For the past couple of seasons, the Chairmen and Managers of the elite football clubs in Nigeria have – in addition to their on-field battles – been fighting to exclude the League Management Company (LMC) from the management and operation of the top-flight football league in Nigeria. This battle is based on what they deem to be their right to elect an Executive Board from amongst themselves to exclusively manage the league in which they participate. Historically, professional football league commenced in Nigeria in 1990 by virtue of decrees of the then Federal Military Government; however, since the incorporation of the Nigeria Football League in 2006, club officials have been elected to spearhead the management of the Nigeria Premier League. The past couple of seasons have witnessed a shift from this model, with an independent body responsible for the day-to-day management of the league and the implementation of the rules that govern it.
This new model apparently does not sit well with some stakeholders, chief among who are the club chairmen, who see it as taking the control of the league from them. The aim of this piece is to throw light on the issue of ownership of association football and to analyse the LMC league governance model vis-à-vis other models in different countries. It is expected that upon reading this piece, one would have a clear understanding of the true status of the LMC, its role, structure and the league governance model it is designed to operate. Then one should be equipped to make an informed decision as to the propriety or otherwise of this model for the advancement of league football in Nigeria.
Who Owns League Football in Nigeria
It is a common assertion by club chairmen (popularly referred to as “club owners”) that they own the league. They admit that over the past couple of seasons they have been pre-occupied with how to ‘reclaim’ the league from the LMC so as to manage it in accordance with what they perceive to be the provisions of FIFA and NFF statutes which, according to them, give the management of the league to the participating clubs via election. First, we will consider what the FIFA Statutes stipulate, before taking a look at the domestic statutes.
The portion of the FIFA Statutes which deals with the status of Leagues and other groups of clubs is Article 18, which states that –
Leagues or any other groups affiliated to a Member of FIFA shall be subordinate to and recognised by that Member. The Member’s statutes shall define the scope of authority and the rights and duties of these groups. The statutes and regulations of these groups shall be approved by the Member
Whereas this provision could be interpreted to mean that recognition may be given to a league as an entity, it says nothing about giving ownership of any such entity to the participating clubs. Perhaps this argument is illuminated by Article 78 which stipulates that the Member of FIFA (the Nigeria Football Federation in this case) is the original owner of all rights emanating from competitions and events coming under its jurisdiction.
As seen above, the FIFA Statues empowers the relevant FIFA Member to define the scope of any competition under its jurisdiction and to – through its statutes – define the scope of any league or group of clubs. Therefore, the NFF Statutes should be the place to look for further clarification on the issue of league ownership or scope. In addition to the general statutory objective of encouraging the development of football in Nigeria, Article 2 of the NFF Statutes lists the objectives of the NFF as including to –
- develop, promote, control and regulate the sport of association football in all its forms throughout the territory of Nigeria; and
- organize competitions in association football in all its forms by conceding areas of authority to the various league
In addition, Article 78 states in clear terms that the NFF “organizes and coordinates” competitions including the Premier League and any other competition that the General Assembly may approve.
The above provisions show that the NFF has the responsibility for organization of league football (whether professional or amateur) and when read together with the FIFA Statutes, it appears untenable for ownership of league or association football to be ascribed to any entity other than the NFF. The principle that a league or other group of clubs is subordinate to and recognized by the NFF cannot be overstretched to connote an inordinate level of exclusivity or ownership by the clubs themselves.
There is an added perspective under the NFF Statutes, which speaks of the power of the NFF to assign/concede/delegate its league governance functions to another body or third party. Specifically, Article 34 states that the powers of the Executive Committee of the NFF includes the power to –
delegate tasks arising out of its area of authority to other bodies of NFF or third parties
The final point is based on what the NFF, through its statutes, perceives a League to be. The definition clause describes a “League” as –
any other body subordinate and duly affiliated to NFF, that has been granted the authority by NFF to organize a competition or competitions which has been sanctioned by the NFF in accordance with this statutes (emphasis mine)
The above should suffice to erase any doubt as to where ‘ownership’ of a league resides. Not only is the NFF the only body statutorily empowered to organize and regulate all forms of football (whether professional or amateur) in Nigeria, it is also empowered to assign or delegate that responsibility. It is a popular tenet that “you cannot give what you do not have”. There is nowhere in the statutes of either FIFA or the NFF where clubs are given ownership of the league in which they participate.
