Of NFA, LMC and Club Owners Fred Edoreh After the establishment of the Nigerian Professional League at about 1990 with intent to upgrade from amateur which it was in the days of Christian Chukwu, Odegbami et al, the league can be said to have actually begun to take shape from the tenure of Chief Oyuiki Obaseki as chairman of the league board. The value of the title right was appreciated and, later, TV broadcast right revenue began to come in. The exposure of the league by Obaseki generated several interests, not only from potential advertisers but also from various people involved in Nigerian football who now wanted to be part of the organisation of the league, for different reasons. With the expiration of the Obaseki tenure in 2010, we have been grappling with the challenge of finding his successor. The election process has taken from 2010 to 2013, with several controversies and conflicts of persons hustling to take control the league board. It is trite to say that the stakeholders in the industry have been divided into camps and cliques fighting for control, and so too have they aligned with different corporate interests who seek to use the platform of the league for marketing communications, to connect with the huge fan base of Nigerian football. Ahead of the 2010 election, Segun Odegbami, Sam Jaja, Barrister Nnaji, had been disqualified for different tenable and untenable reasons, and they took the NFF to court, to FIFA, to CAS, the outcome of which was several court pronouncements that the NFF, the NPL etc were not recognized by law. Held by the jugular, the NFF had to negotiate with this trio on different terms of settlement. Particularly interesting was the tug-o-war between Davidson Owunmi and Rumsun Baribote. Owunmi had worked closely with Obaseki and seemed favoured to receive the mantle. He had however been out of Rangers FC from which he had joined the league board. He therefore had to seek eligibility through another club and zone. His associates ensured that. He went to the polls and defeated Baribote who had only four votes. Barry charged foul play, insisting that Owunmi was not qualified ab initio. The NFF raised an arbitration to sort the matter. Arbitration judged that Owunmi was ineligible to contest and recommended a re-election in which only Barry would be the candidate, being that only him and Owunmi entered the election and as at the time of the election Owunmi was not eligible. So, Barry won the re-election, unopposed. Owunmi also took action against the judgment of the arbitration even as the likes Sam Jaja and Nnaji were still in court protesting their disqualification just as well as the National Association of Nigerian Footballers (NANF) led by Harrison Jalla, were also in court protesting their exclusion and challenging the legality of the NFF as a body. Through all these confusion - court cases, arbitration, settlements and re-election - the league, the players and Nigerian football fans were the ultimate sufferers. Most curious was the fact that as the league boards managed the league through the hiccups of the succession disputes, they drove the game to a point at which spectators stopped coming to the games; the interest of Nigerian fans kept drifting away from the domestic league to the foreign leagues; Nigerian football fans took pride in buying foreign club merchandises and flaunting their being “fans”; players were owed sign on fees, allowances and bonuses for months on end; the league body became unable to pay referees indemnities; it asked the home clubs to take care of referees with the attendant risk of compromising integrity; our players began rapidly to be drawn into slave contracts in a bid to fly away to ply their trade abroad in various backwater leagues in Europe and Asia. The damage has been legion and the foreign leagues were just there to fill the vacuum for Nigerian fans and feed the growing passion of emerging football enthusiasts with their foreign club brands. The Nigerian club managers did not bother. The clubs, in the main, are owned by state governments, ostensibly as PR instruments for which they keep pumping public funds even as it began to show that the clubs were becoming conduit pipes for financial improprieties. The clubs would return at the end of the seasons without any proper balance sheet. Merchandising as a source of revenue is clearly out of the question. Needless to say they didn’t bother about the losses because the state governments didn’t bother. However, we are talking about a professional league system in which clubs should be business outfits, to generate revenue and provide gainful employment for professional players and profit for investors. Interestingly, we live in a time when the football and sports industry have become a major global economic player with leagues and clubs generating volumes of revenue and making footballers some of the best paid people in the world. We have seen how club brands attract cross continental investments in hundreds of millions of pounds and dollars. The Arab oil sheikhs and dynasties, the Czars from Eastern Europe and money bags from American are daily looking in