In the earlier days, when football became a profession (players get paid to play), club funding was mainly based on donations from one person or group. Whenever the funders did not feel like covering the expenses of the club, the team would hit rock bottom.
As days passed by, football clubs have searched for another independent way to secure more money in order to evolve and grow both on and off the field. In this sense, the ideas of broadcasting games (via radio then via TV), selling jerseys and other club-related gadgets, and sponsorships were born.
Unfortunately, in Lebanon, while the game has progressed (in some sort), it’s still very dependent on donations from one person or group. Usually, the donors see the football club as a steppingstone for other ends, mainly political since football is the most popular sport in the country.
Many clubs have lost their main source of income due to the financial situation in the country. Businessmen are less “generous” with their money and prefer not to “waste” it on sports. That’s why the 2019-2020 season was scrapped 4 months prior to the COVID-19 pandemic. While the situation is far from getting better, how is football supposed to resume in Lebanon?
To answer this question, we will take Salam Zgharta FC as an example. Most of the points that we will cover about this club are applicable to every other midtable team or second division teams. In what concerns the top teams, we have already elaborated on their transformation in the article entitled “A Start of a New Era at Ahed FC” on Falebanon.com.
Who are the players?
It’s no secret that the sustainable solution for every club in Lebanon, including Salam Zgharta, is to rely on youth. Players like Imad Karime, Antoine Douaihy, Philippe Ayoub, Oscar Ghantous and Michael Finianos – who already have international caps under their belt – can be the core of the northern team for years to come.
Salam Zgharta still counts many familiar faces in their team. Mostafa Matar, Hamza Al Kheir, Jean Jacques Yammine, Amer Mahfoud, Hassan el Kadi and Hicham Naboulsi are players that have represented the red club on many occasions in the past and have amassed collectively a little less than 400 league games with the team.
Salam Zgharta has also many other players under contract, either with the main team or the reserve team “Amal Al Salam Zgharta”, like Anthony Bou Daher, Charbel Boutrous, Mahmoud Dakramanji, Mahmoud Sidawi, Ibrahim Abdelwahhab, Taha Hussein, Georges Moawad, Ahmad Masri, Patrick Mannah, Walid Fattouh and Yahya Kahil.
These 22 players will be more than enough for the club to participate in the shortened 17-game league and remain in the first division.
Salam Zgharta have one of their own, Coach Ghassan Khawaja, ready to take the helm (again) as he already has taken over the club either as an assistant or head coach in many past tenures with the all the teams in the club.
Therefore, Salam will have a squad with an average age of 23 years old with a capable coach to play in the Premier League.
How to finance the team?
In this section, we will not take into consideration any subsidies given by the Ministry of Sports and Youth or from the Lebanese Football Association (LFA) nor from the FIFA. Theoretically, these funds can be used to close any debt a club may have.
In order to know how much money the clubs need, we must classify their costs.
The LFA is rumored to bear the match expenses for the 2020-21 season. So, the only cost that the clubs will have is the monthly players and staff wages and the transportation cost.
Salam Zgharta have 22 players, a coaching staff of 3, a team principal and a stadium manager. Out of the 22 players, 7 players can play with a small average wage of 500 000 LL (some might accept not getting paid as not long ago they were paying to play in the youth teams), 6 players will accept an average wage of 800 000 LL and 8 will accept an average wage of 1 million LL. We will discuss the remaining player as we go forward in the article.
According to this quick rough estimate, the club will need a little under 220 000 000 LL to cover all expenses (213 000 000 in wages).
How can the club finance this budget?
According to sources close to the LFA, MTV is yet to pay the clubs their TV Rights from the 2018-19 season, but they are expected to in the upcoming weeks. However, sources confirmed that MTV will not pay TV rights for the 2019-20 season while they will honor the agreement for the final season in their contract, the 2020-21 season.
Each club gets 1 500 000 for every point they take in the league so a midtable team secure a little bit under 2 months of wages with their TV Rights money. Salam Zgharta will earn 33 000 000 LL for the 2018-19 season.
Gate receipts are not a profitable income for the clubs. The tickets costs 5000 LL and it’s split between three parties – the two teams and the LFA. Each team gets 2000 LL (40%) and the LFA gets the rest. If a match has 500 spectators, it means that the club earns 1 million LL. In 17 matches, the club would earn 17 million LL.
In what concerns the sponsors, we’ll suppose the worst-case scenario of having 0 sponsorship deals due the economic situation.
In total, the clubs will need around 220 million LL while traditional revenue streams will ensure a sum of 75 million LL; 58 million LL from TV Rights (assuming that Salam Zgharta will have the same points of the last full season at the 17th week) and 17 million LL from gate receipts.
This is not enough; clubs must find other incomes to survive.
One way to close the deficit is to sell replaceable players.
The one player that is replaceable at Salam Zgharta and can command a big transfer fee, is Mostafa Matar. Matar is arguably the best player in the team but Salam already have his replacement in line and his name is Antoine Douaihy. Not only does Salam have already his replacement, but Matar is wanted by many clubs at well. Sources close to Salam Zgharta have told FaLebanon that Ahed and Ansar are interested in the goalkeeper. A transfer of Matar to Beirut will ensure at least 200 million LL for the northern club.
Another way to ensure income for Salam Zgharta is to sell Amal Al Salam Zgharta. Technically, since all the players of the reserve team are joining the first team, Amal Al Salam Zgharta offers little to no added value to the club. That’s why there is no reason why Salam must not cash in on the team. Such deal could potentially bring 30 million LL to the club. If the club decide against the selling of the club, it would mean extra cost upon the club without any significant meaning.
All the potential decisions will bring an extra 230 million for the team which makes the club’s balance sheet 85 million in the green.
What happens after 2021?
Now that the short-term plan has been set, the club must continue in the same path. That is selling players to make profits.
The balance sheet of the 2020-21 season has made 85 million available to spend. This sum must be used to invest in their youth system and talent acquisition. The club must prioritize the development of their talents in order to cash in on them.
There can be two roads for these talents; either they join another club in league (i.e Eddy Chehade to Nejmeh) or the player can be sold to a club abroad, mostly from the emerging leagues of the Far East, where Lebanese players have already major success. In order to do so, these talents must gain experience on the field and the club must know how to market them; either on social media or by bringing in scouts. This mindset will be key in turning the club into an enterprise, but it will not be enough.
Another way to generate income in the future is to sell stocks of the club to interested investors. Such change in the legal status of the club will ensure that money will be flowing into the club whenever it’s needed. When the club becomes more successful in both the football and financial spectrums, the investors will be able to make a profit by selling shares. This isn’t charity anymore, it becomes business.
Football has changed, but in Lebanon we couldn’t cope with this pacey transition due to various reasons. We can’t operate with a 1970’s mindset and wonder why we can’t make it in 2020. The business model of Lebanese clubs must be altered and adapted to the worldwide football scheme, or else…