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Sports economics lessons for Kenya football

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Gor Mahia’s Meddie Kagere dribbles the ball past SuperSport United’s Jamie Webber during the first leg of their Confederation Cup first round match at Kenyatta Stadium, Machakos on April 8, 2018. PHOTO | CHRIS OMOLLO

This week we are looking at sports economics and what Kenyan football can learn, since the essence of this column is about the use and relevance of applied economics.

A few days ago, Gor Mahia was left stranded after the club couldn’t raise Sh2 million for the players’ tickets to face South Africa’s Supersport United in the Confederations of African Football Champions League.

Now, Gor Mahia are the winners of the Kenya Premier League, it’s the club with the most fanatical support and it’s ranked among top brands in Kenya; but they desperately lacked Sh2 million in their account.

It would be right to judge the management of Gor Mahia but all over the world sports consumption like watching soccer even on TV which is only a part of the fan engagement, newspaper stories to read, the banter that passes around - are all entertainment but difficult for clubs to appropriate a penny of value out of that brand loyalty.

So what is the best business model for club football?

Simon Kuper, a sports columnist with the Financial Times of London and Stefan Szymanski, a professor of economics, tried to answer such questions in their book “Soccernomics”, noting that one of the sport’s greatest clichés is that soccer is big business, when it’s not.

The business of soccer is soccer. For example, it is good business for SportPesa to offer sponsorship to the two arch-rivals Gor Mahia and AFC Leopards because a club cannot operate without strong opponents - unlike in business – competitive balance creates the fun in the sport.

So soccer clubs exist to play good soccer and win things but not to turn profit. Therefore the best model to run a soccer club is as a public-spirited organisation like museums that aim to serve community while remaining reasonably solvent. The moral hazard is that no matter how much a club wastes or misappropriates someone will always bail them out.

Second question would be what is the link between a nation’s well being and its on-field success?

Data evidence demonstrates that for a country like Kenya that suffers perennial famine, enjoying success at the international level is a pipe dream.

Another example is that in 2009 it was estimated that a fifth of South Africa’s potential pool of players for the 2010 World Cup carried the HIV virus, depleting their pool of potential.

So there is a direct correlation between the health and nutrition of a country’s citizens and on-field success. In fact nutrition, lack of it, is said to be one of the reasons African players perform poorly at the World Cup.

It was for this reason that I offered help to the Football of Kenya Federation in structuring a subsidised health insurance scheme for professional soccer players in the Kenya, but pork barrel politics unfortunately carried the day. Lastly, why has Africa not threatened to win a World Cup despite the predictions of many pundits?

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According to the aforementioned authors, successful national teams benefit from a combination of a large population pool, a strong economy, and a high level of match experience at the highest levels of the game. 

For example, Brazil only returned to prominence in 1994 after they adopted a more European approach to their soccer, after which they appeared in three more World Cup finals (winning two).

Data trends show countries that have established most links with Western Europe have been the most successful at international competitions.

A look at the five African teams that have qualified for the 2018 World Cup show that Senegal has 21 players plying their profession in European football, Morocco has 18, Nigeria (12), Egypt (10) and Tunisia (8).

So for emerging soccer countries like Kenya, their future success depends on either growing an economy that improves the overall human development index of its citizens or more exposure to the highest levels of soccer.