on football markets to put some cash. Nigeria is a leader in continental African football with a huge population of football fans but the situation of the domestic league distances it far from this bubbling market. Still, the clubs don’t give a hoot! It is expected that before investors come, they would want to first take a look at the books and balance sheet of the league board and the clubs to see if the terrain is worth doing business in and if there is integrity and prospect. But how can such investors come given a situation like this characteristically horrifying external auditors report on the league board (NPL) and the financial governance of the league for the year ended June 2012 (par: Olaniyi Wale Odunaiya and Co), for instance? This informed the subject of a query to Baribote by the NFF on October 31, 2012. The auditors found as follows: 1. That “this (league) board which is supervisory seems to be the most expensive in the whole world.” 2. That “the risk is that the chairman uses his position on the board to selfishly use the company funds to run private life without considering the health of the company.” 3. That the directors run lavish lifestyle; pocket millions through fronts; subverting regulatory procedures; do nothing to block excesses; return losses and indebtedness; fail to move beyond insolvency; maintain perks even in insolvency: maintain allowances, take loans, maintain luxury accommodation, all under insolvency. 4. That the board spent 23% (about N63.4M) of the total revenue received by the NPL on themselves for board meeting, members allowances to attend matches and payment of aides etc. The auditors pointed out a number of situations to back their verdict: 1. That the board maintained monthly imprest of N300k (for Chairman) and N250K ( for Secretary) even in insolvency. No reconciliation, no retirement, no accounting. The club owners backed this up with a provision in their regulation that: “the imprest shall cover petty expenses for telecoms, entertainment, hospitality etc…The officer has the right to expend it as he so wishes and is not under any compulsion to retire such funds…. The funds should be provided when the offices are liquid.” They however continued to pay this even when the offices were not liquid. They were, in fact, borrowing money to attend league matches; and being unable to pay, they asked the clubs to be paying referees’ indemnities. The clubs also would agree to pay the refs because that meant spoiling the refs a little and compromising to gain their sympathy to win games. This also provided them added opportunity for asking more money from their respective state governments, especially as the balance sheet of the clubs doesn’t matter. 2. That the board maintained a 6 Bedroom apartment in Abuja for a yearly rent of N12M and yearly maintenance of N4M for its directors 3. That the board allegedly paid N150M to its lawyer for preparation of contract on title right…and even at that, the contract was defective in securing the revenue of the board thus leading to losses…The firm was however allegedly further rewarded with extra N44M. Baribote is said to have argued that the said amount was for 2006 to 2010 contract. 4. That the board spent N28M for its congress in Yenagoa with N15M from Bayelsa Govt not counted as sponsorship 5. That the board claimed to have borrowed N5.4M in cash for 2010/2011 Week 35 matches with no record of the loan. Only the repayment. 6. That the board made a payment of N15M to Merchant Credit Limited, Benin, for repayment of loan of N5M… but auditors were unable to trace the N5M loan to the books of account of the league or the lending company’s bank statement. They claimed that the transaction was made in cash 7. That of N153M TV right payment in a certain season, only N115.3M was traced to the league account. N38.1M was said to have been paid in cash but the auditors could not trace the record of the expenditure 8. That the top officers of the league board received gifts from business partners and parties to its sponsorship bids such as could, susceptibly, compromise the bargains against values to the league: Obaseki got a Range Rover as birthday gift while, allegedly, Owunmi got a Mercedes Benz R Class and Shehu Gusau got a Mercedes Benz C class from Total Promotion who holds the TV right. Most interesting, perhaps most curious, of the league board dealings has been the TV broadcast right transaction itself. The right holding company pays the league board about N153M annually and collects about N750M from the broadcast operators, whereby the company pockets a profit of about N600m annually. Smart business. It has been so for about three years and into 2014. The league as a whole may have got about N500M in the three years while the company as an individual may have profited about N1.5 bilion in the three years through this deal. The league body and club owners did not see anything inappropriate about this imbalance and if they did, they have posed helpless to correct or salvage any further value for the clubs and players. There have been suggestions that it is so because so much happens under the table