The Status of ‘Club Owners’
There is the need to clarify the status of the group of club chairmen. Whether referred to as ‘club chairmen’, ‘club owners’ or as a group of the clubs themselves, the NFF Statutes recognizes a league (collectively) as a member of the NFF and not merely the clubs or their officials. No mention is made in the statutes of an entity comprising the owners/managers/chairmen of the clubs by themselves. The Statutes only recognizes the players’ association, the coaches’ association and the referees’ association as members of NFF. It is worth reiterating that recognition is given only to the League body and not the chairmen of the clubs participating in the league. Therefore, the incident of club chairmen purporting to exclusively determine the structure and tenure of a league or league body recognized by the NFF is an aberration.
League Governance Models
Prior to the advent of the Nigeria Professional Football League (NPFL), the top-flight professional football league in Nigeria was known as the Nigeria Premier League (NPL). However, ever since a judgment of the Federal High Court, Abuja declared the NPL and the Nigeria Football League Ltd (the company under which it was registered) illegal, there arose the need to operate the top-flight league on a legitimate footing. An Interim Management Committee was appointed to oversee the league and workout modalities for its long term sustenance. This was an opportunity to fashion a modern league governance model that would not only meet international standards but also address peculiar domestic needs. This eventually led to the formation of the League Management Company (LMC), licensed by the NFF to manage the top-flight professional football league.
In order to put the LMC model in proper perspective, it is apt to analyze different league governance models that operate in some other countries. For this purpose, we will first consider four common types of league governance models, after which we will take a look at how the models are applied in the top-flight league in countries such as England, Germany, USA, Australia and the UAE.
Apart from instances where the national football association organizes the league by itself (in Ghana for instance, the Premier League is organized by the Ghana Football Association), there are four common types of league governance models, viz:
- the Club Delegate model: where the participating clubs elect or appoint delegates or representatives into the Executive Board which governs the sport;
- the Independent Board model: where the Executive Committee is made up of persons who are not officials of the clubs participating in the league, but professionals with proven expertise;
- the Commissioner model: where the league appoints a Commissioner who handles the day-to-day management of the league, and
- the Operator License model: where the national association issues a license to a third party to manage the league.
The model adopted by any particular country is determined by the peculiar local circumstances. In modern times, many professional leagues have opted for the independent board structure because of its feature of employing seasoned business professionals to increase the technical capacity and revenue generating ability of the league. We will now look at the specific models applied by some countries.
England – the Premiership:
In 1992, top-flight English football clubs resigned from the Football League to operate a commercially independent league under license from the Football Association. The aim was to increase revenue accruing to the top-flight clubs (through commercial independence) and enhance their competitiveness amongst their European counterparts. Clearly, this model has worked, since the Premiership clubs in England have repeatedly recorded the highest spending ability among the top five European leagues.
The Premiership is managed by a Board of Directors, comprising a Chairman and Chief Executive Officer (CEO) appointed by the participating clubs, but none of whom is an official of any of the clubs. This guarantees administrative independence, integrity and absence of conflict of interest. The members of the Board are usually professionals with sound business track records, appointed to manage the league. Their experience has helped the league to attract lucrative broadcast and sponsorship deals, culminating in increased revenue for the clubs to build upon.
This is an example of the Independent Board governance structure.
Germany – the Bundesliga:
The German Football Association (DFB) is responsible for the overall governance of football in the country, while the League Association and its 100% subsidiary DFL (Deutsche Fußball Liga GmbH) are responsible for the management of the top two divisions (Bundesliga and Bundesliga 2). Unlike the Premier League which is registered as a limited liability company, each of the three bodies is a registered members’ association. The League Association is regarded as an independent member of the DFB and governed by its statutes.
While the DFB has overall responsibility for referees, the coaching system and disciplinary procedures, the day-to-day management of the league is handled by the DFL, which comprises a Chief Executive Officer and a Chief Operating Officer – neither of whom is an official of any of the participating clubs. There is however supervisory board, some of the members of which are club officials. Also, in the parent company, although the League Association Board contains representatives of the participating clubs, about half of the members are not officials of any of the participating clubs.
The point remains that the management of the league and implementation of its rules, including club licensing regulations are handled by an independent board. The DFL examines each club’s fitness to participate in the league according to sporting, legal, staffing, administrative, infrastructural, security, media-technical and financial criteria.
USA – Major League Soccer:
The Major League Soccer (MLS), operates as a single entity rather than as consisting of independently owned clubs. The MLS, via its investors, centrally owns the teams in the league and merely relinquishes some control and operation of clubs to investors in the form of franchise.
The MLS operates the Commissioner model, wherein the Board of the League appoints a single Commissioner, who is tasked with the day-to-day management of the league, including negotiation of contracts and enforcing the disciplinary process.
