Before we begin, we must understand the for-profit model that keeps our not-for-profit passion for football alive and thriving, especially overseas. Every sustainable development model of a not-for-profit endeavour needs a robust for-profit engine to secure longevity.
THE FOOTBALL REVENUE TRIAD
Like thriving enterprises, football clubs hinge on robust revenue streams to fuel their aspirations and sustain their operations. The revenue triad of Match Day Revenue, Broadcast Revenue, and Commercial Revenue forms the financial bedrock of these clubs.
- Match Day Revenue: Encompasses earnings from ticket sales, food, and beverages sold during home games. The allure of the game, the performance of the team, and the stadium experience significantly influence this revenue stream.
- Broadcast Revenue: Emanates from selling broadcasting rights to television and online streaming platforms. A league's global appeal and competitive nature are pivotal in attracting lucrative broadcasting deals.
- Commercial Revenue: Derives from sponsorships, merchandise sales, and brand partnerships. The club's stature and player roster are crucial to its commercial revenue potential.
Comparatively, European football clubs have traditionally excelled in optimising these revenue streams, with the English Premier League and the Spanish La Liga being quintessential examples. Through recent strategic investments, Saudi clubs are ascending on a similar trajectory. However, Ghanaian clubs lag in harnessing the full potential of these revenue avenues, indicative of a pressing need for innovative financial strategies and infrastructural upgrades.
THE INSPIRATION FOR THIS ARTICLE
So it’s last Friday, early afternoon. I get a call from Charles Nixon, Head of Joy Business. He’s inviting me to a Thought Leadership Event. But it’s the way that he does it that catches my attention.
He reminds me that I have lived in the UK and throws staggering stats at me on the English Premier League’s contribution to the British economy during and after COVID - staggering figures. I wondered if he knew I play in the Amateur Premier League as a goalkeeper with Pilsley Community FC.
So he has my attention.
Then I realised from the invite and flyers that Dr. Daniel McKorley would be there. McDan, the builder of stadiums, the Ghanaian King of Entrepreneurship, the one-person microeconomy stimulator… that McDan. As a long-time Accra Hearts of Oaks fan, I also geeked out when I saw our former Hearts CEO, Neil Armstrong-Mortagbe, would also be there. The icing on the cake is the coolest Chancellor in Africa: Prof Robert Hinson. And a couple of the finest, most renowned sports journalists and hosts there are.
At this point, I’m sold! And it didn’t disappoint. The theme was “Football Economy: Repurposing our Approach to Development, The Saudi Arabian Experience”. The Event was Insightful, to say the least.
SAUDI ARABIA'S FOOTBALL RENAISSANCE
Saudi Arabia has heralded a new era of football prosperity through strategic investments in top-tier talent and significant infrastructure upgrades. The acquisition of marquee players such as Cristiano Ronaldo, Neymar, and Benzema not only elevates the competitive stature of the Saudi Professional League but also casts a global spotlight on it. The ripple effects of these star-studded signings extend beyond the football pitch, luring in a broader fan base and enticing a slew of sponsorships, thus fostering a conducive framework for revenue augmentation.
Parallelly, Saudi Arabia has channelled substantial capital towards modernising football infrastructure. From erecting state-of-the-art stadiums to fostering a conducive environment for world-class talent, these infrastructural strides are indispensable cogs in the wheel of football revenue generation. The blend of international star appeal and infrastructural finesse has significantly bolstered the Match Day, Broadcast, and Commercial Revenue streams of the Saudi Professional League.
The resonance of these investments is noticeable in the surging attendance rates, increasing broadcast rights agreements, and lucrative sponsorship deals. The Saudi football blueprint is a testimony to the transformative power of strategic investments in elevating a league's global stature and financial robustness.
IMPLICATIONS ON THE THREE REVENUE STREAMS
Saudi Arabia's football investments have had a ripple effect on the revenue ecosystem of the Saudi Professional League, with a notable impact on the three pivotal revenue streams.
- Boosted Match Day Revenue:
- The influx of world-class talent like Cristiano Ronaldo and Neymar has spurred a surge in match attendance, driving ticket sales to new heights
- Concurrently, the investment in modern stadiums has significantly enhanced the match day experience, creating an atmosphere that not only entices more spectators but also justifies higher ticket prices.
