State should intervene to save Gor Mahia and AFC Leopards from collapse

Collins Shichenje (L) of AFC Leopards SC challenges Joash Onyango of Gor Mahia FC during their Kenyan Premier League match dubbed Mashemeji Derby at Kasarani stadium in Nairobi on March 08, 2020. [Photo: Stafford Ondego, Standard]

As an ardent football fan, I’m not only concerned about the possible adverse effects of Covid-19 on local football in general, but also extremely worried about the future of community clubs in particular.

Our two leading football clubs namely; Gor Mahia and AFC Leopards have taken a serious financial hit after gaming company SportPesa cancelled all sports sponsorship in the country in August 2019.

The withdrawal was informed by regulatory and taxation issues, which the Government and SportPesa could not agree on.

The withdrawal by the betting giants brought to a halt its four-and-a-half-year deal with the Kenya Premier League (KPL) reportedly worth Sh450 million. Sportpesa also had an annual sponsorship deal with both Gor Mahia and AFC Leopards.

In the last deal signed in 2018, the firm financially supported Football Kenya Federation (FKF) to the tune of Sh69 million, the Kenya Premier League (KPL) Sh259 million, Gor Mahia Sh198 million and AFC Leopards Sh159 million.

The withdrawal, therefore, left both the KPL and the two local giants with no sponsors

Other community clubs face the same predicament since the gaming firm was the KPL’s title sponsor. Since then, the aforementioned clubs have struggled to pay players’ salaries for the past seven months.

This paints a gloomy picture considering that apart from standard essential costs such as house rent, which the players must defray, the same players just like all of have dependants we must take care of.

Local football had hardly navigated through the harsh economic times informed by the SportPesa exit when the global coronavirus epidemic exploded.

Consequently, all football activities have been suspended. The situation is likely to continue over the next three months, or even longer.

With no football being played, the implication is that the non-institutional clubs like Gor Mahia and AFC Leopards are not getting any revenue by way of gate collections, which is their primary source of income.

On the flip side, the clubs have constant recurrent expenditures to contend with — chief among them players’ salaries.

Informed by best-practice, our local football clubs enter into performance-based contracts with their players. Yet with the unforeseen circumstances as the COVID-19, the players are not meeting their part of the contractual obligation because they are not playing at the moment. This is a situation both the clubs and the players cannot effectively mitigate as seen elsewhere in the world.

The clubs in the elite Kenyan Premier League, whose monthly wage bills average Sh5million are therefore in deep financial straits.

One cannot help, but empathize with the players, who must fend for their families and at the same time service their monthly bills.

It is even dire given most of the players have their contracts running out during the June transfer window. The risk of complete loss of livelihood in the prevailing circumstances if their contracts are not renewed is real.

More chilling is that the clubs may be reluctant to enter into new contracts with the players in view of the current economic uncertainty. The net effect, therefore, is that the players have nowhere to go.

There is no gainsaying that Gor Mahia and AFC Leopards are the bedrock of Kenyan football. Should they collapse or operate at sub-optimal capacity levels, this will spell doom to the local game. 

Worse still, this will have a catastrophic overall effect on the economy since football is a major contributor to our Gross Domestic Product (GDP) by way of both direct employment and the fiscal framework through taxation and public expenditure.

It is, therefore, my humble submission and appeal to the Government through the Ministry of Sports to urgently formulate and deploy a short-term policy intervention at macro-level to cushion the non-institutional football clubs in the country. This should entail either directly offsetting the players’ salaries over the next three months or provision of subsidies; which can be underwritten through the Sports Fund.

Equally, any existing corporate sponsors to the local football clubs could also be granted tax reliefs over the next three months to facilitate the now much-needed impetus towards football sponsorship.

In the long-term, clubs should adopt sustainable business models to enable them become financially self-sufficient.

This entails acceptance and effective management of change; establishment and operationalization of a professional secretariat; developing and institutionalising elaborate structures but well-aligned to the mandate and core business of the clubs. The clubs should also optimize recruitment and contracting of players, exploring and exploiting possible internal sources of funds and prioritising players’ welfare.

The clubs should also build and sustain strong brands by adopting innovative marketing strategies, including but not limited to effective merchandising. They must institutionalise good corporate governance while pursuing feasible and viable investment options.

Our clubs should develop sound performance management systems by bench-marking on global best practices in football management if they are to be sustainable.

Mr Owalo is a management consultant and an ardent football fan