Australia – Australian Football League:
The Australian Football League (AFL) historically operated the club delegate governance structure with delegates elected from amongst the participating clubs. However, with the league and its clubs facing financial instability in the 1980’s, an Administrative Structure Review was conducted. In the findings published in 1993, parochial interests among the club officials who made up the league board were identified as a problem (Crawford, DA, ‘AFL Administrative Structure Review – Findings’, March, 1993, 5-7). It was then suggested that there was the need for a board that would act independently in the interest of the league as a whole and free from conflict of interest.
There was a shift from the club delegate model to the independent board structure due to the problems associated with the former, which led to the formation of the AFL Commission, consisting of persons who were not officials of the participating clubs. This model is acknowledged to have improved the fortunes of the league with increased finances as well as increased fan presence. The independent board has been hailed as having acted in an essentially corporate manner and operating the league as a business. In a review of ‘League Structure, Economics and Best Governance Practice in Metropolitan Australian Football Leagues’ published by the Australian and New Zealand Sports Law Association, the preferable league governance structure was said to be the independent board structure, where the interest of the league is placed above the interest of the clubs and by 2007, all the metropolitan leagues had followed the path of the AFL by switching to the independent board structure from the club delegate structure.
UAE – Arabian Gulf League:
The Arabian Gulf League in the UAE is controlled by a body known as the Pro League Committee. The Pro League Committee was established in February 2007, by virtue of a resolution issued by the UAE Football Association General Committee, to set a committee concerned with establishing a professional league according to the Asian Football Confederation (AFC) regulations.
The Pro League Committee is responsible for organizing the Arabian Gulf League and holds the league’s commercial rights, working under the umbrella of the UAE Football Association. The Pro League Committee thus is neither owned nor controlled by the clubs that make up the professional league in the UAE and its CEO is not an official of any of the participating clubs. However, it holds General Assembly (and other) Meetings together with the clubs to outline the needs and requirements of the league.
Having outlined one of its objectives as being to enhance the technical and administrative capabilities of the professional clubs, the emergence of the Pro League Committee in the UAE is an instance of the football association licensing its league operation function to a third party – the operator license model. Indeed, similarities can be drawn between the UAE model and what operates locally under the NPFL/LMC model, especially given the need to establish a truly professional league with clubs meeting the requisite standards.
The LMC Model
Whatever the sport, whatever the country, the governance model to be adopted is a product of the relevant rules and the peculiar domestic circumstances. For instance, the Premiership model in England was developed to meet the need for increased financial strength among English top-flight clubs in order to make them more competitive internationally. In Nigeria, the current challenge amongst domestic clubs is undoubtedly the need to adopt appropriate legal structure and to meet club licensing requirements. Over the years, the club delegate structure that had been in operation in the Nigerian league failed to make positive impact on the fortunes of the participating clubs and was plagued by power tussles and court cases. The resultant instability of leadership did not augur well for the development of the league, making it unattractive to potential sponsors and investors, keeping them away and inhibiting the growth of the league. These problems reached climax when a Federal High Court judgment declared the league body – The Nigeria Football League Ltd and the Nigeria Premier League operated by it – illegal, leading to the inauguration of an Interim Management Committee to oversee the top-flight league and to help secure its long-term future. This mandate ultimately led to the incorporation of the League Management Company (LMC) – a corporate body licensed by the NFF and saddled with the responsibility of operating the top-flight football league in Nigeria, in line with modern practice.
It seemed that not everyone appreciated or welcomed this new concept, due largely to either misinformation or a selfish abhorrence of change. The advent of the LMC indicates a paradigm shift from the club delegate model that operated in the NPL to a pragmatic blend of the independent board, club delegate and operator license models. The LMC basically operates under license from the NFF since, as highlighted earlier, the NFF is the institution vested with the responsibility of football administration in the country. The advantages of the LMC model include the injection of leadership stability, independence and the introduction of much-needed business expertise in the administration of the league.
The incessant power tussles led to frequent changes in leadership, which stifled the development of the league. Also, with the vast majority of clubs being owned by state governments, the club chairmen were political nominees of government with uncertainty of tenure and these government-owned clubs have over the years witnessed sudden changes in leadership, raising concerns as to what becomes of a club chairman who after being elected onto the league board, is suddenly removed from the club position. The clubs themselves have consistently failed to show any internal democratic or suitable corporate structure, which reflected in their dealings at league board level.
However, the LMC model does not seek to alienate the clubs from the administration of the league. The LMC operates through a Board of Directors which, in addition to an independent chairman, the CEO, two independent directors, as well as a representative of the NFF, includes three club delegates. This mix of league governance models appears suited to local circumstances, as it brings the advantages of independence and expertise without alienating the participating clubs. It is apt in view of the local circumstances – the need of bringing the clubs up to speed with the club licensing requirements, yet not involving them in the day-to-day management of the league and still ensuring effective communication between the league management and the club components. Also, in a joint communiqué published on the LMC website, at a plenary meeting with all the top-flight clubs held on 6 September 2013, it was agreed that the LMC model would be a modification of the independent board league governance model that operates in the Premiership in England (http://www.lmc-ng.org/pdf/COMMUNIQUE.pdf retrieved on 10 September 2014).
