THE PROFESSIONAL FOOTBALL LEAGUE AS A CATALYST FOR GROWTH PRESENTED TO THE COMMITTEE FOR SPORTS OF THE SENATE OF THE FEDERAL REPUBLIC OF NIGERIA AT NFA ACT (REPEAL AND RE-ENACTMENT) PUBLIC HEARING ON 23/05/2013 BY HON. NDUKA IRABOR, CHAIRMAN LEAGUE MANAGEMENT COMPANY LIMITED
This presentation, in my judgment, is coming at a most opportune time given the fact that this public hearing in respect of the NFF bill coincides with the reforms in the Nigeria Professional Football League which the League Management Company Ltd (LMC) is currently carrying out under the authority of NFF.
As a necessary backdrop to this presentation, it is important to recapitulate some salient matters regarding the foundation and development of professional football league in Nigeria. The league was established as a professional division in 2006 with the incorporation of Nigeria Football League Limited (NFL). The vision at inception was to create a solid foundation for professional football that is transparently managed, financially robust and resilient in accordance with international rules and best practices of the game of football. It was also anticipated that players remuneration and welfare will be central to the new order and that the clubs will invest in youth and infrastructure development.
However, these lofty expectations have been unfulfilled as the league became enmeshed in endless controversies and all but in name dwindled in fortune to the status of a poorly managed amateur division.
Against this deplorable background, the professional football league in Nigeria has only recently emerged from a prolonged period of crisis engendered by a weak administrative structure for the sport, intractable law suits and frequent and disorderly change in the leadership of the league. This unpalatable trend was arrested only at the decisive intervention of the NFF, which set in motion a process that has culminated in the introduction of nascent reforms in the administration of the league, through the instrumentality of the League Management Company (LMC).
The question then arises whether the league can truly act as catalyst for growth as suggested in the title of this presentation. In my view, a straight forward consideration of this question in the manner posed will be proceeding from a shaky foundation. I believe, also, that my contribution is not meant as an academic exercise as the law making responsibilities of the Senate deal with practical day to day issues. Consequently, I shall focus on aspects of the work of LMC that should receive legislative support and reinforcement.
This approach will in turn show the direct correlation between a properly organized and structured professional league and its ability to stimulate growth of different kinds and levels in the society. In order words, it should be seen that we are addressing the question posed in a proper context, that is, as it relates to the current realities and practicalities of the football league administration and management in Nigeria.
The League as a Catalyst for Growth
Extensive researches have been conducted world-wide about the surpassing stimulation of economic activities engendered by professional football leagues in different parts of the world. These effects, it must be pointed out, are often the results of a combination of direct football activities as well as football-related activities.
In some instances, the results are nothing short of astonishing. A case in point is a recent publication by the British Broadcasting Corporation (BBC) of a study carried out to ascertain the economic effect on the Welsh economy on account of the promotion of Swansea Football Club to the premiership. The economic study showed that a staggering £58.6million was added to the local economy in consequence of Swansea’s promotion. The result was all the more impressive as the educated expectation had been that the figure would be in the region of £22million.
On a larger level, profits for the English Premier League are expected to nearly double to $513million next season on account of a new broadcasting deal. Other revenue increases could bring the overall turnover of the EPL to almost $3.5billion.
If the argument, at this juncture, could be raised that these financial figures are representative of mature or developed professional football leagues; the counter balancing view point is that all across Africa, nearer home, countries which years ago were generally classified as football minions, have recently moved determinedly to reform and project their domestic football leagues internationally.
The underlining point, therefore, is that irrespective of the scale of earning power, certain fundamentals are common pre-requisites for the modern professional football league in name, structure and essence. The fundamentals are often rooted in reforms which create a central administrative entity; like LMC, that manages the league from day to day to ensure compliance with rules and regulations which demand enhanced players welfare through written club/player contracts based on stipulated principles; ensure a level playing field by clear financial fair play regulations and guide the investment of clubs in infrastructure and youth development.
These fundamentals are, thus, the irreducible minimums which upon a preliminary survey can reveal whether any professional football league is worth the description or not.
A further dimension has been introduced to these pre-requisites by the run-away success of the German Bundesliga, which currently is widely acclaimed as the best model for administering domestic professional football leagues. The Bundesliga holds the record for being the only professional football league in Europe whose clubs collectively make a profit.
The operators of the Bundesliga attribute its success to the “core” value of the supporter coming first at his club. This is reflected in the ownership structure of the clubs, which mandatorily are owned 51% by their supporters. This mechanism, thus, prevents a single entity from acquiring majority stakes in any of the clubs. This is the much touted 50 + 1 rule.
