Balancing the accounts

There is a fortune to be in Kenyan sports. But we also have a despicable business attitude, bad management structures, and a bad attitude in general, so that even when clubs are recipients of charity, they complain when better clubs get better deals

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By Isaac Swila

Long before the emergence of betting and gaming firms, the Kenyan sports landscape was that of squalor.

Not only was the industry financially starved but also clubs, federations and associations struggled to make ends meet.

Cases of teams failing to honour championships and tournaments were commonplace – they still are.

On the football scene, it was “usual”, or rather “normal” to find players trekking to training for lack of fare. Cases of others being locked out of their apartments for defaulting on rent payment were aplenty – they still are.

Well, it’s not that the gaming industry has done some magic. On the contrary, the leagues, associations, clubs and even players continue to struggle.

However, some progress has been made, however little, thanks to the coming on board of these gaming firms, which, as opposed to blue-chip corporates, have only been too eager to embrace sports.

Though the gaming firms have been loud enough in explaining that their vision of delving into sports is to help the industry grow, it is a no brainer that the only logical way for them to penetrate the market is to embrace the industry players.

Looked at differently, prior to the birth of leading local betting firm, Sportpesa, only telecommunications firms Safaricom and Airtel, and beer firm, Kenya Breweries, had exhibited some love for Sports.

Airtel, have, in the past, been actively engaged in sponsoring the school games through the “Airtel Rising Stars”. Brookside Dairies have also been a major partner as far the school games are concerned.

Safaricom, on the other hand, were proudly associated with the defunct Sakata Ball Challenge – a grassroots talent search initiative which caused a lot of excitement in the football scene, only to fold under unclear circumstances owing to differences with the then Sam Nyamweya-led Football Kenya Federation.

On the national scale, clubs, and even federations, continue with the struggle to attract sponsorship.

After a long lull, it was the Kenya Breweries Limited, through their Tusker brand, which came to the rescue of the Kenyan Premier League by entering into a title sponsorship with the latter in 2012, after signing a three-year deal valued at Sh170 million – that deal handed them the league naming rights.

This deal expired in June 2015, creating room for betting firm SportPesa to enter the scene. Buoyed by their financial muscle, Sportpesa inked a Sh450 million five-year deal, which will expire in 2019.

Apart from becoming the KPL title sponsors, Sportpesa, in its characteristic grand expansion tendency, has entered into other lucrative partnerships with KPL giants Gor Mahia (Sh320 million), AFC Leopards (Sh200 million), Nakuru All Star (Sh20milion), the Kenya Rugby Union (Sh660milion), and even the Boxing Association of Kenya.
These partnerships have been hailed as good measures aimed at improving the status of sports in Kenya.

Simply put, sports and finance cannot be separated. Sports need finance to grow; likewise, the finances need a platform through which to multiply, and there is no better avenue other than sports.

It is due to this that SportPesa has been pulling all strings to ensure that they have the market under their feet; seemingly, they have succeeded.

However, unbeknownst to some, is the fact that hardly had the ink dried on these deals than the ambitious firm signed a deal with Hull City, an English football club which participated in English top tier last term, before it fell at relegation axe to the second tier– the championship.

Under the deal with the Tigers, Hull City stands to get Sh400 million annually during the three- year life span of the contract, taking home a total sum of around Sh1.2 billion – there are reports that the figure could be revised downwards in the wake of their relegation.

In a statement late last year after the signing of the deal, Hull hailed the partnership as the “most solid and best ever in their long but proud history”, leaving no doubt to the fat sums they had taken to their bank accounts.

It did not end there though as SportPesa went ahead to sign a more lucrative deal with Everton recently, which will see the Toffees claim £75 million (Sh9.8 billion) in the five years that the partnership will stand.

Left sulking

Hailing the move, Everton CEO Robert Elstone said, “We’re pleased to have secured the biggest commercial partnership deal in the club’s history with an ambitious and growing, global company. From the outset, we have been impressed by Sportpesa and the company’s plans for the future.

Sportpesa are committed to significant investment not only into Everton through this partnership but also in the city as they open up a new European headquarters that creates new jobs in Liverpool.

He continued, “The Liverpool office will give SportPesa the chance to engage with supporters through a number of fan activities and we look forward to an exciting partnership together.”

Through the venture, it is expected that the gaming firm will create about 70 new jobs.
Interesting to note is the fact that Kenyan clubs and associations, which have been beneficiaries of the Sportpesa windfall are now all sulking after it emerged that the gaming firm had pumped in colossal sums to win the deals with the foreign clubs – making what they (Kenyan clubs) had earlier negotiated for in their deals seem like a joke.

This begs the question, did Kenyan outfits receive the short end of the stick? Whichever way one looks at it, the bottom line is that sports, or football, has to be run as a business in order to flourish.

The English clubs, which are beneficiaries of the Sportpesa’s generosity, have put so much effort in making their brands visible, and it is only logical that they get a dime commensurate to the product they have.

Here is the catch: Kenyan outfits must borrow a leaf on how to run their affairs if they want to get the fat end of the cake. They must invest and work for the sweetened deals rather than praying for lady luck to smile their way.

Put differently, apart from the monies they get from sponsorship deals, Kenyan clubs have done very little to make their own money, or their brands attractive to corporate. With the large number of support bases they boast of, these associations and clubs are sitting on a gold mine that, if well harnessed, could forever change lives and the scope of things.
Kenyan Premier League CEO Jack Oguda in an interview with Nairobi Law Monthly decried the poor performance of Kenyan clubs in continental assignments equating it to the struggle for financial independence – and calling for more funds to be channelled to the game if progress is to be made.

However, what he perhaps fails to understand is that sports, world over, are treated, run and managed as a business and this is what needs to happen locally.

In the developed world, for instance, no club participles in the top-tier league without financial safeguards. Meanwhile, corporates fall over themselves, literally, in search of shirt sponsorship deals with the clubs.

In Kenya, it’s the clubs begging. For instance, in the 2017 top-tier league competition, as high as six clubs lack shirt sponsors, raising the question: Why aren’t our football bosses getting their act right? For how long will the clubs survive on begging bowls?

Sofapaka, for instance, after a long stint in the financial doldrums, occasioned by lack o financial safeguards, recently landed a three-year shirt sponsorship deal with betting firm, Betika to a tune of Sh50 million on a three-year course, while the Kenya Defence Forces team, Ulinzi Stars, attracted a Sh10 million annual deal from Elite Bet to augment what was already in their kitty.

Granted that it is a remarkable step, but these monies are a drop in the ocean compared to what clubs in, say, South Africa attract from corporates.

Besides, clubs such as Kakamega Homeboyz, Zoo Kericho and Kariobangi Sharks, despite competing in the top division still lack shirt sponsorships, raising the question, what must be done to lure more corporates on board?

Football Kenya Federation president Nick Mwendwa argues that clubs must invest in robust marketing strategies, self-sustaining projects, as well as clean their images if the corporate world is to fully embrace the game.

“We came in (to FKF leadership) when things were horribly wrong. We have tried to put a few systems in place and you can see that normalcy is retuning.

“Now, in order to take this forward, our clubs, and even ourselves must ensure that there is streamlining of structures and this explains why we adopted the Caf Club Licensing rules.”

Safaricom, which has been a major partner with sports association, and even Barclays Bank, which is the official title sponsors of the English Premier League have, in the past, cited poor leadership. Barclays, in fact, argued that the local sports landscape is steeped in mud, which would be injurious to their brand.

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