Eliud Owalo: Government should save Gor Mahia and AFC from collapse

Famous politician / Management consultant Eliud Owalo, wrote an article in the Daily Nation making the case that the government should intervene to save Gor Mahia from collapse

Additional reporting from the Nation

As an ardent football fan, I’m not only concerned about the plight of our non-institutional local football clubs but also extremely worried about the possible adverse effects of Covid-19 disease on local football in general and the community clubs in particular.

Our two leading football clubs, namely Gor Mahia and AFC Leopards have not witnessed any form of financial stability since the gaming company SportPesa cancelled all sports sponsorship in the country in August 2019. The withdrawal was informed by regulatory and taxation issues which the Government and SportPesa failed to level expectations on.

The withdrawal by the betting giants brought to a halt its four-and-a-half-year deal with the Kenya Premier League (KPL) reportedly worth Sh450 million, plus an annual sponsorship to both Gor Mahia and AFC Leopards.

In the last deal signed in 2018, the firm financially supported the Football Kenya Federation (FKF) to the tune of Sh69 million, the Kenya Premier League (KPL) Sh259 million; Gor Mahia Sh198 million; and AFC Leopards Sh159 million. The withdrawal left both the KPL and the two football giants with no sponsors.

The same plight is extended to other community football clubs since the gaming firm was the KPL’s title sponsor. Since then, the aforementioned clubs have struggled to pay players’ salaries for the past seven months. This is a very gloomy picture, considering that apart from standard essential costs such as house rents which the players must defray, the same players just like all of us, experience a high-dependency-ratio.

Local football had hardly navigated through the harsh economic times informed by the SportPesa exit when the global coronavirus pandemic came to the fore. Consequently, the local football league has been suspended by the KPL, with the situation likely to continue over the next three months, or even longer.

With no football being played, the implication is that the non-institutional Clubs like Gor Mahia and AFC Leopards are not getting any revenue by way of gate collections, yet this would have been their primary source of revenue at the moment. On the flip side of it, the clubs have constant recurrent expenditures like payment of players’ salaries to meet, which are held constant despite the fact that the local football league has been suspended.

Informed by best-practice, our local football clubs enter into performance-based contracts with their players. Granted, one may argue in the prevailing circumstances that the players are not meeting their part of the contractual obligation because they are not playing any football.

However, Covid-19 is a risk that could never have been effectively mitigated by both the clubs and the players themselves since it is a global problem that has arisen out of reasons beyond everyone’s control.

It is therefore mind-boggling how the non-institutional clubs are expected to generate revenue in the absence of gate collections to enable them pay salaries to the players, which on average ranges about Sh5 million every month. In the same vein, I empathize with the players whose direct expenses are held constant yet faced with a dwindling and erratic disposable income.

Of great concern, quite a number of the players have their contracts running out during the June transfer window and ceteris paribus, they run the risk of complete loss of livelihood in the prevailing circumstances if their contracts are not renewed.

My hypothesis is that the clubs may be unwilling to enter into new contracts with players in view of the current economic uncertainties, but the net effect is that the players equally have nowhere else to go based on the same.

In a nutshell, the aforementioned non-institutional football clubs which are the bed-rock of Kenya’s football are on the verge of closing shop all together.

If Gor Mahia and AFC Leopards collapse or operate at sub-optimal capacity levels, this will spell doom to Kenyan football. Worse still, this will have a catastrophic overall effect on the economy since football is a major contributor to our Gross Domestic Product (GDP) by way of both direct employment and the fiscal framework through taxation and public expenditure.

It is therefore my humble submission and appeal to the Government through the Ministry of Sports to urgently formulate and deploy a short-term policy intervention at macro-level to cushion the non-institutional football clubs in the country.

This should entail either directly off-setting the players’ salaries over the next three months or provision of subsidies; which can be underwritten through the Sports Fund.

Equally, any existing corporate sponsors to the local football clubs could also be granted tax reliefs over the next three months to facilitate the now much-needed impetus towards football sponsorship.