Friday, October 6, 2017 12:00PM / Deloitte
has evolved as a distinct economic sector and major revenue earner in countries
where its capacity to deliver this contribution has been recognized, properly
harnessed and sustained”.
In today’s world, the reality is that sports is
a business. Perhaps this is why there is always that distinction between
those who pursue a particular sporting activity as hobbies or means of
relaxation from those who derive their livelihood from same platform.
Thus, sports has evolved as a distinct economic sector and major revenue earner
in countries where its capacity to deliver this contribution has been
recognised, properly harnessed and sustained. Obviously, evidence of its
capacity and continued potential is in the fact that today’s sports is
organised sports. Almost every single designated sporting activity has a
body which regulates participation in that sport. The sports sector is
also renowned for producing stars and superstars with larger than life
images. It does not matter whether it is an individual or team sport, so
many have transformed themselves and have emerged as global icons, citizens or
celebrities simply by excelling in their chosen sports. What does this
mean for Nigeria?
Presently it is difficult to measure the
contribution of the sports sector to gross domestic product (GDP) as sports is
not currently listed as one of the 46 activity sectors measured by
statisticians in computing the nation’s GDP. The non-recognition of sports as
an activity sector may be an affirmation of the fact that sports in Nigeria is
not yet a significant economic activity. However, we may opine that sports is
covered under the “arts, entertainment & recreation” sector which
contributed a parlous 0.20% to the rebased GDP in 2014, and 0.24% in 20161.
Today, football is one of the biggest sports
with strong followership in many parts of the globe. Nigerians also
follow football passionately whether local or international. What Nigeria
should do with its football (and or the sports sector at large) is already demonstrated
in the top 5 Leagues of Europe2
on the one hand and what the United States of America and China are doing with
soccer on the other hand. Accordingly, it becomes a no-brainer that
Nigeria does not have to re-invent the wheel as there are ample opportunities
to learn from and avoid the mistakes made by those countries in setting their
football sector right. Thus, Nigeria can leverage best practices that
have emerged in these countries and their experiences.
For instance, the radical change in German
football began after a terrible show at the 2000 European championships
co-hosted by Belgium and the Netherlands. The Germans exited without
winning a game, or a goal in the bag. There needed to be a change, and so the
process started. Antagonists of the success of the German football say
the support of the government of Germany gave them an unfair advantage.
Truthfully, but fairly, after all, not much can be done without the support of
In preparation for the World Cup in 2006, Germany
invested $1.84 billion in new and renovated stadia, helping German clubs to set
a record with 13.8 million spectators in the 2011/2012 season, according to the
New York Times. The rewards became inevitable.
In the past decade, Euro 2004 aside, the German
national team has shown consistency in all competitions, and this was recently
crowned with their convincing success at the 2014 FIFA world cup in Brazil.
Bundesliga continues to record positive
development as revenues hit another all-time high for the twelfth year running
at the end of the 2015-16 season. The 18 Bundesliga clubs exceeded the revenue
threshold of €3 billion for the first time with combined revenues totaling
€3.24 billion. This is €622 million more than the previous season, and represents
an increase of almost a quarter (23.7%)3.
With that, the Bundesliga remains the league recording the second highest
revenue in Europe4. In the
seasons ended 2014, 2015 and 2016, the Bundesliga paid €875 million, €980
million and €1.13 billion respectively in taxes and duties, according to the
Bundesliga annual reports.
The Bundesliga has contributed significantly to
job creation. Over 90,000 people have been provided with jobs either
directly or indirectly, according to the latest report. These results are
not solely attributable to the German Government. In a little more than a
decade, Germany invested nearly $1 billion in its youth programs, with
academies run by professional teams and training centers overseen by the German
Football Association, the Deutscher Fußball-Bund (DFB). The professional
teams played an important role, an obvious reason why homegrown German players
find it hard to play outside Germany.
These are important lessons for Nigeria to learn
from. According to Bodo Menze, former administrative director of youth
department at Schalke
“we looked over the fence for inspiration, but with our own particular approach
The Deutsche Fußball Liga (DFL) examines each
club’s fitness to participate in the league according to a range of criteria
all, financial competence.
One of the outcomes of the 2013 general meeting
of the league association is to change the licensing procedure as of the
2014/15 season. According to the Bundesliga Report 2014, “licensing will now be
based on the so called consolidated statements – instead of the previously used
separate financial statements – in line with the UEFA6 financial fair play assessment
With the huge figures thrown around, and like in
every other profitable trade, football, with all its promises and prospects for
Nigeria, is too big a business to be left in the hands of neophytes or those
blinded by greed or corruption or political cronies at the expense of the
Nigerian interest or commonwealth. The Bundesliga experience already
illustrates the various elements of the restructuring that are required in
Nigerian football to unlock the potential of the sector and release its fiscal
opportunities to complement the diversification plans of the Nigerian
government in the face of volatile crude oil prices.
Our plan in this series of articles which would
feature for the next 4 weeks or thereabout, is to dilate on the requisites that
will ensure that the Nigerian league becomes more viable, marketable and
attractive. This will enhance private investments and ensure that the league
becomes self-sustaining and is delinked from politics or government funding
analysis based on 2016 Statistical Bulletin issued by Central Bank of Nigeria
2. English Premiership
(UK), La Liga (Spain), Serie A (Italy), Bundesliga (Germany), and Ligue Un
3. The 2017 Bundesliga
Report – The Economic State of German Professional Football
4. Deloitte Annual Review
of Football Finance, 2017
5. FC Schalke 04 is a
professional club side in the German Bundesliga
of European Football Associations
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