Last week it was reported that Manchester United was the
most valuable soccer club in the world.
Audit firm KPMG using an algorithm that
took into account a club’s profitability, popularity, sporting potential,
broadcasting rights and stadium ownership, put the club’s value at €3.095b
(sh12.7trillion)
The team from the North West of England, beat Spanish club
Real Madrid into second place, followed by Barcelona, Bayern Munich and
Manchester city.
For Manchester United this is a far cry from the team which
started out as a department team for a railway company, went into receivership
at the beginning of the last century, was relegated several times before the
second world war and had to endure 41 barren years before it won its third league
title in 1952 (so Arsenal should not lose the faith).
Closer to home it was reported that most teams in the just
concluded soccer league season are staggering under the weight of massive debt,
many have not paid their players in months.
If the richest sport in the country is suffering like this
one shudders to think about the lesser sports.
"A cursory look around our league throws up some disturbing facts. If we were to judge our teams against the aforementioned KPMG parameters none are profitable, a few are popular or own a stadium, most sporting potential is non-existent and the sh50 fees from broadcasting rights barely covers payroll....
It’s not difficult to see why this is so. Beyond a dearth of
business management talent (I am not talking about having an MBA) most team
structures are more of hobby associations than sustainable enterprises.
They generate little revenue from the traditional sources --
gate collections, membership, endorsement contracts or player transfer fees.
But even the little they get they lose to a combination of
the officials’ sticky fingers and a general financial ineptitude.
Assuming our soccer officials are well meaning individuals
who are totally out of their depth in trying to make a success of their teams,
rather than rapacious sharks whose sole intention is to smash and grab, I
recommend for the off season reading Robert Kiyosaki’s “Rich Dad’s Guide to
Investing”.
Kiyosaki has a simple model which he overlays on businesses
to determine whether they are a worthy investment or not.
Called the B-I pyramid at its base it has cashflow,
communication, systems, legal status and then at the peak the product. And this
pyramid is further supported by the enterprise’s mission, leadership and team.
Notice that between the product – the entertainment, and
cashflow the club’s legal status – the relationship between shareholders and
members for instance, the systems the club employs to sustain the business and
communication, in this respect our clubs continue to operate like the old
Indian dukas where it was enough to throw the shop’s doors open and customers
will come.
That could work those days when you were the only shop owner
on Kampala road.
The interesting thing is that marketing ones product or self
is so much cheaper than it was before. A face book page, a twitter handle, a
SMS blast on match day can do wonders for a team. For much less than the price of
a sugar cane
For all this to happen leadership comes first. What kind of
leadership will lift our teams out this quagmire? One with a vision for the
club that will not only aim for success on the pitch but even more important
one with a goal of long term sustainability. Not one with eyes bulging at the
crumbs now available in the game.
Like a business a club can only grow as big as its promoter’s
vision. The bigger the better.
And by the way this is not calling for a takeover of teams
by egotistical money men, although leverage greed and vanity to build teams has
worked before.
Barcelona FC which last year pulled in more revenue £570m
than Manchester United, £515 is owned by the supporters, like many of our
teams.
In Barcelona’s case leadership is more crucial than in
Manchester United’s case in the latter’s case it is a “public” property and you
know what they say – beware of the stupidity of people in large numbers.
"The point is that we have to realise that our sporting entities, not only soccer, are floundering not because of the economy or lack of government support or lack of talent, but for lack of leadership and more specifically business management. That’s the place to start. Once you have that in place everything else will fall in line...
But then again there is the real possibility that this is
not news to the people who matter. I hope not because then you would have to
wonder about their motives for not effecting it, for maintaining the status quo.
But in the event that this is all news, thank me later. Or
better still pay me!
