If transparency is difficult, why not outsource it?

The courtroom battles between FKF and KPL have taken a brief reprieve at least for now. This means teams can now get back to the business of playing and addressing other important issues. For Gor Mahia, this means they need to figure out who to meet their payroll.

Avoiding Financial Instability

Before the Bandari match, there were reports of a go-slow by some players with other reports suggesting that some players were ready to break their contract due to unpaid salaries. Happily for Gor Mahia fans, the club chairman has miraculously found a way to pay salary arrears. In fact Chairman Rachier deserves praise for keeping the club afloat for an entire year in which Gor Mahia has not had a sponsor. Vice Chairman David Kilo recently indicated that there are times when Rachier has to dig into his own pocket to bail out the club. Whereas this is commendable, the club must start finding ways to attain measure of financial stability. You never now the next time players will go on strike again. It could be at a critical point of the season.

Officials find it difficult to be transparent

Last year the club engaged in a number of initiatives to try and finance the team. These include the 350100 initiative, the membership drive and the much vaunted fund raiser. All these failed to meet their objectives due to a number of reasons. Chief among these is the perceived lack of transparency. When some fans think of contributing to the club they hesitate. After all we live in a country of impunity and corruption

I have had discussions with various sports officials about this subject and some say that the time and effort needed to put in place the structures required for transparency are too effort and time intensive. Last year Gor Mahia took some tentative steps towards transparency and accountability:  But those efforts have since been abandoned. Perhaps the treasurer ran out of time.

Partner with an external Company

Since providing any transparency is too difficult, the club should partner with an external company. Just like last year, Gor Mahia announced a partnership with Diamond Trust for ticketing, why not create a similar partnership with an auditing company like Price Waterhouse or even with Diamond Trust.

This company would be responsible for soliciting funds from fans on behalf of the club. The company would take charge of initiatives like the membership drive which flopped and is now in limbo.

The auditing company would also reach out to Gor Mahia fans who are based in the diaspora, many of whom have been looking for a way to contribute to the club. Note that Moneygram has recently partnered with Safaricom to make it easy for diaspora based Kenyans to send money to M-Pesa accounts.

A major fault of the clubs recent fund raising activities is that it is limited in scope. For example, when the club conducted a fund raiser last year, contributors were limited only to those who could attend the fundraiser event at Shauri Moyo hall. It comes as no surprise therefore that the fundraiser failed.

Performance based payments

The company chosen would keep an agreed upon percentage of the proceeds as pay. Because their pay is based on how much they collect, the company will be motivated to raise funds.  Fans are more likely to trust an external company like Diamond Trust. But the company can generate even more confidence by creating a website that details how much money has been collected on a month by month basis.

Aside from engaging in a transparent effort, the auditing company would be responsible for creating a sustained effort by constantly reaching out to fans and encouraging them to renew their membership. The ability to sustain an initiative is something that our current club officials are unable to do. They typically start an initiative then it fizzles out. You cannot blame them however as they have full time jobs to attend to.

Evidence suggests that by engaging in this level of a sustained effort with transparency, the club can attain 30,000 paying members within 2 or 3 years. if you have 30,000 fans paying Ksh 100 per month, the club can raise Ksh 3 million each month which is Ksh 36 million a year. This is an amount far higher than what the club was getting from Tuzo. In fact it is twice as high.

The club can also create various levels of membership. For example gold membership with increased benefits can be Ksh 500 per month while platinum members. Lets say for arguments sake that 1000 of the members are gold members and 500 are platinum members, then the club can raise Ksh 4 million each month.

Fans have to be the sponsors.

The rumours that the club was going to get a a sponsorship deal with Molo milk are unlikely to pan out anytime soon. Fans who have been going on social media claiming that the deal is imminent pending a few details are doing the club a  disservice. If fans actually think a sponsorship deal is imminent, they are less likely to contribute. And since sponsorship is difficult to come by, it is the fans who are going to have to sponsor the team.

This is the Barcelona model.

Before fans dismiss membership as an archaic way of funding a club, they should know that this method is commonly used by European teams, most notably Barcelona. A glance at their history page suggests that by 1924, Barcelona already had over 12,000 members. By 1970 they had over 65,000 members and todaay they have over 105,000 members paying an annual subscription of €177 per year. No wonder Barcelona did not have a short sponsorship until recently. They never needed it. In Africa, teams like Zamalek and Al Ahly have the highest subscriber bases