WHY DOES THE NIGERIAN FOOTBALL FEDERATION HAVE BONUS PAYMENT ISSUES?
Anyone that knows me, knows that I am a die-hard Super Eagles (Nigeria’s National Soccer Team) fan. Like every other fan, it has been a fun, happy, sad, and painful journey. I constantly debate with friends about who the greatest player is, who the most skillful player is, which era or team was the best (1994 team, hands down), and which coach should be hired or fired.
Nigeria has a population of roughly 200 million people and I firmly believe that over 60% of the populace shares my passion for “Our Super Eagles”. That being stated, in my experience in sport business, this level of fandom typically translates into promising levels of revenue for the federation. Revenue that uses different platforms to create “the Super Eagles experience”. The potential for revenue generation, makes it baffling (not to mention embarrassing) to constantly hear of National Team players threatening to boycott games for the lack of payment of tournament bonuses. The most recent example occurred during the 2019 Women’s World Cup when the Nigerian Women’s team (The Super Falcons), refused to return home due to non-payment of bonuses. Before I continue, I want to stress that this issue is not exclusive to Nigeria, but it seems exclusive to the African continent — teams like Ghana, Togo, and Cameroon have all experienced this issue on the global stage. I have pondered on this bonus issue for a while, and had intimate discussions with people familiar with the Nigerian Football Federation (NFF) to try to understand why this is a repetitive issue. I have heard different narratives, but I knew the only feedback I could trust were the hard numbers that showed the NFF’s sources of revenue, along with how much it generated and spent. Based on my findings, below is a comparison of the NFF’s sources of revenue and amount of revenue generated to that for the U.S Soccer Federation (USSF).
NFF vs USSF
NFF
In researching the NFF and its revenue sources, the most reliable data I could find was the recent audit performed by Price Waterhouse Coopers (PwC) on the financial statements for the year ended 31st December 2017. The results of this document were submitted to FIFA, and is publicly available for review. The audit revealed that the sources of revenue for the NFF were as follows (the definition of these categories came from the PwC report):
Sporting Income
Sporting Income refers to receipts from participation in intercontinental (Federation Internationale de Football Association “FIFA”)‚ continental (Confederation Africaine de Football — “CAF”) and national (National Sports Commission “NSC” and League Management Company “LMC”) Sporting activities and bodies.
Sponsorship Income
The Federation generates sponsorship revenues (direct sponsorship arrangements with third party corporate organizations; and (ii) its exclusive marketing agencies.
Subventions
The Federation receives annual subventions from the Federal Government of Nigeria through the Office of the Accountant General of the Federation. Also, the remuneration of certain category of the Federation‘s staff is paid directly by the Federal Government of Nigeria and such payments are recorded as part of subvention income.
Government Grants
Grants from the government are recognized as a receivable at their fair value when there is reasonable assurance that the grant will be received and the Federation will comply with all the attached conditions.
The table below also shows the amounts generated per category in Naira (Nigerian Currency) and in U.S. Dollars (conversion rate is 360 Naira to $1):
Revenue Generated for year ended 31st December 2017
REVENUE NAIRA — N’ 000
Sporting income
667,237 ($1,853,436)
Sponsorship
1,918,463 ($5,329,063)
Subvention
2,082,068 ($5,783,522)
Total
4,667‚768 ($12,966,022)
USSF
The U.S. federation publishes its BDO audited financial statements on its website, and each year’s version is available for review. For the sake of this article, we will take a look at the statement from the year ended 31 March 2017. In addition, to make sure we are evaluating similar categories, we will only compare revenue categories as reported in the financial statements for the NFF. The categories are Sponsorship (which includes, licensing, royalties, television, corporate sponsorship), International game revenues, and National team game revenues. The financial statement defines these selected categories as:
Sponsorship, Television, Licensing, and Royalties
USSF has a marketing representation agreement with Soccer United Marketing (SUM), and a sponsorship and licensing agreement with Nike. The revenues earned from these agreements are what is entered.
National Team and International Game Revenues
This is revenue earned from National Team and International games from the fiscal year. The revenue from international games is the net amount remaining after the payment to third parties.
Revenue Generated for Year Ended 31 March 2017
Revenue — Values in USD
Sponsorship, T.V, Licensing, and Royalties: 49,911,967
National Team: 55,532,014
International Games: 4,241,754
Comparison
When the revenue generated by the two federations are compared, it shows that USSF generated most of its revenue from National Teams’ games, while NFF generates its majority income from the government subventions. Secondly, the gap in sponsorship and marketing revenue is significant — USSF had $49,911,967 USD and the NFF generated $5,329,063 USD. Finally, the statements for the NFF did not reflect any revenue generated from national teams’ games or international games, while the USSF generated a combined amount of $59,773,768 USD.