Once again, it is important to reiterate that these successes are the direct result of careful planning, painstaking and dedicated implementation of establishes rules and regulations in these leagues. We believe that this is the essential lesson for us as nation in our effort to achieve stability, transparency and financial prudence in the management of our professional football league.
What is also apparent, from our presentation, so far, is that the base question whether the league can be a catalyst for growth is undoubtedly hinged on its structure and management. These elements are, in each particular league cited, the result of deliberate reforms introduced to shift the paradigm in the way the game of professional football is administered in order to create a platform based on the fundamentals described previously in this presentation.
I believe that it is only against this background that greater clarity and direction can be introduced into the very crucial work of this distinguished Committee as it considers the NFF bill.
I shall now, present the position as it relates to the Nigeria Professional Football League (NPFL). This is to afford the distinguished Committee a wider context and more cogent facts to justify the greater emphasis that, we urge, should be given to the NPFL in the law on final passage.
The earning potential of the NPFL is considerably vast. As an economic sub-sector, the NPFL is currently ascribed a value of N3.5 billion and growing. With 20 clubs spread all over the nation, the professional league has the capacity to generate employment on many levels. Aside from the staff required to run each football club, economic activity is stimulated in other football related areas such as transportation, hospitality, advertising and signage, security, merchandising, health and medicine, broadcasting and other businesses. Even the ordinary hawker of various petty goods and wares is an important participant in this sub-sector who looks forward with gratitude to every match day, as he is assured of making some sales.
The earning power of the league is greatly boosted by the fact that it is continuous activity which allows for planning and repetition of expenditure in all these direct or football related activities.
A properly administered professional league also creates jobs for skilled professionals such as doctors, physiotherapists, lawyers, accountants. Practitioners in the field of economics and social sciences, who study societal trends and their impact will also be afforded a new field of activity in devoting time to the professional football league.
The point must be reiterated that only a radical reform of the professional football can unlock these potential and make the benefits available to our people. In this respect, the case of Greater Manchester is worth mentioning.
It has been estimated by a report that football earns £330 million a year for the city of Greater Manchester due to the presence Manchester United and of late, Manchester City. This amount has been equated to hosting the Olympic Games every four years.
The free worldwide exposure United has given to the city over the past 21 years has additionally been valued as £1billion-worth of advertisement. Hotel occupancy is 85% in the city on match days, compared to 70% normally. Oversea visitors to either United of City spend an average of £800, compared to £600 by those not watching matches. Football supports 8,500 jobs in the city. We should note that the population of Greater Manchester is 2,682,500.
The pertinent question, for our purposes, is to wonder greatly how come a metropolitan city like Lagos with a population of over 15,000,000 does not have football team in the NPFL.
The answer lies in the fact that the game in Nigeria is not professionally structured and administered. The tendency to operate this potential sector of the economy in a haphazard manner will continue to deny us the sort of benefits possible in Greater Manchester. This fact underlines why the reform of the NPFL through the proposed law should be a matter of utmost priority.
Nigeria Professional Football League (NPFL): Current Issues
As stated previously, the NPLF is currently at the threshold of a new era. LMC has begun the process of reforming the NPFL in accordance with the mandate and authority it received from the NFF. The desired outcome is to create a new framework for the NPFL in accordance with international best practices, taking into cognizance our local peculiarities. A brief overview of these reforms is as follows:
The organics of the Club sides, the LMC and the league.
Player Employment, sanctity of valid contract as well as welfare.
The new rules will guarantee that clubs have solid financial bases to meet their obligations to players and suppliers.
New rules for the qualification and licensing of clubs within the league to bring our local clubs in line with international standards, not surpassing only African examples.
Protection of our Sponsors and Right holders so as to guarantee the financing of the league, we shall partner with the Clubs Compliance Agreements.
Ensuring stability and continuity in the administration of the league by NFF’s 5% golden shares, which will give NFF a qualified veto in matters relating to the appointment of the LMC’s Board and change in the rules of the league.
Setting aside 5% of the income of the LMC solely dedicated for a youth development program which will ensure that all clubs have feeder clubs of players not older than 18 years of age and of not more than 30 trainees.
New standard of training of players, coaches, referee, medical personnel, match security agents etc will be enforced, amongst other things.
Publish the audited account of the LMC at end of each financial year.
Underpinning transparency and financial accountability in the league by a license condition which gives NFF the right to the financial records of the LMC and also conduct, if necessary, independent audit of the accounts of LMC.
The LMC has resolved and reworked Title Sponsorship Agreement as well as the Broadcast Right Agreement to incorporate more commercial and favourable terms for the league and also to further comply with relevant laws such as the Nigerian Broadcasting Code etc.