to the benefit of the club owners and the company is quick to graciously lend funds to the league body as often as the league went broke. It was feared that after the expiration of the contract tenure by 2014 or so, the league body was ready to renew same contract for another four years to run towards 2020. Going forward, the same TV right holder became the preferred bidder under the league boards and won the title right sponsorship deal which it was also to sell, as middleman, to another telecoms company just like it does with the TV broadcast arrangement. It was observed that the general habit of the league body seemed to be such that they could call an AGM or congress, “make members happy,” go on to get the congress to approve all their transactions, dealings and conducts in the spirit of the powers of an AGM which would further pass a vote of confidence on “Chairmo” and his lieutenants while the league remains comatose and the clubs, the players and the whole idea of association football continue to be under rape and abuse. It is possible, as some people suggest, that the minister of sports felt disgusted about this condition of our league and sought the cooperation of the NFF to bring about reforms. It is possible also that either Owunmi or Baribote or both of them may have hurt some corporate interest in their removal from Globacom and conveyance of the title sponsorship to Total Promotions and then, possibly to MTN. But what was clear was that the league body was running the league down and abusing the powers and privileges that accrued to them from association football as is now the nature of world football administration in which neither FIFA nor CAF nor NFA officials can claim innocence. Whatever, the odour was getting fouler with general feelings of unease. Something had to give. As a move, some members of the body of club owners, seeing that so much bad water was being spilled and a bubble would sooner or later blow, decided to remove Baribote in a congress that he again went back to court to contest its validity. Interestingly, the competing interests with various cases in court deriving from the struggle for the control of the league board eventually blew up dire consequences for all the parties. Most challenging was court pronouncements on the statuses of the football bodies in Nigeria, not only to the embarrassment of the NFF and FIFA but also to the sports ministry and the government and people of Nigeria. The most serious was the declaration that the NFF and the whole of the league body, the NPL, which it authorised, and of which these men have been hustling to take charge, were illegal bodies, unfit to be, and all of their actions and transactions null and void. The pronouncements insisted that the NFA Act (2004) As Amended, subsists. In fact, one of the judges insisted that members of the board of the NFF should not go near the NFA office and when they seemed to violate the order, they were called in for contempt. All these came from the scramble for the soul of the league board. The saving grace for the NFF was that both FIFA and the federal government recognize the governing body of Nigerian football, either with the nomenclature of NFF or NFA, as one and the same body and have had no qualms in relating to the body as such. With the confusion the judgments threw up, especially the nullification of the league body and the voiding of its statutes, board, offices, elections and transactions, the NFA had to act. In acting however, it is to be observed that the NFA took into consideration the condition of the league and the strong back- statements per the auditors’ report on the financial dealings and corporate governance of the league body. Accordingly, the NFA decided to embark on far reaching reforms. As a first step, to take charge, it decided on an Interim Management Committee which it gave the following terms of reference: To: 1. Organise the 2012/2013 league 2. Review all contractual obligations of the NPL, including TV and (title)sponsorship rights 3. Develop strategy and facilitate the reform of the league towards profitability 4. Review existing rules and guidelines for the election into NPL Board 5. Develop new standards for players’ contracts and welfare 6. Any other relevant matter(s) the committee may deem necessary However, not far into the mandate, the NFA realized that it couldn’t achieve much in the reforms with the interim status of the IMC. For one, especially, they it did not have legal personality to review the contracts on the league and negotiate new ones, par item 2 in the terms of reference. Secondly, it realized that there was so much work to do to achieve a deep rooted league reform. The NFA decided therefore to create a whole new league company now called the League Management Company Limited (LMC), as a management agency for the reforms and management of the league. It thus elevated some members of the interim committee into the directorship of the company with the chairman holding down shares for participating league clubs. Some of us, including Lagos SWAN, were quick to interrogate this move in consideration of the fact