CORPORATE NIGERIA AND SPORT BUSINESS: SEVERAL YEARS OF COURTSHIP WITHOUT MARRIAGE

INTRODUCTION: To appropriately appreciate the roles of Corporate Nigeria and Sports is like asking whether the relationship between sport and money is necessary. This cannot be concealed in the light of a Coubertanian ideal that is often poorly understood.

Abdullahi, Sports minister. Can he lead the changes?

From the very first ancient Olympic Games, sporting events have required human, material and financial resources to be mobilised. When sporting practice has a competitive purpose, it offers a spectacle, the organising of which necessitates finance, and the promotion of which can bring in substantial income.

Sporting practice itself has become an act of consumption, bringing in its train expenses for sports clothing, goods, hiring equipment, entry tickets and the price of transport - especially for staffed, maintained, secured, and priced sporting venues, particularly for outdoor  and team sports, which in Nigeria are government owned.

It is neither abnormal nor amoral that money should circulate in sport, in quantities sufficient to develop the practice and the spectacles. This is where the roles of Corporate Nigeria becomes defined and that of the governments become stunted.

Governments by their nature and structure CANNOT spend the kind of monies in sports. Sports also offer markets for numerous viable economic activities thus, the basis for the Organised Private Sector (OPS).

Commercial companies, banks, associations and the media have found an interest in financing sports spectacles abroad, why not in Nigeria? Sports is now highly professionalised not only for the prime purpose of money making, but also for various by-products (sport on TV, in the press and electronic media including the internet, exhibitions, and merchandising), and the use of its image (publicity, endorsement and sponsorship).

Late M.K.O. Abiola. Led a financial revolution in club management in Nigeria

SPORTS AND BUSINESS: Sports is a very big business. Budgets in some sports federations if managed well can be bigger than the budgets of some states of the federation. Sports can only be managed as a business to garner the kind of gains therein. This is where Corporate Nigeria has a semblance in sports. Such trends cause sporting organisations (clubs, leagues, federations, associations) to transform themselves from their original non-profit purposes (the argument of pro-government sponsors) to commercial associations and sometimes to shareholding companies.

Today in Nigeria, there is no sporting federation that cannot do without government funding. We have the economic base and the quanta of members of the Corporate Nigeria that can support such a venture and risk. Each federation should only identify which corporate firms are having historical or other affiliations with their sport and they have to package their sport like a product which they are to market to the organisations. This is where Sports Consultancies are to be involved.

The State Sports Associations are to be formed from the Executives of the Clubs which are supposed to be organised from the communities, wards and local councils (774). Elections of the best materials will be the order. Former players will have a place to contribute their quota.

It is from such structures that the current President of the International Handball Federation (IHF) emerged in Egypt. He was my team mate when we were playing whereas 90% of those who played for Nigeria have no place in their state Associations nor in the National sports federations.

Ultimately, in imitation of the American model of professional sport, the sporting spectacle becomes submitted to a wholly financial logic; such trends have developed in Europe during the course of the 1990s.

Each year, direct (shareholding) or intermediate (bank) finance becomes a more prominent feature of sport. Some African nations like Cote d’ivoire, South Africa, Egypt, Tunisia and Algeria have demonstrated the workability of these models in these climes.

Some years back, Major General Ishola Williams (handball, baseball & softball), Eddie Aderinokun (Volleyball), and recently, Basketball (Umar Tijani preceded by Jacob Gyang {now the monarch of Jos}) have shown that if we get our acts well in place, we can do it as well as it is done in the other advanced environments. The current leadership of the Nigeria Scrabble Federation led by Engineer Toke Aka have proved it can be done.

Xhosa, led a successful financial project in 2010 World Cup

SPORTS AND ETHICS: When financial logic is imposed on sport, the ethical risks deriving from the sport-money relationship grows tremendously. If it is necessary to gain money by any means, then all means are acceptable for winning competitions. Such victories becoming the source of finance directly (from prizes and bonuses), and also more recently indirectly (from publicity fees, payment for rights of TV transmission, contracts for image improvement, sponsorship & leverage, endorsements etc).

If one lets finance and the market guide sporting practice and events, the probability rises rapidly for them being invaded by immoderation, cheating, excessive pressured conditioning of athletes, doping, falsification and concealing of results and age of cadet players, and even the premature death of players (recall the cases in the Nigerian League?). Is that to say that finance alone is responsible for all these perversions, more and more frequently in professional sport? I personally do not think it so.

