The declining profile of Nigeria in sport may have reached an all-time bottom at the recently concluded London 2012 Olympic. This is following a dismal performance of the Nigerian contingent albeit the impressive performance of the Nigerian Paralympians.
Despite the history Nigeria made in football at the 1996 Atlanta Olympic by winning the first ever football gold for the country, and sustaining good feasibility at subsequent football games afterwards, the Nigerian Dream Team-V was unable to even qualify for the summer outing. Nigeria also made history at the 1996 Olympic in athletics with the first ever gold medal in that game. Today, Nigeria has descended from 35th position on the Olympic medal ranking in Tokyo 1964 to 61st at the Beijing in 2008. The country was not categorised at the 2012 London Olympic Games.
Our Rankings Continue To Drop
On the Fédération Internationale de Football Association (FIFA) ranking, the global governing body of football, Nigeria descended from 9th position on the international football ranking table in 2006 to 63 in 2012. Today, in African Regional football ranking, Nigeria is ranked 10th behind countries such as Zambia and Gabon, with Cote D’ivoire, Algeria and Ghana in the 1st, 2nd and 3rd places respectively. Nigeria was 1st in the region in 2007 and sustained the 2nd position in 2008-09. In the last ten years to 2011, Nigerian football maintained a prestigious position amongst the top five in the African region.
Across other games, Nigeria remained a leader in the African region and internationally until recently. Nigeria was the best country in athletics at 2011 All-African Games in Maputo, Mozambique, with 38 medals (17 Golds, 11 Silvers and 10 Bronze medals). In the immediate previous three games, one was hosted on Nigerian soil.
Sports and sporting activities began to take shape in Nigeria in 1963 at the establishment of the National Sports Commission (NSC). The 1960s were a period of laying foundations and the only visible achievement was the qualification of Nigeria's Green Eagles for the Olympic Games held in Mexico in 1968. Today, Nigerian sportsmen and women have entrenched Nigeria's name firmly on the global map as a great sporting nation. Although, the country is yet to win a World Cup in football or lead international tourney like the Olympic, it has been known to possess great athletes. However, the extent to which these opportunities in the sport industry have been exploited has left so much to be desired of.
Sports Value Chain
The entire sports value chain revolves around the rights owners. Rights owners are institutions, including national sports federations, leagues, clubs, team etc. They define the structure of professional sports around the world. They set the rules, organise the events and take responsibility for generating revenues from matches, media and marketing rights.
The value chain is structured around four pillars:
- The properties
- Right management
Properties in sports value chain are intangible assets that draw fans and revenue. These include events such as leagues, tournaments, pro tours (like in Golf’s PGA Tour), teams and star athletes – such as Arsenal FC (Football Club), Lionel Messi, Serena William etc. Properties are owned and managed by right owners.
Rights management is the monetisation of the properties based on gate takings, sponsors, etc. A rapidly rising source of revenue in recent times, especially for professional sports, is media and marketing rights. Rights owners or sports agencies acting on their behalves structure the deal and trade media and marketing rights.
The Huge Business of Sport
Viewership: Lucrative rights management depends on operating live events primarily. A good viewing or participating experience for fans and viewers can create additional opportunities for revenue. The stadia or pitches may only accommodate a number of fans, but packaging content for the media distribution is a vital part of creating revenue in modern sports.
According to a recent A.T. Kearney study of sports teams, leagues and federations, global sports industry is worth between €350 billion and €450 billion (about $480-$620 billion or ₦74.4-₦96.1 trillion). This includes infrastructure construction, sporting goods, licensed products and live sports events.
Media and Marketing: It has been argued that live sports events offer a compelling proposition to different industry participants. For free-to-air broadcasters seeking viewers and advertising revenues and pay-TV broadcasters looking for loyal subscribers, live sports events help them achieve these goals as global audience viewing times expand on the back of advancement in distribution technologies. It also makes jobs easier for sponsors who are increasingly moving away from traditional media, event organisers, athletes and spectators.
The worldwide sports events market defined as all ticketing, media and marketing revenues for major sports, was worth $64 billion (₦9.9 trillion) in 2009. Football or Soccer accounted for the largest proportion of this market, accounting for $28 billion (₦4.3 trillion) annually. This represents 43.75% of the total annual global sports revenue. In Europe alone, football is a $22 billion (₦3.41 trillion) business, with the five biggest leagues accounting for half of the market, and the top 20 teams comprising roughly one-quarter of the market.
