Thursday, 27 June 2013 00:00

EXPANDING THE BUSINESS OF SPORTS FOR THE BENEFIT OF STAKEHOLDERS

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MORE THAN JUST BREAKING SWEAT:
From the worship of the gods, to the prurient pursuits in the circuses and amphitheatres in ancient Rome, to the Olympian days when it was just enough to take part in a bruising marathon race and be rewarded with a mere frond, sports as we know it today has transformed to, among many other things, a big money-making machine.

THE FOOTBALL PERSPECTIVE:
Combination of talent, youth, passion, emotion, fans and money
It is a universal language
A weapon for war and diplomacy
In view of the broad character of the subject of sports, I have decided to centre this presentation on the management of the Nigeria Professional Football League (NPFL), also now known as the Glo Premier League, by the League Management Company Ltd (LMC). This is for the following reasons.
The NPFL is currently undergoing structural and administrative reforms that I judge to be, not just relevant to the topic at hand, but quite embody the subject as well.
These reforms derive their relevance to the business at hand on account of their contemporaneity and thus provide me ongoing practical experience to address the topic.

Who Are the Stakeholders?
Before proceeding to consider the mechanisms for expanding the business of sports, I think it is very critical that we achieve clarity as to who the stakeholders are, at least from the view point of NPFL. I would venture to list the stakeholders of professional football in Nigeria as:
The football players
The clubs 
The owners of the clubs (including state governments)
Bodies such as FIFA, CAF, WAFU, NFF and LMC
The fans and millions of followers of the game in the general population.
Sponsors
As will be shown later, there is a secondary category of stakeholders, whose interests and involvement in the game of professional football is not ordinarily acknowledged.
 
Defining Benefits
Considering the foregoing list of stakeholders, the possible benefits in participating in professional football could be said to be inter-linked:
For the football players – proper and documented contracts, enhanced remuneration packages and general welfare issues.
For the clubs – proper league administration and organization for conducive competition.
For the owners of the clubs – a stable, predictable, competent, dynamic, transparent administration to guarantee a return on investment.
For the regulatory bodies – compliance with the rules of the game to ensure healthy competition and overall growth and appeal of the sport.
For the fans and followers of the game – a well organized competition that provides real competition, excitement, big rewards for their heroes and the drama of real life uncertainty.
For the sponsors – a combination of all of the interests of the other stakeholders, to ensure the continuous appeal and marketability of professional football as a spectacle.

Other Stakeholders?
The secondary category of stakeholders mentioned previously consists of those whose involvement in the game of professional football is generally in the background. They include:
Doctors
Physiotherapists
Lawyers
Grounds men
Communications experts (graphics, design, e.t.c)
Commentators and the media
Technicians
The Taxman 
Advertising practitioners and marketing practitioners
Security providers
Given the nature of this gathering, I should be particular in stressing the very crucial roles of lawyers in administering and organizing professional football. This role shall be expanded upon later.
 
A Game or a Business?
There exists still in the minds of many in our environment, the confusion whether football is a game or business.  
This unresolved conflict, for instance, underscores the ambivalence that attends matters relating to sport administration and funding in Nigeria. 
The root of this problem lies in the historical involvement of government as the principal organizer and financial sponsor of sports.
Government saw (still sees?) sports as part of its social responsibility agenda.
Government has no expectation of financial return from its involvement in sports generally.
Government concerned only about the social cohesion provided by sports.
This resulted in progressive deterioration in all aspect of the game, including infrastructure decay and dilapidation of sporting arenas nationwide.
The “use and dump” syndrome arose from the apparent disinterest of government in matter of remuneration or general welfare of football players and other sportsmen.
 
Changed nature of the Game
Professional football is at the same time a game as well as a business. 
Both aspects of its modern nature are mutually reinforcing.
It needs to remain a game to continue to hold its mass appeal and it requires the investors’ capital to ensure a proper administration and organization.
The modern game demands the promotion of players’ remuneration and general welfare.
Investment in infrastructure is promoted. In well-run football leagues, clubs must show proof of ownership or right to use modern stadia and other stipulated facilities.
The demographics present a very robust prospect that ought to be exploited as a sub sector of the entertainment and leisure industry.

Mechanism for Expansion
As I have shown previously, the benefits and interests of all stakeholders of professional football are inter-linked and inter-dependent. The mechanism for creating expansion that engenders benefits for all stakeholders starts with the alteration of the ownership structure of the clubs.
In the NPFL, all but two of the participating clubs are wholly owned by state governments.
The clubs should be restructured as corporate entities or acquired by corporate entities in line with FIFA regulations.
Government’s absolute ownership should be reduced to about 30% stake in the clubs.
This will create room for participation by other interests and investors.
This will also address the long-term negative effects of government sole sponsorship and organization of sports.
The expanded participation of other private interests will engender best practices in accordance with the rules of the game.

Role of the League Management Company Ltd (LMC)
The LMC is a newly-formed private limited liability company registered to carry on the business of managing football and other sports, whether in league or other formats. It also has the power to carry on entertainment promotion and management. The company is owned 5% in part by the Nigeria Football Federation (NFF). The future ownership will expand to accommodate the participating clubs once they are restructured and ready to take up this responsibility.  LMC currently administers the NPFL under license from the NFF.
To provide a properly structured central administrative entity for the NPFL
To ensure a stable, efficient, dynamic and transparent administration for the NPFL.
To safeguard and promote the welfare and interests of players.
To ensure the restructuring of the participating clubs.
To ensure compliance with the rules of the game.
To preserve and promote the interests of sponsors.
To safeguard the image of the NPFL as a marketable brand.

Again, I must stress the important role lawyers can play in facilitating the work of the LMC. The frequently mentioned rules of the game include the rules and regulations of FIFA, CAF, WAFU, NFF, LMC as well as relevant statutes of the National Assembly.
It is apparent that professional football is administered and organized within a legal and regulatory matrix.  The higher standards of corporate governance the LMC will be demanding of participating clubs will require greater involvement of legal practitioner in the industry.
Each stakeholder requires legal advice and representation at most stages in the administration of the game.
Lawyers are the only professionals recognized and permitted by FIFA to act at the same time as lawyers and players’ agents without the need to obtain agents’ license.
The involvement of lawyers in this area will facilitate the reforms driven by LMC, improve the quality of representation and serve to protect the rights and interests of the stakeholders.
Regardless of uninformed but popular opinion about domestic laws being excluded by FIFA covenants, I dare say, only the Law can arbitrate youth, talent, emotion and money successfully.  
Thank you, my learned audience for your kind attention.
 

 
AT THE SECTION ON BUSINESS LAW ANNUAL CONFERENCE ON TUESDAY 18TH JUNE 2013 AT EKO HOTEL AND SUITES, VICTORIA ISLAND, LAGOS
BY HON. NDUKA IRABOR, CHAIRMAN LEAGUE MANAGEMENT COMPANY LIMITED 
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