• Saturday, June 22, 2024
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NASD, LMC open capital raising window for Nigerian Football clubs


The future and ownership of Nigerian Football Clubs will soon enter into a new territory following Wednesday’s agreement by the NASD OTC Securities Exchange and the League Management Company (LMC) for willing local clubs to raise capital through the NASD OTC platform.

The NASD is bringing to the table, its constituency of over 100 Issuing Houses, financial advisers and stockbrokers who are willing to work with the League Management Company and individual clubs to achieve their dream of a commercially viable and self-funding industry.

Some of the participating institutions at the NASD are willing to advice on the most plausible structure to follow –be it joint stock structure, as exits in the Italian model, the English pure public company structure, or indeed a truly Nigerian solution.

The NASD community of financial advisers will also be advising the willing clubs on whether to float many cheap shares, or a few high value ones.

This newest development in Nigeria’s capital market and football industry comes at a time when State and Federal Government are seeking to re-order their expenditure patterns due to dwindling revenues. 

At the official signing of the Memorandum of Understanding (MoU) between the NASD and LMC yesterday in Lagos, they assured prosperous investors of adherence to good corporate governance, uninterfered  valuation of willing clubs, and proper due diligence.

The NASD will draw up guidelines, requirements and standards which if met, will increase the possibility of success of privatised Nigerian football clubs in the capital market.

In the light of the services that NASD will offer the LMC towards achieving the commercialisation of Nigerian Professional Football League (NPFL) Clubs and also in opening doors of opportunity in the private sector to Nigerian football clubs, the LMC on Wednesday granted NASD the right of official supporter of the NPFL at no financial cost.   

Willing Nigerian Football Clubs now have the opportunity to boost their capital structure, either from listing or being adopted by some corporations and through the NASD OTC which will enhance the commercial and promotional opportunities of the NPFL.

NASD plc is the promoter of a Trading Network that eases secondary market trading of all securities of unquoted public companies, primarily in Nigeria but with a focus on the West African region. Its intention is to stimulate growth by easing the capital raising process.

“It is a journey that has been long but potentially fruitful to the league, the clubs, our partners, NASD, corporate Nigeria and the general footfall stakeholders,” said Shehu Dikko, chairman, League Management Company.

Dikko further noted that the need to standardise the NPFL Club Ownership structure in line with what obtains 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 quest of this, we did sometime in the past, visit the Nigerian Stock Exchange (NSE) all in our bid to bring about this change to a more enduring club ownership structure. We are again very glad that NASD has embraced this vision and has offered to work with us towards the actualisation,” Dikko added.

“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. 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,” said Bola Ajomale, CEO, NASD OTC Securities Exchange.

Ajomale added, “We at NASD, share the belief that Nigerian football clubs can harness the power of the capital market and the passion of sports-loving Nigerians to develop reliable funding channels. NASD OTC Securities Exchange is a platform registered by the Securities and Exchange Commission that supports growth in all forms of economic endeavour, of which sports is certainly not the least”.     

Interestingly, Mountain of Fire and Miracles Football Club, a Lagos-based Nigerian professional football club that competes in the Nigeria Premier League, has indicated interest to leverage this newest window at the NASD OTC for additional capital, according to its chairman, Godwin Enakhena.

The club is wholly owned by the The Mountain of Fire and Miracles Ministries, a Pentecostal Christian Organisation.

The management of the League Management Company came up with this great initiative, having drawn from many models worldwide.

For instance, Societa Sportiva Lazio and Juventus are two of three Italian clubs whose shares are traded on the Borsa Italiana; Borussia Dortmund, one of the most successful clubs in German history, is the only German football club to have its shares traded on the Xetra  Exchange; also, Celtic FC in Scotland was close to bankruptcy in 1994 when it was bought by Fergus McCann for five million pounds, when he sold his 51 percent stake in 1999 on the London Stock Exchange (LSE), he made a healthy 31million pounds profit.

Arsenal FC sells fanshares valued at 15,000 pounds each, on the ISDX market, was valued at around $1.3billion in 2014, the 5th most valuable football club in the world, behind Real Madrid, Barcelona, Manchester United and Bayern Munich.

Manchester United is reputed to be the wealthiest Football club in the world. It however had to go through numerous changes and close scrapes before it got to where it is today.

From a weak initial outing which brought the club for only 6.7million pounds, great management led the club to a valuation of $2.8billion by June 2014. It is traded on the New York Stock Exchange (NYSE).

Iheanyi Nwachukwu