to all sports in Nigeria. For instance, it has been interesting to see the traditional sport of Dambe which is less institutionally supported pulling up into the global arena, even if with a humble 100,000 views on a video, through the sheer efforts of its digital promoters.
Thankfully, the various state governments which promote majority of the clubs now understand the need for a re-focus on commercialisation and have committed to opening up their holdings for partnerships with possible equity on facilities while the LMC has signed an MOU with NASD OTC Exchange to assist them in the process.
It is as part of the drive that the LMC had to take Nigerian club managers to on-the-spot training in Spain and the Lagos Business School among other several capacity development training , to acquaint them first hand with the critical rudiments of running clubs as business and the various revenue streams and marketing tools and strategies employable.
With work in progress, the LMC has also not neglected improving the technical capacity of the game. Even though it is essentially the call of the sports establishment, as a matter of nation building, to create institutions and regular programmes for the training and retraining of national coaches in all sports, even as it behoves individual coaches and their clubs to invest in themselves and improve their personnel, but the LMC, through its partnership with the Spanish Football League, continues to organise annual advanced training clinics for coaches in various tiers of the league with over 500 coaches trained and certified over the last 3 years.
There is also a specific elite coaching programme, through its partnership with Star (NB PLC), in which coaches from top European clubs come to interact with those of the 20 NPFL clubs on the update of skills and tactics.
The LMC has also maintained the same effort to support talent development through its NPFL Futures programme for club youth teams, notwithstanding that it is actually the business of individual clubs to invest on their Feeder Teams as a strategy to reduce expenditure on signing new players from outside their communities and also to earn revenue through players transfer.
So much said, it is left for stakeholders in the Nigerian football league to lock hands together and pull in the same direction on which basis success will be guaranteed or choose to pull the institutions and their leaderships down for narrow interests.