However, just as the unbridled globalisation of finance has led to a monetary crisis, so in its search for capital growth, the unregulated penetration of money in professional sports risks sports losing its ethical sense, being transformed into a mere spectacle offered by professional performers, in which sporting values are less and less present. More seriously, the ever more internationalised financing of professional sports, if uncontrolled, could embroil it in the laundering of dirty money, under-the-table transfers of dubious capital, corruption and embezzlement, as in other areas of international business.

FINANCE & FAIR PLAY: In this confrontation between the logic of finance and the ethics of fair competition in sports, the latter must be preserved by the application of a double regulation, the one seeking to curb the uncontrolled lust after money of sports organisations. The other, financially guaranteeing the ‘good conducts’ of the major financial investors in sports.

Otherwise, by default, the power of finance could choke and kill the commercial value of sports as a spectacle, and through capital flowing directly and indirectly through the system. This can be the case with financing of spectator sports like football, basketball, handball, baseball, softball, hockey, volleyball, rugby etc. These sports disciplines have the higher television appeal. Here, the sponsor is counting the number of eyes following the event. However, in continental scheduled games, they carry one lonely medal despite the population involved.

Facing a growing commercialisation of sport activities, sporting ethics is a multi-faceted notion. On the one hand, it is based on the enforcement of rules regulating sports practices and ensuring that participants conform to the same rules, that all competitors play on the same footing so as to get a fair game on the pitch, and as a result maintain the so-called ‘glorious uncertainty’ of outcome which is usually considered one pillar of the credibility of sports competitions.

From this point of view, commercialisation should not disturb or circumvent sporting rules and regulations. Thus, the need and quick establishment of a Court of Sports Arbitration (as Egypt did in the 2004 season) with the powers of a High Court of the land though with a trained eye on the principles and rules of particular sports disciplines.

Had we had one, the so-called crisis in the Nigerian football family over election matters involving the National Association of Nigerian Footballers (NANF) and the football house can be settled there, though with the current FIFA route still open. Crisis between clubs, between clubs and players, between players etc can only be settled therein. Regular courts have no place in the management of sports conflicts, especially contractual. Scrabble had a similar conflict about a year and half ago.

On the other hand, sporting ethics refers to a system of moral values, among which are the fighting spirit, fair play, seeking of health (physical, mental and moral), avoiding doping, and looking for technical and aesthetic beauty in sports practice, equality and fellowship of human beings (at least, on the field of play), a social use of time, surpassing oneself, even a spiritual experience, a humanist ideology and philosophy and a deontology (for sports professionals).

In this respect, sporting ethics pertains to a behavioural logic, a sporting spirit, usually fairly disinterested in financial matters, or at least, not overly greedy. From this point of view, commercialisation should definitely not spoil or endanger the very existence of either the combative sporting spirit or the financial disinterest by superseding them with a strict logic of personal money making or maximising profit. This is the current marriage between Corporate Nigeria and sports with attendant government-bureaucratic mien which has to change to a more responsible and accountable business orientation, on a general note.
FINANCING OF SPECTATOR SPORTS IN NIGERIA:  If handball in the early 1980s experimented with the collection of gate-takings in Minna, Sokoto, Bauchi and Ilorin during it’s championships and people gladly paid to watch games, it is as good as saying if those successes had been worked on, that discipline would have achieved more than it is today.

The basis why people paid and will pay is the conviction that a great part of the practice of sports is being a leisure activity, a spectator activity, a stranger to all, put up as a spectacle and to seek for financial gain. Some money (taken from the personal budgets of the players or other sources) is necessary to finance sports for fun, organised or informal, but in this context, money is in the service of sports.

It essentially is composed of the expenditures of households. For instance, in 1995, sporting expenditure of households in France reached 43 billion francs, divided into 46.1% for services (subscriptions, lessons, entry fees, insurance, hire and repair of goods), 44.3% on shoes and clothing, and 9.5% on buying equipment.

