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Professionalisation of African football (part 2): Clubs facing the challenge of financial dependence – is stadium ownership the solution?

According to the Jeuneafrique newspaper, more than half of TP Mazembe’s income still comes from its president, Moïse Katumbi. However, his strategy to remedy this dependence makes the club a model in Africa. His commitment is to “maximize the club’s own revenues” by acquiring the production tool of modern football clubs, namely the stadium.
This puts the club in the ideal position to conquer new and more sustainable sources of income such as ticketing and commercial income (sponsorship and merchandising).
Today with its own modern stadium of 18,500 seats, TPM has the biggest private stadium in Africa which generates up to $ 70,000 ticketing revenue in Champions League big games, and attracts more than 6 sponsors (source: Jeuneafrique). The success of the project convinced the president to launch the project of a larger stadium with 50,000 seats.
Tp Mazembe stadium

The stadium is in fact described as “The production tool” for modern football clubs because it’s the source of most of the club’s income at maturity. These are more sustainable because they are independent of an individual. However, to fully enjoy these revenues, having your own stadium is a proven advantage. It is indeed shown that the 5 richest clubs in the world all have their own stadium and also generate the highest ticketing income, namely:

  • Manchester United (137.5; 44% of the total budget),
  • Arsenal (134, 6; 51% of the total budget),
  • Chelsea (110.7; 39% of the total budget),
  • FC Barcelona (88.6; 31% of the total budget),
  • Real Madrid (82.2; 23% of the total budget).
Screenshot of Éric Besson’s report entitled “increasing the competitiveness of French professional football clubs” published in 2008

But the stadium does not only offer income from ticketing. It’s the lesson that we learn from the correlation observed between ticketing and commercial income (merchandising and sponsorship), since the same 7 clubs generate more income from these two poles.

Comparative ranking of the clubs with the highest revenue in ticket sales and commercial income. Screenshot of Éric Besson’s report entitled “increasing the competitiveness of French professional football clubs” published in 2008.

In fact, the stadium is not only a source of direct profit but equally a powerful marketing tool. To better understand the stadium’s potential beyond ticketing, let’s start from the observation that the stadium is an element of the club’s identity. It help to distinguishe a club from the others. It very quickly merges with the club to the point that it becomes impossible to dissociate them. The stadium offers the club the opportunity to attract fans and above all to create a unique relationship with them, thus fosters their loyalty and offers the opportunity to other companies to associate their brand with the image of the club, sponsorship and merchandising find all their justification. If the club wants to be able to build this particular relationship with its fans, it is important to keep control over its stadium “Thus, mastering their production tool, the clubs set up strong marketing policies, target the clientele, adapt the stadiums for a better hosting, attract sponsors, improving on their image”.

Such a mastery is ideally done by having its own stadium, is precisely what TP Mazembe did.

Non-ownership of the stadium… a handicap!

The non-ownership of the stadium increases the risk for the club of not mastering its production tool and of not being able to adapt it to the standards of the competitions in which it participates or wishes to participate, to its strategic and marketing choices, thus increasing the difficulties [ …] To increase commercial income “,

affirmed Eric Besson in his report entitled “increasing the competitiveness of French professional football clubs” published in 2008. This report demonstrates how the option of renting stadiums has resulted in slower development of French clubs in Europe and increased fragility. In terms of budget, the French championship is 5th behind England, Germany, Spain and Italy (the gap with Italy is just of 20%), with the lowest commercial incomes, and dependence on TV rights which represent 57% of revenues.

The same stadium rental system shows its limits in South Africa, where it deprives clubs of their freedom by exposing them to competition from other clubs or other events. Orlando Pirates is suffering from this situation, as the club has often been deprived of his stadium by the concessionaire Stadium Management South Africa, in favour of other events such as concerts.

PSL - Kaizer Chiefs v Orlando Pirates | Sport24
Orlando pirates fans

The club is often forced to relocate its home games. A very uncomfortable situation for the supporters. Umar Farouk Mathir, famous supporter of Orlando Pirates told us:

“Clubs don’t realize how much they are losing in the long run. Supporters hate stadium changes. This can sometimes discourage them. ”

The case of Asec Mimosas in Côte d’Ivoire deserves special attention. Its investments focus mainly on its training centre and other activities not related to football, such as the acquisition of a hotel complex. Modelled on the Amsterdam Ajax model, it is above all intended to be an academy that trains footballers to resell them in the biggest clubs.

Ligue des Champions Afrique : l'ASEC Mimosas revient de très loin !
Asec Mimosas FC

So the club lives mainly from the sale of trained players (50% of the budget), ancillary activities and subsidies (29%). The production of the professional club itself is reduced to 20% sponsorship, 1% ticketing (according to statistics from Le monde). By concentrating its investments on annexe activities, Asec is taking the opposite path from TP Mazembe by creating dependence on an external source of income. We must therefore fear that the professional team will become a financial abyss which would become economically absurd to maintain. The current situation does not, however, seem ideal for increasing the team’s own production, since Côte d’Ivoire certainly offers the worst solution in terms of stadium policy. Stadiums generally belong to the state that makes them available to the league. Thus, when a stadium is built in a city, all clubs in that city and in the surrounding cities where there is no stadium have the right to schedule their games to this stadium. This sharing of the same stadium with other clubs is not conducive to maintaining a conducive playground to the practice of their style of play. This is particularly harmful to Asec which wants to be an academy and claims the identity of a club that produces a beautiful game. This is the argument that allows them to build and maintain their fan base.

The disaster of the mythical clubs of Cameroon allows us to better understand the dangers of this system. Union de Douala, for example, was initially forced to share the Reunification stadium with sometimes up to 8 other clubs, as was the case in the 2016/2017 season. The first consequences are unfavourable scheduling such as playing on a Sunday at 1 p.m. under a temperature of 40 ° C or Monday at 3 p.m., which is not likely to encourage fans to come and support their team.

In addition, overuse has led to a rapid deterioration of the playing area, thereby lowering the quality of the show. Worst, for the past 2 seasons, the Reunification stadium has been unavailable due to work for the preparation of Chan 2020 and Can 2021.

The Douala reunification table – Ready to host CHAN and AFCON games

Union has been relocated to the neighbouring city of Limbe where it is wandered from stadium to stadium , depending on availability. A generalized situation which made Oumarou Sokba, then coach of Apejes de Mfou FC, say,

“The law of domicile no longer exists in the Cameroonian championship”.

This situation is certainly not unrelated to the spectacular decline of Union of Douala, since abandoned by its fans who can no longer follow it in its changes of domicile, the club has almost lost its ticketing and commercial revenues. She is almost dead financially and even athletically.

Elite One: Union de Douala enchaîne – Lion Indomptable
Union FC of Douala

Now unable to provide salaries of around 150,000 CFA francs / month (around $ 255), the club has accumulated overdue payments for years (according to fifpro and synafoc), the club has disappeared from the international scene and only exists in a dying local championship with competitors practically all in the same survival situation.

Version française originale

André Marie Awoumou Manga, business lawyer, sports columnist

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