- Elevated Broadcast Revenue:
- The star player endorsements have bolstered brand partnerships, drawing a plethora of sponsorships that have materially enhanced the clubs' commercial revenue.
- The presence of international football stars has exponentially expanded the league's viewership, rendering it a more attractive proposition for broadcasters and advertisers alike.
- Amplified Commercial Revenue:
- The star player endorsements have bolstered brand partnerships, drawing a plethora of sponsorships that have significantly enhanced the clubs' commercial revenue.
- The heightened global visibility of the Saudi Professional League also entices multinational corporations to enter into sponsorship agreements, thereby driving commercial revenue upwards.
The metamorphosis of the Saudi Professional League is symbolic of how strategic investments can substantially uplift the financial health of a football league. The Saudi model clarifies a viable pathway for other leagues that are in a difficult position, laying a blueprint that, albeit requiring a tailored approach, could be emulated to foster financial rejuvenation.
A CRUCIAL TAKEAWAY
The Saudi example should be seen in the proper context. In Saudi Arabia, the government's Public Investment Fund, the sovereign wealth fund of the nation, bought majority stakes in the top clubs of the Saudi Pro League, making decision-making on investments into the clubs, infrastructure and the League a far more straightforward endeavour that it would be in, say, the Ghana Premier League.
The problem of investment for growth in non-English football leagues is well-documented. On one side of the coin, there's the allure of escalating League and club revenues through enhanced viewership, akin to the lucrative trail blazed by the English Premier League. Yet, on the flip side lies the upfront financial leap needed to attract superior playing talent, essentially to enhance the on-field product, which, in theory, should magnetise more viewers.
This cyclic dilemma is not just a solo expedition but a collective one, where all clubs within a league must be on the same fiscal page. The obstacle? Convincing the cohort of all the club owners in a League to unclench their fists and loosen the purse strings, especially when many are already echoing sentiments of over-investment with underwhelming financial returns. Imagine achieving this in Ghana! Not an easy feat.
European football leagues, like the Bundesliga or Serie A, have shown a semblance of the investment-viewership growth model. Germany's Bundesliga, for instance, prides itself on its boisterous matchday atmosphere, owing to its club's fan-centric approach, which has also been a drawing card for TV viewership locally and internationally. On the commercial front, clubs in these leagues have sought to augment their brand allure through strategic player signings and brand partnerships, propelling their commercial revenue streams.
However, the financial model of football is not without its pitfalls. The English Premier League, despite its global viewership magnetism, has its clubs grappling with soaring player wages, which, as of 2019, consumed as much as 61% of their revenues. Around the same 2019, in Spain, Barcelona's financial woes with the player-salary conundrum had the club pay 80-90% of all of its revenues to players as salaries. This financial back-and-forth, balancing investment for growth and fiscal prudence, is the tightrope that non-English leagues and their clubs navigate.
Moreover, the historical relegation/promotion procedure in English football leagues underscored a different form of financial dynamics, where non-league clubs were also in the running for promotion based on their performance in feeder leagues, showing a different approach to fostering competitive football.
The road ahead demands a holistic strategy for non-English leagues aspiring to elevate their financial standing. It's about fostering a competitive on-field product, prudently managing financial resources, and innovatively enhancing the league and club brands to attract more eyeballs in the stands and behind the screens. This also nurtures a sustainable financial model that ensures the longevity and stability of the clubs and leagues they represent.
The narrative of investing for growth in football is a complex, multi-actor play, with the stakes as high as the potential rewards. Yet, the essence of football - the thrill of competition, the communal spirit of fandom, and the joy it brings to millions - underscores the imperative of finding a sustainable path to financial growth and stability in the beautiful game.
TRANSPOSING THE SAUDI MODEL TO GHANA
The narrative of Saudi Arabia's football evolution is a testament to the potential transformation that strategic investments and meticulous planning can trigger in the sports sector. However, transplanting this model into Ghana's football ecosystem is no straightforward task. It demands a nuanced approach that respects Ghana's unique socio-economic and footballing context.
A. Feasibility and Necessary Adaptations
Saudi Arabia's football metamorphosis was significantly propelled by abundant financial resources, government backing, and the allure of the Saudi Professional League to international stars. Ghana, although boasting a rich football heritage, faces a starkly different economic reality. The financial muscle that drove Saudi's football renaissance may not be as robust in Ghana, necessitating a tailored approach.