There is a Nigerian sports market of a scale bigger than that of France (Nigeria’s sports market is about 1,000% bigger than France) but is not tapped. It is sufficient to attract industrial, financial investors and investment worth no less than =N=15billion a year. The Nigerian Professional Football League alone can mass up to that value if fully commercialised and privatised. No club in the Nigeria Professional League cannot mass up to N1billion a year. With 20 clubs, and the fact that clubs like Kano Pillars, Rangers of Enugu, 3SC of Ibadan, Heartland of Owerri can mass up to N3billion means that the League alone can hit a N30billion value if professionalised, commercialised and managed as a business. It does not command 1% of that value presently.

Consider that in 1997, French sports expenditure reached 93.5 billion francs, of which 46.2 billion were household expenses, a growth of 7.4% from 1995. The total is obtained by adding to this spending by communes (27 billion), the State (9.6 billion), enterprises (6 billion), the Departments and Regions (3.3 billion), and by the media (1.6 billion).

SPORTS AND PUBLIC FINANCE: One can see an obvious fall in the element of public finance in France. This was due in part to the disengagement of the State as sports budgets grew, but less quickly than the growth of private finance. This tendency is indirectly confirmed in France by the stagnation of the budget of the Ministry of Youth and Sport, at 0.18% of the State’s expenditure, a decrease from its maximum at 0.27% in 1982.

For the other part, above all, one can see a clear reduction by local authorities in their financing of sports, their spending growing more slowly than all other sources, even than that of the central government. The communes (our equivalent of local governments) had acted as a motor in sports finance until the beginning of the 1990s. This double tendency of relative disengagement of the state centrally and locally has been observed in recent years in most European countries. So why is public finance the major catch in Nigeria?

The share of private money flowing into sports grew from 50.9% in 1990 to 57.5% in 1997, this growth being attributable wholly to the increasing household expenditure, while that of companies remained roughly constant. While business spending grew by 36% in seven years from 5.6 to 7.6 billion Francs, principally due to spending by the media – a growth of 181% from 0.55billion to 1.55 billion Francs in 1990-97, while other business spending grew only by 20% in the same period.

This increase was due more to sports spectacles than to Sport for All. This is corroborated by the growth of spending on sports services by households from 7.4 billion to 19.8 billion Francs during 1990-97 (or 168%), to the measure that several of these services are event-related (ticket sales, pay TV, prizes and bonuses in sports, etc.).

The fact that household purchases of sports services grew barely less quickly than the money injected into sports by the media is scarcely a coincidence.

FINANCING OF SPORTS INFRASTRUCTURE: The financing of sports infrastructure (stadia, sports hall, swimming pools) attracted modest private finance, between half and two thirds coming from the communes with the central government contributing a prominent part of the rest. Only equestrian centres, golf courses and facilities in urban leisure centres have attracted substantial private money.

The financing of spectator sports in Europe shows great similarity from one country to another, with some notable variations, such as the Swiss on the one hand, and countries with long-established public sports systems on the other.

According to the study undertaken by the Council of Europe sports expenditure represented between 0.56% and 3.47% of the Gross Domestic Product, with numerous states around 1%; private spending (including that of households) above all prevailed.

In all the countries studied, except Portugal, households contributed the largest part. This ‘West European’ model of sports finance is based on the spending by choice of households, that is logical of the market where participants and spectators are considered as consumers of sports goods and services. This is also premised on the fact they are the one who follow their local teams.

Nevertheless, this model of public finance is not negligible, in particular, the input of local authorities. The financing of sports by businesses, after the American model is everywhere limited in Europe.

Can this generation or the one next benefit?

THE VEBLEN EFFECT:The more sports is immersed in a market economy and becoming more dependent on private money, the greater the probability of money from unknown sources, eventually deviating from the objectives supported by sporting ethics. It is rather that the rising amounts and growing temptations bring the risks of embezzlements and diversions of funds to the well-endowed sports. The growth of private financing sources upsets the structures of spectator sports, notably in the federations (national), associations (state) and the clubs (communities).

They cannot help but stir up covetousness and shake the disciplines which the federations exercise. They tend to separate, at least, at the level of financial planning, the practices of spectator sports and of professional spectator sports. They favour the development of new competitions and parallel competitions organised by the commercial sponsors, and undermining those of the federations. The reaction of the federations has been to not allow to leak away the revenues of the events they own and over which they exercise control, while the media success of a sports is often correlated, at least, mathematically with the volume of their associative, that is, spectator sports, and with the efforts to select and train winning athletes, one of the federation’s key missions. This is where the sports federations (except Basketball, Chess and Scrabble) have all failed.

