Friday, February 26, 2010

Why CAF’s $1.5 million prize money is just not enough

orange_Champions_LeagueGary argues that the money given at the end of Africa’s grueling continental club competition is inadequate for the finances of many Ghanaian – and African – teams.

The CAF Champions League is one of the longest running continental club competitions in world football. It first started out as the African Champions Cup in 1964, before it was redesigned to its current format in 1997.

In between this period, there were hardly any sponsors for the tournament and no prize money was paid to the clubs. They were mainly motivated by the quest for sporting glory and prestige as well.

Since the continent's leading club competition took on its present format where the eight top teams qualifying for the money-spinning group phase then go onto a knockout semi-final and a final played over two legs, however, the overall winners are guaranteed prize money of a million US dollars.

In September last year, the CAF Executive committee put this amount up by 50% beginning from this year's edition of the annual tournament. This was possible because of the appointment of Orange, the new title sponsors for the competition.

Admittedly, CAF have taken positive steps forward since Issa Hayatou took over the leadership of the organisation in 1988. Yet, it must be said that despite the many strides of CAF in all these years, the organisation have fallen far short in the marketing of their commercial rights, as I wrote in my last piece.

Like its sister football confederations, CAF rely on an exclusive marketing agent to sell their commercial properties. But there have been allegations of compromises on the part of the leadership CAF in respect of this partnership.

One would have expected that CAF would be transparent about their sponsorship earnings, making public all the details of how much a sponsor has committed to their various competitions and events. But that has not been the case and this has fuelled more speculation that a lot of money meant for football in Africa is being paid under the table into private pockets.

Better marketing would mean more money for CAF and more money for the clubs and the players.

Officials are often quick to argue that CAF are lagging far behind the likes of Asia Football Federation (AFC) and the European Football Union (UEFA) because the African economy cannot compare with that of those continents.

Yet, the difference between these continents is, for want of a better word, annoying.

The problem

Money matters have always been a focal point of managing football clubs everywhere. Recent headlines of Portsmouth FC in England staring administration in the face makes for grim reading and the sad thing is that this phenomenon is being replicated all around the world. In Ghana, we have a football financial crisis of our own.

For the past several seasons, monetary issues have meant that the teams that finished in the top four places of our country’s elite league have played checkers with taking part in African club competitions.

This weekend sees Asante Kotoko play ASC Linguere, a Senegalese team, in the second leg of their Caf Champions League competition. They need to win by a good scoreline but they are not only fighting for their place on the field. They desperately need a good win to help them get into the so-called ‘Money Zone’.

Getting into this year’s continental competitions itself was a problem for Ghana’s teams. For example, despite finishing second in last season’s league, the Kumasi-based side nearly dropped out because their financial projections showed that they simply could not foot the bill for playing in the tournament.

Kotoko were only bailed out by an undisclosed amount given them by the Ghana League Clubs Association (GHALCA). Sources say the dosh was $20,000. Whether that amount can take them far enough in the competition is another issue.

Many Ghanaian clubs are in serious debt as we speak and are only operating because of reasons of stature, who-you-know and benevolence from their debtors. Conservative estimates say that Hearts of Oak are in debts accruing to about GH¢2.7 million (just under 2 million dollars).

Going into African club competitions means airfares, hotel costs, player and technical team allowances and many more. As Ghana’s only representative on the continent, even if Kotoko should win the African Champions league, the money they would make is just $1.5 million.

Let’s put this amount into perspective. When Kotoko left Ghana on February 10 for their first leg game in Senegal, their spending totaled so much more than the $20,000 they were given by GHALCA. Now, multiply these figures by the number of times Kotoko would travel outside Ghana if they should get to the final of this year’s Champions League. That brings you to far more than the $1.5 million. Sources have revealed that the $20,000 stipend from GHALCA only covered the costs of the Senegal trip a fortnight ago.

Later, you may be reading about how much Hearts of Oak wanted to spend on this year’s CAF Champions League and why they were thwarted.


UEFA pay each team that qualifies for the Champions League €3 million Euros plus another €2.4 million for reaching the group phase. A group stage win is worth €600,000 and a draw is worth €300,000.

In addition, UEFA pay each quarterfinalist €2.5 million, €3 million for each semi-finalist, €4 million for the runners-up and €7 million for the winners.

In Asia, the total budget for the 2009/2010 Champions League is $20 million. Of that, 70 per cent is dedicated to prize money and incentives, with the eventual winners taking home $1.5 million plus bonuses from earlier rounds. A victory in the group stages will be worth $40,000.

On face value, a million dollars is a small fortune, but when one computes the cost of travel across Africa for a club, as well as the ever-rising costs of running such a club, this cash prize is already overdrawn before a club has played its final group matches.

Before you say we should not compare apples with oranges, do not forget that Africa also has some of the biggest companies in the world, spread over varied business interests and who will love to be involved with African football. So why don’t they like to do so? The answer is simple: too much stress with getting CAF involved with the various competitions.

Just as an example, the annual budget for a ‘Top 4’ club in Ghana is around one to two million dollars. This is to cover their travel and boarding within the country, as well as the general running of the club - players' salaries and bonuses, hiring of match venues, taxes, medical expenses, indemnities for referees, among other expenditure.

South African clubs have been known to withdraw or show less enthusiasm for the competition, because one of their several local tournaments earn them far more than they would get featuring in the CAF Champions League.

Generally, most clubs have, therefore, in the past 12 years operated deficit budgets to compete in the Champions League and one would then have expected that their patience and perseverance would have been better rewarded by the competition organisers with a cash prize far in excess of the $1.5 million that this year's Champions League winners will receive.

Officials complain of the football talent drain from Africa, but if they cannot help to improve the working conditions on the continent through such measures like better remuneration for the clubs, African players will prefer to take up the slave contracts that are pushed at some of them in Europe and beyond.

What to do
The current holders of the CAF Champions League, TP Mazembe, had a budget of $5 million last year and this year it's now $10 million. How can you reconcile that with the prize money?

Currently, CAF’s charges for the prize money from television and marketing revenue was ratcheted up recently from a total of US $3.5 million to some US $5 million and for me, the amount given to the winner out of this total should be increased. After all, it is they who do the travelling and the playing.

Secondly, where are all the sponsors who pump money into the African Nations’ Cup? Basic rules of marketing dictate that if CAF decides to give them a good deal, they can extend the sponsorship packages to the Champions League (and all other CAF competitions for that matter.)

Finally, the final destination of all the money CAF accumulates in every fiscal year beggars belief. This is certainly not a hasty generalization, for there are facts. CAF's financial report, released ahead of their congress in Luanda during Angola 2010, said the organisation had an operating profit of $939,000 over the last financial year and a cash balance of $18.8 million.

Are we seriously saying that out of all these figures in addition to sponsorship deals for the various CAF events are not enough to pay winners of CAF competitions at least $5 million?

It’s a pity we do not have access to CAF’s financial books - it should make for some very grim reading.

This feature also appeared on Ghana WCB