- Grassroots Development:
- Unlike the Saudi model, which heavily leaned on importing foreign talents, Ghana might need to focus more on grassroots development. This includes nurturing local talents from a young age, improving football academies, and creating a conducive environment for the growth and flourishing of domestic football talents.
- Infrastructure Enhancement:
- Stadium and training facility upgrades are essential to mirror the infrastructure leap seen in Saudi Arabia. However, this would require substantial investment, possibly through government funding, private-sector engagement, and international partnerships.
- Policy Frameworks:
- The establishment of favourable policy frameworks can act as a catalyst for attracting investment into the football sector. This includes creating incentives for private sector investment, streamlining regulatory frameworks, and fostering a business-friendly environment for football-related enterprises.
- Engagement with International Football Bodies:
- Collaborations with international football bodies and leagues can help boost the profile of Ghana's football scene, possibly attracting foreign investment and expertise in the process.
- Enhanced Broadcast and Commercial Strategies:
- Evolving the broadcast and commercial strategies to enhance revenue generation is crucial. This includes better broadcast deals, enhanced marketing strategies, and stronger brand partnerships and sponsorships.
B. Stakeholder Engagements
The journey towards replicating Saudi's football success in Ghana is a collaborative venture. It necessitates the convergence of efforts from various stakeholders:
- The government's role is pivotal in creating a conducive environment for football growth. This includes infrastructure development, policy formulation, and possibly direct financial support.
- Private Sector:
- Engaging the private sector can unlock substantial financial resources. Establishing partnerships with local and international corporations can lead to sponsorships, investments in infrastructure, and other financial support mechanisms.
- Football Community:
- The football community, including clubs, players, and fans, must be at the heart of this transformation journey. Their engagement is crucial for creating a vibrant football culture that attracts investment and generates revenue.
- International Partnerships:
- Forming alliances with international football bodies, clubs, and other stakeholders can provide the necessary expertise, financial support, and global exposure.
Ghana can tailor a football financial model that aligns with its unique circumstances by keenly examining the Saudi model, identifying the adaptable components, and engaging critical stakeholders. The road ahead may be challenging, but with a united front, the goal of financial sustainability in Ghana's football scene becomes an attainable dream.
PROSPECTIVE GAINS FOR GHANA
A rejuvenated football sector in Ghana, driven by the Saudi model's influence, could herald economic and social benefits that transcend the football pitch.
A. Economic and Social Benefits
- Employment Generation:
- With a surge in football-related activities, many job opportunities could be unlocked, spanning players, coaches, administrative staff, security personnel, and a host of auxiliary services, including catering, transportation, and merchandise retailing.
- Youth Development:
- Football has historically been a conduit for youth engagement and development. By channelling energies positively, Football can play a pivotal role in nurturing discipline, teamwork, and a sense of community among the youth.
- Tourism and Global Recognition:
- A thriving football scene could become a magnet for football tourism, drawing fans and sports enthusiasts from around the globe to Ghana. The international spotlight could further brand Ghana as a sporting nation, bolstering its global standing.
- Local Business Growth:
- The spill-over effects of a vibrant football sector could invigorate local businesses, especially those near football venues. From eateries to memorabilia shops, the ripple effect could be substantial.
- Community Cohesion:
- Football, often termed the universal language, can foster community cohesion, engender local pride, and ignite a collective spirit among Ghanaians.
B. Potential Partnerships and Sponsorships
- Corporate Sponsorships:
- With a buoyant football scene, the allure of corporate sponsorships could escalate. Local and international companies might find value in associating their brands with Ghana's football renaissance, thereby injecting much-needed funds.
- Broadcast Rights Deals:
- A competitive and attractive football league could lure lucrative broadcast rights deals akin to the Saudi experience. This could unlock a steady stream of revenue, aiding the financial sustainability of Ghana's football ecosystem.
- Merchandising Partnerships:
- Opportunities for merchandising partnerships could abound, where reputable brands could collaborate with football clubs on merchandise production and distribution, fostering a culture of official merchandise consumption.