Besides, the practice of mass participation furnishes the foundations of excellence in most sports. In any case, the sporting federations are involved in commercial and financial acts in the whole range of their sport for all activities, today being seen as an act of consumption. Winning new licences implies a marketing approach occurring between the federations in a competitive game. Federations have created external leagues with their own juridical status (as in football, basketball, volleyball, handball) and internal leagues to manage their own elites (handball and cycling in France).

This move towards the commercialisation and professionalisation of sporting structures is accompanied in general by a minimum of controls (at least, so far as accountability and internal audits are concerned).

In less professionalised sports, the influx of money with less transparency has led to a financial crisis from malpractices. Such trends have led some people, at least, to think that professional direction is needed for some small federations like Scrabble, Chess, Karate, Taekwondo, badminton, Squash Racket etc.

Others assert the idea of a triple reform: to pay salaries to the Presidents of federations in order to fight illegal payments from ‘black boxes’; To make the President responsible for the deficits of the federation; and to isolate commercial operations from sports spectacles and spectator sports activities. In any case, there is urgency to modernising the regulation of this new profession that has become an activity of state sports directors just as sports commercialise and become spectacles drawing in major sums of money.

Without this, there is a danger that the money coming to the service of sports will enslave them and individual sportspeople in a fashion that is opportunistic, often tactless and sometimes dishonest as has been demonstrated over and again even in the national teams. In all such cases the ethic of sport will suffer.

THE FINANCING OF PROFESSIONAL SPORTS: The penetration of sports spectacles by financial interests generated in Europe and America after the World War I. Sports spectacles really began to develop and created a new form of sports financing: spectators paid for entry to buildings and sites where high level sports was displayed. The ‘mediatisation’ of sports, solely by the press before 1914, then by radio, and after the 1936 Berlin Olympic Games by television, and the internet from the 1990s, has added new forms of finance for sports: rights of quotation, of transmission, and of using an image or logo.

There is also the economic internationalisation of sport, contemporary with the first signs of globalisation, which sealed deeper and lasting relations between sports spectacles, industry, commerce and finance. Henceforth, a sports spectacle offered a new scale of publicity and the most profitable of service activities. The major source of financing sports has switched from participants (by 1914) to spectators (around 1980), and since to businesses, sponsors and TV networks (from the 1990s).

With the measured audiences for TV transmissions of hallmark sports events (the Olympic Games, Tour de France, World Cup football, Athletics World Championships), sports has become a privileged vector of communication for businesses wishing to conquer new markets, improve their images, and their international recognition.

This explains why with a private company marshalling these issues outside of government structures, Nigerian companies quickly identified and supported the ‘Team Nigeria’ concept that led to the 8^th All African Games and the Athens Olympics. The unethical did not happen for the Press to report in these two games. This buttresses the fact that continued government financing of sports in Nigeria is anathemic and ‘unconstitutional’ (especially at professional sports level).

As for professional sports in Europe, its finance rested on the 3Ss until the 1980s: spectators, subsidies (from the municipal councils), and sponsors, with a not negligible element arising from the media. In the 1980s and 1990s, this structure evolved: the media became an essential support, and new sources appeared – businessmen and industrialists investing in professional sports, bank loans, merchandising, and in some European countries, the appeal to the population to invest by way of the introduction of some clubs in the stock market. These are feasible in Nigeria with a cultured marketing by those who know the field well.

PROFESSIONAL SPORTS AND SPECTATORSHIP: That professional sports attracts spectators and turnstile receipts can be swiftly illustrated by the case of football (which is about 10% of profit in the game). In the course of the 1997-8 season, each Division 1 match attracted on average, 31,160 spectators in Italy, 31,112 in Germany, 29,189 in England, and 16,572 in France. In the same period, Nigerian clubs had an average of 15,601 (Raccah Rovers of Kano, IICC of Ibadan, Rangers of Enugu, Stationery Stores of Lagos).

