Africa

Professionalisation of football in Africa (part 1): Can we be inspired by the Zambian model?

In African football, only few clubs including the Maghreb and South African big teams have a very advanced level of professionalization. The immense majority of clubs are unfortunately struggling with an unfavorable economic environnement. The later are victims of a traditional concept which does not make football an economic activity, the low purchasing power of the populations which does not favour the markets linked to football, the structural problems etc. Due to all those challenges, the clubs retain very little attraction in the eyes of impatient investors. In such a context, how then to establish and support a football club? The Zambian model has caught our attention, since in recent years, clubs from this country have shown good health in African competitions and are attracting more and more foreigners.

The Zambian model

The Zambian model consists of the creation of clubs by companies for social activities. The clubs therefore belong to these companies, which provide most of the funding. It is certainly not a Zambian invention since other countries have tried it. One of the most famous cases being that of Bayer Leverkusen in the small district town of Leverkusen in Germany, which with its 160,000 inhabitants offered little potential for a football team. The pesticide manufacturing company “Bayer” created the “Bayer Leverkusen” which grew to become an autonomous entity, a large European club which reached the 2002 UEFA Champions League final.

Leverkusen | Career Germany
Bayer Leverkusen head office

Zambia has adopted this model and generalized it to the point where it has become its appendage. Everything started in the years after independence as the then Zambian authorities required all institutions to have clubs. This led to the birth of Nkwazi (owned by the police), Green Buffaloes (owned by the military), Green Eagles (national service) etc…
In this model, players are paid as employees of the parent company and have the opportunity to join her afterwards. The idea will continue to make revenue and attract large companies like Zesco (electricity company), Zanaco (Bank), and mining companies (one of which owns Nkana fc).
Is this model sustainable and can other African countries learn from it?

We Are Ready – Joe Bwalya – Zambia today
Zanaco players celebrating – We Are Ready – Joe Bwalya – Zambia today

Traps to avoid

This model presents a trap that Zambian football actors are cleverly trying to avoid. When you evolve from the amateur to the professional level, the running costs increase considerably and it becomes very heavy for the company that owns the club. While waiting for a possible return on investment, it is necessary to successfully reduce the charges.

It is also well known that businesses are not immune to bankruptcy or a change in policy. Would it then be possible for an investor to be interested in the club in view of the buyout? This is the question that must constantly be asked by the management team. It is the challenge to be met with this model. This requires hard work to increase the popularity of the club and provide it with a fan base capable of supporting the club and enabling the economy of the sport in its modern conception, notably through merchandising, sponsorship, ticketing. To this , the club must not only be known to the public, but also loved, hence the need to work on its image. This involves victories and marketing. The club must also be endowed with real estate assets (having its own stadium is premodial) to increase its BANK BORROWING CAPACITY. These are elements that increase the attractiveness of the club vis-a-vis potential investors.

Failure to meet this challenge led to the bankruptcy of this model in Cameroon. No longer able to cover the charges and lack of buyers, companies which owned clubs had most of the time disengaged themselves and abandon the clubs which ended up disappearing.
This was notably the case of Prévoyance FC (in its time owned by the National Social Security fund, CNPS), Port FC (owned in its time by the port of Douala), Impôts FC (owned by the Tax department)…

The good Zambian example

Diversification of sources of income

The case of Nkana FC illustrates quite well the general situation of Zambian clubs. It is one of the oldest clubs (founded in 1974), the most successful and traditionally considered to be the most popular in Zambia. Sources refer to a financial contribution of more than 80% from its owner, the Mopani mining company. This shows how the clubs remain fragile, but efforts are noticeable.

The intelligence on the side of the Zambian football authorities is to have succeeded in finding the means to lighten the load of the companies, to multiply the assets, and to diversify the sources of income. Clubs therefore no longer rely solely on funding from the parent company. A contract with Super Sport allows the league to redistribute TV rights and another sponsorship contract with MTN allows a bonus to be paid to each club according to its ranking at the end of the season.

SuperSport pay top dollar for Zambian TV rights

We must also salute the strategic intelligence of the clubs which manage to create other sources of income and to acquire real estate heritage, so the majority of clubs have their own stadium (only 3 clubs out of 20 do not have one).

So, even if Nkana fc is still 80% funded by Mopani, the club has taken advantage of its sporting success to build popularity over the years and diversify its sources of income. Nkana Fc succeeds in generatiing $ 161,000 from external sponsors, $ 200,000 from replica sales on a forecast of $ 600,000 in 2017. Ticket sales which can amount to $ 40,000 in a single game (KITWE derby in 2017), figures reported by zambia eye. The club also owns its stadium, which is a major asset for future investment.

Zesco United is the most spectacular development case. Present in the Zambia Super League since 2004 only, the club in its 16 years of existence already challenges Nkana FC in terms of popularity and considerable economic potential. Through his sporting and marketing success, Zesco was able to take advantage of the demographic potential of the city of Ndola (about 475,000 inhabitants) and the capacity of the Levi Mwanawasa stadium (49,000 seats). The club hits record attendance of 13,000 spectators on certain championship games (Ndola derby in 2013). Zesco is equally ranked 65th most followed club on social networks in Africa (first in Zambia) by the African football Digital benchmark with 102k followers.

This has paved the way to a big sponsor on its jersey which disburses the sum of 1.7 million Kwacha (about US $ 91,000);figure reported by Diana Chipepo in daily-mail.co.zm). This is proof that the club already has potential that can attract investors, but must continue to work on its value.

There is still a long way to go

Despite the efforts observed, there is still a long way to go for the Zambian clubs.
In terms of popularity, Zambian clubs are far from the 20,000,000 average spectators for a club like cs constantine from Algeria, or 27M from followers of AL Ahli which allow them to derive considerable income from merchandising and sponsorship.

It is also important to have an insightful business development department to get the most out of different contracts including buying and selling players, being able to attract partners, negotiate various licenses. The training and acquisition of real estate are also important sources of diversification of sources of income to which we will return later.

Awoumou Manga André Marie, sports columnist, Business Lawyer

 

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

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