• Thursday, June 13, 2024
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Sports Business: Exploring partnerships for economic growth, youth development

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Football is a global game and also a profitable venture for potential brands willing to take advantage of it.

Like the European leagues, the Asian and South American nations where Sports business, especially football is a major revenue driver, Nigeria too can revolutionize its sports industry and benefit from the revenue windfall.

Sports hold a huge prospect in Nigeria with an estimated population of over 200 million, a growing middle class and about 65 percent youth population. Nigerians’ interest in sports is legendary. Asides, sports have been a uniting factor in the country despite the ethnic, regional or political divides.

Read Also: Minister urges youths to take advantage of economic benefits in sports

Unfortunately, the Nigerian sports industry, especially football, have witnessed a decline regarding its prospects over the years. Many have blamed the decline on the lack of investment in the sector.

No doubt, investing in the football business can help impact the economy by creating jobs, but private sector participation is key in driving the sports industry.

Read Also: Towards sporting success

At the 2017 Nigeria Economic Summit Group (NESG) stakeholders meeting, participants from the public and private sectors unanimously agreed that government interference is hindering the development of the sports industry in the country. They concluded that the industry should be private sector-driven while the government provides the structure, policies and enabling environment to attract investors.

Panelists at the forum highlighted the business potentials in investing in sports in Nigeria to drive future economic growth and youth development. One project that is presently providing such an opportunity includes the Higher Institutions Football League.

The panelists stated that capital investment is needed in sports merchandising, media and facilities, stressing that it was the best model to financing sports to drive revenue generation, employment and business opportunities.

Gains in investing in sports business

Amaju Melvin Pinnick, President of Nigeria Football Federation (NFF) and FIFA Council Member, had mentioned that the potential in Nigerian sports is limitless. However, the government needs to create an enabling environment for the sports industry to thrive.

“The British government invested £200 million in the Premier League almost 30 years back and, the EPL is worth £18 billion in May 2021. If we create enabling environment with proper structure, sports can contribute significantly to Nigeria’s GDP more than any other sector,” said Pinnick.

According to Sportico, the average value of a Premier League team now stands at $1.29 billion. On an estimate, the 20 clubs in the English top-flight football league are worth more than $25 billion cumulatively. The overall average was significantly lifted by the Premier League’s so-called “big six”, who were involved in the recent failed attempt to form a breakaway European Super League (ESL).

Read Also: The importance of sport for the unemployed youths

The report further showed that in the EPL, Manchester United, Liverpool, Manchester City, Arsenal, Chelsea and Tottenham Hotspur are worth $3.675 billion on average. The remaining 14 teams are valued at $3.7 billion combined.

“We must engage reputable brands to drive sponsorship for the national team. If every geopolitical zone concentrates on its strengths and harness them properly, Nigeria will fly the flags high at international competitions and thus get global attention for investors to come in and invest,” Pinnick added.

 

Sports business as a revenue drive

Economic experts believe that investing in the sports industry will boost the nation’s revenue and spur economic growth.

Speaking at the 26th Nigerian Economic Summit pre-summit webinar themed “Re-categorization of Sports as a Business Sector of the Economy: Partnership Imperatives” Sunday Dare, Minister for Youth and Sports Development, in his keynote address said the sports industry which is a labour-intensive growth industry is being re-categorized as a business venture beyond recreation based on its capacity to spur economic growth.

“This move prioritizes the industry and fosters its eligibility for incentives, development of metrics for impact measurement, consideration for special funding by the Central Bank of Nigeria, creation of jobs and tax rebate, the sports industry can deliver N2 trillion revenue in the next 5 to 10 years for Nigeria and this can help to drive the largest real estate and infrastructure development in the country however it will require $500 million annual investment in sports infrastructure” he explained.

Yemi Kale, Statistician-General, National Bureau of Statistics, said that Sports is valued at $500 billion globally. However, the sector accounts for a meagre 0.005 percent of Nigeria’s GDP.

“Sports remain a small business in Nigeria but has the potential to be much bigger, we need to agree on what sporting activities should constitute and focus on data integrity, collaboration with relevant agencies and most importantly ensuring the steady funding for data computing as related to the sports industry,” Kale stated.

StanbicIBTC, Nivea Men setting the pace with Higher Institutions Football League

In Nigeria, PACE Sports & Entertainment Marketing in conjunction with Stanbic IBTC, Nivea Men, Minimie and BOLD are taking significant steps in showcasing the benefits of partnerships in the sports business.

For example, StanbicIBTC has remained committed to the Higher Institutions Football League (HiFL) from its inception in 2018. In 2019, the Company signed a long-term deal to be part of the league for five years. On the occasion, then Chief Executive, Stanbic IBTC Holdings plc, Yinka Sanni stated, “so far, we have been impressed with the organisation of the league. The inaugural edition in 2018 set a standard that we as an organisation are proud to be associated with. At Stanbic IBTC, one of our core objectives is to engage the youth through initiatives, which will contribute to talent-moulding and character-building. We have committed in long term to this project because we sincerely believe that its course is aligned with our strategic vision”.

Now in its fourth year, the partnership is waxing stronger with new introductions in branding and activations on the project despite the effect of the COVID-19 pandemic. Announcing the sponsorship of Nivea Men, Beiersdorf’s Managing Director, Nigeria, Godwin Harrison said, “Nivea Men is thrilled to come on board as HiFL’s Official Men’s Grooming Partner in 2021. The partnership will enable us to support the nurturing of football talent among Nigerian youth while connecting with our young future consumers through a sport the whole country is passionate about. We look forward to the upcoming collaboration and an exciting sporting football league in 2021”.

According to Goodness Onyejiaku, Chief Strategy Officer, at Pace Sports, the HiFL impact story has been massive with over 60 scholarships awarded to players who have participated in the league by their different institutions. “So far, there have been over 20 professional pathways, 3000 collegiate volunteer sign-ups and distinguished awards from different institutions including the National Institute of Sports. The HiFL is gradually becoming an extensive platform for youth engagement in Nigeria and we hope to keep this going in the collegiate space for as long as we can” he said.

Process of building takes time

Building a formidable sports sector is not automatic or quick fix. It requires strategic and continuous investment. As demanding as this task is, the recreational appeal of its result presents a unique opportunity for corporate organisations and individuals to promote their brands.

What sponsors stand to achieve

Nigerian brands must realise that when they invest in local sports they do themselves a world of good. Sponsoring domestic sports must be seen as a business module and not just for corporate social responsibility purposes.

In European countries, the sports business is one of the biggest employers of labour, and Nigeria must encourage private sector investments in sports.

Big brands in Nigeria can leverage sports investment to drive productivity and deepen their company awareness.

Also, sport is a tool for national unity, reduces crime and promotes healthy living.

Investment in the sports business keeps increasing. A PwC report estimated that in 2015 global sports sponsorship reached $45billion and Africa contributed less than $2billion, with South African companies dominating.

Bwin, an online betting brand paid $329 million for the sponsorship of Real Madrid shirts in 2009.