Ethiopian football clubs have been financially dependent upon their hometown municipalities and government funding arms for long. However, this is to become history, after the clubs decided to bet higher. A fotball games televizing bid floated by the Ethiopian Premier League S.C, recently established by the 16 elite clubs, fetched a dream amount, enough to free local football from undue dependence and thus usher an unexpected comeback. EBR’s Abiy Wendifraw delved into recent moves undertaken to commercialize the football industry.
For those who engage in football, and of course, the sport industry as a whole, 2020 is probably a year everyone would prefer to forget. The 2019/20 Premier League season was suspended and later declared null and void. Stadiums were empty and football stars had to stay home for months after the COVID-19 outbreak.
Even before the pandemic started knocking on everyone’s door, Ethiopian football was on the verge of financial culmination. Clubs were struggling to pay salaries and the Ethiopian Football Federation was also reportedly experiencing budget deficits. Presumably provoked by fan violence, even the government of Ethiopia had been considering cutting the money clubs were receiving from city municipalities and other state-owned corporations.
Adding that to the ban on alcoholic beverages advertising which used to heavily sponsor the country’s football scene, COVID-19 was another nightmare for the struggling clubs, footballers, and even the sport governing bodies.
Yet, the news that came out early in October seemed to be too good to be true for many. The move to commercialize Ethiopian football fetched prospective offers. Social media reacted with mixed feelings of happiness and disbelief. People were asking, “can anything this good come out of Ethiopian football? There must be something wrong with it.”
According to official figures, Supersport slated USD21.5 million as a direct money investment into the league for five years. “The investment will start with USD4 million for the first year and will culminate with a USD5 million investment in the final year” says Ezana Wubshet, Communications Manager of DSTv Ethiopia, responding to questions from EBR.
If we refer to the overall worth of the deal, it reaches up to USD68 million including broadcasting rights, naming rights, and the investment package along with production, satellite, training, and branding outlays.
What convinced SuperSport to invest such a large amount money on Ethiopian football might lead industry observers to different opinions. The quality of Ethiopian football’s standard, market potential, and commercial opportunities may need critical analysis.
“Apart from the market potential, sports is an integral part of our content offering, and supporting the development of sports content is given the highest priority and value in our business,” Ezana explains. “This investment will also give the Ethiopian Premier League greater visibility, thereby creating multiple economic spinoffs around football and substantially impacting the football landscape in one of the largest countries in Africa.”
“Globally, the most successful football leagues are those who are making huge broadcasting revenue. The English Premier League and Spanish La Liga, are good examples. In Africa, the South African league makes such big revenue,” explains Girmachew Kebede, university Lecturer and sports radio Host.
Football has a few streams of revenue. Broadcasting, sponsorships, match-day revenue, and merchandizing are the major ones. Yet, broadcast income remains the largest of all.
‘’Our football lacked this massive money source. Clubs need this revenue to sustain their existence. Having a club that spends ETB80 million annually beyond its means tells how badly finance is managed in our football. There have been reports indicating government spends around ETB2.2 billion. This money primarily goes to players’ and coaches’ salary. There has been no significant investment in football development and infrastructure,’’ Girmachew argues.
Having broadcasting revenue means a lot. This sets a clear border between football and politics, mixed up as of now. In the long run, clubs will become business entities able to manage their own finances and budgets. Being financially independent, clubs can escape the trap where they find themselves being run by government officials. Since most of the teams are financially assisted by municipalities, we see mayors being offered the board’s chairperson position. And the government will be able to shift the financial support to other priority areas. Fourteen of the sixteen clubs in the elite league are financed by municipalities and government funding arms.
The broadcasting deal is meant to be a gamechanger not just for the league and clubs, but for players who dream of playing abroad. “DSTv is an international broadcaster with massive experience in the business. DSTv is the one that brought a satellite revolution to Ethiopia in early 2000s when the country started falling in love with European football. Now DSTv is bringing this experience with it. The league’s expected global viewership creates the opportunity for players to showcase their talent and break into international football. International scouts who may never come to Ethiopia for recruitment will now have the chance to recruit by reviewing the globally broadcasted domestic games”
Having fixtures on TV would also put more responsibility on host cities and fans. They will try hard to show their hospitality and positive images.
“The deal is also an opportunity for our sport journalists as well. Now we have colleagues working with Supersport and learning a lot to further develop their skills,” says Girmachew.
Ezana agrees. “Upskilling and empowerment of local production staff is one of the pillars of the investment from Supersport. The holistic approach intends to create lasting value for local industries with benefits including training on our stringent technical standards, opportunities for local content creators, distribution of content in local languages, and promotion of local talent.”
Kifle Seife, CEO of Ethiopian Premier League S.C. further strengthens the idea. “Besides the revenue, we think the knowledge and skill transfer in the deal is also significant. We expect to have a strong group of technical crews of our own, in five years.”
According to Haileegziabher Adhanom, Managing Editor of Liyu Sport website, the Ethiopian Premier League’s leaders deserve credit for their effort. “This is a milestone in the country’s football history and it was a demanding one,” says Haileegziabher.
The young league company, established just a year ago, is taking care of such a challenging task of dealing with international broadcasters like DSTv and CANAL+, and mobilizing the 16 clubs in the league to come together and decide on how to share the revenue. After reviewing the English Premier League and other African championships, the share company’s member clubs decided where the money goes and how.
Each club equally shares 50Pct of the broadcasting rights revenue. Then, merit payments consider the league position of each team at the end of the season to accordingly divide 25Pct of the income. The facility fee of 10Pct, depends on the number of fixtures each team has televised. The remaining 15Pct goes to the share company’s administrative expenses.
Just last year, things seemed all doom and gloom. Now, Ethiopian football may have managed to rise from the ashes.EBR
9th Year • Nov 16 – Dec 15 2020 • No. 92