A couple of months I gave an overview of the state of South African football to a foreign entity wanting to learn more about SA sports. Part of the conversation migrated to what teams may be a possible take-over target I can tell that Bidvest Wits didnât even feature in that category of teams. So how did we miss this?
Well, the truth is IÂ have no idea how this came about. I am not privy to the circumstances behind this but it got me thinking. This week in a conversation with a group of football journalists I was also asked about the profitability of PSL professional football. Again this got me thinking if Bidvest Wits a team that has some of the best footballers and the nations top back 4, national champions barely 4 years ago could suddenly be sold presumably because the numbers were no longer adding up, Â what does that say about the rest of the clubs in the bottom half of the league.Â
That football is indeed a tough business at the best of times is a fact, according to the UEFA Club Report 2018 was only the second consecutive year that the European clubs, the most lucrative of markets showed, an aggregate profit. If you look at the middle to low-income European football market which is closer to where South Africa is commercially, less than half (only 46%) of the clubs show a profit. In South Africa, I expect that not even a handful of clubs make a profit. The biggest driver of the move towards profitability in Europe was the implementation of Financial Fair Play (FFP) Regulations. This was implemented as part of UEFAâS attempt to protect football from its reckless football clubs. The FFP rules essentially seek to enforce a prudent financial management discipline that ensures clubs to live within their means especially those with deep-pocketed owners.
I am surprised that FIFA has not followed suit and adopted that so it’s implemented across the world. I think itâs a fantastic idea that all responsible football leagues, federation and club must adopt. Had it not been for FFP football in Europe may well have sunk deeper and deeper into the financial mess. At some point, the aggregate European football losses was nearly 10% of its revenues at âŹ1.6B. Why you may be wondering wonder am I rambling on about European regulation instead of addressing the issue at hand. Well, part of any federation and leagueâs responsibility is ensuring that the integrity of the game is preserved. Doing so requires a good review of the financial position of the league and its clubs, It is in both SAFA and PSLâs interest to accelerate to full implementation of club licensing which should include submission of audited financial statements and annual financial warranties and guarantees.
This is one of the ways of managing and the risks the league may be facing. I am not sure how much of this is already in place. But this last sale for me is perhaps the strongest sign for football leaders that a much more robust licensing program is perhaps now overdue. It cannot be an acceptable situation that the league will start a season every year with fingers crossed that all its clubs will finish the league program without going into administration and throwing the enter system into a tailspin. Some of the measures that must be considered is salary caps as part of a broader FFP-type program. This is not so much about setting the upper limit of what players can earn but rather setting % of your revenues you can pay in salaries. It’s a widely use program not just in football but across sport to enforce financial prudence and prevent reckless trading that could cause rea har to the league.
That said the sale of statuses and sports teams is as old as organised sport. Itâs all legitimate and within leagues transfer of clubs provisions. Globally there is new money for all sorts of reason from pure investment, to political capital, social and cultural reasons. The clubs are privately owned and these tend to be private commercial transactions. That said football leagues must approve these and cannot claim to be powerless on this. Anything that may come across as making light of a time-honoured value of merit and merit only being the determinant of your sports status must be managed and carefully dealt with. No league or federation should accept that at any time the integrity of its season and the game as
 May be changed by some non-football decisions that it has little or no control of. While they cannot stop some of these they can influence how they are done and on what conditions they are implemented.Â
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