the clubs are critical players and needed to be carried along in what the NFA had opted to do. Most importantly, we solicited and advocated that the clubs must agree on the shareholding since they are to play the games. However, there are other issues already indicated as part of the reforms. They include sound capital base, distinctive business foundation and structure, deposit and guarantee for players entitlements, infrastructural sufficiency and many more conditions that the clubs would need to meet to registered as part of a sound professional league system. In the interim, the LMC and the NFA have been meeting with the clubs on a number of these issues and the 2012/2013 league season has panned out beautifully. Interestingly, old soldiers never die and some club owners have come to say the LMC should hands off the league since the 2012/2013 league season has ended, quoting the first item on the terms of reference of the interim committee which was to “organize the 2012/2013 league.” The NFA has however declared that it is not in a hurry to do away with the LMC, arguing that the LMC is doing a good job of the league reforms and it still wants to go some distance with it. There have been arguments that the NFA decision to stay with the LMC is not in sync with the terms of reference of the Interim Management Committee and even that the NFF has no powers to decide how the league should be run on the belief that it is the exclusive prerogative of the club owners constituted into a league board to run the league. To deal with the issue of power, it is important to note that by the provisions of FIFA Statutes and the NFA Act, all powers over the league and all football property belongs to the NFA. It can only delegate any of its power as it may decide. These are settled issues as follows: 1. The league is defined in FIFA Statutes, under General Provisions (Definitions) as: “an organisation that is subordinate to an association.” The statutes does not make any adjustments nor qualifications nor exceptions on this. 2. Article 18 (Status of Leagues and Other Groups of Clubs) amplifies this power) as Sub section 1 states: “Leagues or any other groups affiliated to a member (association) of FIFA shall be SUBORDINATE to and recognized by the association. The member’s statutes shall define the scope of the authority and rights and duties of these groups. 3. Article 78 (Rights of member associations) also states in Subsection 1, that: (as per such issues as right over titles, contents, assets and properties) “FIFA, its member associations and the Confederations are the ORIGINAL OWNERS of ALL the RIGHTS emanating from competitions and other events coming under their respective jurisdictions… 4. Article 78 states further in Subsection 2 that: “The Executive Committee shall DECIDE HOW and TO WHAT EXTENT these rights are to be utilized and DRAW UP A SPECIAL REGULATION to this end…The Executive Committee shall ALONE DECIDE whether these rights shall be utilized exclusively or jointly or entirely through a THIRD PARTY These provisions of the FIFA Statutes eminently clears the air that the league is essentially the property of the NFA and thus qualifies and empowers the NFA to decide on how it wants to run or reform any league to be approved and recognised by it under its jurisdiction. With regards to the proven mismanagement of the league, it is important to point out that the FIFA Statutes also requires the NFA to take charge and act as it deems necessary to salvage a situation like we find our league. The statutes states under Article 2 (Objectives) Sub E: that it is the duty of the member association (the NFA) “to prevent all methods or practices which might jeopardize the integrity of matches and competitions (the league is a competition) or give rise to ABUSE OF ASSOCIATION FOOTBALL” I do not know what else can be defined as abuse if many of the transactions, dealings, failings of the league boards, including the resort to home clubs for the payment of referees indemnities thereby compromising integrity, and the terribly impropriate nature of corporate and business governance of the league board is not abuse and if the NFA should just stand and stare. In addition to the explicitness as enunciated on the powers of the NFA over the league (par FIFA Statutes), the NFA Act itself makes its position abundantly clear on who owns the league: 1. Article 6 (Functions of the Board of the NFA), Subsection (a) states that one of the functions of the board of the NFA is: “to organize league and other matches FOR professional and amateur clubs in cooperation with the respective bodies recognized by it.” The NFA has set up and recognised the LMC to work with it just like it also set up and recognised the league bodies –NPL, NFL etc before now as its vehicles for the delivery of ITS league and gave them powers to do so. It may decide tomorrow to create another league board to carry out that function. 