This inflow has grown in recent years: in France the average gate in Division 1 was 14,212 in 1996-7, 10,728 in 1989-90, and 9,825 in 1980-81. The annual average revenue in a season was in Division 1 is between 2 and 2.5 billion Francs, and in Division 2 between 450 and 500m Fr, of which 20% and 15% respectively originated in match receipts. The high degree of poverty makes the Nigeria situation worse whereas some of the more organised leagues especially South Africa has virtually empty stadia but excellent television coverage to make the demand thirsty.

SN	COUNTRY (LEAGUE)	WEEKLY ATTENDANCE	REVENUE (2007/2008) IN EURO
1.	SPAIN (LA LIGA)	28,478	1.46B
2.	FRANCE (LIGUE 1)	21,034	0.96B
3.	ITALY (SERIE A)	25,304	1.4B
4.	ENGLAND (EPL)	35.592	2.4B
5.	GERMANY (BUNDESLIGA)	41,904	1.6B
6.	NIGERIA (NPL)	NOT AVAILABLE	ESTIMATED AT 4M

Given the figures officially released from the NPL, an average of N7.5m gets to the clubs yearly from incomes from the League.

Aminu Tambuwwal, Speaker. Can laws make changes?

Taking into account, however, the magnitude of players’ salaries, sign-on fees (which many players do not get and the weak chemistry of the NFA (now NFF) makes club sanctions difficult), transfer fees and external costs of a professional club, and income from spectators does not assure a club’s financial survival.

Until 2005 season when the League Board in Nigeria removed referees indemnity from clubs, it was worse in previous years. In 2012, the relegation and controversy in the Nigeria Premier League (NPL) involving Ocean Boys of Brass is tied to the bankruptcy of the NPL which shifted referees indemnities to the clubs whose finances depend on government releases bi-weekly or in some cases, rarely.

In foreign climes, TV rights and sponsors contribute more than spectators fees: for French Division 1 clubs in 1996-97, TV fees represented 25% of income, sponsors 20%, local authorities 11% and transfer fees 20% (in Division 2, the equivalent figures were 28%, 25%, 21%, and 7%). A corresponding tabulation of the figures for Nigerian clubs will show a poor show in all directions.

Taking together the recent growth in football as a spectacle, the TV and sponsors rights, (won initially by Africa Independent Television (AIT) but later by the Nigeria Television Authority (NTA) and Globacom Communications respectively) nonetheless has been tinted by a particular collection of shares of players’ sign-on fees by coaches before such players are fielded by teams.

The strict control of the management of professional football clubs, launched in Nigeria in 1990 and in France in 1991, should have been an example of a successful financial stabilisation of a professional sport. Ironically, in France not in Nigeria. The number of professionals employed has been limited by the DNCG to 21 players per club in Division 1 and 15 in Division 2 whereas in Nigeria the NPL has no such rules yet.

The global balance sheets of Division 1 clubs in 1989-90 was a deficit of 619million Francs, compared with 168million Francs for Division 2; three quarters of these clubs were ‘in the red.’ By 1994-5 D1 had become a beneficiary (of 60mFr), D2 in 1996-7 (by 1.3mFr), a year in which D1 showed a profit of 363m Francs. Such a financial redress took place under the league’s threat of relegation to an inferior, non-professional competition, irrespective of the standing they achieved in the Championship, a threat that materialised for some clubs. One can draw three lessons from this experience: a financial logic is imposed on the sporting logic; a sporting spectacle is clearly put at the service of a saleable professional sports product; and, a return to profit is a necessary (but not sufficient) condition to the outcome of privatisation through a stock market flotation. The transformation of clubs to shareholding companies does not escape this rule of thumb.

Sport spectacles evidently  attract finance from the media, especially TV, which desire to reach large audiences and the promise of significant publicity, for which they must acquire the rights of transmission (for a more detailed economic analysis of broadcasts and retransmission). The abolition of the public TV monopoly in 1984-87 and the concurrent appearance of several private networks have raised the price of transmission rights to a level where they are the most important source of finance for professional sports. A similar trend is visible worldwide: The value of the TV rights for the Olympic Games of 2004 has multiplied by 2.6 from those for 1988. The rights of retransmission represented 40% of the total income of the Atlanta Games or the Paris–Dakar Rally, 34% of the Barcelona Olympics, and nearly 30% of the Tour de France and the Roland-Garros tennis tournament.