Views on the NFF Bill
After a thorough perusal of the bill, I am of the position that more should be done to reinforce the task of reforming the NPFL. This is especially true, if meaning must be given to the title of the bill as an Act to, among other things, provide for the administration of the game of football in Nigeria and for related matters. Specifically, we urge that the following should have clear provisions in the law underpinning them, such that the impression is not given that the bill is merely concerned with a change in nomenclature from NFA to NFF and nothing else:
In the interpretation section of the bill, “LMC” should be defined as the “League Management Company Ltd”, the body subordinate and duly recognized by NFF and responsible for the organization of premier professional football league in Nigeria. This should be substituted for the definition of NPL and its description as the body recognized by NFF and responsible for the organization of premier league football in Nigeria.
“NPFL” should be defined as the “Nigeria Professional Football League” or “premier professional football league in Nigeria”
There should be clear provisions stipulating that the professional football league must be run in accordance with rules of prudent financial management.
The bill should make clear provisions for the minimum amount payable as remuneration or salary to the players. Our players should be central to the distribution of the income earned by the league, just like players in other settled leagues. This is the only way of keeping our best players in the league and attracting talents from other countries. If the quality of players in the league is poor or deteriorates, the league is to that extent devalued.
The bill should also create the “NPFL Trust” to cater for the welfare of current and ex-players. The trust should be managed by key stakeholders such as the NFF, LMC, the players Association and other Nigerians of high integrity with knowledge of football. The investible fund of the trust should be transparently and independently managed and used to provide assistance in deserving cases, such career-ending injuries. This will enable us banish the belief that football is a “use and dump” endeavour by providing assistance to those who have given their best for the game in their hour of need. A veritable source of funds for the Trust is the National Sports Lottery. The bill could make it mandatory for a given percentage of the Sports Lottery’s profit to be paid to the Trust.
The bill should clearly criminalise match fixing, bribing of referees and other football-related manipulations meant to fraudulently affect the outcome of part or whole matches. These activities bring the game into disrepute, devalue the league and jeopardize the livelihood of the players and every other person who works in the football industry.
The bill should contain clear “fit and proper” criteria for persons charged with the administration of the professional football league. These criteria should require that such persons are competent relative to the office to be occupied, honest and of high integrity and of sound financial standing.
The bill should make provisions to restructure the ownership of the clubs in the professional football league in order to reduce the burden on public finances (particularly of the states) and open an area of investment for ordinary Nigerians and institutional investors. Currently, the state governments finance an overwhelming majority of the clubs as a social responsibility issue. This approach hinders the clubs from being the main engine for effecting reforms to make them business oriented and profit-making entities.
The bill should confer “pioneer status” on the clubs of the professional football league. This will make them eligible for tax breaks for such number of years as may be specified. Other incentives should be given to the clubs to encourage them to make donations to the “NPFL Trust”. This package of incentives is a recognition of the fact that the work of LMC involves a wholesale reform which essentially is the creation of an entirely new aspect of our nation’s economic life. This process requires all the support available as a matter of national importance.
I believe that Section 16(e) of the bill be modified. In place of the requirement of clubs to build their own stadia within seven years of the commencement of the bill, I am of the opinion that clubs should be encouraged to share or lease stadia. From the vantage point of LMC, I know that the clubs cannot meet this requirement for a very long time to come. Moreover, in my view there is reason to place this burden on the clubs. If they had the level of funding required that should be ploughed into standardizing their current playing pitches and their youth development program.
The bill should make it mandatory for the clubs to have football academies for the youth development program. The young players in the academies will form the bedrock of the clubs and the league. There should be provision for their education and a competitive league for their participation.
I believe that we should all be determined that football must be administered as a viable economic activity beneficial to players, the youths, technical officials, corporate bodies and Governments under strict adherence to the rules of the game and fiscal astuteness. The business of football should be no exception to ethical and principled management.
I recognize, therefore, the singular opportunity provided by the NFF bill for this distinguished committee to create professional football as a major economic activity in Nigeria by giving statutory underpinning to the reforms embarked upon by the NFF and LMC as I have canvassed in this presentation.
Let me also place on record the invaluable assistance LMC has received from the Honourable Minister for Sports, Bolaji Abdullahi, Esq, under whose auspices the reform of the NPFL has received tremendous support and impetus. It is important to mention the vision and determination of the NFF under the leadership of Alhaji Aminu Maigari to ensure a proper and endurable football administration in Nigeria. My gratitude and appreciation goes to Honourable Minister and Alhaji Aminu Maigari.
May the Almighty crown all our efforts with success to the glory of His name and the benefit of our fellow countrymen and women, the true owners of the game of football in Nigeria.
Hon. Nduka Irabor
(Chairman, League Management Company Ltd)