2. Subsection D of same Article 6 provides that the NFA; “determines such areas of the league to be commercialised in order to earn income for the league, professional players, clubs and the association 3. MOST SIGNIFICANTLY, as per the setting up of the LMC, Subsection H of same Article 6 (Functions of the NFA Board) provides that the Board has the powers to: “SET UP or recognize such SUBSIDIARY bodies to assist the board in the performance of its functions.” One of the functions of the board is the organisation of the league for professional and amateur players (par Article 6 (A)) and the subsidiary body (par Sub H, above) is the LMC. This authority is in line with the provisions of Articles 18 (1) and 78 (2) of the FIFA Statutes, for the Executive Committee of an association to decide how and to what extent to discharge its functions and whether or not to use a third party. With these provisions, there can be no argument as to whether the NFA is in its right to operate certain aspects of the league with the LMC. It is especially so given the expediency of the reforms against the backdrop of the financial mismanagement, loss of public appeal and nosedive in the value of the league. Indeed, it would be most irresponsible for the NFA not to take drastic and far reaching measures to achieve a reform. It is in view of this submission that I encourage those who are quoting the initial terms of reference given to the initial Interim Management Committee to understand: first, that the NFA has left the point of Interim Committee with the setting up of the League Management Company which obviously is a going concern until the NFA, ALONE, DECIDES the extent it would want the LMC to go; second, for the purpose of argument, the first item on the terms of reference of the initial interim committee, to wit: organise the 2012/2013 league, cannot interpret that the duties of the LMC to the NFA terminates with the conclusion of the 2012/2013 season. It should be noted that the remaining items on the terms of reference were not related to any particular time frame. Clearly, item 1 and the mention of 2012/2013 season does not, in any way, predicate nor control the operation of the remaining items 2-6. Item 3, for instance: “to DEVELOP STRATEGY and FACILITATE the reforms of the league towards achieving profitability,” does not seem to be a one-season task given the situation: challenges of infrastructural, ownership/directorial, administrative and corporate governance structures; the prevailing philosophy of Nigerian clubs especially in relation to their lethargy to drive the clubs towards business and commercial viability hemmed on the preponderance of state government ownership and arbitrary governance of the clubs. As we all know, we can’t take these to the banks. We can only take them to government houses and that will perpetually keep the professional development of the league under arrest. That will be eternally sad in the face of a global economy in which football is competing with oil and other high revenue economies in national GDPs. We have seen clubs in Europe and we know how they are run. There have been half breadth references to the supposed autonomy of the board of the English Premier League and it is important to inform that even in the EPL, the board appoints a Chief Executive and other management competences to manage the league. The club owners and managers do not go and sit all day at the league office in London in the name of club owners managing a league; they do not ask the EPL to give them travel, hotel and bush allowances to monitor league matches; they do not take hotels and apartments under the bill of the EPL whenever they are in London. They focus on managing their clubs and meet to take policy decisions which they convey to the English FA for due approval and get the management team led by a CEO to implement. Should we even consider, for argument sake, the relative autonomy of the board of the EPL, it should be noted that by their structure and adherence to strict professional management and best practices of corporate governance, they have grown to earn the trust and confidence of the English FA. Remarkably, these clubs and club owners have distinguished themselves to attract domestic and foreign investments such that they can stand on their own and be trusted to conduct the business of the league and club running properly. That is why the English FA was convinced and compelled to let the super clubs form the elite premier league which we today celebrate. Still, it is not without the look in and control by the FA which also will not hesitate to call the EPL or any club owners to order if they find a lapse in their conducts and affairs. It must be established that the appointment of the Chief Executive of the EPL is subject to the approval of the English FA. The FA can decide to veto the appointment of a CEO of the EPL if it considers the person unworthy or unacceptable or of pecuniary interest. To a large extent, the FA remains in charge as regulator and supervisor of the EPL. As yet, it has found no reasons to invoke its powers to re-arrange the management system of the EPL, it is not hoping for any either, but it will do if there comes the need. The structuring and governance of the clubs is crucial to the league reform process and that is not a day’s