- International Club Partnerships:
- Ties with international clubs could be cultivated, paving the way for player exchanges, coaching education, and shared resources that could mutually benefit all parties involved.
- Government and International Bodies:
- Collaborations with government bodies and international football institutions could provide the structural and financial support needed to propel Ghana's football scene to greater heights.
The potential gains for Ghana from a revitalised football sector are significant and far-reaching. Beyond the tangible economic benefits, the social impact could be profound, making pursuing a football financial renaissance a worthy national endeavour.
THE ROAD AHEAD
The journey towards financial rejuvenation in Ghana's football scene is laden with promise and challenges. However, the road ahead is clear: a concerted effort among the government, private sector, and the football community is indispensable to kickstart a financial renaissance in Ghana football.
A. Critical Steps
- Investment in Infrastructure:
- The dire need for modernised and well-maintained football infrastructure cannot be overemphasised. Investments in stadiums, training facilities, and other necessary football infrastructure are fundamental to raising the standard and appeal of the game.
- Policy Frameworks:
- Establishing clear, supportive, and enforceable policy frameworks is essential to encourage investment, ensure fair play, and promote financial sustainability within the football ecosystem.
- Talent Development and Management:
- A robust mechanism for scouting, developing, and managing football talent must be instituted. This includes players, coaches, referees, and other key personnel involved in the game.
- Financial Management and Transparency:
- Enhancing financial management practices and fostering transparency within football institutions will go a long way in attracting investment and sponsorships.
- Marketing and Branding:
- Aggressive marketing and branding efforts are crucial to elevate the profile of Ghana's football, both domestically and internationally, which, in turn, could open up new revenue streams.
B. Stakeholder Collaborations
- The government's role is pivotal in creating a conducive environment for football to flourish. This includes policy support, infrastructure development, and possibly tax incentives for investors and sponsors.
- Private Sector:
- The private sector, including corporate bodies, can play a significant role through sponsorships, partnerships, and direct investments in football clubs and related activities.
- Football Community:
- The football community, encompassing football clubs, associations, and fans, must rally together to foster a culture of excellence, professionalism, and financial prudence.
- International Partnerships:
- Establishing partnerships with international football bodies and clubs could facilitate knowledge transfer, technical support, and financial investments.
- Educational Institutions:
- Collaborations with educational institutions could help nurture football talent from a young age, providing the necessary training and education to aspiring footballers.
The road ahead requires a multi-faceted approach, intertwining investment, policy reform, stakeholder engagement, and relentless effort. The blueprint laid down by Saudi Arabia serves as a beacon of what can be achieved with the right blend of vision, investment, and collaboration. As Ghana stands on the cusp of a new football era, the call for a concerted effort reverberates across the football landscape, echoing the sentiment that together, a financially sustainable and thriving football ecosystem is within reach.
The football world in Ghana teeters on the precipice of promise and peril. A nation with a rich football heritage, its potential remains untapped mainly due to many challenges, with revenue generation being predominant. This financial predicament not only stifles the growth of local clubs but also impedes the nurturing of budding talent that can propel Ghana football to international acclaim.
On the other side of the globe, Saudi Arabia has embarked on a transformative journey, injecting substantial investments into its football ecosystem. The acquisition of world-class talent and significant infrastructural advancements have ignited a renaissance in Saudi football, catalysing considerable improvements across its entire football ecosystem. This juxtaposition illuminates a potential pathway for reviving Ghana's football fortunes, warranting a deeper exploration, as I have attempted in the article above.
I hope you found this article to be an enjoyable read. Your feedback is highly valued and appreciated. I welcome your suggestions for topics you want me to address or provide insights on. You can schedule a meeting with me at your convenience through my Calendly at calendly.com/maxwellampong. Alternatively, you may connect with me through various channels accessible on my Linktree page at https://linktr.ee/themax.
Wishing you a highly productive and successful week ahead!
Dr. Maxwell Ampong is the CEO at Maxwell Investments Group . He is an Honorary Curator at the Ghana National Museum, the Official Business Advisor with the General Agricultural Workers’ Union of Ghana (GAWU) under Ghana’s Trade Union Congress (TUC), and an Executive Ambassador at the Zongo & Inner-Cities Development Secretariat (ZICDS). He has a keen focus on relevant economic topics and general perspective pieces.