A historic step towards restructuring Nigeria Professional Football League (NPFL) Clubs’ ownership and open it to private sector investments was initiated on Wednesday in Lagos when the League Management Company (LMC) and NASD OTC Securities Exchange signed a Memorandum of Understanding to partner towards actualising the listing of NPFL clubs in the secondary capital market.
At a well attended ceremony inside the event hall of Westwood Hotels on Awolowo Road, Ikoyi, Lagos, the Chairman of LMC, Shehu Dikko and the Managing Director and CEO of NASD Plc, Bola Ajomale, signed the MoU and separately pledged to drive their respective organisations to bring about the attainment of the set objectives.
Dikko, in his remarks after the signatures were appended said the partnership is very important to the LMC as it “sign-posts a step towards realising the vision nursed by the LMC to provide a strong structure for the NPFL Club ownership. It is a journey that has been long but potentially fruitful for the League, the clubs, our partners, NASD, Corporate Nigeria and the general football stakeholders”.
Taking a historical look at club ownership in Nigeria, the LMC chairman recalled that in the late 1970’s to early 1990’s, individuals and companies dominated club ownership and funding listing the likes of Stationery Stores, Udoji United, Leventis United, Abiola Babes, Ranchers Bees, Ayufsalam Rocks, BCC Lions, Jasper United, ACB, New Nigerian Bank, Flash Flamengoes and Iwuanyanwu Nationale and many other s.
Dikko explained further that the domination of state ownership of clubs in contemporary times is a result of downturn in the economy in the 1980s as a result of the oil glut in the international market which affected mostly private businesses.
“Today, the fluctuating oil revenue is hitting harder at states’ resources while the organised private sector are now driving the economy hence we are seeking this platform to take football to the organised business and the people as is obtained in some more prosperous leagues such as those in Germany, Spain and coming closer home, North Africa has since been appreciated by the LMC hence we took steps to seek the actualisation.
“You will recall that in the quest for this, we did sometime in the past visit the Nigeria Stock Exchange (NSE) all in our bid to bring about this change to a more enduring club ownership structure. We are therefore very glad that NASD has embraced this vision and has offered to work with us towards the actualisation”.
On concerns that state owners of the clubs may not be willing to relinquish their hold on the clubs and that the clubs also lack the prerequisites to meet the admission criteria into the capital market, Dikko responded that while enlisting is not compulsory, “the LMC will work with transaction advisors to prepare the clubs that elects to join the securities exchange.
The truth is that most of the governance structure requirements of the Securities and Exchange Commission are already in our Club Licensing requirements and all we need to do now is ensure the enforcement such that clubs that satisfy that requirement are almost eligible for enlistment in the capital market,” the LMC boss stressed.
In his own remarks, the MD/CEO of NASD Plc, Ajomale said the partnership was significant to the extent that it was bringing football and the business community together for the mutual benefit of all parties.
“It is with a sense of excitement today that I announce that the NASD OTC Securities Exchange has reached an understanding with the major promoters of football in Nigeria – the League Management Company (LMC).”
“Our Memorandum of Understanding marks the beginning of a merging of financial and sporting interests in an unprecedented manner in Nigeria. It is not often that securities markets and football are discussed in the same conversation but interesting things can happen when an imaginative manager decides to improve the fortunes of a sport and he decides to encourage teams to be publicly traded on a Securities Exchange. Like any other commodity, football clubs have rising and falling fortunes and can live or die based on foresight of their managers. Soccer may be a passion but it is a business like any other”.
Ajomale said the NASD understands that actualising the objective of listing NPFL Clubs is not a short term venture but one that will require processes to adhere to the discipline of the financial market which may not be present in the structure of club ownership.
“Of course I do not imply that listing a football club on NASD OTC Securities Exchange is an instant recipe for success – after all Tottenham Hotspur, one of the biggest clubs in England, were publicly traded from 2001 to 2011, but decided to a private ownership structure.
Again, of the 27 clubs that listed in early 1990s Britain, only a few remain successful and listed today. Significant restructuring is required to get the football clubs in shape before they can efficiently utilize investors funds and indeed attract such funds. The journey will be long and the hurdles numerous. But as they say, “the journey of a thousand miles begins with a step in the right direction” – such as the step the LMC is taking today”, Ajomale remarked.
He said NASD will provide business education to the clubs and at the same time sensitize the capital market community on the opportunities in football.
The MoU also conferred on NASD the status of Official Supporter of the NPFL.
Top NASD and LMC Directors who witnessed the signing of the MoU include the NASD Chairman, Mr. Tolu Mobolurin, Head of Legal, Jane Ijegbulem, Directors, Oladipo Aina, Arito Olushekun and Victor Ogiemwonyi. LMC Directors present were Dr. Isaac Ayodele, Alhaji Kabiru Baita of Kano Pillars, MFM FC Chairman, Godwin Enakhena, LMC Legal Adviser, Samson Ebomhe and Head of Special Projects of LMC, Harry Iwuala.