job. Unfortunately, back here, with the nature of things, the club owners as league runners cannot and will not even accept this agenda of club restructuring, not to talk of implementing it. Such restructuring will stop or reduce funding from the state governments; require probity and accountability to investors/shareholders; hard work in management, like in any other business enterprise; and certain high profile competences which many of “us” do not possess. That would be “san san in garri.” Even when there is the will on some on the part of some of the club managers like Chief Onigbinde tried to sell Shooting to the Ibadan and Oyo public, various strongholds would “fight naked” to block it. The point remains however that it is the only way to true professionalism and we cannot remain as we are. Shay na like this we go dey dey? Already, both FIFA and CAF have issued guidelines on licensing and registration of clubs and part of the requirements relate to the structuring of the clubs. It is not enough for state clubs to register names with the Corporate Affairs Commission and pretend to be private companies whereas in reality they are not doing any business other than guzzling funds from the state coffers. On this score, the NFA and the LMC are talking to state governments to support the reforms while also talking with high networth institutions and individuals to take confidence to float clubs and invest in the league, with the assurances of better corporate governance as against the mob management system that prevailed, hitherto. The achievement of item 3 also relates to the achievement of item 5: to develop new standards for players’ contracts and welfare, else, how can we achieve this if the clubs are not driven to profitability? How can we achieve better welfare for players if we maintain a TV rights issuance system in which out a value of N750M, the league board accepts N150M while the agents and middlemen walk away with N600M? On item 2, the LMC has moved on to restore title sponsorship to Globacom for about N550M per annum but already considering the upward negotiation of that value. It went into dialogue with Total Promotions to release the title right for a pay off N100M and recognition of its TV right deals, notwithstanding the said bid by the league board and the voiding of the NPL which did the transaction. However, the LMC insisted that the unfair, imbalance in the TV right transaction, between the N150M to the league and N600M as profit to the company, is not acceptable. It asked for an upward review of the sum that should accrue to the league, if the TV right holder is to continue to enjoy such right and perhaps renewal. The LMC enjoys this leverage to renegotiate these transactions on behalf of the NFA par item 2 under reference and since the NPL with which the Club-Owner-league bodies sold the TV right in such apparent jaundice had been declared illegal and their actions null and void. Total promotion is however apparently not satisfied with the review of the broadcast transaction. Following this, the LMC has moved on to sell the right at the expiration of the current contract tenure to another Supersport/DSTV group which was operating the broadcast under the Total Promotion contract. The new N5.4billion TV right deal for four years tenure means an average of N1.1 billion annually for the league, from broadcast alone, and this money goes directly to the league, the clubs and the players. No middlemen, no supporters, no corner betting. On the management of the league, we saw a situation where the two clubs from Kwara, the home state of the sports minister, ABS and Kwara United, as well as the club from the home state of the NFA president, Wikki Tourist of Bauchi, all went on relegation. There was no fear, no favour. We also saw how the league title chase remained in breathtaking contest until the very last whistle of the season, eliciting such drama and suspense that a well run competition should excite. Given the reforms being driven and the integrity of the LMC management vis-à-vis what hitherto obtained under the management of the league board, it becomes really difficult to agree that the LMC should handover to the club owners so soon. Though the question does not even arise by virtue of the powers of the NFA to do what it deems fit. It is for these reasons the EXCO of Lagos SWAN, on behalf of members, support the retention of the LMC in line with the wishes, decision and powers of the NFA and in the public interest of the development and growth of the league and,… for the good of the game. Lagos SWAN is not only showing support now. We have shown commitment by calling a conference and workshop to mobilize the media to give more coverage and promotion to the domestic league because it is what we have got and we need work out the future of our sports industry. This is our honest conviction and concern. We rest our case with a plea, once again, with all concerned, their supporters and our friends who accuse us of all sorts, to, please, let us make some progress.
Posted on: Mon, 04 Nov 2013 12:15:25 +0000
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