Stadium Naming Right: For the rights owners of FIFA World Cup, revenue for the event comes in from the sponsors who benefit from such brand feasibility, from media houses who seek content for viewers, as well as gate takings. Coca-Cola is one of FIFA’s (World Cup events rights owners) six official partners, each of which pays an estimated £86.9 million (₦21.7 billion) for the privilege. A good proportion of this revenue goes to the host nation. In return, the company gets pouring rights at match stadia as well as pitch-side advertising hoardings. This is called stadium naming right.
Stadium naming right is a rising source of revenue for private football clubs in the United Kingdom with private stadium of their own. After 93 years at its cramped Highbury home, Arsenal FC moved to its gleaming new Emirates stadium in July 2006, which was built at total cost of £390 million. About half of this was financed by bank loans, alongside sponsorship deals which left about £100 million debt in the book of the club. By July 2010, the club had sponsorship and naming-rights deals in the United States of America worth more than £700 million.
Brand Ambassadorship: The other popular revenue source for sports rights owners is brand ambassador deals. This gives the brand positive attributes and associations from the endorser and transfers same to the brand and its products.
The endorser in this case is usually the club, individual sport figure, sports council or federation. Puma, Usain Bolt’s brand of choice at the recently concluded London Olympic, got a valuable advertising platform for the semi-finals and finals of the 100 meters, both in less than 10 seconds. The short moment was valued at about $1.7 million, according to Comcast owned Front Row Marketing Analytics. Puma’s logo popped on shoes, sweat suit, shirt and shorts; all of which came through during the post-event celebration and interviews.
Nigeria: “Put Your House In Order”
It is noteworthy that the Sports industry in Nigeria has never been organised and the value chain remains substantially unwieldy despite the increasing level of participation by all levels of stakeholders. It is likely that the main factor responsible for this unwieldy sports investments and value environment is the sustained domineering roles of government in the sector. Unlike in other clime where government participation is largely reduced to protecting rights, the role of government in Nigeria spans the regulation as well as participation within the value chain.
Starting with the Nigerian Premier league, in the past, all the major clubs were owned by business people and as such ran as profit-making ventures. Today they have all been taken over by state governments and are run as political tools. This has brought about a lack of checks and balances, and a lackadaisical attitude towards the sport. A former Nigeria international, Segun Odegbami, captured the essence of this argument when he said, “In Nigerian football, everything is about government. Until the economic and political situation changes, proper professional football, the sort that will bring up a private organisation as defined by the FIFA statutes, cannot exist in most Africa nations.”
It is arguable that the hosting of a number of international and regional tournaments by Nigeria, in the past decade, yielded low revenue when compared with the cost of hosting. The revenue is even lower in comparison with other African nations.
In addition, the public ownership of the rights at these tournaments and the appropriation of costs and revenue were unlikely to have followed global best practice. In the process, the opportunities to expand private participation in sports value chain may have been lost. South Africa is estimated to have generated a total revenue that is near commensurate with the £3.5 billion incurred by the country for building and renovating 10 stadia, improved transport infrastructure, and security in addition to FIFA income of £2.1 billion. No such information exist on the two tournaments Nigeria has hosted as the Nigeria Football Association has not rendered financial account of the Nigeria ‘99 World Youth Championship and Ghana-Nigeria 2000 Nations’ Cup competition.
Yet, Opportunity Remains
In the past two decades, the Nigerian league has suffered a decline and has lost fans. Fans have kept away from the stadia and a larger proportion of them now follow European league football. A report by TELL magazine in 2008 estimated that more than 500 outlets sell jerseys of major European clubs, while viewing centre entrepreneurs make at least ₦32 million ($200,000) monthly from screening live games. The English Premier League broadcast rights in Nigeria for 2010-2014 was sold for $115 million to the South African Multichoice, the owner of DSTV Nigeria.
Individual sportsmen brand rights and ambassadorial sponsorship deals are however rife and yielding substantial return albeit the skew to football. Peak Milk’s usage of Kanu Nwankwo as a brand ambassador resonates deeply as well. Jay-Jay Okocha still commands respect and acclaim for his football skill; hence, he has several endorsement deals. Other games enjoy some patronage but inflows to them are near obscurity in most cases, with sponsorship being largely dominated by the telecommunication companies and the international oil companies.
The foregoing indicates that not only is sport’s value chain in Nigeria suboptimal, largely as a result of government dominance, statistics on the activities of the industry is almost non-existence. Sports in Nigeria however will continue to attract not just attention but passionate and frenetic followership. Sports also encapsulate and bring real life expression to brand attributes such as leadership, passion, energy and winning. Advances in technology and the proliferation of the media have meant that sport teams, events and major players are able to cultivate worldwide followership.
Government needs to reduce its participation substantially in the industry to protection rights, and allow the industry to grow. The good development is that the market recognises the potential of the industry. It is therefore expected that the sector will enjoy speedy growth once government takes its proper role.