By Alex Chiejina
LAGOS (Sundiata Post) – The NASD OTC Securities Exchange has reached an understanding with the major promoters of football in Nigeria, the League Management Company (LMC). Football analysts believe that the Memorandum of Understanding marks the beginning of a merging of financial and sporting interests in an unprecedented manner in Nigeria.
At a time that state and federal government are seeking to reorder their expenditure patterns football enthusiasts say it is appropriate for the LMC to look at allowing private and public investment play a bigger role in the financing of the most popular sport in Nigeria and indeed, the rest of the world.
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.
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.
NASD shares 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.
A peep into the football industry show that Società 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.
Celtic FC in Scotland was close to bankruptcy in 1994 when it was bought by Fergus McCann for £9 million. When he sold his 51% stake in 1999 on the London Stock Exchange, he made a healthy £31 million profit.
Arsenal FC sells fanshares valued at £15,000 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 clubs 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 only £6.7million, great management led the club to a valuation of $2.8billion by June 2014! It is traded on the NYSE
Of the 27 clubs that listed in early 1990s Britain, only a handful remains successful and listed today. Significant restructuring is required to get the football clubs in shape before they can efficiently utilize investors funds and indeed attract such funds.
Sundiata Post gathered that 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.
Investors can tap into a wider investment base in the economy; clubs will have more access to long term funding and securitisation of their core assets. Clubs will also be able to raise new capital for building higher standard arenas thereby attracting more interest both from supporters of the club and commercial interest from the use the facility at other times.
Just as the English Premier League football matches are broadcast to 720 million homes across the world, the LMC intends to bring the beautiful game of Nigeria to 180 million Nigerians and beyond.