Lessons from Germany

From Robson Sharuko in FRANKFURT, Germany
ZIMBABWE’S football leaders could borrow a leaf from their Bundesliga counterparts, who have the best club licensing system in the world, in their struggle to navigate the storm triggered by the Confederation of African Football’s new tough club licensing regulations.
The Caf executive committee issued a directive on Monday that there should be an implementation of their club licensing regulations and those who fall foul of those requirements might find themselves being outlawed from inter-club tournaments like the Champions League and the Confederations Cup.

Clubs are now required to have a full-time office, equipped with phone lines, faxes, e-mail facilities and running official websites, youth development programmes and producing audited financial statements on a yearly basis.

Failure to meet these requirements — which have to be enforced through the national association — will see the clubs being barred from taking part in Caf inter-club tournaments from next year.

While Zifa have covered a lot of ground in terms of equipping its staffing levels at its offices, including the recruitment of a media officer, the association still finds itself being pegged behind by its failure to produce audited financial statements.

The Bundesliga, which has 18 teams, has a turnover of 2 billion every year, the most sustainable model of all top-flight football leagues in the world, highest profit and equity in assets, lowest debt rate and the highest attendance figures on the globe.

It also has the lowest ticket prices of any major league in the world, the best modern stadiums, most of them club-owned, and the best balanced distribution of television income among clubs.

Two Bundesliga teams, Bayern Munich and Borussia Dortmund, played in the final of the Champions League last season in what was a phenomenal display of the league’s rapid rise to the top of the pile in the world.

But to get to the top of the world, the          Bundesliga leaders have had to put together a structure that would not only be sustainable but also produce successful football clubs that could compete against the best in the world.

Because of the way the Bundesliga licensing system is structured and enforced, it has become a model for the world and its success stories can be seen in the following:

• No Bundesliga club ever went bankrupt during a running competition or was unable to complete the season

• Gives business partners additional appeal and security

• Guarantees fascinating competition in connection with the distribution of revenues generated through central marketing of rights

• Provides the impetus for continuous professionalisation in clubs and corporations

• It has provided a role model for Uefa’s licensing procedure

It’s a model that could be used by Zimbabwe’s football leaders in their march, not only towards meeting the Caf requirements, but also in their journey to try and convert the local clubs into successful commercial entities.
The licensing system for the 18 Bundesliga teams and the other 18 teams in the Second Bundesliga, which will give a club the licence for the right to play in the two top tier leagues of Germany, is structured on the following criteria:

• Establishment of a youth academy respecting defined standards

• Provision of annual financial statements backed by audited statements from reputable audit firms

• Disclosure of sponsoring contracts

• Disclosure of credit contracts

• Proof of liquidity to foot the costs for the forthcoming season

• Stadium checks (capacity, ground heating, emergency and security, media area)

• Security standards

• Assignment of certain club positions e.g executive board, head coach, medical staff, security manager, financial manager

• The need to have at least one full-time media manager

• Installation of a Press tribune, commentary boxes, Press conference rooms, mixed zones, power supply and parking spaces for OB Vans etc.

If the Zimbabwe football leaders were to borrow a leaf from their Germany counterparts, it would mean that every club that applies for a licence to play in the domestic top-flight league would have to provide guarantees that their liquidity situation can enable the following:

• That payment obligations can be fulfilled at all times

• That regular match operations can be fulfilled at all the times

• That financial distress can be countered

• That consolidated accounts will be provided and the liquidity circulation must be for the period of December 31 to December 30 the following year.

This would mean that the plight of clubs like Motor Action, Tripple B and Monomotapa, who have failed to sustain the payments of their players salaries and allowances throughout the season, would have been picked up long before the domestic season started and rescue packages, if any, could have been explored.

In the event that the clubs were not in a position to sustain their activities, as has emerged in recent months, their membership of the domestic Premiership would have been withdrawn with a club, which can meet the requirements, being asked to take their place.
There are penalties in the Bundesliga for breaches of the licensing requirements and these include a warning, a stadium ban, fines of up to 25 percent of media income, deduction of points and withdrawal of the licence.

While the Zimbabwe Premier Soccer League is celebrating its 20th anniversary this year, the company that changed the face of the Bundesliga, the Deutsche FuBball Liga, is only 13-years-old having been formed in 2000.
In just more than a decade the DFL has helped transform the Bundesliga, using strict licensing guidelines, into the league with the second biggest turnover in the world after the English Premiership.

While the Zimbabwean clubs cannot match their Bundesliga counterparts, for various reasons, with the key one related to the differences in revenue generation, there are lessons that can be drawn and which could help the domestic Premiership in its journey towards commercial prosperity.

Interestingly, while the bankrupt Zimbabwean football family has more than 80 clubs in the top two tier leagues of the Premiership and the four Division One Leagues, the mega-rich Germany football family has only 36 clubs in its top two tier leagues of the Bundesliga and the Second Bundesliga.

What comes out clearly in this contrast is the fact that too many football clubs in Zimbabwe are chasing a very small cake, which they might never eat, while a few Germany clubs share a very huge cake, which helps keep them in a very healthy state.
The two clubs with the big brands and appeal, Dynamos and Highlanders, have failed to use their brands to turn themselves into giant commercial entities the way Kaizer Chiefs and Orlando Pirates have done in South Africa.
The brand of the Zimbabwe Warriors was at its peak, in terms of its international profile, when the late German coach, Reinhard Fabisch, was in charge in the early and mid ’90s.