Conclusion
Whenever I chat about the business of NFF with fellow Super Eagles’ fans, the push back I get is that: “well, you can’t really compare the U.S. federation to the Nigerian federation because one economy is clearly more advanced”, and I always say to them that it is true that the U.S. economy is more advanced, but it still doesn’t excuse the absence of multiple streams of revenue for the NFF. Based on the data collected from both audited financial statements, l will use my experiences in revenue generation departments of professional franchises to offer solutions. The data above clearly shows that the NFF has work to do to meet 20% of the revenue generated by USSF (USSF had a total of $125,301,588 USD generated in the statement dated 31 March 2017). So, here are my proposed solutions:
Stadium Naming Rights
The NFF needs to seriously look into how it can sell the naming rights of its preferred stadium. This will not be an easy task in Nigeria, but the promise of revenue to the state government can be enticing enough to get the deal done. During the FIFA World Cup qualification, the NFF played its home games at the Godswill Akpabio stadium in Uyo, Akwa Ibom, Nigeria. If the NFF can convince the Akwa Ibom government, or some other state government to allow it to sell the name of the stadium to a corporate entity, the revenue generated can be split between the NFF and the state government. The proceeds can be used for sports and education in the state, and the NFF will get its additional revenue. Given that all NFF games will be played at this stadium, the associated level of branding can generate 7 figures (USD) in revenue per year.
Hospitality/Tickets
Ok, so let’s assume that the NFF identifies an exclusive stadium, instead of collecting subventions from the federal government, it can get a grant from the government and use that money to renovate the stadium. The renovation will build in VIP locations, hospitality, entertainment, restaurants/bars, and premium entrance/parking. Why should they do this? Well, by creating all these areas, more affluent Nigerians will come to the games, more will be charged for tickets, and the revenue from National Teams’ games can be tripled. I can see the naysayers right now — “no one will come to the game, people don’t want to pay for games”, before you start with all the reasons why it won’t work, let me just remind you that thousands of people buy tickets to attend a Burna Boy or Wizkid concert, and Super Eagles were here before them, and will be here after those musicians fade from stardom. One more thing, the creation of these VIP areas will draw in more sponsorship dollars.
Registration/Affiliation/Certification Fees
Every time I am in Nigeria, the one thing I see is football being played everywhere; from the street corners to the side roads and sandy make-shift fields. The love for the game is undeniable. The NFF can generate revenue from mandating registration and affiliation fees. Yes, I know, people may resist this, but nothing is free, especially running a football federation in today’s world. Nigeria’s huge and young population will be a good revenue source for the NFF. Every amateur and professional team’s players should be registered with the federation. Each amateur player can register for 360 Naira (1USD), while professionals can register for 1,080 Naira ($3) at the start of the fiscal year. Referees and coaches should also pay a fee and be registered. NFF should then create a very comprehensive referee and coaching certification process, which will do two things — improve the quality of coaches and referees in the country, and generate additional revenue. The USSF generated $10,193,538 USD in registration and affiliation fees alone.
T.V. Rights/Digital Platforms
I can personally attest to the pain I have felt several times for not being able to watch Super Eagles online or trying to find a game, but thanks to beIN Sports, a global network of sports channels, this has recently changed. The NFF has to create a digital platform for streaming its games. Preferably, this should be done on its site, or by a third party. There are millions of Nigerians around the world that will pay an annual fee to watch NFF games and sports content online.
Licensing
The financial statement as of 31 March 2017 states that the USSF currently has a licensing agreement with Nike where Nike pays cash compensation including annual base compensation, minimum royalty guarantee payments, and discretionary funds. Nike also provides USSF with annual product supply allowances for national teams’ players, coaches, and staff members. There is also a performance bonus based on the performance of the women’s’ and men’s’ teams at different tournaments. The rave about the 2018 FIFA World Cup jersey should demonstrate to any apparel company that the NFF deserves a better deal (the U.S. deal can be used as a benchmark).
The NFF has to take a look at all its income sources and create tangible strategies to generate more money while weaning itself off the subventions from the Nigerian government. The non-interference of government mandated by FIFA is another reason why the NFF has to generate its own revenue. The independence of the NFF cannot be overstated. In a country where government involvement can infuse political interests into an organization, the Nigerian Federation must stop government funding. If these steps are taken, the bonus payment issues can be avoided, and an economically self-sufficient federation can flourish.