The Board of the LMC is subject to the powers of supervision and policy direction of the Members in a General Meeting (Art. 19 of the Supplementary Regulations), which includes the clubs. Also, the LMC model is not designed to impose an independent chairman or the two independent directors on the clubs, as the appointment process is done by a Selection Committee – which comprises two representatives of clubs, two members of the outgoing board, two co-opted persons with experience in human relations, management or law and one NFF representative. This selection committee is charged with recommending persons for appointment, based on set criteria. The criteria for independent chairman includes passion for the game, educational qualification not less than a certificate from a tertiary institution for at least 10 years prior to the date of his selection, an indemnity bond on terms prescribed by the board in favour of the company for a sum not less than 10% of the company’s authorized share capital at the time of appointment, of good corporate standing, a confirmed business address and capacity to sustain and drive the league to greater commercial success, goals and development. In addition, contrary to fears that have been expressed by some that certain individuals want to hijack the league in perpetuity, the chairman and independent directors have a tenure of four years in the first instance (renewable for only one further term of three years for purpose of stabilizing the league administration and winning the confidence of sponsors and partners).
The LMC must be firm in implementing the club licensing requirements, which is at the forefront of its tasks. In the MLS for instance, two clubs – Miami Fusion and Tampa Bay Mutiny – had their franchises withdrawn in 2002 for failing to meet the league standards. The development that the MLS and other leagues have witnessed is a reflection of their implementation of rules and maintenance of standards. The LMC wields powers to sanction clubs for failing to meet club licensing requirements and these powers must be exercised.
The LMC and the NFL
The implication of the Federal High Court judgment which declared both the NFL Ltd. and the Nigeria Premier League operated by it to be illegal is that no aspect of the administration or management of football in Nigeria can be conducted in the names of either NFL of NPL. Therefore, in carrying out its mandate to secure the future of the league, the Interim Management Committee realized that the way forward was to incorporate a new and legally recognizable body for the administration of the top-flight league. This led to the incorporation of the LMC as a new company, distinct from the NFL and the NPL, which did not inherit their assets or liabilities. This was apt because the court judgment erodes the identity and legal capacity of the NFL and the NPL. One significant contrast between the NFL and the LMC, which surprisingly has been ignored, is that whereas the NFL did not list the participating clubs as members or shareholders, the LMC gives shares to the participating clubs, in addition to naming two of their representatives on the Board.
One of the failings of the league governance model under the NFL was the inability to enter into valid contract as a result of the faulty corporate structure. In order to rectify this going forward, the new league structure required a vehicle through which it could enter valid contracts and attract corporate sponsorship; hence the registration of the LMC as a legal corporate entity – a limited liability company with its subscribers possessing legal personality. As required by the law governing registration of companies (the Companies and Allied Matters Act), the LMC as a limited liability company has shares, divided into two classes – ordinary and preference shares. The NFF only is entitled to hold preference shares, while the eligible clubs – upon meeting the club licensing requirements – hold ordinary shares together with the person who is appointed as the independent chairman for the time being. (i.e. when a chairman leaves the post, he does not walk away with the shares but transfers them to the succeeding chairman).
The legitimacy of the LMC model is presently hinged on the licensing agreement entered into between the NFF and the LMC and the next step would be to reflect same in the statutes of the NFF. This authority given by the NFF to the LMC to organize the NPFL is compliant with definition of a League in the NFF Statues – a body that has been granted authority by the NFF to organize competition.
As for the clubs, they need to embrace this new model, wake up to its positive realities and welcome the idea of ensuring that they improve technically and administratively to meet licensing requirements. The only election that the club chairmen should be talking about is that of electing their representatives into the LMC board; the NFF (represented by its President) and the independent chairman are already signed on as the initial subscribers, awaiting the notification of those selected by the clubs as their representatives on the board. The truth is that unlike the NFL/NPL, which did not have the league clubs or their representatives as members of the company, the LMC model is actually more inclusive of clubs.
In the light of the above, it is unfathomable why anyone would resist the progressive change that the LMC model represents, especially in the light of the improved sponsorship and broadcast deals already secured, which are testaments to the potential for development. All over the world, leagues and football clubs have had to review their legal structure and this has had a positive impact on not only their technical, administrative and financial capabilities. With the LMC model already on course, one is scared to imagine what it portends for the Nigerian league if the league governance model reverts to what it was under the Nigeria Premier League.