In France, deregulation of broadcasting provoked a fiercer bidding between the networks for football coverage, and even an agreement in June 1987 between five of the chains to divide the football broadcasts did not call a halt. It required the signing in 1992 by all the networks of a Code of Good Conduct drawn up by the Higher Audiovisual Council (CSA) to put an end to the savage competition and to maintain the viewers’ right of access to information. This right had been put into question by individual acquisition of rights at great cost by the networks. The Code allowed the networks to:

Ø  transmit extracts of up to 90 seconds in the news and magazine programmes of sports events for which a competitor had acquired exclusive rights;

Ø  broadcast longer extracts at a payment pro rata to the competition;

Ø  authorise regional or local retransmission by a secondary broadcaster; and,

Ø  to forbid exclusive contracts between the networks and athletes.

In other words, it introduced rules seeking to reconcile the exclusive rights to events bought by the networks and the normal rights to information of TV viewers. It also envisaged avoiding the creation of agreements, such as those that ruled for several years between Darmon, TF1 and Canal plus to prevent sharing the broadcasting of European Cup football matches as it was in 1995. In 1996, the European Parliament pronounced that a right to exclusivity cannot deny a large part of the public of a member state the right to follow a sporting event live and ‘in clear’ on the small screen.

However, the European directive of 1989, Television without frontiers in Article 3b created in 1997, did not guarantee that certain events would not one day be retransmitted in a coded, Pay–per-view form. The networks devoted a growing amount of air time to sports events, which exceeded 1,946 hours a year in 1993 for the general networks (Canal Plus, FR2, FR3, TF1, M6). It grew to 2,788 hours in 1998, to which must be added more than 600 hours broadcast by Eurosport and AB Sport. The most broadcast sports in 1998 were all professional, in decreasing time coverage- football, tennis, basketball, cycling, rugby, motor sports other than Formula 1, golf, ice hockey, athletics, and Formula 1.

Ishola Williams...experimented with handball

The first five of these together accounts for about 60% of all annual sports coverage, with football and tennis together taking about a third. However well regulated, the competition between the networks continues to enrich the same privileged sports, but the networks tend to specialise in certain sports. As a result of the overbidding, televised sport is in deficit, but since the competition is so intense, the networks consider such programmes to be necessary to maintain their images, demonstrating their unwillingness to cede part of the market to their competitors. The situation requires better regulation, insofar as it is not surprising that profit-seeking triggers the development of Pay TV programmes, aided by the introduction of digital TV – and the entry of new commercial networks. Thus the next soccer World Cup is at risk of being available only to some TV viewers, and only subscribers to satellite channels may be able to follow the whole series of matches. 

CONCLUSION: Despite this comparative analysis, even within the African continent, it is obvious that we have made snail progress. We are not yet there. Corporate Nigeria has not yet seized the gaunt of maximising sports spectacles in Nigeria given our unique populations and human resource advantages. We can only become better but definitely not at the level of organisation of sports in the country which remains essentially pedestrian and amateurish.

It is obvious that Nigerians sports federations can stand on her feet walking and running without the funds of government, which ordinarily is meagre and flint, but concentrating on the provision or support to provide financially intensive stadia or and such facilities where needed from the government while she markets and delivers her other financial  requirements.

However, there must be a shift of paradigm between the sports Federations, Corporate Nigeria with ‘informed’ sports consultancies coming as interstitial professional agencies. If these standards work in smaller economic and other factorial climes like Cote d’ivoire, Tunisia, Algeria, South Africa, Egypt why not in Nigeria?

Corporate Nigeria alone is enough to muscle our sports like a regular sports business to stardom such that in three years we can find Nigerian football, handball, or sports franchises named on the Nigerian Stock Exchange (NSE) as major players. Until this Olympic height is conquered, we may just have to continue to work harder, training and re-training with an Olympian ambition remaining a dream.

Thank you.

BEING SPEECH DELIVERED AT THE NIGERIA SPORTS BUSINESS SEMINAR HELD AT THE TRANSCORP HILTON ON THE 13^TH OCTOBER, 2012. FASHIKUN, A FORMER NIGERIAN HANDBALL INTERNATIONAL PLAYED FOR ZABGAI OF BAUCHI, EL-KANEMI WARRIORS OF MAIDUGURI AND HANDBALL FOR ZAMALEK SC OF EGYPT. HE IS MANAGING EDITOR OF www.gongnews.net