Business of Football

Will Nigerian and other Sub-Saharan African football clubs ever achieve their full potential? From Senegal to Ghana, from Nigeria to Kenya, the story is the same – these “home” teams suffer from inadequate coaching skills, and inefficient administration
The Nigeria Premier League, the largest in the region has been in “infancy” for decades now. Most Nigerian clubs have an unstable hold on prosperity: here today, gone tomorrow! At the height at its glory, the promising Enyimba club of Aba, in Eastern Nigeria, once dreamt of a Nigeria Stock Market Quotation. The listing was put on hold because the then Abia state Governor, Orji Kalu, felt too personally attached to the team to share it with shareholders. And even today, its Enyimba stadium home base is not yet completed.
So-why do these clubs underperform? Not due to lack of football fans – fans are there. Mostly due to lack of understanding and dedication to the business process of generating revenue- to concepts like ticket sales, sponsorships, TV rights, transfer fees, bonuses and salary payments e.t.c.
At the request of some football club administrators and coaches, we provide a primer on the European
league system, the largest and richest in the world;

Enyimba Football FC.

EUROPEAN LEAGUE PRIMER
* How does a football transfer fee work?
* Bonus, Salary e.t.c
Every summer, the top European Football Clubs observe what is called the “Transfer Window” This year’s begins in a couple of months? During the period, these top clubs spend hundreds of millions of dollars to vie for the best players for the coming season How big- The transfer fees?
The amounts of money involved can be stupendous; Recently Brazilian super star Neymar moved from Barcelona to Paris Saint-Germain for 222million Euro ($265million). The bar moves higher each year. Neymar transfer fee is more than double the previous record of 105 Euros ($125million) paid for French player Paul Pogba.
How does it work?
Professional players sign contracts with clubs for a fixed team of five years, if a player transfers before his contract expires, the new club pays compensation to the old club. This is known as the transfer fee
Who gets the money?
That $265million fee does not get paid to Neymar. Paris Saint Germain paid the money to F.C. Barcelona to secure his services. Specifically, they paid the buyout clause in Neymar’s old Barcelona contract, which was fixed at 222million Euros
Who else gets paid?
Neymar father-agent and others will share a 38million euro ($45m) amount for facilitating the move, according to news agency reports
So what’s there for Neymar?
French football club will now be paying Neymar his salary- approximately 45m euro ($54m) a year before tax. The hope is that the club will make a profit exploiting his name and image. All parties strike a deal. For instance, the player appears in advertising and paid-for publicity, splitting the proceeds 50/50 between player and club.
How big is the football business?
There is serious cash in football and those who own the clubs are in it to make money.
Paris Saint-Germain is owned by the oil-rich Middle Eastern state of Qatar. The twenty richest clubs in the world – all European – earned 7.4billion Euros ($8.9billion) in the 2015/16 year, according to accounting consultant, Deloilte. The top-earning club remains Manchester United garnering 689 million Euros ($813 million)
What makes up the clubs’ revenue stream? Commercial sources, such as sponsorships and merchandise, say T-shirts, account for 43% of revenue – the largest slice. Ticket sales can bring 18% and clubs can also make money selling players. The mounting Television revenues are one reason why the European clubs keep getting richer. In 2016, the 20 English premier league clubs signed a three year, 10.4bn pounds ($13.4bn) deal with TV broadcasters. In addition, BT and SKY TV now pay the premier league #710m ($12.9m) to screen each game. Back to transfers fees: According to FIFA, a record $4.79 billion was spent on 14,591 deals world-wide in 2016. And the Jokes: Those who were stunned by Neymar transfer fee, should ponder the following: were it Lionel Messi the fee would have been much higher.
Lionel Messi has a 300million euro ($354m) buyout clause in his contract with Barcelona, which would eclipse Neymar’s record-breaking fee.

Neymar’s tranfer fee was 220 million euros. Were it Messi, it would have been 300 million euro.